Also in this letter:
■ Navi to file for Rs 4,000-crore IPO this week
■ Edtech firm Eruditus gets $350 million debt
■ Zeta raises another $30 million
Retail sales of passenger EVs, two-wheelers see huge jump
It looks like Indian consumers are lapping up electric vehicles.
Driving the news: Retail sales of electric passenger vehicles grew 296% from 593 in February 2021 to 2,352 units in February 2022, while those of electric two-wheelers rose 433% from 6,083 to 32,443 units over over the same period, data from the Federation of Automobiles Dealers Association showed.
Bracing for impact: Meanwhile, auto firms are busy firming up new launches to transition more vehicles in their portfolios to electric as the ongoing Russia-Ukraine conflict is expected to hit the industry hard.
- The shortage of semiconductor chips and spiralling crude oil prices could also hurt conventional vehicle sales.
- Fuel price hikes will also propel faster EV adoption, especially two- and three-wheelers, said Hemal Thakkar, director at Crisil Research.
- The proposed battery swapping policy, too, will help scale the EV ecosystem and drive adoption.
Who’s doing what: Most auto companies are stepping up production by partnerships or by putting up separate assembly lines, which will see more EV models on the road in fiscal year 2023.
- Hero Electric and the Mahindra Group announced a Rs 150-crore, five-year partnership last month, and rolled out their first electric two-wheeler, Optima.
- Ola Electric and Ather Energy are also increasing production capacity of EVs.
- MG Motor India on Monday launched its all-new ZS EV variant, with a starting price tag of Rs 21.99 lakh.
Yes, but: Experts cautioned that the ongoing conflict in Ukraine could severely hamper sales as trade sanctions are likely to constrain the import of components from Russia and Eastern Europe.
Companies are thus “indigenising and diversifying their procurement plan to shield themselves from international supply chain disruptions,” said Rishabh Jain, programme lead, CEEW- CEF.
Sachin Bansal’s Navi to file for Rs 4,000-crore IPO this week
Navi Technologies founder Sachin Bansal
Sachin Bansal’s Navi Technologies is set to file draft papers with the markets regulator for a Rs 4,000-crore initial public offering (IPO) later this week, sources briefed on the matter told us.
Details: The company plans to launch its IPO in June, according to the current plans. The public issue will be entirely through an issuance of new shares, with no offer-for-sale (OFS) component.
This means Bansal, who holds 97% in the firm, will not sell shares to investors in the planned IPO, sources briefed on the matter told us.
Navi’s other shareholders are Ankit Agarwal, its cofounder and chief financial officer, and Paresh Sukhtankar, former deputy managing director at HDFC Bank, who is a board observer at Navi.
Bansal, who has invested Rs 4,000 crore of his own capital in Navi, is expected to retain majority control of the firm even after the IPO.
Concerns remain: Chaitanya Micro Finance, which Navi acquired in 2019, had filed for a universal bank licence from the Reserve Bank of India (RBI) at the start of 2020 but has yet to receive the licence.
The Enforcement Directorate (ED) has also sent a notice to Bansal for allegedly violating Foreign Exchange Management Act (FEMA) guidelines during his stint in Flipkart. In September, Bansal moved the Madras High Court against the ED’s actions.
Sources now say it is unlikely that Chaitanya will get the licence any time soon, and definitely not before the proposed IPO.
Bucking the trend: News of Navi’s IPO plan comes as India’s listed new-age companies such as Zomato, Paytm and Nykaa have seen their value erode significantly over the past few months.
Other startups such as Delhivery and PharmEasy that have received Sebi’s approval for their IPOs are now unlikely to launch them this financial year. But Navi is ploughing ahead.
Edtech firm Eruditus gets $350 million debt for M&As
Eruditus cofounder Ashwin Damera
Executive education-focussed startup Eruditus has closed a $350 million debt financing from Canada Pension Plan Investment Board (CPPIB), largely to fund its aggressive acquisition plans in its overseas markets, cofounder Ashwin Damera said.
The SoftBank-backed firm has been in talks for strategic acquisitions and plans to spend as much as $1 billion on these, Damera told ET in an exclusive interaction.
The debt capital will be used for two key acquisitions in Europe and the US, as the company plans to grow its gross annual bookings by 90% to around $950 million in fiscal 2023, from an estimated $500 million in this fiscal.
About $200 million of gross bookings next financial year are expected through the inorganic route. Eruditus is said to be already in the final stages of closing a $250 million acquisition in Europe, of a company that offers online certificate courses to non-English speakers. Damera did not disclose the name of the company.
