At the start of the year, we knew that the IPO momentum was going to be super strong among Indian startups. Some of the most noted companies in the country — PhonePe, Urban Company, OYO, Pine Labs, Zepto and others — are on the cusp of going public and naturally, there was a lot of confidence among investors about exits and maturity in the startup ecosystem.

But in the past month or so, there is also a new wave of caution. Under the President Donald Trump administration in the US, global trade has been shaken to quite some extent, and markets are reacting every day to new developments and changes in trade tariffs.

Many believe this is a temporary pain that should not deter the IPO parade in India, but it will have some impact on new IPOs. The first sign of this was perhaps on display this week as Urban Company finalised its plans for the IPO and received its board approval.

But the final issue size might be well below previous expectations.

For one, the next set of IPOs are likely to be much smaller than the ones we have seen in the past four years. More and more companies will be looking to take a rational approach to fundraising in this current environment, and companies with minimal exposure to global trade winds will be the ones that will cash in.

Take for example, Urban Company, which was bullish about a mega IPO in late 2024 but has had to rejig its plans in the past two months. As we reported this week, the company’s board has approved raising up to INR 528 Cr (about $60 Mn) via a fresh issue in its IPO, in addition to an offer-for-sale component.

Incidentally, earlier this year, when the startup converted into a public entity, reports suggested that Urban Company was planning to file its draft papers for an INR 3,000 Cr IPO ($300 Mn+) before the end of March. While that timeline has since changed, clearly, so has the company’s appetite for fundraise from public markets.

It’s not just Urban Company — even EV maker Ather Energy is cutting its IPO size by at least $50 Mn (about INR 430 Cr) from its earlier target of $400 Mn (about INR 3,460 Cr) amid the ongoing volatility in the Indian and the global stock markets.

The market turmoil might also result in Ather seeking a lower valuation for the IPO, however, as of now, Urban Company’s valuation for the IPO remains under wraps.

The New Look Of Urban Company

Founded in 2014 by Abhiraj Singh Bhal, Raghav Chandra and Varun Khaitan, Urban Company has been in the news recently for its quick commerce transition with the launch of InstaHelp to offer services in 15 minutes. Under it, the startup offers services such as cleaning, cooking, washing and more, connecting users to professionals in their area.

Urban Company’s revenue model has changed quite a bit in the past two years. In fact, the revenue has nearly doubled since the end of FY22, and losses have come down significantly. It saw a near 30% increase in its revenue to INR 827 Cr in FY24 and narrowed its loss before tax to INR 93 Cr.

The company has gone beyond the commission-based model it started with. Today, it operates a marketplace for professionals and even these gig workers have to pay a subscription fee to remain on the platform. In addition to this, there is a commission charged on every job, plus of course revenue collected from consumers.

With the IPO on the horizon, revenue from services is a key focus for Urban Company, along with revenue from products sold to professionals for fulfilling these services. But it’s also adding other pieces such as InstaHelp, its take on quick commerce and venturing into consumer brands.

No Room For Loss-Making IPOs?

“There is no real precedent for a model like Urban Company in the public markets. While most investors and institutions would be familiar with Zomato or Swiggy’s model, they may not quite be in sync with how Urban Company pulls off the operations and the many moving pieces,” said a Bengaluru-based VC fund partner.

According to him, not having a counterpart in the market is often a disadvantage for companies looking to list, as most public markets investors like to have benchmarks for revenue and profitability. Even among the Indian listed companies and new-age tech stocks, there is no precedent for a model like Urban Company.

This is undoubtedly a challenge for the company, similar to what Paytm faced when it listed, and it will have to spend considerable time and effort to convey the model to the investor base.

The other big issue is sustaining profitability even as rules for gig work and part-time professionals change and evolve in the long run. The likes of Zomato and Swiggy have diversified quite a bit and while any changes in gig worker rules will naturally impact them severely, Urban Company is more heavily reliant on gig workers for revenue and business momentum.

It is perhaps for this reason that Urban Company is reported to be mulling a D2C play, launching beauty, wellness, and personal care products for consumers, which could put it in the same league as Nykaa or Honasa, and therefore give investors a better view of its financial roadmap.

The IPO size cut is a strong message that the public market investors are no longer willing to pay 10x or 20x revenue multiples for loss-making startups.

Even though cofounder and CEO Bhal claimed that Urban Company hit profit before tax in the first quarter of FY25, long-term profitability will be key for the company as it hits the public markets trail. This is perhaps the biggest hurdle for Urban Company as it goes through the IPO litmus test.

Stock In Focus: Honasa

Honasa Consumer, the parent of Mamaearth, showed signs of resilience after opening the week at its 52-week low. The stock rebounded on Friday after four sessions of decline, gaining 5.72% on April 11, 2025, outperforming its sector.

In terms of performance metrics, Honasa outperformed the retail sector by 5.35% this week, but it remains below the 5-day, 100-day, and 200-day moving averages, indicating that this may be a temporary bump for the stock.

Incidentally, this past week, Honasa earned a victory in its lawsuit against RSM General Trading LLC in the UAE. A Dubai court ruled in favour of Honasa, overturning a previous ruling which ordered the company to pay AED 25 Mn as compensation. This court case has been an overhang on Honasa for the past year or so, and settling this would allow the company to press ahead with its international business.

Over the past month, Honasa has seen a 7.38% gain in its stock price compared to the 1.68% bump for the overall Sensex. However, the Varun Alagh and Ghazal Alagh-led company’s year-to-date stock performance remains well below par at -8.82%, compared to the Sensex’s decline of -3.57%.

Honasa was not the only major gainer this past week, as a host of new-age tech stocks bounced back after two weeks of pressure. Here’s a look at the top ten stocks last week:

IPO Watch: Upcoming Issues & More

• Paytm Gets Domestic Boost: Domestic mutual funds increased their stake in Paytm to 13.11% in the fourth quarter from 11.2% in the Q3 FY25, primarily led by Nippon India Mutual Fund and Motilal Oswal Mutual Fund
• Wakefit Rises For IPO: Bengaluru-based D2C furniture and mattress startup Wakefit is reportedly looking to make a splash and aims to raise around INR 1,500-2,000 Cr (around $173-231 Mn) through a public offering later this year
• More’s IPO Roadmap: Amazon India backed supermarket retailer More Retail is planning to launch its initial public offering (IPO) next year as it looks to expand its network of supermarket stores in India and cater to the quick commerce boom
• Pine Labs’ Reverse Flip: Making another stride towards its IPO journey, fintech major Pine Labs has now secured the final approval from the National Company Law Tribunal (NCLT) to merge its Indian and Singapore entities and redomicile to India

The post Urban Company Lines Up For IPO Race appeared first on Inc42 Media.

Ola Electric seems to be on the cusp of a transformation. And we don’t necessarily mean with the number of scooters sold, its ambitious HyperDelivery model or the upcoming motorbikes. The Bhavish Aggarwal-led giant’s focus is turning to something that could open up a bigger market: battery and cell manufacturing.

With a proposed investment of INR 200 Cr in the battery subsidiary, Ola Electric is looking to take some of the focus away from sales figures in a competitive EV two-wheeler market, and is instead looking to not only improve its margins but contribute to India’s battery supply chain ecosystem as well.

To be clear, battery manufacturing has always been on the cards for Ola Electric. But this is the first big push we have seen from the company after it brought on board some bigwigs to lead this business in the pre-IPO days.

For instance, Hyun Shik Park, previously head of cell operations at LG’s so-called Mother Factory in South Korea, now leads the Ola Cells Gigafactory and is a critical link in Ola’s battery push given his prowess.

Now that Ola Electric is well into its life as a public company though, this push is a sign that relying on the sales prowess and building up a user base was not quite enough. To be clear, Ola Electric’s customer base is still strong, but now as Aggarwal & Co have come under competitive pressure, the focus needs to turn to the full EV stack.

Bajaj Auto and TVS Motor surpassed Bhavish Aggarwal-led Ola Electric in terms of electric scooter sales in March, continuing their dominance in the segment. Bajaj Auto topped the charts, with registrations of its Chetak electric scooters surging nearly 62% to 34,863 units last month from 21,537 units sold in February.

Ola Electric’s net loss surged 50% year-on-year (YoY) to INR 564 Cr in Q3 FY25, while revenue from operations declined 19% YoY to INR 1,045 Cr.

Over the past three months, the OEM has been dousing fires on multiple fronts, including regulatory scrutiny, mounting losses, dwindling stock price, among others. It relied on cutting service and warranty related expenses to the tune of INR 32 Cr per month, and reduced its headcount to effectively save INR 29 Cr per month, according to the company.

In the meanwhile, the company’s shares have slumped over 32% over the past three months, and have been under the INR 60 mark since late February. With the new HyperDelivery model and the investment in scaling up battery manufacturing, Ola Electric would be hoping that

Ola Electric’s Season Of Woes

Largely to blame for this spiral are the raids at Ola Electric’s stores by state government departments in Madhya Pradesh and Maharashtra and other states in February and March. This saw authorities impounding scooters and reports claimed a majority of the company’s 4,400 stores were operating without necessary trade certificates.

While Ola has denied these allegations, reports, as recently as this week, suggested authorities in Maharashtra are continuing to look into stores being operated potentially without licences. Ola Electric is likely to respond to the latest notice from the state government next week.

In addition, the heavy industries and transport ministries are probing the EV maker over alleged discrepancies between its reported sales figures and actual vehicle registrations in February.

While these concerns are likely to be solved in the near future, Ola Electric’s focus is beyond that. Unlike peers such as Ather Energy or even Bajaj and TVS, Ola is manufacturing its own cells. It is worth noting that building cells in India is extremely important for the company from a strategic point of view because this was always the end goal for Aggarwal.

For every INR 100 spent on an electric scooter, over INR 32 goes towards importing cells and other components. Since March 31, 2024, Ola Cell Technologies has developed the capability to produce 1.4 GWh at the company’s Gigafactory in Krishnanagar, Tamil Nadu, located near the Ola Futurefactory.

This is not enough in the short term. In the past, Ola Electric had revealed plans to invest heavily in cell manufacturing till 2027 to meet the targets per year as promised under the PLI scheme to the Indian government.

The most recent investment in the battery manufacturing business is just the first step. Ola Electric is expected to continue investing in this business to increase production capacity to not just meet its internal demand but also supply to the rest of the industry.

As for the sales dip, Ola Electric has touted its HyperDelivery model as a saviour. Questions sent to Ola Electric about more context on the model and how exactly it is leveraging AI to solve the friction did not elicit a response. We will update this story if the company sends us the responses.

Here it’s important to note how exactly Ola Electric’s new HyperDelivery model fits with its company-owned stores approach. Since late last year, Ola Electric has added close to 3,000 new stores to its network, and each of these also has service facilities for customer support.

Some of the larger stores act like dealerships for Ola Electric, stocking scooters from the factory and delivering them to customers after registration. Now same-day delivery of scooters is not new, but same-day registration is something that has the potential to completely disrupt the market.  Usually, there’s some friction between OEMs and dealerships in terms of data and customer details, which leads to delays in registration.

But with Ola Electric being both the OEM and the dealer, this could indeed be streamlined to a certain degree. Whether it will always follow the same-day rule is hard to tell.

However, we have now seen a problem arise with how Ola expanded its stores in terms of the trading licence. Ola Electric sought complete ownership of the sales experience, and absorbing the registration process internally could lead to similar woes. The question also is will Ola Electric’s process comply fully with registration norms?

The market’s reaction to Ola Electric’s investments and the March sales figures will come over the course of the first month of the new fiscal year. And after that, a lot will rest on how impactful the cost-cutting of the past quarter has been. Crunch time for Aggarwal & Co as they face the public markets litmus test once again.

Stock In Focus: Zomato

This week, Zomato did what not many expected Zomato to do, but the signs were there. Amid slowing growth in its food delivery vertical and rising competition in the quick commerce space, foodtech giant Zomato laid off nearly 600 employees from its customer support team.

The company is leveraging AI to automate its customer support functions to trim costs, but the market was not convinced with this cost-cutting step quite as expected.

Zomato is expected to allow its AI-based product Nugget run the customer support show for now, but these are sensitive times in terms of market share in the food delivery and quick commerce space, so any drawbacks in customer retention could hurt Zomato badly.

However, lower costs are typically welcomed by investors, and that’s one of the reasons why Zomato had a bright start to the week. Will Zomato see another big rally in the coming weeks just as we saw in the early days of 2024, or will that entirely depend on the company’s Q4 results?

IPO Watch, Acquisitions & More 

• Globalbees Gets A Boost: FirstCry has transferred the first tranche of the INR 146 Cr infusion in the house of brands, with an investment of INR 73 Cr, as the ecommerce giant looks to diversify its revenue mix
• Navi Eyes IPO This Year: Sachin Bansal-led fintech unicorn Navi is looking to get listed on the bourses in the current fiscal year, the founder said during a session at the Startup Mahakumbh
• Swiggy Gets Tax Notice: Swiggy has received a tax demand notice from the Income Tax Department to pay INR 158 Cr for allegedly miscounting deductions for cancellation charges paid to merchants
• Kissht’s Listing Plan: Digital lending startup Kissht is gearing up for a public offering of $225 Mn with ICICI Securities, UBS Securities, and Motilal Oswal expected to lead the IPO

The post Ola Charges Up Battery Game appeared first on Inc42 Media.

When OYO stepped out of losses and emerged into profitable territory in FY24, there was more than a healthy dose of scepticism. But in the 12 months since then, the Ritesh Agarwal-led company has shown that that was not a flash in the pan.

While the hospitality giant has not filed its FY25 numbers, each quarter, OYO’s revenue performance has come under the spotlight as well as its growing profits. This week, Agarwal told employees that the revenue for the final quarter touched INR 2,100 Cr.

What exactly fueled OYO to this position, and will OYO hit the INR 1,100 Cr profit milestone by FY26 as Agarwal has claimed? But before we answer that, here’s a look at the top stories from our newsroom this week:

• Swiggy’s New Bet: While Zomato’s Hyperpure has a head start, Swiggy Assure is expected to address its shortcomings, such as a lack of flexible credit options, and pre-processed essentials. Will Swiggy outpace its arch rival?
• The Sneaker Mania: India is witnessing a sneaker revolution right now, with a new generation of consumers flocking to new-age sneaker marketplaces to show off their identities and personalities through a pair of trendy shoes
• MakeMyTrip’s GenAI Playbook: Listed giant MakeMyTrip is doubling down on the personalisation of user experience at a time when the GenAI wave has taken the industry by storm, and hyper-personalisation is the new norm

How OYO Made The U-Turn

In his message to employees earlier this week, Agarwal said the 60% YoY revenue growth highlights the company’s ability to drive sustainable, profitable growth. “A key contributor to this performance has been the successful integration of G6 Hospitality, adding INR 275 Cr to our revenue,” Agarwal’s email is reported to have said.

It is pertinent to note that OYO clocked its maiden profitable year in FY24. While it posted a net profit of INR 229 Cr, its revenue declined 1.3% YoY to INR 5,388.78 Cr in FY24. But in FY25, the revenue growth is evident, with the total operating income expected to cross INR 6,700 Cr.

After the downturn of the pandemic years, OYO has bounced back in a significant way in the next four years, nearly doubling revenue between FY21 and FY25.

Of course, these are unaudited numbers for FY25, and as such we can expect a change in the final outcome. Even though the company has not spoken about the expenses in FY25, OYO has also claimed improving profits each quarter. A large portion of that can be attributed to the acquisition of international properties as well as the investments in new properties abroad and in smaller cities in India.

