A compilation of important news from the startup world:
- Angel investment in start-ups in India hits five-year high: report
Angel investment in Indian start-ups hit a five-year high in the year ended March 2016, as venture capital firms and existing angel investors pumped in cash to back the next wave of start-up stars, according to a report by InnoVen Capital, a venture debt firm. According to the report, angel investment in India in FY16 stood at Rs.113.6 crore across 69 deals, a rise of about 62% in deal value and 47% in deal volume from the previous financial year. In FY15, about Rs.70 crore was invested across 47 deals, said the report which takes into account investments made by four major angel groups: Indian Angel Network, Chennai Angels, Calcutta Angels, Hyderabad Angels and Mumbai Angels. To be sure, venture capital firms turned increasingly cautious about their bets late last year, forcing a number of start-ups to shut shop and the rest to focus on cash conservation and unit economics instead of chasing growth.
- Banks take startups under wing to foster innovation
If you can’t beat them, join them is a common adage, one that today’s financial institutions are taking very seriously as they jostle for space with Indian IT majors for a chunk of the startup innovation pie. Blockchain, chat-bots, speech-to-text, predictive analytics, risk management, robotic kiosks, are just a few of the exciting areas, employing cutting-edge technology. Some of these labs become virtual stock exchanges with mock-trading carried out at high-frequencies in nano seconds. Axis Bank, Societe Generale, and Swiss Re have their own innovation labs and accelerators to help startups beta-test their ideas, find funding and access clients. Edelweiss, Kotak Mahindra, DCB Bank are among other financial institutions, who are trying to collaborate with startups by running contests and giving them space for their pilot-runs.
- Flat tyre? Startups to the rescue
This monsoon, new help is around the corner. When your four-wheeler breakdowns in the middle of the road, assistance offered by the automobile companies or insurance providers would require long calls and verifications leading to a probable delay in service. Solving this problem are a clutch of startups that provide on demand roadside assistance. Zauito offers roadside assistance with an average estimated time of arrival (ETA) of 20 minutes. Tying up with the local service stations, the startup connects the user with mechanics within a radius of five or seven kilometres from the customer’s location. “The differentiation we offer in comparison to the traditional players include – faster services, easy tracking and payment options. Also, we do not require them to have a membership, while the conventional players do,” said Daksh, founder, Zauito. The company currently has 600 customers.
- How ‘Me-Too’ Startups Have Spammed The FoodTech Market In India
When industry veterans in the year 2015 debated on whether ‘hyperlocal’ will be able to replace ‘ecommerce’ in India, one segment that grabbed maximum investor attention was the FoodTech. The reasons were simple – touted to reach $78 Bn by 2018, growing at 16% YoY, it was creating high demand, looked promising for higher returns and obviously showed an option for a profitable exit. But, as they say – all that shines is not glitter. Soon, the sector became overflowed with ‘me-too’ startups lacking both – differentiation and innovation. The results were obvious. To date, out of the 105 FoodTech startups launched in India, only 58 are active. In past few months, there has been over 37 shutdowns while 9 went off the picture consolidation via M&A route. Where on one side startups like iTiffin, Eazymeals, Zeppery, Zupermeal, Dazo, SpoonJoy, have to shutdown operations, on the other side, Tinyowl and TastyKhana grew well initially but got acquired much earlier than expected. The entry and exit of UK based JustEat was faster than one would order something online.
- Government mulling startups’ tax, compliance concerns
With an aim to boost Startup ecosystem in the country, Nirmala Sitharaman, minister for Commerce and Industry on Thursday called the founders of about 30 startups including Urbanclap, Practo, Delhivery, Cardekho and Altigreen Propulsions to discuss their concerns related to taxation and other regulatory matters. “We were keen to know their views on how start-ups in the country were doing, their expectations from the government and the difficulties they were facing in dealing with various ministries and departments,” Sitharaman said. When most of the representatives asked the government to allow start-ups that were incorporated before April 1 2016 to qualify for tax sops, Sitharaman said that the start-ups discussed various issues ranging from taxation, funding, compliance and regulations to the period of relief offered to investors.
- IITP incubation centre set to mentor startups
The incubation centre (IC) of Indian Institute of Technology-Patna (IITP) has invited startups in electronics system design and manufacturing (ESDM) and medical electronics for enrolment to its first batch of a two-year incubation programme. IITP director Prof Pushpak Bhattacharyya said the idea behind setting up IC-IITP is to address the quality gap in healthcare in the country. “As one of the fastest growing IITs among the new breed of the premier tech cradles, we want to explore if technology can be an enabler in this sector through our capabilities in research and development,” he said, adding, “The vision of IC-IITP is to identify, nurture and translate technology ideas and innovation in ESDM with a focus on medical electronics.” The incubation centre, which was inaugurated by PM Narendra Modi last year, will provide support to startups for idea validation, product development, building and testing prototypes and early stage scaling of innovations. They will be guided by experienced teams from cross industry and academia at IC-IITP and will also have the option of taking guidance from IITP faculty members.
