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VCC Startups Weekly Wrap: A mega desi fund in works; Mahesh Murthy under scanner
Photo Credit: Mukul Mudgal/VCCircle

Infosys co-founder and Axilor Ventures head Kris Gopalakrishnan is at the forefront of a new initiative to bring together wealthy Indian individuals for a desi multi-million-dollar investment fund to back local startups.

In other major developments this past week, Flipkart injected fresh capital into logistics arm eKart and prominent investor Mahesh Murthy had a police case lodged against him after a woman alleged sexual harassment. Also, Uber co-founder Travis Kalanick is reportedly offloading one-third of his stake for $1.4 billion.

Desi startup fund

A handful of Indian billionaires who actively invest in early-stage ventures are exploring the possibility of floating a multi-billion-dollar domestic fund in the wake of a rush of foreign money flowing into local startups.

Infosys co-founder Kris Gopalakrishnan, who is also an active early stage investor through his Axilor Ventures as well as Indian Angel Network is at the forefront of this initiative. According to him, the idea stems from the fact that Indian investors make relatively few investments into growth-stage startups and that about 85% funding at the Series C level and beyond is made by foreign investors—Chinese, American and Japanese sovereign funds.

Flipkart pumps more into ekart

The online retailer has infused another Rs 1,632.81 crore ($257.3 million) into logistics arm eKart to improve its shipping and delivery times.

Separately, Flipkart CEO Kalyan Krishnamurthy told The Economic Times that the company’s new focus metric would be increasing its monthly active users, which is expected to grow over two-fold in 2018. He also said that Flipkart will build its grocery initiative, Supermart, with the right unit economics, thereby focusing on profitability.

Amazon’s food retail venture

Amazon Retail India Pvt. Ltd, the food retail arm of Amazon, will start selling locally produced food from March, The Economic Times reported, citing unnamed sources.

In July last year, Amazon secured the government’s nod to invest $500 million in India’s food retail sector. Amazon has also planned to open brick-and-mortar outlets, apart from a portal.

Mahesh Murthy in the dock

On Wednesday, according to a report by ET Now, the National Commission for Women had registered a case against prominent investor Mahesh Murthy following a complaint by a woman. She claimed that the investor had stalked her, apart from making objectionable, derogatory and sexual remarks and obscene signs. Her identity remains undisclosed.

The development follows accounts from digital media platform YourStory and women-focussed portal SheThePeople last year, where several women claimed Murthy had made inappropriate sexual advances. Also, author Rashmi Bansal had told tech news website FactorDaily last April that Murthy had made sexual advances towards her 13 years ago.

Murthy, who is in the midst of raising a new venture fund, had previously denied these allegations, calling them “absolute and complete lies”.

PayUMoney wallet shutdown

Naspers-owned PayU India Internet Pvt Ltd, which offers an online payment solution under PayUMoney, is shutting down its wallet service at the end of this month. The move is part of its business consolidation strategy, where the company has decided to focus on Citrus wallet, according to Jitendra Gupta, managing director of PayU India.

In September 2016, PayU, owned by South African Internet conglomerate Naspers, had bought Mumbai-based rival Citrus Pay for $130 million (Rs 865 crore). Citrus has a highly successful payment gateway business. The joint entity has more than 30 million users.

In another development, Naspers and Chinese internet giant Tencent may jointly invest around $150-200 million in homegrown food delivery platform Swiggy, The Economic Times reported. Naspers–an existing investor in Swiggy–is likely to lead the round after Japan’s SoftBank Group and Indian e-commerce major Flipkart ended talks with Swiggy.

Alibaba may back XpressBees

Chinese internet giant Alibaba is in advanced talks to pick up a significant minority stake for $100 million in logistics company XpressBees, The Economic Times reported, citing people with knowledge of the matter.

XpressBees is the logistics arm spun out of Pune-based Brainbees Solutions Pvt. Ltd, which operates online baby products retailer FirstCry. The parent is also reportedly in the midst of a fundraising exercise from multiple investors, including Singapore state investment firm Temasek Holdings.

EarlySalary, others raise funds

The first week of this year also saw a number of investment deals closed, perhaps an indicator of the things to come. Industry experts and investor, by and large, believe that 2018 will see a lot more action on this front.

Leading the pack was online lending platform EarlySalary, which raised Rs 100 crore ($15.7 million) in a Series B funding round led by Eight Roads Ventures.

WizRocket Technologies Pvt Ltd, which operates mobile app analytics startup CleverTap, has raised an undisclosed sum from Japan-based diversified consumer and business services provider Recruit Holdings Co.

IDfy.com, an online human resources analytics platform that provides background verification services, raised Rs 19.50 crore ($3 million) in a fresh round of funding from new and existing investors. Existing US investor New Enterprise Associates participated in the round. NB Ventures, the family investment office of UAE-based investor Neelesh Bhatnagar and Tokyo-based Dream Incubator also put in money in this round.

The RP-Goenka group led a Rs 5 crore round in health foods startup True Elements while media house Bennett, Coleman & Company Ltd invested in fintech platform FinReq.

WOTU, a B2B e-commerce platform for food and beverages, raised an undisclosed amount from Claris Capital and Mumbai Angels Network.

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