27 Apr 2020

Startup NEWS, April 27, 2020

1. Paytm in funding talks with Microsoft to build war chest

  • Mumbai: Digital payments firm Paytm has held talks with US technology giant, Microsoft for fresh funding as the company looks to boost its war chest to fight growing competition in the sector, two people in the know said.
  • The proposed fund raise, which may amount to around $100 million (Rs 760 crore), is likely to be an extension of a planned $1-billion (Rs 7,600 crore) fundraising that the company had initiated last year, people briefed on the matter told ET.
  • In November 2019, US-based asset manager T.Rowe Price had come in as a new investor, ploughing $150 million (Rs 1,140 crore) into Paytm, valuing the company at $16 billion. The entire sum from this round is yet to come in, as per regulatory filings by the Noida-based firm.
  • “The talks with Microsoft began last year when Paytm was in the middle of raising funds. While Microsoft could not participate in the funding then, it is likely to pump in cash now,” said a person familiar with the talks.

2. Bira 91 owner B9 Beverages raises $20 million in bridge financing from Sequoia Capital, Sofina

  • B9 Beverages, which owns and sells craft beer brand Bira 91, has raised $20 million (about Rs 153 crore) in bridge financing from two of its existing investors – Sequoia Capital India and Belgium’s Sofina.
  • “We continue to grow our business in both existing and new markets. Our market shares in several markets are now higher than 5% in overall beer and more than 20% in premium beer,” said Jain.
  • In 2019, the now five-year-old company had commissioned two new breweries–in Andhra Pradesh and Karnataka—in a bid to quadruple production capacity. The company now operates four breweries in India and has a presence in 400 cities across 10 nations.
  • B9 Beverages entered the mass market beer segment in February last year with its product Boom. “2020 is a key inflection point for the company where we expect to reach double-digit market share in a number of states through the year,” Jain said.

3. SoftBank Will Deploy Unspent Vision Fund Corpus In Indian Startups

  • Japanese multinational conglomerate SoftBank, with $13 Bn left in its corpus for the SoftBank Vision Fund, has been in talks with 15-20 companies to strike new deals in India. Rajeev Misra, CEO of SoftBank Vision Fund, said that the Japanese investor is on the lookout to strike new deals “at the right valuation”. He assured that SoftBank will reveal the deals in the upcoming three months.
  • “SoftBank Vision Fund I and II are both interested in buying secondary positions from early-stage investors who are wanting to exit as their fund lives come to an end. Next three months, we will announce deals as currently, we are in mid-stages of talking to 15-20 companies for both secondary and primary investments…” Misra added.
  • In an interview with Economic Times, Misra also agreed that portfolio company Paytm, which is a digital payments platform, might face an impact due to the recently announced Jio-Facebook deal. He elaborated that the deal will allow Facebook to push WhatsApp Payments to go fully live through Reliance’s ecommerce platform, JioMart. Misra noted that even though the Jio-Facebook deal will be a “formidable” competitor, Paytm has always been in competition with Google Pay and Walmart-owned Phone Pe.

4. Sequoia Surge backs seven Indian startups in the third batch

  • Sequoia Capital’s accelerator fund ‘Surge’ has backed 15 startups across India and Southeast Asia, at a time when new deals globally are far and few.
  • The $200-million fund has made seven investments in the country across sectors in its third batch, taking its overall Surge portfolio to 52 startups. The program is co-led by Shailendra Singh and Rajan Anandan.
  • The latest batch includes Atlan, which helps teams in large enterprises collaborate on data projects, community management platform Convosight, subscription-based smart water purifier product DrinkPrime, online fitness app Fittr, digital procurement platform Procol, site reliability engineering platform Last9, and a consumer brand in stealth.
  • The hands-on approach of the accelerator and its highly resourceful community of investors and mentors could be key for startups to deal with the many challenges in a tough global business environment, some Surge entrepreneurs said.
  • “The (Sequoia) network has been incredibly hands-on – right from making customer introductions to hiring…the (Surge) program itself is MBA on steroids for entrepreneurs…it is a privilege to learn from partners who’ve backed the most legendary global technology companies of our times from Zoom to Github,” said Prukalpa Sankar, cofounder of Atlan. A third of Surge’s latest batch have at least one female founder.

5. Zoom’s biggest rivals are coming for it

  • As people turned in droves to video chatting app Zoom in recent weeks, the buzz caught Facebook’s attention. Inside the social network, that immediately set off a scramble.
  • Mark Zuckerberg, Facebook’s chief executive, ordered employees to ramp up and focus on the company’s own video chat projects, especially as use of its products also increased, said three people with knowledge of the plans, who declined to be identified because the details are confidential. On Facebook’s internal message boards, employees openly gawked at public data showing Zoom’s growing popularity, they said.
  • On Friday, Facebook unveiled one of its biggest expansions into videoconferencing with several new video chat features and services. They included video group chats for as many as 50 people on Facebook Messenger, WhatsApp video calls for up to eight people, and video calls in Facebook Dating.
  • Facebook, Google and others want a piece of that success. Behind the scenes, people with knowledge of the companies said, employees are sore that they have not grabbed more of the same buzz as Zoom, especially because many of the giants have offered their own video chat software — like Google Meet — for years.
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