OYO Bets Big On G6 

Firstly, in order to shore up its revenue and expand presence in the US, OYO acquired G6 Hospitality from Blackstone Real Estate for $525 Mn (around INR 4382.72 Cr) in an all-cash transaction in September last year.  The hospitality unicorn expects G6 Hospitality to contribute INR 630 Cr to its overall EBITDA of INR 2,000 in FY26.

The move was aligned with OYO’s strategy to increase its presence in international markets like Europe and the US, where it earns higher revenues. The company also acquired Paris-based company Checkmyguest for INR 230 Cr in a cash and stock deal in August 2024 as it looked to push into the homestay and long-term rental property market and take on the likes of Airbnb.

Besides the US and Europe, OYO is looking to invest and expand its base of SUNDAY Hotels, eyeing 100 properties under the brand globally by the end of FY26. This is expected to draw in a host of international visitors to OYO’s house of hotel brands.

In addition to India, SUNDAY Hotels have opened in the United Kingdom, Saudi Arabia, the United Arab Emirates, Bahrain, Indonesia, Malaysia, Thailand, Philippines, and Vietnam — which shows that OYO is also diversifying its international presence and not just relying on the US market with G6.

SUNDAY Hotels, a premium brand of four-star and five-star hotels, was originally launched in May 2023 and is part of the premiumisation strategy that worked so well for OYO in FY24.

The India Story

Besides the international push, a big boost to the revenue has come from the India business, where spiritual tourism has been a big draw for OYO, particularly given the tourist rush at the recent Maha Kumbh Mela in UP. With OYO said to have reached INR 2,100 in revenue in Q4 FY25, a large part of this would have come from the Indian business and Kumbh travellers.

In early January, Agarwal said OYO would be adding 500 hotels across 12 major pilgrimage destinations, particularly in Ayodhya, Varanasi, Haridwar and Puri (Odisha). Among other destinations on OYO’s radar are the likes of Amritsar, Ujjain, Nashik, Vrindavan, and Tirupati.

The CEO claimed that Ayodhya has become one of the most searched destinations, with searches up by 39% YoY on the OYO app. “This isn’t just about adding hotels—it’s about addressing real demand. With religious tourism expected to generate $59 Bn in revenue by 2028 and create 140 Mn jobs by 2030, we’re excited to contribute to this growing movement.”

Overall, Agarwal expects OYO to report a profit of INR 1,100 Cr in FY26, which would set up the company nicely for an IPO.

On The IPO Trail

As reported a few weeks ago, OYO is being pushed to expedite its IPO plans as founder Ritesh Agarwal faces pressure from creditors to clear a looming debt repayment.

Lenders, including Mizuho Financial Group, had reportedly urged Agarwal to pay up $383 Mn, part of the debt raised by the founder in 2019.

A Bloomberg report claimed that if the company doesn’t list by October this year, the lenders want Agarwal to repay $383 Mn as part of the $2.2 Bn loan which was used to increase his stake in the company and gain more strategic control in 2019 after years of dilution.

The OYO founder has paid off a portion of the debt through secondary deals, but the company’s slow revenue growth has set some alarm bells ringing. Lenders are likely wary as OYO has turned its focus towards profitability and revenue contribution of recent acquisitions is only likely to become pertinent by next year.

A clearer look at the fundamentals for FY25 and more up-to-date unit economics nitty-gritties is warranted, which is likely to only come before OYO’s listing. The company has come to the IPO table twice before in 2021 and 2023, but Agarwal’s debt situation and poor market condition forced it to step back.

Now with the market having a bullish mid-term outlook, OYO is back on the IPO trail. And this time, it has the backing of a profitable business to make its pitch, which was not the case in the past. Will this turn of events propel OYO to a bumper IPO in the near future?

Sunday Roundup: Startup Funding, Deals & More

• Delhivery’s Mega Deal: Listed major Delhivery is acquiring rival logistics tech startup Ecom Express in an all-cash deal for INR 1,407 Cr for 99.4% equity
• Funding Remains Steady: Between March 31 and April 5, startups cumulatively raised $144.4 Mn across 22 deals, with the total funding for Indian startups crossing the $3 Bn mark in the first quarter of 2025

• The GenAI Summit Is Here: Bringing together 350+ founders, policymakers, business leaders, and investors, The GenAI Summit By Inc42 will decode the transformative potential of AI in India’s startup ecosystem
• Snitch’s Rise: D2C fashion brand Snitch posted an operating revenue of about INR 520 Cr (as per unaudited numbers) in FY25, founder and CEO Siddharath Dungarwal told Inc42
• Piyush Goyal’s Reality Check: Addressing a huge audience at the Startup Mahakumbh, the commerce and industry minister said Indian startups need to move beyond convenience-oriented consumer models and focus on deeptech and IP creation

The post OYO Builds Its Tower Of Profits  appeared first on Inc42 Media.

Paytm went through the fire soon after its listing, and now it’s MobiKwik’s turn. The Gurugram-based fintech company has seen a rough few months after listing.

Having peaked in the first week after its IPO, MobiKwik has been on a slide for the past three-plus months.

It has indeed been painful for those who have been holding MobiKwik since its listing. The stock hit a peak of INR 698.30 on December 26, 2024, but since then it has lost over 56% value and is currently trading at INR 304.85 as of Friday, March 28, 2025.

This quarter of pain for the stock has coincided with higher-than-expected losses for the December quarter. Revenue from the lucrative lending business fell in the quarter (over 50% YoY) as the distribution model saw a slowdown.

Besides this, the company brought in a default loss guarantee in its contracts with RBI-backed lenders to ensure higher commission on each loan disbursed, but this requires allocation from the capital reserves. This higher expense pushed MobiKwik to a loss of INR 55 Cr in Q3 FY25, a sharp turn from the profitable end to FY24.

And since the December quarter MobiKwik has put all its energy into the diversification push. The big measures are a new investments and wealthtech platform along with a push towards insurance broking.

These are also steps that bring MobiKwik closer to the super app model that’s basically the only strategy on offer for many payments apps in light of the extant zero MDR rules for UPI payments.

MobiKwik Dives Into New Revenue Streams

MobiKwik currently offers digital payment offerings such as Pocket UPI where users can make UPI payments directly with the platform’s digital wallet. It also offers other financial services such as micro lending and investments in mutual funds.

It’s interesting to note that despite a dip in lending revenue and GMV, MobiKwik’s overall revenue from operations jumped nearly 18% YoY to INR 269.47 Cr. So the company has clearly seen credible growth in the past year.

Cofounder and CFO Upasana Taku said the focus going forward is on balancing the lending portfolio by adding new products, some of which would be secured loans which typically have lower commissions, but are getting increasingly popular among retail mutual fund investors.

Taku also claimed the losses in Q3 are a result of the DLG contracts, but the slowdown in disbursals in the previous quarter — thanks to a shrinkage in small ticket size loans — is ominous to some degree.

In light of this, the launch of a new wealthtech platform and insurance broking is critical for MobiKwik to regain momentum on the revenue side and in the stock market.

This past week, MobiKwik entered the investment tech space by incorporating a wholly owned subsidiary Mobikwik Securities Broking. Under this, it will deal in shares, stocks, securities, debt instruments, commodities, currencies and their derivatives, and take on the likes of Groww, Zerodha, Paytm Money, Angel One and others in the wealth tech space.

In February, it acquired a stake worth INR 1.5 Cr in B2B banking infrastructure company Blostem Fintech to expand on fixed deposit (FD) aggregation, which is likely to be a part of the wealthtech platform in the future.

It’s No Easy Path

But competing with these giants will not be a cakewalk, and even though MobiKwik claims to be going at it in a frugal manner, bigger rivals have already bemoaned some shrinkage in volume since late last year when SEBI brought in new rules to curb the market frenzy.

India added 1.52 Cr active investors in 2024, with over 65 % or around 1 Cr coming from Groww, Angel One and Zerodha. Groww reported INR 535 Cr in profits in FY24, and Zerodha’s net profits touched INR 4,700 Cr in the year.

However, for the first time in a year, the number of registered users on these platforms declined in February 2025, Despite this Groww boasted 1.3 Cr active investors in February and Zerodha had 79.6 Lakh. Market observers believe the slowdown is largely due to the changes in futures and options trading, and it is expected to reflect in lower revenue for both these platforms in FY25.

Today, MobiKwik has a base of over 17.2 Cr users, but converting them to start investing through MobiKwik will not be easy. It will also have to fight off other new-age tech startups like PhonePe’s Share.Market, Upstox, Dhan, INDMoney, Lemonn and BharatPe.

Besides the hefty competition, MobiKwik has to deal with the typical pains of a newly listed company.

For instance, the company reported that a former employee defrauded the business to the tune of INR 1.26 Cr by fudging merchant details between August 2023 and September 2024. MobiKwik told the exchanges that it has implemented a slew of measures to fortify the KYC of merchants and restrict edit access to merchant details.

It’s small things like these that do matter at the end of the day. Within fintech, and particularly in payments and lending, compliance and controls are paramount, and without these, even super app dreams can come crashing down.

As Paytm can testify, rushing into new verticals is not always the answer. MobiKwik may not claim to be a super app, but that’s the direction it is heading in, with some fintech giants for company and others as cautionary tales.

Stock In Focus: Eternal aka Zomato

Among the quarter-long decline for Indian new-age tech stocks, Eternal’s (formerly Zomato) pains have been somewhat masked by its massive rally in the year gone by. But even the Deepinder Goyal-led company is feeling the heat.

For the first time in six months, Eternal’s stock fell under the INR 200 mark, before settling just above.

Incidentally, global brokerage firm BofA Securities downgraded ratings for Eternal and Swiggy, citing concerns over profitability. BofA expects losses to rise for the quick commerce verticals for both giants in particular till the end of FY26, and potentially beyond.

It further believes that new entrants in the QC segment will further push incumbents towards higher losses in the near term on the back of platform-led discounts and higher marketing expenses. The Zomato stock actually looked on course to have a good week after the Monday and Tuesday sessions.

But it tumbled sharply after the report on March 26, indicating that at least some long-term investors looked to cash in on the 66% gains between March and December 2024, as Hong Kong-based Kadensa did this week.

Other new-age tech stocks suffered too this week, with 22 out of the 35 companies in Inc42’s coverage seeing a red week. Yatra, Awfis and Menhood were the biggest gainers in the week, gaining by 9.54%, 6.81% and 6.25% respectively.

IPO Watch & Major Deals

• Paytm Sells Jugnoo Stake: Paytm has sold its entire 12.75% stake in mobility aggregator Jugnoo’s parent Socomo Technologies for INR 3 Cr, as the company continues to offload assets to shore up its bottom line
• Zaggle Invests In Effiasoft: Fintech SaaS company Zaggle plans to acquire a 45.33% stake in point of sale (PoS) software solutions provider Effiasoft for INR 36.72 Cr in an all-cash deal
• Cult.Fit’s IPO Flex: Fitness unicorn Cult.fit has reportedly initiated its IPO bid by shortlisting Axis Capital, Jefferies, Goldman Sachs, Morgan Stanley and JM Financial to helm its INR 2,500 Cr ($292 Mn) public offering
• FirstCry’s House Of Brands Push: FirstCry will invest INR 146 Cr (about $17 Mn) in its ecommerce roll-up business Globalbees Brands Private Limited over the next year, possibly to acquire new brands

The post MobiKwik Spins The Revenue Wheel appeared first on Inc42 Media.

Riding high at INR 617 just three months ago, the Swiggy stock has nosedived 43% from peak levels, wiping out a staggering INR 60,000 Cr in market cap in the last quarter of FY25.

If that wasn’t enough, the stock is over 10% below its issue price of INR 390. But there’s also optimism in the air, especially as we enter FY26 and Swiggy prepares an arsenal of new businesses to scale up.

After lukewarm financial performance in Q3 FY25 (December), things have been downhill for Swiggy, which this week entered the B2B supply space with Assure. A direct rival to Eternal’s (formerly Zomato)  Hyperpure, Swiggy Assure is the final piece of the puzzle, bringing the Bengaluru-based company on par with Eternal in terms of major lines of businesses.

Assure is the latest standalone app launched by Swiggy, which has decided to take a totally different approach post listing in November. Other standalone apps include Swiggy Snacc, a quick food delivery app and Pyng, a professional services marketplace. Besides this, Instamart was also launched as a quick commerce app.

It’s part of a new strategy where Swiggy looks to acquire new users in each of these verticals, even as it continues to offer a single app for food delivery, dining, live events and quick commerce.

For Swiggy, the revenue diversification push continues with the launch of Assure. This is potentially more significant because it allows the company to maximise its revenue share from restaurants and cloud kitchens, in addition to extracting more revenue on the food delivery side, and also adding to the Swiggy Snacc operations stack as well.

In essence, Assure is a multi-pronged revenue push that banks on the Swiggy’s logistics knowhow and expertise to take on Eternal’s burgeoning Hyperpure business.

Why B2B, And Why Now? 

Hyperpure is no small business for Eternal. The B2B business has been on a steady growth path over the past few quarters. In Q2 FY25, Hyperpure saw its revenue nearly double to INR 1,473 Cr from INR 745 Cr in Q2 FY24.

In November 2024, Hyperpure launched ‘Express’ delivery service to deliver products in 30 minutes to 4 hours. The parent company also set up a processing plant to provide value-added food supplies, including sauces, spreads, pre-cut and semi-finished perishable products, to Hyperpure’s restaurant partners.

Swiggy is very likely planning a similar onslaught through Assure and could very well use this supply chain network to also streamline last-mile deliveries to dark stores for Instamart in the near future. This could prove material to improving Instamart’s profitability in the long run.

While Swiggy Instamart remains a key player in the space, Blinkit and Zepto have pulled ahead. BigBasket and Flipkart are also in the fray with heavy discounts, so competitive intensity in the quick commerce space is not suitable for a push towards profitability.

This leaves Swiggy with very little room to maneuver — starting a new business in a space where it is familiar with the customer base is a good way to plug the revenue gap as quick commerce matures.

Plus, Swiggy Assure is a great way to solve the supply chain headaches for Swiggy Snacc as well, which would have the same procurement needs as some cloud kitchens.

The Idea Behind Swiggy Assure

The food delivery business—once the primary growth engine—has witnessed a moderation in gross order value (GOV) growth over the past few quarters, particularly in urban markets. Meanwhile, its ambitious expansion into quick commerce has become a high-stakes bet that is proving costlier than anticipated.

“The company enjoys 45% share in food delivery, which should grow in high-teens in the medium term along with margin expansion. Quick commerce offers tremendous growth opportunities although faces high competition and hence, profitability will remain under pressure. This would result in negative EBITDA and free cash flow over FY25-27,” Jefferies analyst Vivek Maheshwari said.

Given the near-term pressures on margins and cash flow, the brokerage has set a price target of INR 400,

Meanwhile, JM Financial echoed similar concerns on Swiggy, stating that both Swiggy and its rival Zomato are expected to see rising EBITDA losses in their quick commerce businesses. The correction in their share prices in the past two months mean investors have a fresh and attractive entry point if they want to build up long-term positions.

JM Financial also maintains a ‘Buy’ rating on Swiggy with a target price of INR 500 as of March 2026.

Just a few weeks ago, we commented about Swiggy and Zomato only just starting to live up to their valuations which have been built all around food delivery. Quick commerce is yet to be factored in meaningfully into this valuation.

It’s no wonder then that Swiggy is looking to double down on food delivery by offering restaurant partners more services, and forming deeper inroads into the restaurant supply chain. But as ever, this new business will take a few months to mature.