- India’s Industrial Policy and Promotion body to meet government departments over concerns raised by startups
The Department of Industrial Policy and Promotion (DIPP) will soon hold talks with other government departments to address specific concerns raised by start-ups at a meeting with commerce and industry minister Nirmala Sitharaman. After the meeting, held on Thursday, Sitharaman said she had asked DIPP, which is driving the ‘Startup India’ programme, to hold inter-ministerial meetings to address the issues. “Start-up founders spoke about the difficulties they are facing relating to various ministries and what is it that they want the government to do further. The concerns raised include taxation, period for which they are getting tax relief, and role of regulators. They also talked about issues related to compliance. I have instructed the DIPP secretary to hold meetings with ministries concerned to address these issues,” she added. Anu Acharya, founder of Mapmygenome, a molecular diagnostics company, said start-up founders asked the department to provide all start-up-related information at one place and that accessing regulatory information was the biggest challenge they faced.
- 3D printing helps $5 million Indian jewelry startup Melorra keep overheads low
Indian online jewelry startup Melorra, which raised $5 million in a successful seed round earlier this year, is using 3D printing to carry out individual orders in a cost-efficient manner. 60% of Melorra designs are now available for under Rs 30,000 ($450). With its ability to facilitate on-the-spot manufacturing of one-off items, 3D printing is today enabling startups of all kinds to get off the ground quickly and efficiently. Gone are the days of big outlays on large and potentially risky orders, with businesses now choosing to 3D print their products as and when they are needed. The jewelry market is no exception to this additive manufacturing craze, with many entrepreneurs launching 3D printed jewelry businesses and selling their products online to an enthusiastic audience of futuristic fashionistas. One of the most promising jewelry startups of the year is Melorra, an online shop launched by Bengaluru-based Saroja Yeramilli earlier this year, which has been using 3D printing to produce high-end wares for the modern Indian woman.
- ‘Special’ Startups: Talking Tabs, Beeping Cups, Canes That Can See
How difficult could it be to pour some coffee into a mug? Quite a bit, if you cannot see the cup, or if you struggle to know which direction to pour, or the right moment when you need to stop so that the coffee doesn’t spill over. For the differently-abled who possess immense resilience to improvise their skills and overcome a certain ‘disability’, little day-to-day things can still be a hassle. The ‘special’ start-ups and tech innovators in India are now venturing into the Rs 4500-crore ‘disability market’ to bridge this gap. Bringing ease, services and assistance to the lives of the differently abled, we look at a few Indian startups and technologies aimed at making the world more inclusive. From a cup with an alarm that beeps once the poured liquid reaches maximum limit, to a vibrating clock, to a talking messenger for the deaf and mute that can speak on your behalf, to the special keyboards for the visually impaired or dyslexic – the list is substantive.
- Flipkart’s performance-based layoffs putting 1000 jobs at stake isn’t surprising
Now, we saw this coming, didn’t we? After the dramatic Jabong acquisition, one of India’s biggest e-commerce site is in the news yet again, but this time for lay offs. If reports are to be believed, Flipkart has asked its under-performing employees to either resign or opt for severance package. With this move, it is ready to layoff about 700 – 1000 employees, three people familiar with the matter told The Economic Times. While Flipkart is looking for a lean re-organisation, this move shouldn’t come as a surprise considering the recent state of affairs in the startup segment. After enjoying a year of over-valuation, excessive flow of funds, investors have started to worry about returns. Flipkart has been in a grim mood ever since the company’s app-only strategy backfired, and then took to some major re-organisation in the top-level management. The company also saw some prominent figures exit. The company’s valuation had raised many eyebrows late last year as even established large-cap companies weren’t valued at $16 billion. There has been some reality check these days and Morgan Stanley lowered the company’s valuation to under $10 billion.
- How the GST Bill will impact startups
In spite of the impasse over the Goods and Services Tax (GST) Bill, there is solid possibility that it may soon become law. Currently, it is stuck in the Rajya Sabha. For the first time, the comprehensive tax law will bring reforms marking a paradigm shift in the taxation system. It will affect businesses of all sizes, including startups. India is witnessing a boom in startups, particularly those in the IT industry. According to a recent NASSCOM report the number of Indian start-ups is the fourth highest globally, at more than 3,100 start-ups. It also predicts that the number could increase to 11,500 by 2020. Of all these startups, more than 85% fail because of lack of funds and other reasons. In such a scenario, a new tax regime could a tricky proposition. The tax law would be wide-ranging in its effect on the manufacture, sale and consumption of goods and services throughout India. It would replace various different taxes that the Centre and State governments charge separately. It would be collected at each stage on basis of the input tax credit method, in which taxes paid in other states can be claimed.