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VCC Startups Weekly Wrap: WhatsApp weighs digital payments; Grab buys Indian startup

20 January, 2018

Speculation about WhatsApp’s much-anticipated entry into the crowded mobile payment space in India gained momentum this week as media reports suggested the company may launch the digital payment feature as early as next month. The Facebook-owned chat app is working with several lenders to integrate a Unified Payments Interface-based solution.

In other major developments this past week, investment bank Morgan Stanley gave the restaurant-finder and food-delivery startup Zomato a jump in valuation to peg it at $2.5 billion; Uber’s Southeast Asian rival Grab acquired Bengaluru-based payments startup iKaaz; and US-based investment crowdfunding platform AngelList launched its syndicate programme in India.

Here is a look at the top developments.

WhatsApp to foray into payment business in India
Instant messaging platform WhatsApp may make its digital payment debut in India next month.
According to a report in The Economic Times, the Facebook-owned chat app is working with top lenders including State Bank of India, HDFC Bank, ICICI Bank and Axis Bank to integrate a Unified Payments Interface-based solution.

“The platform is already in beta stage (testing) with one of its partner banks,” the report quoted a person as saying. “We expect the product to go live for consumers by the end of February, depending on how the trials work out.”
The report also quoted an unnamed banker who said security tests were being conducted. Once this is done, the system will be integrated and tested out among some beta users before being rolled out to the public.

WhatsApp has than more a billion active users. India is the US-headquartered company’s biggest market, with more than 200 million users.

WhatsApp co-founder Brian Acton had met Indian IT minister Ravi Shankar Prasad in February last year, following which the company received approval to integrate UPI.

Morgan Stanley pegs Zomato’s valuation at $2.5 bn
Investment bank Morgan Stanley has valued the online food ordering and restaurant discovery firm Zomato at $2.5 billion.

The firm valued Zomato while taking stock of the startup’s publicly traded shareholder Info Edge (India) Ltd, which runs jobs portal Naukri.com, realty site 99acres and online matrimonial platform Jeevansathi, The Times of India reported.

According to the report, this estimate is three times more than Zomato’s valuation in its last funding round. This will put the Gurgaon-based company much ahead of other unicorns like e-commerce firm Snapdeal, ad-tech firm InMobi, e-tailer Shopclues, online classified site Quikr and messaging app Hike.

Media reports in September last year said that Zomato may raise $200 million from Chinese e-tailing giant Alibaba. It is not clear whether the investment bank’s new valuation of Zomato will affect the negotiations.

China’s ofo partners with Paytm
Alibaba-backed Chinese bicycle sharing unicorn ofo has partnered with digital wallet Paytm to offer its services in India. Ofo is currently running pilots across seven cities, including Bengaluru, Indore, Ahmedabad, Delhi, Pune, Coimbatore, and Chennai. VCCircle had earlier reported about ofo’s India entry.
In July, the Alibaba Group, along with cab aggregator Didi Chuxing and DST Global, had pumped in $700 million into ofo, powering its global expansion in the face of tough competition at home. A Reuters report had said that the company was also in talks with SoftBank for a $1-billion funding round.
It is entering a market where three homegrown companies, including ride-hailing firm Ola and Ford- and Sequoia-backed self-drive car rental startup Zoomcar, are running pilots for their respective bicycle sharing services.

Tiger Global invests in Razorpay, Xiaomi backs ShareChat
Bengaluru-based online payment gateway startup Razorpay Software Pvt. Ltd has raised $20 million (Rs 127 crore) in its Series B round of funding led by existing investors Tiger Global and Y Combinator. Existing investor Matrix Partners also participated in the round. The latest round takes the total amount the startup has raised to $31.5 million. The startup will be using the funds to scale up products and improve technological capabilities and offerings. The funds will also be used to expand the team.

Vernacular social networking platform ShareChat has raised Rs 116.31 crore ($18.2 million) in a Series B funding round led by Chinese smartphone manufacturer Xiaomi. According to Ministry of Corporate Affairs (MCA) filings, Xiaomi put in Rs 36.84 crore ($5.76 million). Shunwei Capital, the venture fund started by Xiaomi founder Lei Jun, invested Rs 18.01 crore ($2.82 million). The rest came from existing investors SAIF Partners ($4.29 million), Lightspeed Partners ($2.94 million), India Quotient ($2.06 million) and Venture Highway ($264,600). Sharechat, operated by Bengaluru-headquartered Mohalla Tech Pvt. Ltd, was valued at Rs 431 crore ($67 million) post-money, according to VCCircle estimates.

Grab acquires mobile payments startup iKaaz
Southeast Asian ride-hailing firm Grab has acquired Bengaluru-based payments startup iKaaz to help expand its digital payments platform GrabPay.

The flexibility and scalability of iKaaz’s technology make it suitable for Southeast Asia’s diverse payments landscape, Grab, which competes with Uber Technologies, said in a statement. The company, however, did not disclose the deal value. The iKaaz team will join Grab’s R&D centre in Bengaluru.

Grab, formerly known as GrabTaxi, operates one of the largest transportation networks in Southeast Asia and is one of the most frequently used mobile platforms in the region with up to 1.5 million daily bookings, according to the company.

AngelList launches syndicate programme in India
US-based investment crowdfunding platform AngelList has launched its syndicate programme in India. The syndicates allow experienced technology investors to create a single VC fund that raises money from institutions and leading angel investors.

The company has already roped in a number of syndicate leads including Freecharge founders Kunal Shah and Sandeep Tandon; Ash Lilani, co-founder and managing partner of Saama Capital; KStart Capital, the seed investment platform of venture capital firm Kalaari Capital; and Shalini Prakash, venture partner at 500 Startups.
AngelList has supported investments into Indian startups like ClearTax, DocTalk and Squad in the past.

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VCC Startups Weekly Wrap: WhatsApp weighs digital payments; Grab buys Indian startup

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