Even Hyperpure took its sweet time but its revenue has doubled on a YoY basis in each of the last six quarters as per Zomato’s disclosures. But it’s not yet clear how many restaurants use Hyperpure services actively, but Hyperpure said it has served 40,000 partners till date.

Some might say Swiggy is late to the B2B supply game, but if it manages to convince restaurant partners on the basis of pricing and service quality, then there’s another big battle on its hand with its ‘Eternal’ rival.

Stock In Focus: PB Fintech Bounces Back

The week began with fears of a big dip for PB Fintech, but the insurance and loan distributor seems to have won back the faith of the retail investors.

Shares of the Policybazaar parent company finished the week 20% higher than last Monday’s opening price. Brokerage firm Kotak Institutional Equities gave PB Fintech a big thumbs up and upgraded its rating to ‘Add’ on the back of strong growth expectations and cheaper valuations.

KIE assigned a price target of Rs 1,525 to PB Fintech, which it breached this week already, interestingly. It will be intriguing to see where the stock goes after it opens on Monday.

Among the other top gainers, Ola Electric reversed its bad fortune on the stock markets with a relatively positive week, while Mobikwik, CarTrade and Tracxn had a bright week on bourses as well.

Markets Watch: Deals, IPO Tracker & More 

• Fintech major Pine Labs is eyeing an initial public offering (IPO) in the second half of 2025, its CEO Amrish Rau has revealed, despite concerns related to market sentiments souring for new listings
• Global investment management firm Vanguard Group has bought 7.13 Lakh shares of CarTrade amid a major bull run for the company, which has seen its share price grow by 160%-plus in the last year
• After months of speculation, edtech unicorn PhysicsWallah has reportedly filed its draft red herring prospectus (DRHP) through the confidential route for an INR 4,600 Cr ($531.4 Mn) IPO
• Augusta TBO (Singapore) Pte Ltd and TBO Korea Holdings Ltd dumped over 70 Lakh shares of B2B travel tech company TBO Tek, representing a 6.8% stake in the company, for INR 870 Cr via bulk deals
• Listed gaming major Nazara has bought an additional 8.97% stake in Sportskeeda’s parent company, completing the full acquisition of the sports media platform

The post Swiggy Adds B2B Brick In Food Delivery Wall appeared first on Inc42 Media.

Three years ago, we wrote about the 15-minute economy. At the time, quick commerce had just begun to find its feet. But in 2025, pretty much everyone — like Urban Company, this week, for instance — wants a piece of it.

Born out of the quick commerce boom in post-pandemic India, it’s similar to the renaissance in hyperlocal delivery startups almost a decade ago now. Today, when it comes to consumer services, 15 minutes is the name of the game.

Somehow the 15-minute economy has barged its way into the mainstream, but is this a bubble or a real transition? Let’s look at it, through the lens of Urban Company’s controversial launch of ‘Insta Help’ — renamed from Insta Maids after an online backlash.

After a detour through the top stories from our newsroom:

• FAST42 Is Here: After 3 months of rigorous groundwork, Inc42 released the fourth edition of FAST42 this past week to spotlight India’s fastest-growing D2C brands, which have a consolidated revenue of INR 1,300 Cr and have created over 4,000 jobs
• Unikon’s Strange Pivot: Eight months after raising $2 Mn in funding, AI-based social media platform Unikon.ai to pivot to a D2C brand. What exactly went wrong for the startup that wanted to create a LinkedIn for the AI generation?
• TWO AI’s LLM For The East: Locking horns with the biggest LLM builders of the world in both customer-facing and enterprise AI use cases, Pranav Mistry’s TWO AI could be the answer to the question of an AI model for the east

The Bandwagon Grows

It’s going to be close to two years since Blinkit announced that it would enter the professional home services space, but so far the quick commerce platform has not done anything concrete on this front.

If we know anything from the launch of Nugget by Zomato, it sometimes takes the company several years to flesh out new verticals. It was three years in the case of the SaaS product —  could we see a similar launch timeline for Blinkit’s home services?

Either way, it’s not clear whether it is this potential launch that has prompted Urban Company to introduce Insta Help. Blinkit would surely have been a factor in the decision — Eternal chief Deepinder Goyal was once on Urban Company’s board and stepped down when Blinkit announced these plans in 2023.

Something else has happened since 2023. The quick commerce boom has sparked new ideas in this space — including Nexus and Elevation Capital-backed Snabbit, which raised $5.5 Mn earlier this year to take its 10-minute service proposition to more parts of Mumbai.

Regardless of the Blinkit factor, one has to ask why Urban Company has introduced this service and why now. Is it a revenue push or just a moat against potential new competition?

Does Urban Company’s ‘Insta Help’ Make Sense?

First let’s come to the why. The most obvious answer is it’s the trendy thing to do and marketing something as new and fast does help.

But let’s examine the merit behind this move. Urban Company’s revenue model has changed quite a bit in the past two years. In fact, the revenue has nearly doubled since the end of FY22, and losses have come down significantly.

With an IPO on the horizon, revenue from services is a key focus for Urban Company, along with revenue from products sold to professionals for fulfilling these services. The former has grown faster than the latter in the past two years.

The company does not have just a commission-based model any more; it operates a marketplace for professionals and even these gig workers have to pay a subscription fee to remain on the platform. In addition to this, there is a commission charged on every job, plus of course revenue collected from consumers.

The subscription fee paid by professionals comes with a minimum job guarantee, but multiple service partners have alleged in the past that Urban Company is not able to meet this guarantee. Despite that, partners need to be active on Urban Company in case a new job comes through.

Many partners have claimed this demotivates them from paying the subscription fee and encourages off-platform transactions. Essentially, professionals are taking on smaller tasks that allow them to juggle jobs coming from Urban Company and outside the app.

Does Insta Help solve this situation? It’s too early to tell if it will unlock revenue growth on the consumer side given the expected smaller ticket size (starting at INR 49 for now), but it is likely to increase the order volume, which might bring in more professionals over a longer term.

The ‘Dark’ Gig Worker

If Urban Company delivers more jobs to its service professionals, it might solve two problems — the complaints from professionals about fewer jobs and it will drive higher engagement from users.

However, on the flipside, with a volume-centric model, Urban Company will have to spend heavily on getting repeat customers and it has to constantly add use-cases. It also has to create a denser network of professionals to cater to the volume — just like dark stores.

Urban Company’s plan to increase the density of its professionals is not clear. The company claims it has 40,000 registered professionals world over — is this enough to pull off Insta Help?

Will Urban Company have the same pool of professionals for both its standard and instant service? How will it ensure adequate availability and no overlap between jobs in certain pockets of a city? Will it create a new layer of ‘dark’ gig workers that wait for an order to be triggered but are never listed on the standard service?

These are legitimate questions that have not yet been answered in Urban Company’s announcements around this service.

Besides this, the startup will also need to ensure that service quality does not suffer. In the past, there have been some complaints about deteriorating service quality particularly in beauty and repairs. These are not likely to be part of Insta Help as far as we can tell.

Convenience and speed only go so far, quality does matter when it comes to service. Even quick commerce today is more about categories and assortment than speed.

The difference between typical quick commerce and Urban Company’s Insta Help is that when it comes to grocery delivery, the customer satisfaction is still largely linked to getting the physical product.

A few minutes of delay do not matter here, if the products are of the right quality, which is more or less ensured with the right supply chain. Quick commerce apps have spent millions in building this network. It would be vital

Services such as cleaning and cooking are more subjective in nature. Customer satisfaction is a matter of personal preference, and delays of a few minutes do mean a lot more in this case.

Urban Company is taking a risk, even quick commerce was a big one in the early days. But if the use-case gains traction, it could pay off in a big way, just like with 15-minute delivery.

Sunday Roundup: Startup Funding, Deals & More

• Funding Dips: With 18 deals and $109 Mn raised in the past week, startup funding saw a sharp drop compared to the previous week
• Elon Musk Vs India: Social network X has sued the Indian government for its content blocking orders, even as India looks into X’s AI chatbot Grok over certain controversial responses
• New UPI Mandates: Among other changes, the NPCI has directed UPI apps to obtain “explicit user consent” with a “clear-out option” when seeding or porting a user’s UPI number
• Paytm Gets SEBI Boost: Investment platform Paytm Money has received the approval from the Securities and Exchange Board of India (SEBI) to operate as a registered research analyst
• Betting Season: About 700 offshore entities involved in online sports betting or gambling are said to be on the government’s scanner for alleged illegal activities, with IPL 2025 kicking off this weekend

The post Urban Company Joins The Rush Hour appeared first on Inc42 Media.

What’s brewing at PB Fintech? That’s the question many are asking this past week after the release of a curious report by Mumbai-based Trudence Capital.

The PB Fintech analysis by Trudence questioned past revenue recognition practices by the company, as well as the role of Paisabazaar, PB Fintech’s lending arm, and even allegations about misleading analysts and investors in post-earnings calls by PB Fintech.

In a report titled ‘Premium Promises and Discounted Truths’, Trudence claimed that since March 2023, there has been a sharp increase in total commission paid to insurance distributors to secure new customers. In the following fiscal year i.e FY24, PB Fintech saw a three-fold jump in brokerage commission earned.

But this does not track with what the company’s management has told investors and analysts in public disclosures, Trudence claims. So where exactly is the gap?

The Revenue Muddle At PB Fintech 

But surprisingly, PB Fintech chose to downplay this growth in back-to-back post-earnings calls, first in Q4FY23 and then in Q1 FY24. Both times, CEO Dahiya told analysts there was very minimal impact on revenue from these changes and the take rate for PB Fintech did not see any material shifts or changes.

However, the financial disclosures for PB Fintech show quite a different picture. In FY23, the total income including commission and outsourcing income came to INR 1267.85 Cr or 10.9% of total premiums collected, but this increased to INR 2,750 Cr or a commission take rate of 17.3% on the total premiums collected.

It must be noted that PB Fintech’s Policybazaar is the largest digital insurance aggregator in India.

Clearly, there was a broad jump in commissions, so why did PB Fintech claim that take rates did not have a material shift in early FY24?

Trudence believes that the key to understanding this lies in PB Fintech’s Paisabazaar business, which is its lending vertical.

This revenue stream grew from INR 188.3 Cr in FY21 to INR 1,224.9 Cr in FY23, before somehow plummeting to INR 585 Cr in FY24, despite higher disbursals in FY24. This is largely down to a massive decline in online marketing and consulting income, by 95% or around INR 800 Cr (see below).

Given this, the PB Fintech management commentary on take rates is only accurate if the online marketing and consulting income of Paisabazaar is clubbed with commission income in the previous year i.e FY23.

Further Trudence questions why, if at all, the revenue streams of Paisabazaar have crept into the insurance business of PB Fintech, despite Paisabazaar not being registered with the IRDAI. “But what management commentary is suggesting, it is likely that PolicyBazaar’s revenue was being recorded in Paisabazaar. Is this a normal business practice, or has PB circumvented the law in this manner?” Trudence asked.

Naturally, being a listed company, PB Fintech has to disclose any material changes pertaining to revenue recognition. Failing to do so could attract further scrutiny for the company, which has been under regulatory scrutiny in the past few weeks already.

PB Fintech did not respond to Inc42’s questions on the Trudence Capital report.

Corporate Governance Challenges & Rejigs

Even before the Trudence Capital analysis, which has ruffled some feathers, PB Fintech was among the headlines this year for a number of wrong reasons.

The company’s shares crashed by over 5% to hit an intraday low of INR 1,322 apiece on the BSE on Thursday, March 13, before finally finishing the week at INR 1,327.80. News around potential revenue red flags will not ease the pressure on the stock.

Incidentally, PB Fintech is now trading close to the March 2024 levels, after hitting its peak in January.

The year began with a tax raid in January on PB Fintech’s offices in Gurugram and a major rejig in management was announced in late February.

In this top-level reshuffle, Naveen Kukreja, the cofounder of Paisabazaar, stepped down from the role of the CEO. Meanwhile, Ashutosh Mishra resigned from the role of the CFO of Policybazaar as well as another subsidiary. Mishra will be replaced by Vivek Audichya, who was earlier Paisabazaar’s CFO. Instead, Neeraj Tripathi will lead the finance role at Paisabazaar.

Then in early March, the company’s CEO Yashish Dahiya settled a case with the Securities and Exchange Board of India for alleged failure to disclose unpublished price sensitive information about an overseas acquisition. Dahiya proposed to settle the proceedings against him without admission of guilt or denying the findings of the case,

Most recently, the insurtech major also announced plans to infuse INR 829 Cr (around $95 Mn) in a new  healthcare business, which is yet to begin operations. PB Fintech will own up to 33.63% stake in this healthcare subsidiary, with the rest being owned by PB Fintech cofounders Yashish Dahiya and Alok Bansal, along with three key managerial personnel.

The investment in the healthcare business is a vital cog in PB Fintech’s plan to bring in revenue diversification, but there’s more in store. The group also incorporated a wholly owned subsidiary PB Pay last year to foray into the payment aggregator space to shore up its top line.

But the questions raised in the Trudence analysis are not likely to go away any time soon. In fact, we expect the Q4 results in April to address these concerns head-on, or at the very least, clarify any doubts pertaining to revenue recognition.

The timing of this could not be worse for PB Fintech. Most tech stocks have been under tremendous pressure after not meeting revenue guidance in the previous quarter. Any deviation from the standard in this regard will have an even adverse impact on the PB Fintech stock, so a lot rests on PB Fintech’s Q4 results.

Stock In Focus: Ola Electric

Ola Electric’s free fall continued in the past week, despite the company trying its best to assuage fears of prolonged losses and a further delay in the company’s already lengthy profitability horizon.

The Bhavish Aggarwal-led EV maker claims cost-cutting initiatives since November 2024 have helped  it reduce the cash burn by INR 90 Cr per month.

Ola now expects its automotive segment to achieve EBITDA breakeven in Q1 FY26 i.e. June 2025. But will this calm jittery investors who have already seen a lot of erosion in the past few months?

Among other new-age stocks, it was something of a bloodbath with just four of the 35 stocks under Inc42’s coverage showing any gains. Even these were relatively minor in the scheme of things, but the biggest drops were seen by Zaggle, TBO Tek, Awfis, Droneacharya, Veefin and RateGain.

CEO Speak: Lendingkart’s IPO Challenge

Digital lending startup Lendingkart is on track for an IPO in 2026 or even late 2025? And CEO Harshvardhan Lunia believes the shift from being a founder-led business to a publicly accountable company brings a great burden.

“This transition means tighter governance, more regulatory compliance and a higher expectation for transparency. Fortunately, as a debt-listed entity, we have a solid foundation to cope with these changes. On a personal level, public listing means adopting a more structured leadership approach, balancing agility and stability while ensuring we continue to innovate.”

See the full interview with the IPO-bound company’s founder and CEO

IPO Watch

• PW Preps For Listing: IPO-bound PhysicsWallah has appointed former Zomato deputy CFO Nitin Savara, former RBI regional director Rachna Dikshit, and ex-bureaucrat Deepak Amitabh as independent directors as it looks to restructure the board ahead of its listing
• Ather’s IPO Valuation: Electric two-wheeler manufacturer Ather Energy is said to be eyeing a valuation of $1.6 Bn for its initial public offering which is likely to go live by April
• OYO’s Profit Swells: Under pressure from investors for an IPO, hospitality giant OYO claims to be on track to clock EBITDA of INR 1,550 Cr in FY25, according to  founder Ritesh Agarwal

The post PB Fintech’s Revenue Muddle Amid Healthcare Foray appeared first on Inc42 Media.

