Unicorns – the newest and oldest – continue to make headlines. The biggest newsmaker of the week was online logistics startup Rivigo, which attained near unicorn status with its latest Series D funding round of $50 million (Rs 322.5 crore). The deal saw the company being valued at $945 million making it probably India's fastest startup to reach the unicorn landmark. Another unicorn that was in the news was InMobi, which acquired Los Angeles-based ad-tech company AerServ for $90 million in a cash and equity deal.
In other developments, Bengaluru-based analytics firm Manthan is considering buyout offers from global technology and retail giants, including Walmart. Mahindra & Mahindra invested in car rental startup Zoomcar along with existing investor Ford. Former Facebook employee Chamath Palihapitiya's Social Capital made its second investment in India after Ezetap in fin-tech startup NiYO. Amidst mounting losses, Faasos raised $5 million or Rs 33 crore from its existing investors.
A newbie in the unicorn world
Gurgaon-based tech-enabled logistics services provider Rivigo Services Pvt. Ltd has raised Rs 322.5 crore ($50 million) in a Series D round from its existing investors SAIF Partners and Warburg Pincus, with the former leading the round. The round catapulted the logistics firm to near-unicorn status.
Unicorn is an industry term for startups commanding a valuation of $1 billion or more.
VCCircle could not ascertain whether the round was already closed or if Rivigo was looking to rope in a new investor as part of a larger Series D round. Its main competitor is Blackbuck. A little over one year ago, Rivigo was valued at $500 million in a Series C round that saw private equity firm Warburg Pincus come in as the sole investor to pick up a 15% stake.
Rivigo’s revenues for 2016-17 shot up by 170% to Rs 401.8 crore from Rs 149 crore in the previous fiscal year, filings with the Registrar of Companies showed. However, its losses, too, went up substantially to Rs 137 crore from just Rs 5.5 crore.
Other logistics startups in the space - Delhivery and Ecom Express - are also well-funded firms. All these players had revenue of around Rs 500 crore in 2016-17.
Zoomcar signs term sheet with M&M and Ford for $50 mn
Car rental startup Zoomcar is set to raise $50 million (Rs 318 crore) from automobile and farm equipment manufacturer Mahindra & Mahindra and existing investor Ford Smart Mobility, the startup investment arm of global automaker Ford Motor Company. The term sheet has been signed and a deal, which would value the Bangalore-based startup at around $200 million, will be closed within weeks.
The development comes a few months after Mahindra & Mahindra and Ford announced a strategic alliance to work together in areas such as shared mobility and connected cars, besides helping each other expand their presence in the Indian and overseas markets.
InMobi looks to paper over its declining revenues
Mobile ad-tech firm InMobi has acquired Los Angeles-based AerServ, which deals with inventory and audience monetisation technology for mobile publishers, for $90 million (around Rs 574 crore) in cash and stock. Amidst declining revenues, InMobi hopes “the acquisition will enhance monetisation for publishers globally and enhance premium mobile programmatic platform InMobi Exchange,” it said in a statement.
The acquisition comes amidst a decline in revenue for the first time for the SoftBank-backed company. The Bangalore-based company is still struggling to make profits, quite contrary to the company's claims. InMobi Pte. Ltd – the holding company registered in Singapore – recorded a $12.7 million loss in the financial year ending 31 March 2017.
A silver lining is that at the group level, the firm managed to narrow its losses from $53 million in the previous financial year, as per the firm’s consolidated financials available with Singapore’s Accounting and Corporate Regulatory Authority (ACRA).
Singapore-registered holding company InMobi Pte Ltd’s revenue dropped to $280 million in 2016-17 from $283 million in the previous financial year, according to filings with Singapore authorities.
Are Manthan's investors asking for a high price?
Private equity and venture capital-backed retail analytics firm Manthan Software Services Pvt. Ltd has attracted half a dozen potential international buyers, including a retail behemoth and two tech firms. It has received strong interest from retail giant Walmart, besides technology firms SAP and Cognizant, among others.
However, the company and its investors are looking for a high valuation, while the suitors are not willing to shell out that much, delaying the acquisition. The lack of profit makes it tougher for the company to go for an IPO.
Temasek, which had come in as the lead investor in a $60-million Series D funding round, is looking at a valuation of $600-700 million, while the buyers are willing to pay just $350-400 million. “The early investors are happy with a $350-million valuation, but the investors that came in later (Temasek) want much more, delaying the potential acquisition,” the person added.
Chamath Palihapitiya’s Social Capital makes second India bet
NiYO Solutions Inc, a fin-tech firm that digitises payroll and employee benefits management, has raised $13.2 million (Rs 85 crore) in a Series A round from US-based venture capital firms Social Capital, JS Capital and Hong Kong-based Horizon Ventures. Its existing investor Prime Venture Partners also participated in the current round. PVP had invested $1 million in the company in 2016.
The company will use the funds to expand into smaller cities, develop its product, and ramp up customer service, Vinay Bagri, chief executive and co-founder of NiYO told VCCircle.
Silicon Valley-based Social Capital is run by Chamath Palihapitiya, an early Facebook employee and venture capitalist. JS Capital is the family office of Jonathan Soros, son of George Soros who ran the storied US investment firm Soros Fund Management. In August last year, the fund had co-invested along with the Social Capital and other investors in PVP portfolio company Ezetap.
Faasos redials investors after losses mounted
Pune-headquartered Faasos Food Services Pvt. Ltd, a quick service restaurant chain and online food delivery platform, will receive fresh funding of around Rs 33 crore ($5 million) from existing investors, two people familiar with the development told VCCircle.
The participating investors will include Lightbox Ventures, Sequoia Capital India, RuNet South Asia and RB Investments, said the above-mentioned persons who wished to remain anonymous. The same investors had put in $6.3 million last April.
The firm had narrowed its losses by 35% to 82 crore in 2016-17 from Rs 111 crore in the previous financial year, show filings with the Registrar of Companies. Net sales rose to Rs 82.28 crore in the last financial year, up from Rs 62 crore in 2015-16.
That’s it for the week's top and relevant news from the startup world. Log back in on Monday for more.