The CPPIB investment marks a growing trend among some of the largest Indian startups, which have opted for various kinds of debt financing. Other companies that have raised debt funding include Byju’s, Udaan and Oyo.
Zeta raises another $30 million from Mastercard, others
(L-R) Ramki Gaddipati and Bhavin Turakhia, cofounders, Zeta
Banking tech platform Zeta has raised $30 million as a part of strategic investment from Mastercard and other investors, taking the company’s valuation to $1.5 billion.
This is a continuation of the $240 million funding round that Zeta raised last May, led by SoftBank Vision Fund 2. The round valued the company at $1.45 billion, marking its entry into India’s unicorn club. A unicorn is a privately held startup valued at $1 billion or more.
Mastercard’s investment in Zeta is a part of a strategic five-year partnership in which both companies will offer their credit management offerings and card-processing product stack. The company declined to share names of other investors that participated in this round.
Other Done Deals
■ Captain Fresh, a business-to-business (B2B) seafood and meat marketplace, has raised $50 million in a round led by existing investors Prosus Ventures and Tiger Global. Accel India, Matrix Partners India, Ankur Capital, and Incubate Fund also participated in the round.
■ Agritech startup Otipy (operated by Crofarm Agriproducts) said that it has raised $32 million (about Rs 235 crore) in funding led by Westbridge Capital. Existing investors SIG and Omidyar Network India also participated in the round.
■ DeepTek, a Pune-based healthtech startup, has raised $10 million (Rs 77 crore) in a funding round from Tata Capital Healthcare Fund II (TCHF II), and other investors.
■ Digital freight brokerage platform Lobb said it has raised $1.1 million in a funding round led by Byju Pillai, group managing director, Inflow Technologies and angel investor Gopal Kaul.
■ Indian metaverse firm Ikonz has raised a seed round of funding from early-stage venture capital firm Village Global and technology investment firm Woodstock. The round also saw participation from Polygon Studios, the NFT and gaming vertical of Polygon.
■ CureSkin, an artificial intelligence-driven beauty and personal care brand has raised $5 million in a funding round led by JSW Ventures, the company said in a statement.
TWEET OF THE DAY
BharatPe board acted quickly, cofounder Nakrani says on PwC report
BharatPe cofounder Shashvat Nakrani
In an internal memo sent to employees on Monday, BharatPe cofounder Shashvat Nakrani said that the company’s board “acted quickly and decisively to uphold good corporate governance”. Nakrani was referring to the audit of BharatPe undertaken by PricewaterhouseCoopers (PwC), the findings of which were tabled before the board on March 1.
This is one of the first times Nakrani has publicly spoken about the controversy that has plagued BharatPe since the start of the year.
“What is important to note is that this is an aberration and not the norm,” he added in the memo.
On Grover: Nakrani said that his cofounder Ashneer Grover “sadly has also gone ahead and tried to create a false narrative about the company that we built together with the right spirit”.
“It’s time now to stop rumours and innuendoes from distracting us and go back to building,” Nakrani added.
Culture in focus: He said that going forward, the management would focus on the company’s “culture”. “I promise you that we will make BharatPe not only the best place to work in India but also the place where all of us belong,” Nakrani wrote.
Grover’s exit: On March 1, BharatPe cofounder and managing director Ashneer Grover resigned from the fintech startup and its board, alleging that he had been “vilified” and treated in the “most disrespectful manner”.
Hours later, BharatPe said that it took strong objection to Grover’s “lies” and that he and his family had “engaged in extensive misappropriation of company funds”. We also reported on March 2, citing sources, that BharatPe was looking to claw back Grover’s restricted shares.
Other Top Stories By Our Reporters
Edtech most popular with student founders: The most popular sector among student founders in India is edtech, which dominates with a 5.6% share in high resource campuses (HRCs) and 10.7% in medium resource campuses (MRCs), Campus Fund said in its report titled ‘State of student entrepreneurship in India’.
Microsoft to set up fourth data centre region in Hyderabad: Microsoft India said on Monday that it intends to set up its fourth data centre region in Hyderabad to meet the growing demand for public cloud in India. This will be the company’s largest data centre in India and will be among the largest foreign direct investments in the state.
Global Picks We Are Reading
■ Ukraine’s victories in the ‘TikTok war’ won’t stop Vlad the Invader’s missiles (The Guardian)
■ Chinese tech firms weigh opportunities in Russia after Western pullout (WSJ)
■ Samsung confirms hackers stole Galaxy source code (The Verge)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.