In the face of global geopolitical shifts, Indian VCs and startup investors are increasingly seeing AI and SaaS investments as the moat for the Indian startup ecosystem in competing against big tech giants globally.

As international markets grapple with supply chain disruptions and economic uncertainties, India’s SaaS sector in particular has the opportunity to become a symbol of resilience and innovation. We are already seeing signs of an AI and SaaS convergence, thanks to newer and improved large language models emerging from AI giants such as OpenAI, Anthropic, Google and Meta.

But the entry of DeepSeek and smaller language models has upended the competitive landscape a fair bit, and added more fuel to the AI fire, particular for SaaS-focused VCs in India.

The integration of GenAI models into SaaS has not only enhanced product capabilities, but also attracted significant venture capital interest, bringing a new wave of deals for Indian startups in the enterprise tech segment.

Indian SaaS VCs Raise The Ante

More than 35 deals have been recorded in the first two months of the year in the SaaS and enterprise tech space, with the likes of Darwinbox and healthcare SaaS giant Innovaccer leading the way with mega rounds.

Among other prominent deals were the investments for SaaS startups such as Spotdraft, Atomicwork, SuperOps and TrueFoundry.  And each of these companies is banking on AI to unlock the next phase of growth.

This past week, US-based venture capital firm Bessemer Venture Partners closed its second India-focussed fund with a corpus of $350 Mn (INR 3,052.3 Cr) to support early stage startups. The global VC firm is looking to invest in startups across sectors like AI-enabled services and SaaS, fintech, digital health, consumer brands and cybersecurity.

A large part of the capital raised by these SaaS players would be deployed for AI/ML ops, development of in-house models and training, and this will be the case with every SaaS company in 2025, says a Bengaluru-based fund manager.

Some might argue that every business is heading in this direction, with even new-age giants such as Paytm compelled to look at AI for a measure of efficiency in unit economics and operations.

Every large company is thinking about the build vs buy decision in AI. Some such as Zomato (now called Eternal) have taken on the challenge head-on by launching SaaS products in AI, while others are tentatively testing the waters.

In a similar vein, Alok Goyal, a partner at Stellaris Venture Partners, observed earlier that while the fund’s  investment approach remains sector-agnostic, it is hard to ignore AI. GenAI and AI have become a dominant theme in current deal flows for most VC funds.

This trend underscores the growing importance of AI in shaping the future of SaaS in India. We have even seen established SaaS giants pursue a new course of action for the AI world.

The AI Shift In SaaS

When Girish Mathrubootham stepped down as CEO of Freshworks last year, it marked the beginning of significant leadership changes at the Chennai-born SaaS giant. Since then, the company has seen a complete overhaul of its top management, including the chief technology officer (CTO), chief product officer (CPO), chief revenue officer (CRO), and even the India head.

A similar transition is being seen at Zoho. The Chennai-based SaaS giant is developing its own large language model (LLM), with a focus on Indian languages, its group CEO Shailesh Kumar Davey said recently, soon after taking over from founder and former CEO Sridhar Vembu. Vembu stepped down in January to take up the role of chief scientist and focus on the company’s R&D initiatives, with a focus on AI.

These transitions at large companies indicate a ground movement towards AI-first SaaS, a path that investors are also keenly following. The preference for vertical GenAI startups over general-purpose solutions is becoming increasingly evident among Indian VCs.

An Inc42 survey at the end of 2024 indicated that 84% of VCs favour industry-focused startups, reflecting a strategic shift towards specialised AI applications. This inclination aligns with the broader trend of integrating AI into SaaS offerings, enabling startups to deliver tailored solutions that address specific industry challenges.

As the global economic landscape continues to evolve, the question arises: Will the strategic focus on AI and SaaS enable Indian startups to maintain their competitive edge and attract sustained investments amidst geopolitical uncertainties?

The Bengaluru-based VC quoted above said that it would be impossible for Indian SaaS startups to function without a global presence. And this is why geopolitical issues may be a big red flag for some investors. “But at the same time, the reality is that India is the AI development hub of the world and this is the next big focus for all big tech giants in AI, whether it is OpenAI or Google or Meta. Now, can SaaS startups innovate, adapt, and deliver value to enterprises despite this competition?”

Beyond enterprise technology, AI-driven SaaS solutions are also seeing rising adoption in sectors such as healthcare, finance, and ecommerce. Companies are using AI to optimise supply chains, automate customer interactions, and enhance cybersecurity, making AI-powered SaaS an essential tool across industries. This diversification of use cases is another reason why investors see long-term potential in Indian SaaS.

Fintech exemplifies this trend in some ways, with investors showing heightened interest in AI-driven solutions. Startups like IDfy are revolutionising fraud detection through AI-based technologies, highlighting the transformative potential of AI in financial services.

Anirudh A Damani, managing partner at Artha Venture Fund, said that GenAI-led innovations can prove crucial for fintech companies looking to boost customer engagement and reduce operating costs.“GenAI is upgrading fintech by addressing inefficiencies across the credit cycle, from improving risk assessments to streamlining debt recovery. Beyond these applications, there is immense potential in fintech intersecting with niche areas to create innovative funding models,” Damani added.

Similarly, Agentic AI company OnFinance’s founder Anuj Srivastava believes that many financial institutions are still reliant heavily on outdated systems and manual intervention. This opens up a white space for GenAI startups to tap this segment.

“Creditworthiness assessment, for example, still relies heavily on traditional models that don’t always capture the full range of risk factors, leading to inefficiencies in lending and underwriting. Similarly, compliance processes often remain manual, time-consuming, and prone to human error, exposing firms to regulatory risks,” he added.

Vikram Ramasubramanian, partner at Inflection Point Ventures, also believes that there is potential for LLMs specialised in the pharma and healthcare space because the sector has its own nuances.

“We’ve got LLMs for people interaction and customer engagement. We will get LLMs for manufacturing, planning, scheduling, for data analytics or the management part of it. We will also get LLMs for the finance projections, forecasting, and more for the healthcare data science and the life sciences,” he told Inc42 earlier.

The confidence in SaaS and AI-driven businesses is particularly strong, but this optimism is not without caveats. High interest rates in global markets, increasing competition, and shifting trade policies could yet influence investment flows. While India’s startup ecosystem has proven resilient, maintaining investor confidence will require a continued focus on profitability, scalability, and product innovation.

As 2025 unfolds, the question remains: Can Indian SaaS startups leverage their AI advantage to cement their place as global leaders, or will macroeconomic pressures slow down their momentum?

The post Indian VCs Pile Up On SaaS Deals In Chase For AI Gold appeared first on Inc42 Media.

Food delivery-turned-quick commerce giants Swiggy and Zomato have seen significant erosion in value and stock price in the past month, with Swiggy dropping by around 45% and Zomato by 30%. Pertinently, Swiggy hit its all-time low this past week before bouncing back curiously just after reports of the food delivery business being undervalued.

A lot of the pressure from sellers in the past few months has been down to the view that any profitability for these companies is short-term because of expenditures to come.

Spending and investments in quick commerce (QC) is not only for increasing market share but also fighting off Zepto and others. This has crystallised attention on this segment, but perhaps taken the eye off food delivery, which is still a strength according to one report this week.

ICICI Securities claims that the current market valuations of Swiggy and Zomato do not reflect the full scope of their businesses. The brokerage’s analysis says Swiggy is trading approximately 30% below the value of its food delivery operations alone, even without accounting for the negative implied value to its quick commerce vertical.

Even Zomato, which is a more mature stock, is not pinned to the QC business, says ICICI Securities. The brokerage claims that investor sentiment is influenced more severely by short-term financial concerns than long-term growth potential.

Food delivery has remained EBITDA profitable for both companies since mid-2023. Although growth in the segment slowed in the third quarter of FY25, the brokerage claims a boost in spending from the tax cuts in the latest budget is not unexpected.

The Contrarian View

It relies on past instances of tax cuts to base its thesis, but to play devil’s advocate, this largely depends on how discretionary spending grows in key markets for Zomato and Swiggy and how much of the share of the higher consumer spending these platforms can grab.

Food delivery growth in the short term has come through experiments such as 15-minute food delivery, but longer-term value still remains unlocked. Swiggy began charging an additional 2% fee from restaurant partners in February. But investors would perhaps be more willing to stick to see persistent and repeatable growth rather than short spikes.

Beyond food delivery, quick commerce will continue to face scrutiny over cash burn and competition. At one point, quick commerce was seen as a growth hope, but now the reliance is turning towards food delivery to prop up Zomato and Swiggy. Quick commerce, for now, is a cash burn business.

Just a few days ago, Zomato’s Deepinder Goyal stirred things up by suggesting that Zepto was responsible for half of the industry’s INR 5,000 Cr quarterly burn.

“This statement is verifiably untrue and it will be clear when we publicly file our financial statements. However, I know Deepinder, and I know he has only good intentions; this quote could have been taken out of context or said as an honest mistake,” Zepto CEO Aadit Palicha responded on LinkedIn.

What’s undeniable is that discounting is a major factor in quick commerce — we are seeing something akin to the Swiggy-Zomato battle of the early days but with around five or six players vying for market share.

Turning focus to profitability means losing out on some market share in the short term and then burning more to catch up. It’s this cycle of spending for growth that has complicated the profitable growth potential of quick commerce.

As for food delivery, it could potentially be a silver lining, but revenue streams in food delivery are perhaps a bit saturated despite any potential boost for consumer spending in the near term.

Stocks In Focus: Nykaa & FirstCry Show Some Spark

After seeing muted investor interest early in the past week, shares of ecommerce marketplaces Nykaa and FirstCry surged by Friday.

While shares of Nykaa gained 4.27% to end the week at INR 164.70, FirstCry gained 1.78% to close at INR 392.35. In comparison the average gain for the new-age tech stocks cohort tracked by Inc42 was 3.47%.

For BPC major Nykaa, the bull run of the week was capped by a thumbs up from brokerage UBS. On Friday, UBS upgraded its rating on the company to ‘Buy’ from ‘Neutral’. However, it cut the price target for Nykaa to INR 200 from erstwhile INR 205.

Nykaa’s growth and margins for the BPC vertical continue to improve despite competitive pressure, UBS claimed. A significant part of this would be through private label brands selling through new channels such as quick commerce.

On the other hand, shares of FirstCry plunged to an all time low of INR 356.55 on Wednesday (March 5). However, the stock revived by about 12% on the subsequent day before shedding the gains of Thursday on the final day.

And here’s a snapshot of the top gainers and losers this week:

OYO Races Against The Clock

Hospitality giant OYO is being pushed to expedite its IPO plans as founder Ritesh Agarwal faces pressure from creditors to clear a looming debt repayment.

Lenders, including Mizuho Financial Group, are reportedly asking Agarwal to pay up $383 Mn. A Bloomberg report claimed that if the company doesn’t list by October this year, the lenders want Agarwal to repay $383 Mn as part of the $2.2 Bn he borrowed in 2019 to increase his stake in the company and gain more strategic control.

The OYO founder has paid off a portion of the debt through secondary deals, but the company’s slow revenue growth has set some alarm bells ringing. Lenders are likely wary as OYO has turned its focus towards profitability and revenue contribution of recent acquisitions is only likely to become pertinent by next year.

On the financial front, the company profit after tax (PAT) is said to have jumped nearly 6X to INR 166 Cr in Q3 FY25 with a 31% bump in revenue to INR 1,695 Cr on a YoY basis. But it must be noted that even though it was a profitable fiscal, FY24 was a degrowth year for OYO, and the profitability was a factor of cost-cutting.

A clearer look at the fundamentals for FY25 and more up-to-date unit economics nitty-gritties is warranted, which is likely to only come before OYO’s listing. The company has come to the IPO table twice before in 2021 and 2023, but Agarwal’s debt situation and poor market condition forced it to step back.

Now with the market having a bullish mid-term outlook, OYO is back on the IPO trail. And this time, there’s extra incentive to cross the finish line.

The Destination For Upcoming Startup IPOs

OYO is part of Inc42’s IPO Tracker, our up-to-date guide on the startups that are eyeing public listings which was launched last year. Besides OYO, boAt is also said to be revisiting IPO after pulling out earlier.

The consumer electronics startup has received the go-ahead from its board to proceed with its initial public offering (IPO) where it’s likely to raise INR 2,000 Cr.

One final thought: Food delivery remains as relevant to the narrative of Zomato and Swiggy today as it was a decade ago. But will the narrative that quick commerce value has not yet been accounted for change quickly as soon as profitability arrives?

The post Is Food Delivery The Silver Lining For Zomato, Swiggy? appeared first on Inc42 Media.

Even as the tubelights go off one by one, BYJU’S founder and CEO Byju Raveendran continues to fight the fight and delay what looks like the inevitable. The latest weapon in his arsenal is an anonymous whistleblower claiming a huge conspiracy at EY against the crumbling edtech giant.

While Inc42 could not get EY or Byju Raveendran to officially comment on the allegations, the company is still stuck in limbo. With cases in the US and India looking like they might fall against BYJU’S, there’s also a serious possibility of an official dissolution of the company.

Here’s how BYJU’S is stuck in a limbo and with nowhere to go. But first, a look at the top stories from our newsroom:

• Inside Licious’ High-Stakes Bet: At a time when the D2C meat delivery unicorn, currently at an inflexion point, is burdened with growth challenges, what aces do its cofounders Abhay Hanjura and Vivek Gupta have up their sleeves?
• How IvyCap Sharpened Its Playbook: Fifteen years ago, when IvyCap was founded, the Indian startup ecosystem was in the nascent stages and had very few VC players. So, what have IvyCap’s learnings been that helped the VC firm amass a portfolio of 50+ startups?
• 30 Startups To Watch: Despite the subdued trends headlining news cycles, the world’s third-largest startup ecosystem continued to forge ahead. In our 56th cohort of ‘30 Startups To Watch’ series, we bring to you a balanced mix of startups

BYJU’S In A Loop

There seems to be no end to the twists and turns in the BYJU’S saga. Now, the troubled edtech’s founder and CEO Byju Raveendran has raised questions over the ongoing insolvency proceedings against the company.

In a LinkedIn post, Raveendran alleged that he has documents that show “conclusive evidence of criminal collusion” between EY India, the lenders and Pankaj Srivastava (IRP). While he did not divulge any further details, he called for a government probe into the matter.

In fact, training his guns at Srivastava, Raveendran said that he was appointed by an Indian court to protect BYJU’S but “ended up destroying it”.

Curiously, this follows a viral post online by a whistleblower, alleging that Srivastava had hired EY India to advise on the insolvency proceedings even though the audit firm had a conflict of interest, as it has been working alongside the lenders of BYJU’S on a related matter.

Meanwhile, Raveendran is likely in for a rocky ride as the NCLT, which is hearing the insolvency case against BYJU’S, has appointed Shailendra Ajmera, also an EY India executive, as the new RP of the troubled company.

On top of this, lenders are now part of its committee of creditors and are looking to extract whatever remains of the once poster child of India’s edtech revolution.

In addition, a US bankruptcy court has ruled in favour of the creditors in connection with the fraudulent transfer of $533 Mn out of the $1.2 Bn term loan B — more on this next.

It’s a pattern of blame and allegations that has brought down the once highest valued startup in India.

The Bigger Blow In The US

Curiously, just hours before the allegations broke out, a ruling made by the United States Bankruptcy Court in Delaware, said BYJU’S is responsible for orchestrating and executing an unlawful scheme that defrauded the investors through the wrongful transfer of money.

In its order, the court named BYJU’S parent company Think & Learn Private Limited, director Riju Ravindran (brother of CEO Byju Raveendran), BYJU’S Alpha and Camshaft Capital as responsible to the wrongful transfer and will rule on damages in the matter.

“We are gratified the Court unequivocally recognized that Riju Ravindran, Camshaft, and BYJU’s together conducted a deliberate fraud on a global scale arising from the theft of $533 million. This is a significant step forward in the Lenders’ efforts to recover the stolen funds that are rightfully owed to them,” according to a statement from the BYJU’S creditors, collectively known as Glas Trust.

Glas Trust, incidentally is at the heart of the allegations levelled at EY in terms of collusion and conflict of interest and trying to manipulate India’s insolvency laws.

The US ruling is very likely to be a factor in India, as thus far the company believed that Glas Trust could not be part of the India bankruptcy hearings because of this US lawsuit. Since that is close to winding down, the insolvency proceedings against BYJU’S is also likely to wind down soon, according to a IBC law expert based in Bengaluru

Earlier in March, the BYJU’S committee of creditors proposed the appointment of Shailendra Ajmera, a partner at EY, as the new interim resolution professional. Ajmera is now responsible for handling the financial restructuring of BYJU’S, engaging with creditors and drafting a plan to either revive or liquidate the company.

His appointment has also been targetted in the latest allegations against EY’s tampering with the process and back-channeling of the insolvency process.

Byju Raveendran’s Fight Goes On

“From now on, you will hear it directly from me. Because direct action is how we built BYJU’S. Those who believe in me make me strong. Those who do not, make me stronger. As they say, you can never defeat someone who does not give up. To all BYJUites, past and present, I have just one message: stay strong, stay proud. Forgive me for my mistakes. We will be back stronger than ever before,” Raveendran exclaimed on LinkedIn.

But it’s not clear how exactly the company might be making a comeback. The business is in disarray. Raveendran himself has not been in India for the past 18-24 months. Sources told us earlier that the CEO has not stepped back into India since leaving it at the end of 2023, much before BYJU’S came crumbling down.

Calling it a shell of its former self might just be an exaggeration.

Raveendran calls for forgiveness, but there is real money at stake here. He urges employees to stick with him despite no pay or incentive in the offing. There’s no business at BYJU’S any more.

The shutters are down on the offline learning centres, plus the two acquisitions have both separated themselves from the management. As we reported in our coverage of Great Learning earlier this year, perhaps staying away from the BYJU’S leadership and management saved the skill development startup. Even if it meant the founders settled for a lower amount during acquisition.

Today, Great Learning is able to eye profits and a future away from the shadow of BYJU’S. The edtech giant is stuck in purgatory.

And while it’s there, Raveendran is milking every glimmer of hope to claim a comeback is on the cards. What exactly is BYJU’S coming back to?

Sunday Roundup: Startup Funding, Deals & More

• Between March 3 and 8, Indian startups cumulatively raised $385.5 Mn across 29 deals. This is over 4X of the $88.3 Mn raised by 16 startups in the preceding week
• In an effort to bolster the startup ecosystem and boost entrepreneurship, the Karnataka government has announced an INR 300 Cr fund of funds and INR 100 Cr corpus to support the deeptech startups in the state
• Rohan Misra, son of former SoftBank Vision Fund chief Rajeev Misra, has launched a $150 Mn fund under Gravity Holdings, looking to invest in growth stage deals
• Info Edge portfolio company NoPaperForms’ board has green lit the SaaS startup’s initial public offering, which is likely to have OFS component
• Ahead of the IPL 2025, JioHotstar is going all out to lure startups and SMEs for ad spaces during the marquee tournament with events planned in various cities for prospective customers

The post BYJU’S Stuck In Bankruptcy Limbo appeared first on Inc42 Media.

At an event before the Ola Electric IPO in August last year, the company’s founder and CEO Bhavish Aggarwal banked on one central theme to take the EV maker to profitability –  high sales volumes that will drive higher revenue and lower costs at scale.

So far, neither of these has come to fruition. The EV maker’s numbers for the December quarter make for bleak reading with losses growing 50% from Q2 to INR 564 Cr. Operating revenue fell by 19% to INR 1,069 Cr as the company lost market share to new-age rivals and legacy OEMs.

On the profitability side, the widening EBITDA losses should be even more worrying for those eyeing Ola Electric for their portfolio. EBITDA loss grew to -40.7% from -19.5% — Ola’s investments for its service network expansion in the quarter resulted in worse profitability.

This is reflected in the slump in the share price of Ola Electric since the beginning of the year. Since January 1, 2025, the stock price has fallen by over 30%. In the past two weeks, Ola Electric has twice hit the all-time low, and is now trading at INR 56.85, down 64% from the all-time high, and 25% below listing price.

The company’s current market cap is INR 25,075 Cr (around $2.9 Bn at current exchange rates), whereas when it listed, this was close to $4 Bn. The value erosion at Ola Electric is reminiscent of the big slide seen by Paytm and Zomato soon after listing.

Ola Electric In Rejig Mode

And the sales or registration data does not make for great reading thus far this year, especially when one accounts for the fact that Ola Electric expects a slowdown in sales and registrations in the short term.

In January 2025, Ola Electric had 22,656 units registered with the Vahan database, up from 13,794 units in the preceding month. This gave it the top spot in terms of sales among OEMs. It was also around this time that Bhavish Aggarwal claimed the company is close to achieving 50,000 sales per month.

But in February, Ola Electric lost its top spot to legacy automotive player Bajaj Auto. Overall, two-wheeler EV plummeted 27% to hit a 10-month low of 71,847 units in February as compared to 98,246 units in January 2025.

Vahan data shows that Ola Electric only registered around 8K units in February, however, in a statement on February 28, Ola Electric claimed that it sold over 25,000 units in February and remained a leader in the E2W segment with a market share of 28%.

Earlier, the company had forewarned about lower sales data in February as it was renegotiating contracts with agencies responsible for EV registration. This could explain the discrepancy between Vahan data and what Ola is claiming. The real picture will become clear once the contracts are finalised.

As for improving profitability, the company is reported to have shut all its regional warehouses across India. The EV maker now plans to leverage its 4,000 retail stores across the country to maintain vehicle inventory, spare parts, accessories, and last-mile deliveries.

As per a PTI report, the move is expected to boost Ola Electric’s EBITDA margins by almost 10 percentage points, “improve” inventory management and enable faster customer deliveries.

Besides this, the EV major also expects to rake in roughly INR 30 Cr in monthly savings from this “redesigned” distribution network and new plans to optimise vehicle registration process. It’s pertinent to note that the company has not corroborated this report with a disclosure.

Any further clarification on the cost front could be a spur for investors. Market expert Arun Kejriwal believes that Ola Electric has suffered as a result of being in a selling spree.

“The company is getting its act together, hoping to turn profitable faster than earlier. It can be an attractive stock to look at in the longer run when the market has bottomed out,” he added.

Perhaps the only silver lining as for the stock price is that its 14-day relative strength index (RSI) came at 23.96, which is typically classified as oversold. A turnaround could very well be on the cards, and all that Bhavish Aggarwal needs to do is exactly what he said last August.

Stock In Focus: Swiggy

After the high of listing, Swiggy has not exactly set the right pace in terms of revenue or market share momentum, which has dented the stock to some degree.

Even though it fell by just over 5% this past week, the big worry is that this is the beginning of a larger slide. In the past one month, Swiggy has gone from INR 458.30 to INR 334.70 — a fall of 27%. 

The bearish conditions in the broader market may be masking some of the weakness in Swiggy’s stock. A lot will depend on how Swiggy reacts to Zomato infusing INR 1,500 Cr in Blinkit last week, and what kind of growth Instamart shows in the final quarter of FY25.

Despite falling in the week, Swiggy was not among the worst performing new-age tech stocks. TBO Tek broke its streak of gains falling nearly 20% between Monday and Friday. MobiKwik, Yatra and Fino were among the other top losers.

In terms of gains, only BlackBuck and Zaggle showed some upward movement rising by 2.23% and 2.22% respectively compared to their opening price on Monday.

CEO Speak: Zappfresh Set For Debut

Zappfresh filed its draft papers in August last year, but SEBI’s new rules for SME listings caused certain delays in its path to a public listing. In a conversation with Inc42, Founder and CEO Deepanshu Manchanda expressed certainty that in FY26, Zappfresh will become India’s first profitable meat delivery startup to list.

“After the regulatory approvals are in, we would look at listing as and when we see the markets being right. Currently, the markets are volatile and different sentiments occur in different intervals,” he added.

IPO Watch

• boAt’s IPO Dreams Back On Track? Consumer electronics major boAt has got its board green light to proceed with its initial public offering The company’s board has cleared changes in its articles of association (AoA), clearing the path for an IPO, as per regulatory filings
• PhonePe Nudges IPO Pieces Ahead: Fintech giant PhonePe has reportedly picked four investment banks — Kotak Mahindra Capital, JP Morgan, Citi, and Morgan Stanley — to advise on its upcoming IPO, aiming for a valuation of up to $15 Bn. The IPO is likely to be a combination of primary and secondary issuance of shares, with a listing in FY26

The post Can Ola Electric Stop The Drop? appeared first on Inc42 Media.

When CRED crossed INR 2,400 Cr in revenue last year, it finally sent a message to India’s fintech ecosystem. The company’s strategy of targeting just the top 1%-2% of the fintech customer base was finally paying off.

Over the past 18 months, the Kunal Shah-led startup launched several products that sought to increase user engagement on the platform, but the latest changes are all geared towards monetising this top 2% of the fintech user base.

Like this past week, when CRED did the most CRED thing, launching secured loans with a so-called Svalbard release. This ‘release’ also revamps the credit cards experience and adds a credit score history feature.

Where does this place CRED among the front-runners in the fintech space — Paytm and PhonePe? Before we answer these, a look at the top stories from our newsroom this week:

• Zappfresh’s IPO Cook Book: A lot has changed since SEBI’s regulations delayed Zappfresh’s listing dreams last year. The meat delivery startup has been rolling in profits unlike its peers and now it’s looking to capitalise on the global opportunity after making a mark in India
• The Dilemma In Gaming: In the absence of a uniform, pan-India regulatory framework, most gaming companies are still in a state of limbo. The cry for centralised regulation in gaming has only turned louder, as companies deal with disparate legislation at the state level
• Rebel Foods’ 15-Min Gamble: The race to reach a netizen’s doorstep with a platter full of goodies at unprecedented speeds is as real as it gets. Amid this, Rebel Foods, too, has stepped into the ultra-fast food-delivery lane with QuickiES.

What’s The Svalbard Release?

The Svalbard Release is meant to evoke imagery of the Northern Lights, where the Arctic night sky changes in an instant from dark to a colourful delight.

Where other companies go for a simple press release, CRED launched the secured loans product Cash+ with a big media event in Bengaluru. Plus, CRED’s new product launches and feature drops are starting to sound more like Apple macOS upgrades (macOS Sequoia, anyone?) rather than just another fintech app feature.

It’s not the first time someone has compared CRED to Apple and it won’t be the last, even though both are worlds apart. But CRED’s approach to catering to the premium segment of the market is similar to Apple’s, even though Android phones have the larger overall market share.

For CRED, it’s not about the market share or hundreds of millions of users but about getting the right users, ones that can be monetised.

The Kuvera Effect

In February last year, CRED made its long-awaited push into investments with the acquisition of Kuvera. Unlike Zerodha or Groww, Kuvera is a free investment platform offering direct plans at zero commissions.

Instead of fees from individuals, Kuvera earns revenue through B2B services i.e. working with large investment houses, and market data analytics.

In a recent interview with The Arc, Kunal Shah revealed that Kuvera’s average AUM (per user) is INR 15 Lakh, which would allow the company to lend around INR 7 Lakh per user through the secured lending product.

Shah also believes that there is a huge untapped market as far as secured loans are concerned, with just 1.5% of the total AUM of mutual funds in India being pledged as collateral for loans. This is the audience that Shah & Co are chasing.

The Kuvera acquisition, which has thus far not shown major revenue traction, is essentially being used to learn about investor behaviours including the fact that even those customers with a sizeable MF portfolio would be taking unsecured personal or business loans.

For CRED, the problem comes down to the friction in the customer experience in secured lending, where a lot depends on negotiations with banks and NBFCs over collateral and interest rates. Shah claims by standardising interest rates and a product that enables a 90-second experience, CRED might have an edge over others also venturing into the secured loans segment.

Super Apps Turn To Secured Loans

One could say that the fintech super app space is one of the most competitive battles in the Indian startup ecosystem. From Paytm to PhonePe to Google Pay to Groww, and even Flipkart and Jio Financial Services, everyone wants a piece of this action.

PhonePe invested billions of dollars in scaling it up, just like Paytm or Google Pay, Amazon Pay or others. While the market is undoubtedly large, competition makes it hard to acquire and retain users, which is where perhaps CRED is looking to differentiate itself by going after the cream of the market — customers it believes will delight in the CRED product experience more than its rivals.

In May last year, PhonePe ventured into secured lending products on its platform in partnership with banks, non-banking financial companies (NBFCs) and other fintech firms. The company is looking to capitalise on its massive install base (535 Mn registered users) with loans against mutual funds, gold, bike, car, home and education loans.

Ever since the troubles for Paytm, Navi and DMI Finance in 2024 vis-a-vis the RBI, there has been an industry-wide transition in the digital lending space. Across the board, digital lenders have looked to diversify their lending partnerships with multiple NBFCs and registered lenders furnishing the funds. With four NBFCs being asked to stop lending operations, many fintech companies would be left scrambling for partners.

In particular, the RBI’s claims that such platforms have been charging usurious interest rates means that other lenders would feel compelled to reevaluate their lending partnerships in the short and medium term.

One side effect of these changes is that lending platforms are finding it harder to raise funds and acquire new customers. This is why super apps — built around the high-volume UPI payments and bill payments businesses — have something of an advantage over pureplay digital lending startups.

Planning a super app and launching products is one thing, but scaling it up will be just as critical for CRED. However, unlike other platforms, CRED’s marketing strategy has been about treating its users as members, while offering products in the form of experiences.

CRED’s Eyes On Profits

Those leading CRED believe the company has now successfully created an Apple-like premium niche and ecosystem. But this has not yet translated into that other very Apple thing: profits.

Shah and Co have always said that building the right products in an efficient manner leveraging technology is the only way to get to meaningful profitability. It’s this slow and steady approach that has baffled many CRED observers in the past.

Now the company is also speaking with conviction of hitting breakeven by the end of FY26.

CRED’s revenue grew 67% YoY to INR 2,473 Cr in FY24 and operating loss reduced 41% YoY, driven by a 40% decline in customer acquisition costs and a 36% decline in marketing expenses.

However, net loss rose 22% to INR 1,644 Cr in the same fiscal year from INR 1,347 Cr in FY23.

As per a Fitch credit ratings note, the company’s management estimates operating loss to more than halve in FY25 and reach close to INR 300 Cr, nearing EBITDA breakeven.

The Fitch report also revealed that the number of monthly transacting customers on CRED crossed 12 Mn users as of December 2024 (9MFY25). With its FY24 disclosures last year, CRED claimed that  its MTU had increased by 34% YoY, along with 58% increase in monetised members.

As of FY24, over 35% of CRED’s MTU base engaged with three or more products, and more than 90% redeemed rewards, including cashback and vouchers, on a monthly basis.

Starting with credit card payments, CRED has added ecommerce, UPI, travel bookings, FASTag, motor insurance and now secured loans — the focus is clearly on higher user engagement. Even the launch of features such as credit score history, CRED Money and others are super critical in order to keep users coming back to the platform.

This has definitely pushed CRED closer to PhonePe and Paytm — the two largest fintech companies by revenue. As we saw PhonePe capitalised on Paytm’s woes in 2024 with a massive campaign to onboard merchants and customers. The IPO-bound company is likely to dethrone Paytm on the top of the fintech revenue charts by FY25, as seen in our analysis in the past.

In the same vein, the bigger emphasis on lending could actually be a major revenue multiplier for CRED.  Now the question is whether profits will follow?

Sunday Roundup: Startup Funding, Deals & More 

• Funding Turns Sluggish: Amid a bearish market, investor sentiment towards the Indian startup ecosystem was down. This past week, startups cumulatively raised $88.3 Mn via 16 deals, 43% lower than the previous week

• super.money Buys BharatX: Flipkart-backed super.money has bought the BNPL fintech startup BharatX to strengthen its credit offerings in the checkout financing space. Founded in 2019, BharatX enables embedded credit on consumer-facing platforms.
• How SaaS Bets Are Evolving With The AI Boom: Stellaris Venture Partners believes that with the AI boom, SaaS is being put through the churn. Therefore, it is shifting its investment focus from horizontal to vertical SaaS while keeping an eye on AI-powered productisation of the services economy.
• Govt’s INR 30 Cr Startup Challenge: DPIIT has partnered with VC firms to offer financial support and mentorship to innovative startups across 11 key sectors, including AI and deeptech. The Startup Maha Rathi Challenge is part of the second edition of Startup Mahakumbh.
• CBI On GainBitcoin Scam’s Tail: The agency has seized cryptos worth INR 24 Cr after two-day search operations across 60 locations in connection with the ongoing investigation into the crypto scam, which bilked victims out of INR 6,600 Cr.

The post CRED Cranks Up The Loan Machine appeared first on Inc42 Media.

Ola Electric, Swiggy and now PhonePe. Another IPO from Bengaluru is all set to grab the limelight, as the fintech giant announced its plans this past week.

With no major movement in the stock market and listed new-age tech companies, PhonePe’s press announcement about its upcoming IPO was not only the biggest piece of news but also unusual because it came out of nowhere.

Of course, we knew that PhonePe was on course to hit the public markets for some time now, but the company had always maintained that it needed clarity on the UPI transaction share being the market leader in UPI payments.

But with the current fiscal year about to end, PhonePe felt confident enough to declare its IPO plans for the first time ever.

“I’d like to share the news that PhonePe, our fintech business, is making preparations for an IPO in India. Our PhonePe team has long aspired to be a public company and we are excited to be taking these early steps,” Walmart CEO Doug McMillon told analysts while discussing PhonePe’s results.

McMillon also told analysts that PhonePe hit $1.7 Tn in TPV at the end of January with close to 310 Mn daily transactions.

Not much is known about PhonePe’s IPO plans as of now, but by the time it lists, it could very well be the largest fintech company in India, considering Paytm’s growth challenges, which only adds to the hype around this listing.

PhonePe reported operating revenue of INR 5,064 Cr in FY24, up 74% from the previous fiscal. In comparison, Paytm reported income of INR 9,978 Cr in FY24, comfortably more than the two rivals combined. Paytm is well ahead when we look at the numbers as of March 2024.

But in the nine months since then (till December 2024) Paytm has fallen behind. Its FY25 annual revenue is on course to match PhonePe’s FY24 and the company has also fallen into losses.

Paytm’s revenue for Q1, Q2 and Q3 FY25 has been trending 35% lower on a YoY basis compared to these respective quarters in FY24. If this trend continues, Paytm could finish FY25 with around 30%-35% lower revenue than FY24, which would put its annual income in the ballpark of INR 5,300 Cr.

In fact, if PhonePe maintains the revenue growth rate seen in FY23 and FY24 — 77% and 74% respectively — it could well emerge as the leading fintech app in India by revenue by March 2025.

“PhonePe has two things going in its favour in the run up to the IPO. Unlike Paytm where the leadership board was restructured several times before and after listing, PhonePe has had a stable board and its leadership. Secondly they have smartly avoided the regulatory axe until now by not going aggressive on lending or other businesses and increased their dominance in UPI,” a fintech unicorn CXO turned investor told us.

PhonePe has also likely made a meaningful improvement in its profitability since FY24, and as such will feel confident about seeking a high valuation at the IPO as well. In its last round in 2023, the company had raised funds at a valuation of $12 Bn, and since then its revenue has likely more than doubled.

We’ll know more as the company looks to file its pre-IPO papers in the coming weeks, but PhonePe is already looking like the biggest startup IPO of the year

Gainers & Losers

Amid a mixed week for new-age tech stocks, DroneAcharya saw the greatest selling pressure from its investors this past week. Meanwhile, TAC Infosec was the biggest gainer this week, hitting upper circuit at the end of the week on the back of robust topline growth.

Stock In Focus: TAC Infosec Soars

Cybersecurity firm TAC Infosec was the biggest gainer this week, gaining about 10% since Monday open on the back of the company’s growth projections for the second half of the fiscal year FY25.

In an investor presentation released this week, the cybersecurity firm said that it is now operational in countries like China, UK, The US, among others and is serving clients like Microsoft, Freshworks, Nissan.

It also projected robust returns on its acquisitions of CyberSandia US and TAC CSC, Dubai. While CyberSandia acquisition will allow TAC to access the US government business through its already won contract that only “open for bids once every four years, its Dubai acquisition will help it target local enterprises and government entities based in the UAE.

Brokerage Corner: Thumbs Up For FirstCry

After touching a fresh low of INR 374.40 on February 19, the shares of kidswear brand FirstCry revived a bit to end the week at INR 404.30. The revival came on the back of the renewed optimism that brokerage firm JM Financial showed for the company’s shares  on February 20, giving them a ‘Buy’ rating along with a price target of INR 605.

The brokerage noted that the downturn for the company’s shares come at the behest of its pre-IPO lock-in expiring recently, resulting in potential buyers holding off while potential sellers liquidated their positions before the event.

“With over a week since lock-in expired on Feb 10, 2025, we note that neither have the volumes spiked nor have we seen any block deals, denoting pre-IPO investors’ willingness to hold on to their positions until better value is on offer,” the brokerage said in its report on February 20.

Markets Roundup: IPO Watch & Top Stories

• Licious’ $2 Bn IPO: The online meat delivery startup is eyeing a public listing next year after attaining profitability. The startup is planning for an IPO that values it at $2 Bn, a 33% jump from its last private valuation of $1.5 Bn.
• Lenskart To File Papers Soon: Shortly after roping in bankers like Kotak Mahindra Bank and Morgan Stanley for its much awaited IPO, Lenskart is now eyeing to file its DRHP by May. The startup is eyeing a valuation of $10 Bn for the offer, which is double its last private valuation.
• Navi Preps For IPO: Eyeing a public listing in the second half of FY26 like PhonePe, Sachin Bansal’s fintech startup Navi has initiated discussions with merchant bankers to finalise the valuation, timeline for the offering.
• boAt’s Second IPO Bid: About three years after dropping its IPO ambitions, boat is now looking to file for an IPO to raise INR 2,000 Cr in FY26. It is planning to file its DRHP for the IPO soon and is likely to take the confidential filing route.

The post PhonePe Rolls Out The IPO Carpet appeared first on Inc42 Media.

When Zomato announced that it would become Eternal, it kinda flipped a switch. The group became bigger than Zomato. It’s hard to believe that the name first came up in 2022, and has taken three years to become reality.

But this was also an opportunity for Deepinder Goyal to kickstart the next phase of evolution for Zomato, so it’s not just about a name.

If Zomato 1.0 was just Zomato, Zomato 2.0 meant Blinkit and District, Zomato 3.0 needs to be something bigger than just a rebranding. And that’s where this week’s announcement of Nugget comes in.

On the surface, it seems like Zomato testing the waters with AI agents for customer support, but this potentially be Amazon’s AWS moment for the AI world. After all, every company in some way or the other needs to answer the AI question.

So will Nugget be a big turning point for Zomato? Let’s find out, after a look at the top stories from our newsroom this week

• What’s Ahead For Instamart? Swiggy’s quick commerce arm has been trying to catch up to its rivals by aggressively expanding dark stores and SKUs to offer customers more variety. However, the expansion spree appears to have taken a toll on its unit economics.
• Life After BYJU’S: The fall of the $22 Bn behemoth took its toll on the fortunes of several startups that had looked to flourish aboard the BYJU’S ship — think WhiteHat Jr and EPIC. However, Aakash and Great Learning were the only exceptions and have made healthy progress.
• What’s Powering Shiprocket’s Growth Engine: Shiprocket has come a long way since 2017. Along the way, it has also crossed INR 1,300 Cr in revenue and is now eyeing to become profitable this fiscal. But, will the asset-light company’s growth momentum continue?

A Nugget For The Agentic AI Wave 

Agentic AI is all the rage these days and Deepinder Goyal is looking to drag Zomato into the AI age with the no-code platform to help businesses scale up their customer support operations. “No rigid workflows, just seamless automation,” Goyal said in a post on X, but Zomato declined to elaborate further on how Nugget works.

According to Nugget’s website, it offers AI agents ranging from conversational AI chatbots to co-pilots, which help in handling complex queries and streamlining support. Nugget provides features like image classification, automation of audits, voice AI agents, analytics, among others.

Goyal said Nugget was built as an internal product for Zomato over a period of three years, and now supports over 15 Mn support interactions per month for Zomato, Blinkit and Hyperpure. He also claimed that 90% of companies which’ve seen Nugget have signed up for it.

Zomato’s product train is certainly not going to stop at Nugget. “Nugget is the first product from Zomato Labs, our incubator for in-house innovations. More exciting launches coming soon,” the CEO added.

Goyal’s announcement comes in the backdrop of him announcing a desire to work with business leaders utilising AI as their “second brain”. On February 4, the CEO invited such individuals to mail to him how they were leveraging AI in their operations.

The company is entering the burgeoning AI space after a period of experimentation on the recommendation and content creation side. GenAI has clearly taken the world by storm, but so far no major Indian consumer services or tech company has pivoted into AI software as Zomato has done.

According to Inc42’s annual investor survey “The Pulse Of Tech” for 2024, about 80% of surveyed startup founders said they were looking for external help to build their AI capabilities. Instead, Zomato has decided to build it on its own. It’s of course too soon to tell whether Nugget can become something bigger, but it should not be a major cost for Zomato at this point, particularly given its large cash reserves.

Zomato In The SaaS World

Interestingly, the launch of Nugget pits Zomato against some of the largest software companies in the world, including many that have taken the turn towards AI, such as Freshworks and Zoho.

OpenAI too launched its agentic AI platform “Operator” in multiple countries, including India, for its Pro users this week. The company claims it can handle repetitive tasks like filling out forms, ordering groceries, among others.

To lure founders who have already signed a contract with a “legacy provider” for AI tech, Goyal said that Zomato will give access to Nugget for free for the remainder of their contract terms. It’s similar to what Ola Krutrim tried with the launch of its cloud computing platform.

But for Zomato to truly unlock the value of this, it has to think like a different company. For now, it’s solving something relatively small.

Gupshup founder and CEO Beerud Sheth told Inc42 that there’s a fundamental difference between handling customer queries for a single business model versus serving diverse enterprises across industries and across the globe. “Each industry has its unique compliance requirements, customer interaction patterns, and integration needs. This deep B2B expertise isn’t something you can develop overnight,” he added.

Incidentally Gupshup also launched its agentic AI platform earlier this month, but this covers multiple use-cases and industries. Sheth added, “Our biggest advantage is the training data. We’ve trained our AI agents on industry-specific conversations, making them more accurate and contextually aware. Our agents understand industry terminology, common customer issues, and appropriate resolution paths,  allowing brands to deploy them quickly and see immediate business impact.”

The company’s AI agents cater to retail, ecommerce, banking, financial services, travel and hospitality businesses. As for challenges in selling AI products and agents to customers, Sheth said AI has made customer acquisition even more complex and competitive.

Deepinder Goyal Takes A GenAI Bet 

Obviously other Indian companies have begun launching agentic AI models as well. Infosys is building over 100 GenAI agents for client applications, while Hyderabad-based startup Pulse raised $1.4 Mn last November to build its agentic AI platform aimed at SaaS product teams, Atomicwork raised $25 Mn in January as it aims to transform IT service management with its agentic AI platform.

Pranav Patil, chief data scientist at fintech startup AdvaRisk, told Inc42 earlier that early adoption of agentic AI will largely be on the customer support front because it’s less risky to target this segment. BFSI adoption is relatively slower, he added.

It’s not immediately clear what Zomato is targeting with Nugget. But it does claim to be building for enterprises. Whether Nugget stretches across key sectors or instead only focusses on areas that overlap with Zomato’s lines of businesses is unclear.

Either way, it would not be right to say that Nugget is a big bet for Zomato, but its potential success while not guaranteed could push Zomato — Eternal by then — deeper into the software world.

To extend the analogy mentioned earlier, AWS changed Amazon completely by making it a cloud company, but it began in 2002 as a free framework to link websites to Amazon’s ecommerce content. Will Nugget be this first step for Zomato?

Sunday Roundup: Startup Funding, Deals & More

• Ashneer Grover-led Third Unicorn’s fantasy cricket app CrickPe has halted operations owing to its failure to break through in the real money gaming space
• After selling Sirona back to its founders, the Good Glamm Group has now sold ScoopWhoop to marketing firm Wubba Lubba Dub Dub (WLDD)
• Between February 17 and 22, Indian startups raised $152.9 Mn across 17 deals, a 43% decline from $270.2 Mn raised across 22 deals in the preceding week.

• Uber has rolled out a subscription-based zero commission model for auto drivers across India, over a year following its rival Rapido. The company will no longer have control over the execution, completion or quality of the rides

The post Zomato’s GenAI Bet: A Golden Nugget? appeared first on Inc42 Media.

For India’s private equity ecosystem, the wave of startup IPOs has unlocked new insights into the Indian market and in many cases vindicated belief in Indian startups even when the tide was not in their favour. And now they are reaping the rewards through exits.

As many as 13 new-age tech startups made it to the public markets in 2024, cumulatively raising over INR 29K Cr ($3.4 Bn). And in 2025, this number is expected to double with at least 23 new-age tech startups eyeing a public listing, and looking to raise more than INR 55K Cr ($6.4 Bn) cumulatively.

As predicted in the beginning of the year, the general elections in 2024 played a pivotal role in the IPO numbers. In fact, in the startup ecosystem, only five startups got listed before the elections while the rest hit the market once there was more stability post the election results. In 2025, while no such major events are due, ongoing macroeconomic uncertainties like GDP downfall might make the public market volatile from time to time.

Of course, there are cycles of up and down, and while currently, we are in the throes of a bearish market, that has not shaken the faith of private equity investors on exits from the Indian market. Given that India has not been a great M&A market, the IPO wave is the biggest source of exits for many PE investors.

The list of IPO-bound companies includes Ather Energy, BlueStone, CarDekho, CaptainFresh, Ecom Express, Fractal, Infra Market, IndiQube, ArisInfra, Innoviti, OfBusiness, Ola Consumer, Pure EV, Physics Wallah, Ullu, Smartworks, among several others.

Exits Galore In India For PE Funds

According to IVCA-EY data, PE/VC exits in 2024 were at $26.7 Bn across 282 exits, a 7% growth YoY in value terms. Plus, in 2024, PE-backed IPOs recorded the highest growth of 130% YoY in value and 33% higher in the number of deals.

“Exits in India are largely going to come from a very vibrant public market,” Niren Shah, managing director and head of India at PE fund Norwest Venture Partners, said on the sidelines of the IVCA Conclave in Mumbai earlier this month

For Shah and other PE fund managers, there has been a noticeable strategic shift: “The market is getting deeper and more vibrant, so our entire strategy changed around 2017 to find those companies which are IPO-able,” the Norwest MD said adding that seven more IPOs are planned from its portfolio over the next two years, after eight Norwest-backed companies listed on the public markets.

Echoing this bullish sentiment, PE fund Iron Pillar partner Mohanjit Jolly added, “Our companies are making the most of this moment by going public. When we think about US entities, the IPO market is shut. And the other thing is, you have to be a $400-500 Mn in ARR and a profitable entity to finally list on NASDAQ. This is not the case in India“

Shah also emphasised the contrast between the Indian and US stock markets, even though in recent days the tide of foreign investors and PEs has turned towards the US.

Discipline In Exits

Oman India Joint Investment Fund CEO Srinath Srinivasan said in a session at the IVCA Conclave that disciplined exit timing is vital for PE investors. “One thing we have done right is to take money off the table without waiting forever. It is a discipline. You will come under criticism from all quarters, but I think it’s a good discipline to have,” Srinivasan, whose firm has seen seven exits between 2023 and 2024, added.

The Norwest MD added that India has not produced the IP technology that gives long-term value even if the company is not able to list. Large M&A opportunities are simply not the norm in India. This means PE investors have to turn to the public markets for the exit outcomes. “You don’t get the Googles coming and paying a couple of billion dollars. In the US, even if a company in the startup world doesn’t do too well, somebody might pay $200 Mn or $500 Mn. It doesn’t happen in India,”

Lightspeed India managing director Anuj Bhargava believes that the public markets trends of 2024 will continue well into 2025 and the momentum is expected to be strong. “Though we have seen some recent softening, which was expected, fundamentally, nothing has changed. Domestic capital inflows remain strong and are getting stronger. While foreign investment inflows have been sporadic, I think that was also expected. And the market today is held together, in large parts, by domestic institutions, which was not the case a couple of years ago,” said Bhargava.

But PE investors still have to work with startups in India to manage outcomes to get the best exits.

While a number of companies are lining up for IPOs, profitability is still elusive for many. Even those with profitable models such as Zomato have seen some pressure in terms of investor selloff thanks to competitive pressures.

“Very early, we bring in independent board members, start rolling out the IPO piece very early on. The market size needs to be large enough because public companies can’t be like $600 Mn. You want to make sure you IPO around the billion-dollar mark if you want some liquidity,” Norwest’s Shah added.

And when it comes to market volatility, Shah said that there is always the possibility of some automatic discounting during the IPO. “If the market drops 20% (turns bearish), that’s still business as usual. Maybe under negative extreme periods, you will not be able to go for an IPO, but in most times, if you build solid companies, you will be able to go out at a reasonable price.”

The post PE Funds Hone India Exits Playbook Amid Startup IPO Wave appeared first on Inc42 Media.

It was a week to forget for all new-age tech stocks in India, with just Honasa surviving the broad market-wide slowdown that hit smallcap stocks the hardest.

Overall, the small and midcap market has declined 18.4% from peak levels and is close to the 20% drop mark, which would put these stocks in a bear market. In fact, between February 10 and February 14, the Indian broader market saw its worst fall since the Covid-hit week of March 20 in 2020.

Within the tech stocks ecosystem, the downturn was fuelled by slowing earnings growth for many of the marquee stocks, lingering concerns over stretched valuations for newly-listed companies, as well concerns over US-India trade relations, where the sword of tariffs is dangling over investors.

Among Indian new-age tech companies, fintech stocks Fino and Veefin were the worst hit. Incidentally, this past week, Veefin announced picking up a controlling stake of 49% in digital marketing agency White Rivers Media for INR 166.6 Cr.

SaaS companies Zaggle, Unicommerce and TAC Security were among the other top losers this week among Indian new-age tech stocks, shedding more than 20% in the bloodbath.

Honasa was the only listed company to show a gain on a week-on-week basis, despite lukewarm financial performance in Q3.

It’s no wonder then that a lot of the foreign portfolio investors have turned their focus to the US market, where there is renewed breadth after Donald Trump took over as the President. In India, the relentless foreign investor selling was not aided by the fact that marquee stocks such as Swiggy, Ola Electric, Firstcry, Unicommerce, among others, hit their expiry windows for the post-IPO lock-in periods.

According to data compiled by Nuvama Alternative & Quantitative Research, this is India’s biggest lock-up expiry in recent months. The expiries come amid a continued rush of IPOs, with SEBI currently processing more than 60 applications.

This despite the stock market not being kind to companies that fall into the narrative of a slowing economy and less-than-impressive earnings growth. Brokerages and research analysts believe that more than the pressure from potential geopolitical moves, the market is reacting to business fundamentals worsening.

Geojit Financial Services’ Vinod Nair, for instance, said, “Risk-averse sentiment continues to rule investor minds as corporate earnings are significantly lower than market expectations during the start of the year, especially for mid and smallcap companies. Muted earnings trend, rupee depreciation, and external factors like US tariffs are expected to keep the sentiment weak in the near term, which may further push FPIs outflows.”

Nair added that volatility is expected to stay elevated until there is clarity on US tariffs. No signs of that happening in the past week, as Trump looked to firm up plans for reciprocal tariffs on India, because of the high tariffs on imports into India from the US.

Other analysts believe this was a signal for investors to pull money out of the Indian primary market. As reported in the Business Standard this week, Elara Capital reckons that the Indian market breadth cycle expansion seems to have hit a peak, which will typically be followed by a period of contraction.

Trading activity is likely to tilt towards index heavyweights and large cap stocks, which does not make for good reading for new-age tech stocks or indeed startup public listings.

Thus far, India was seeing massive breadth cycle expansion, which means more stocks were increasing in value than decreasing. This is now reversing, Elara Capital contends, with the US now bouncing back for the first time in five years.

It’s very likely that the global asset allocators will review their India allocations and adjust to this breadth cycle expansion in the US, which is a trickle down effect of Trump’s tariff wars and the high liquidity in larger stocks in the US.

Gainers & Losers: Honasa Bucks The Trend

Among the bloodbath in the wider market, Honasa seems to have somehow come out unscathed. The company ended five out of the last seven trading sessions below the opening price, but finished this week with a minor 5% gain, the only stock to finish higher than the opening on Monday, February 10.

What’s surprising is that the company reported a flat profit in Q3 FY25 at INR 26.02 Cr compared to INR 25.90 Cr in the year-ago quarter. However, operating revenue rose 6% to INR 517.51 Cr, which seems to have given investors confidence about a big uptick in profitability coming soon.

Even sequentially, Honasa’s revenue from operations rose 12% from INR 461.82 Cr.

Incidentally, Honasa had hit its all-time low just before the Q3 results, as the company faced questions from the All India Consumer Products Distributors Federation (AICPDF) in November, which has had some impact on the brand reputation.

Despite a slide in EBITDA, the Mamaearth parent company claims to be back on a “growth trajectory” with a “gradual” scale up in general trend.

Brokerage Corner: Green Light For Nykaa 

Shares of Nykaa could see a rally in the coming week after brokerages cheered the beauty retailer’s  strong Q3 performance. JM Financial retained a ‘BUY’ rating on the stock with a target price of INR 240 and an upside potential of 42%. “Nykaa’s ability to deliver robust growth in a tepid demand environment demonstrates its differentiated market positioning,” the research note said.

The Falguni Nayar-led company reported a 51% year-on-year jump in its consolidated net profit at INR 26.4 Cr in the December quarter of the fiscal year 2024-25 as compared to INR 17.5 Cr in the year-ago quarter. Sequentially, Nykaa’s profit zoomed 104% from INR 12.97 Cr.

Revenue from operations surged 26.74% to INR 2,267.21 Cr in Q3 FY25 from INR 1,788.80 Cr in the corresponding quarter last year.

“Despite the unfavourable demand environment recently, Nykaa has delivered against the odds to improve margins while delivering growth in mid-twenties. We lower profitability improvement in core BPC while building a sharper improvement in fashion,” said JM Financial.

Markets Roundup: IPO Watch & Top Stories 

• DevX’s DRHP Sent Back: Market regulator Securities and Exchanges Board of India (SEBI) has returned the draft red herring prospectus (DRHP) of managed office space provider DevX without stating the reason
• Zaggle Promoters Up Stake: Zaggle CEO Avinash Godkhindi, executive chairman Raj Narayanam and other promoters have increased their stake to 44.03% by purchasing shares from the open market
• Zetwerk Pushes Ahead: B2B manufacturing unicorn Zetwerk is reportedly looking to file draft papers for a $400-500 Mn IPO in the next week, with Axis Bank, Goldman Sachs, and Kotak Mahindra appointed as bankers for the issue

The post Bearish Market Curbs New-Age Tech Stocks’ Enthusiasm  appeared first on Inc42 Media.

‘One ring to rule them all, and in the darkness, bind them’ — the situation perhaps not as morbid as that line from The Lord of the Rings, but the launch of JioHotstar this week marks another pivotal moment for the Indian streaming industry, with Reliance now holding the keys to the kingdom.

Incidentally, the previous such moment also involved Hotstar as the streaming platform moved homes to Disney+ five years ago right in the middle of the Covid pandemic. Since then Disney+ Hotstar not only lost rights to key live sports properties but also marquee international shows, which put it on the backfoot.

Many of those shows and live sports events moved to JioCinema, so in a roundabout way, Hotstar is back to what it was before the pandemic. In fact, we can argue that no OTT or streaming platform in the world has the dominant slate that the all-new JioHotstar now boasts of  — not just movies and global hits, but also live cricket matches watched by hundreds of millions of Indians.

But before we look at the fate of the streaming industry, a short detour into the top stories from our newsroom this week:

• The EV Funding Question: A slowdown in sales across categories, cautious investment climate, and macroeconomic parameters have dampened investor interest in the EV space. What will change this malaise?
• Much Furore Over ‘Latent’: Outrage over Ranveer Allahbadia’s allegedly ‘obscene’ remarks have set India’s social media ecosystem on fire. Did the award-winning influencer cross a line that could have grave implications for the creator economy?
• Shein, Five Years Later: Shein is back in India, but the market has changed in the five year exile for the fast fashion giant. Will Reliance’s backing be enough to dethrone Zudio, NEWME and others that are now ruling the roost?

JioHotstar Goes Large

Putting an end to months of speculation, Disney and Reliance officially announced the signing of binding agreements in late 2024 to create a joint venture, merging Viacom18 with Star India Private Limited.

The combined JioHotstar entity is anticipated to host more than 100 TV channels and two of the country’s most prominent OTT platforms – Disney+ Hotstar and JioCinema.

As of now, RIL is set to infuse INR 11,500 Cr into the new platform — an investment that has raised concerns around Reliance gunning for big revenue in the streaming business. Thus far, JioCinema had taken a slower approach to revenue growth, with its subscription plans launching only last year, despite the platform being around since 2022.

If Reliance’s past is any indication, JioHotstar will not go slow on customer acquisition. Armed with the content library that no other platform can boast of, this is Reliance’s new money machine. All indications are that even formerly free content such as the Indian Premier League will now require subscriptions.

According to a Reuters report, viewers will only be able to match a few minutes of an IPL match without a subscription. Post this, users will have to subscribe to plans starting at INR 149.

In other words, it’s the end of the freebie era that defined Reliance’s streaming service till now. In many ways, this is JioHotstar flexing its content muscles and unlocking a huge revenue stream for the Mukesh Ambani-led company. It’s also worth noting that Jio has played it smartly by integrating JioCinema into the larger Disney+Hotstar app rather than the other way around.

According to RIL’s annual report, JioCinema reached 225 Mn monthly active users in FY24, while Disney+ Hotstar led the way with 333 Mn monthly active users as of December 2023.

Disney+ Hotstar reported 35.5 Mn paid subscribers as of June 2024, despite a decline in its customer base, whereas JioCinema, as of September, became the fastest-growing subscription-based OTT platform, surpassing 16 Mn paid subscribers. But with subscriptions now coming to the fore, we expect this base to skyrocket in the next couple of months, especially with the IPL around the corner.

The OTT Monopoly

The other big concern around the JioHotstar combine is the potential monopoly on international content and live sports streaming in India. While Netflix and Amazon Prime have tried their hands at live sports, neither came close to what Disney+ Hotstar or JioCinema can offer.

In fact, the new merged platform leaves Netflix or Amazon Prime with very little in terms of differentiation in content and a very limited library. For instance, when Disney combined with Hotstar in 2020, Netflix lost access to a whole host of Disney-owned content in India.

This forced Netflix into a corner and compelled the company to spend heavily on its original content slate in India, which we have covered in the past. But this is a cost-intensive strategy.

Instead of going this way, JioCinema chose to acquire rights to marquee content by splurging millions. Now, JioHotstar has the luxury of sitting back and watching the subscription revenue roll in and recover the investment into these sporting rights.

Kiran Mani, a former Google executive with extensive experience in digital business, has been leading JioCinema for about a year, and will helm JioHotstar as its CEO. Additionally, Viacom18 has brought in another former YouTube executive, Ishan Chatterjee, as the chief business officer for the combined platform.

JioHotstar Or Nothing

Before the merger was announced, there was talk about keeping Disney+ Hotstar and JioCinema as separate platforms. However, experts believe this wouldn’t have been sustainable, given that the company would have to spend separately on content acquisition and technology. It would have been challenging to generate robust average revenue per user (ARPU) from these two separate platforms, especially if both involved subscription plays.

And going ad-only on one platform would have exposed Reliance to the risk of slow revenue quarters where there is no big streaming property to bank on, such as when there’s no live cricket, for instance.

“Regarding pricing, Reliance has a potential advantage due to its strong last-mile reach. Reliance can tap into its vast Jio network. This distribution capability allows JioHotstar to set competitive pricing, likely at more affordable rates. Unlike competitors that may realise only 30-40% of rack-rate pricing due to revenue sharing with telecom and OEM partners, the direct reach could enable JioHotstar to capture a larger share of revenue, leading to better ARPU and increased subscription revenue,” Taurani said.

Competition with international giants like Netflix and Amazon Prime Video will be worth watching — will these giants double down on India or look to increase prices as their user base shrinks?

Amazon, after its merger with MX Player, is eyeing low-hanging fruits and low budget productions, while the failed Zee-Sony merger leaves Zee5 and SonyLIV as distant contenders. At the moment, the Indian market looks like a JioHotstar or nothing kind of a situation.

Sunday Roundup: Startup Funding, Deals & More

• Indian startup funding seems to have found new wings in 2025. With $270 Mn raised in the past week, the total funding in the first seven weeks of the year has now crossed $1.6 Bn
• In a major restructuring exercise at fintech major Navi, Sachin Bansal has stepped down as CEO of Navi, but will continue to be the executive chairman of the Navi Group
• Shailesh Lakhani and Abheek Anand, both managing directors at Peak XV Partners, are set to leave the VC giant, which has seen a heavy exodus from the leadership in the past few months
• IPO-bound cloud kitchen unicorn Rebel Foods has forayed into the 15-minute food delivery segment to take on the likes of Zomato and Swiggy with the launch of QuickiES
• Bollywood music labels like T-Series, Saregama, and Sony are reportedly looking to join an ongoing lawsuit against ChatGPT developer OpenAI in the Delhi High Court over alleged copyright violation

The post India’s OTT Battle Turns Into JioHotstar Or Nothing appeared first on Inc42 Media.

After a spell of running with the bulls, Swiggy is grappling with bears. The stock fell below its issue price this week and the pre-IPO concerns around overvaluation are finally playing out in the public markets.

On the final day of trading in the week, Swiggy stock fell up to 2.5% to INR 379.20 on the BSE, around 3% below the IPO issue price of INR 390, before ending the week at INR 380.

Despite reporting YoY revenue jump of 31%, Swiggy’s Q3 loss widened to INR 799 Cr, and the company did not exactly show the kind of growth expected on the quick commerce front, where revenue and average order value growth was under par.

In fact, most analysts expect Swiggy’s operating losses to balloon in Q4, and in many ways this also calls for more patience from investors.

The dual effect of dark store expansion and growing customer acquisition costs are likely to significantly intensify the pressures on Swiggy’s stock price in the opinion of many brokerages covering the stock .

To be clear, most brokerages are bullish on Swiggy because of improvements in the food delivery business, where the take rate has remained steady. Many credit the launch of Bolt as a key factor in keeping food delivery on track. It is Instamart that is a problem area.

Brokerages expect a sharp deterioration in Instamart’s margin profile due to heightened competition, and higher spending on expansion. Among the marquee brokerages, the likes of JP Morgan, Bernstein, Motilal Oswal and JM Financial slashed the price targets for March 2026.

However, UBS, BofA Securities, JM Financial and Kotak remained bullish, expecting an upside of between 18% and 60% from the current price.

JP Morgan saw the biggest adjustment in the price targets. “While elevated competition and quick commerce losses could weigh on the stock, superior food delivery growth with similar margin expansion is the key silver lining in the print,” the brokerage said.

However, most brokerages believe this correction in the stock price is an ideal entry point for Swiggy. Quick commerce is a valid opportunity and Swiggy has not lost the race by any stretch of the imagination. In fact, the company added more stores in January 2025 alone compared to all of Q3 (October-December 2024).

Swiggy wants to add 100-plus dark stores over February and March to meet its target of 1,000 dark stores by March 2025. Many of these will take over a year to turn profitable. Some even longer.

The company is also replacing small-format stores in some cities with larger stores and adding megapod stores in other cities. All of this expansion is only likely to pay off after the next three quarters.

Contribution-level breakeven is expected in a year, but that’s not a given. It’s a bet that the scale itself is enough to pull Swiggy through. Having said that, some brokerages believe that to be the case.

Quick commerce offers significant operating leverage advantages at scale which JM Financial says could itself be a reason to continue believing in Swiggy.

Keeping Faith With Swiggy

That’s part of the larger narrative around Swiggy — CLSA titled its Q3 coverage ‘Keeping faith’. Reading it with Zomato’s profit slump in Q3, Swiggy is clearly not the only one that will call on the faith of the public markets.

Indeed, Swiggy is going through exactly what Zomato (and even Paytm) went through soon after listing. And after the highs of the IPO frenzy, both new-age tech stocks shed more than 50% of their value in a matter of three months. Zomato saw a sharp recovery only after reporting improved financials, and even now, the stock price is heavily influenced by the company’s financial performance.

For the next year, at least, investors keeping their faith will have to swallow this pill for Swiggy as well. In the short term, there might be some accumulation of the stock as the price remains low.

There will be more value on offer with new IPOs on the cards for a number of startups as we said last week. But as per analysts, this is unlikely to put pressure on Swiggy from a portfolio perspective — what Swiggy needs to guard itself against is a less aggressive approach for revenue growth.

The heat is definitely on for Swiggy in the cauldron of the public markets.

New-Age Tech Stock In Focus: Ola Electric

After reaching an all-time low of INR 64.68 last week, shares of Ola Electric continued their downward movement this week. The company’s shares slipped 6.08% from Monday opening to end the week at INR 70.02.

While Ola Electric’s shares continued to reel under a bearish investor sentiment throughout the week, the same was accelerated at the end of the week when the company disclosed an underwhelming financial performance for Q3 FY25. After opening at INR 72.14 on Friday, the company’s shares dropped over 5% during intraday trading after the financial disclosure.

Ola Electric’s consolidated net loss widened 50% to INR 564 Cr from the INR 376 Cr loss it incurred in Q3 FY24. While its revenue from operations declined 19% YoY to INR 1,045 Cr, its scooter sales also fell 3% YoY and 15% QoQ to 84,029 in Q3 FY25.

Top Gainers & Losers

Robust top line expansion in Q3 led to a bull run for Blackbuck this week, while the Firstcry stock had a week to forget as a crash was sparked by lock-in expiry concerns.

Brokerage Corner: “BlackBuck Deeply Entrenched In The Ecosystem” — JM Financial

Logistics company BlackBuck reported a robust growth in its top line despite reporting widening losses due to one time exceptional expenses in Q3. While the company’s revenue from operations surged 41% YoY to INR 113.98 Cr, net loss also jumped 145% to INR 48.03 Cr.

The company’s total userbase also surged nearly 30% to just under 3.50 Lakh with an average monthly transacting truck operator running 7.35 Lakh trucks using BlackBuck’s tolling and vehicle tracking solutions.

Now, the logistics major is anticipating windfall gains in revenues in the upcoming quarters from ‘FasTag Program management fee’ along with scaling its new business verticals Telematics and fuel sensor business. JM Financial recommends a buy rating for the stock and projects a price target of INR 570 by March 2026.

Interview: Razorpay’s IPO Playbook

Inc42: The redomiciling is one step to prepare for an IPO. But you also had to adjust in other ways. What was that like?

Harshil Mathur: The first thing to understand is that an IPO is not just a one-day event. It’s a long-term commitment. The actual listing happens in a day, but once you go public, you’re a public company for the long run.

A common mistake founders make is focusing too much on the listing day, by trying to get the best possible stock price at launch. If you look at India’s tech IPO history, companies that optimised for short-term listing gains haven’t done well in the long run.

The ones that succeeded were those that prepared themselves to deliver steady, long-term results for shareholders.

See the full story — part of the Griffin Dialogues series

IPO Watch 

• Urban Company’s New Avatar: With an IPO on its horizon, Gurugram-based Urban Company has converted itself into a public entity and is likely to submit the draft papers for an INR 3,000 Cr IPO before the end of FY25
• Zetwerk’s Pre-IPO Raise: Ahead of a 2025 IPO, manufacturing unicorn Zetwerk is in talks to raise $25 Mn to $30 Mn from Indian family offices and high-net-worth individuals (HNIs). Zetwerk is also close to filing for a $500 Mn IPO this year
• Zepto Gears Up: Zepto is reportedly looking to bring mutual funds on board to facilitate sale of shares worth $300 Mn ahead of an IPO. The quick commerce startup is eyeing a pre-IPO round of $300 Mn later this year
• Flipkart’s IPO Gameplan: The ecommerce giant  is looking to expand its base in Gurugram in what seems to be a strategic move in the run up to its mega IPO. As Flipkart is looking to position itself as a homegrown company, it also needs to accelerate efforts to achieve profitability target

The post Swiggy Enters The Cauldron appeared first on Inc42 Media.

Ola Electric has had a rough few months, going from a post-IPO high to crashing below its listing price and with more pain in store after a weak Q3 performance.

For most of its life — after becoming an OEM in 2020 — the company has played from a position of strength whether it is due to its high capital accumulation or heavy market share. The EV maker now finds itself in an unusual position, having to claw back from a position of weakness.

Having raced its first electric scooter out of the factory in less than two years, Ola Electric stepped on the accelerator on the distribution front by using the ride-hailing app to acquire customers. Plus, the company’s competitive pricing also allowed it to grab a huge market share quickly, even as complaints rose against its scooters.

Some of that corner-cutting is catching up to Ola Electric now, as the Bhavish Aggarwal-led company enters a tough phase. Let’s see how, but after a look at the top stories of the week:

• Flipkart’s IPO Gameplan: Ahead of its IPO, Flipkart is looking to position itself as a homegrown company, but the $36 Bn giant also needs to accelerate efforts to achieve profitability and tackle the leadership attrition over the past year
• Razorpay Lays The Road: Cofounder and CEO Harshil Mathur gives us a sneak peek behind Razorpay’s push toward the IPO milestone — including how the fintech giant navigated the reverse flipping maze
• The D2C Gold Rush: From ITC to HUL, legacy FMCG players are splurging cash on D2C startups and new-age brands. What explains this new gold rush in India’s D2C rush that has seen major deals for Minimalist, Meatigo, The Man Company and other brands

Ola Electric Falls Well Short 

The EV maker’s numbers for the December quarter make for bleak reading with losses growing 50% from Q2 to INR 564 Cr. Operating revenue fell by 19% to INR 1,069 Cr as the company lost market share to new-age rivals and legacy OEMs.

On the profitability side, the widening EBITDA losses should be even more worrying, skidding to -40.7% from -19.5%. Ola’s aggressive pricing, investments for the service network expansion and persistently high fixed costs mean that the company is unable to move the needle on profitability.

We have made this argument in the past. Ola Electric losses were lowest and revenue was highest between April 2024 and June 2024, when the company delivered a record number of scooters. Since that peak, it has been a downhill track for Ola in terms of deliveries.

Ashwin Patil, senior research analyst at LKP Securities, told Inc42 after the Q2 results that Ola Electric needs to focus on growing sales volume by about 30%-40% from the current levels to at least reach the breakeven mark. But the company did not meet this target in Q3 and now is further behind the ideal trajectory.

At the time, Patil said that it would take at least two to three years for Ola Electric to get out of the red.

Brokerages also estimated that the company will remain loss-making on a consolidated level till FY27, or March 2027. And the latest performance is unlikely to truncate this timeline.

In January, Ola Electric reclaimed its top position in India’s electric two-wheeler (E2W) market, surpassing legacy players TVS Motor and Bajaj Auto in terms of electric scooter sales. Ola Electric slipped behind Bajaj Auto and TVS Motor in December 2024 sales. With this, Ola Electric’s market share in the electric two-wheeler market increased to 25% in January from 19% in the previous month.

Will New Models Solve The Puzzle? 

Nearly five months after unveiling its first EV bike, Roadster X series, the company officially launched the production-ready Roadster X this past week, with a starting price of INR 74,999, and going up to INR 1,69,999.

This marks the company’s entry into the electric motorcycle market after introducing the new-gen S1 range of electric scooters in the previous week. Ola Electric started Roadster X production last month at Ola’s Futurefactory in Krishnagiri, Tamil Nadu and the deliveries are expected to begin in mid-March 2025.

The new motorbikes would be a key focus for CEO Bhavish Aggarwal, who is pinning the future of the company on these premium products. But that may not exactly pan out.

Total units sold by Ola Electric dipped by over 3% YoY to 84,029 in Q3, however, the number of premium scooters sold by Ola Electric dropped to 34.8% of total sales in Q3 FY25, compared to 96% in Q3 FY24.

This shows that Ola Electric has not been able to carry forward the premium segment momentum that held it in good stead one year ago. Will the new launches reinvigorate sales as Bhavish Aggarwal expects? In fact, the CEO clearly laid out the marker for his business team after the Q3 results.

Bhavish Aggarwal’s 50K Target

In the earnings call, Aggarwal told analysts that Ola Electric is looking at a monthly sales figure of 50,000 units in order to break even in terms of EBITDA. Currently, the company is around 25,000-30,000 monthly sales, so getting to that stage would require a 2X surge in sales.

The CEO elaborated: “We are diversifying our portfolio by simultaneously selling two generations of our EV scooters to grow margin and volume. We are also expecting the battery cell manufacturing division to start reaping us benefits in terms of expanding our operating margin, and finally, the motorbike category will expand in terms of sales through this calendar year.”

Some analysts are of the opinion that Ola Electric’s plans to penetrate into the electric three-wheeler segment could be beneficial for the company given it is a more profitable segment compared to two-wheelers.

While acknowledging the competitive EV two-wheeler market, Aggarwal added that investment in service centre and dealership experiences, warranty schemes resulted in creating stronger customer goodwill but higher losses.

Shares of the Bhavish Aggarwal-led company saw a 3% decline on Friday to INR 69.69 after the poor Q3 FY25 numbers — below their IPO price of INR 76, and less than half of the all-time high of INR 157 in August last year.

Sunday Roundup: Startup Funding, New Launches & More

• Between February 3 and 8, Indian startups cumulatively raised $124.6 Mn via 21 deals, marking a 36% decline from the $195.5 Mn raised across 24 deals in the preceding week

• Ola founder Bhavish Aggarwal announced an investment of INR 2,000 Cr into AI unicorn Ola Krutrim, with a commitment of infusing INR 10,000 Cr by next year
• With an eye on expanding its D2C play, FMCG giant ITC has signed definitive agreements to acquire 100% stake in D2C meat delivery startup Meatigo
• The National Company Law Appellate Tribunal has told the National Company Law Tribunal to dispose of BCCI’s application to withdraw insolvency proceedings against BYJU’S, complicating matters further for the edtech giant
• The board of Zomato has approved the proposal to change the name of the company from ‘Zomato Limited’ to ‘Eternal Limited’, and the company’s stock ticker will also be updated accordingly
• Swiggy’s consolidated net losses rose 39.1% YoY to INR 799 Cr in Q3 FY25, with revenue growing by 31% compared to Q3 FY24

The post Ola Electric’s Slide  appeared first on Inc42 Media.

This is the first edition of Inc42 Markets, a special Sunday newsletter that spotlights exclusive insights, deep analysis, and expert commentary on India’s startups and new-age tech stocks—tracking startups from pre-IPO trends to post-listing performance as they reshape public markets.

Why now? Read the first edition, and it should be amply clear

It’s the day after the Union Budget, but our eyes are firmly on the future. And the future for Indian startups is public — just this week, we reported on the IPO roadmap of Servify, Pine Labs, WeWork, Droom, OfBusiness, Lenskart and Curefoods!

Since 2015, the transformation of the Indian startup and tech ecosystem has been nothing short of extraordinary. In fact, India’s status as a global startup powerhouse is only growing. With over 1.5 Lakh  government-recognised startups, 119 unicorns and $158 Bn+ in startup funding, the stage is now set for a massive public markets run.

Already more than 30 startups have joined the new-age tech stocks cohort in the past three years, and this number is expected to double in the next 11 months as dozens of startups are lining up for IPOs. It’s this bull run on the bourses that has created the bull case for Indian tech today.

It’s not just us saying this.

As investment giant UBS put it in its January 2025 report: “The story goes beyond the immediate hype though, gathering strength from long-term themes such as global supply chain reconfiguration and a rising Indian middle class. Progressive structural reforms in many areas, such as improving export competitiveness, attracting foreign investments and creating a business-friendly environment through tax benefits, subsidies and other incentives, also provide the right setup for growth to continue in the long run.”

Among other advantages, India has technology adoption on its side. India’s big focus on STEM education at the primary level, and early adoption of technology such as 5G, AI and digital public infrastructure have only served to make this the hottest destination for foreign investors.

In fact, UBS goes a step further and says this about the Indian opportunity: “The investible universe has been broadening over the years, and the current balanced mix of companies big and small and from different sectors presents the right conditions for sustained alpha delivery. Although diverse, the market is still somewhat inefficient. Identifying mispriced stocks, especially undervalued ones, offers the potential of excess returns.”

Plus, there’s plenty of room for new listings given the current optimism in the market. Consider this: The world’s largest economy, the United States, has 773 listed tech companies with a combined market cap of $21 Tn, which accounts for 40% of the total market cap of all listed US companies. In contrast, listed tech companies in India account for just 2% of the total market cap — a clear signal of the untapped potential.

Kunal Bahl, cofounder of Snapdeal and listed B2B ecommerce company Unicommerce, believes there is a shift in the founder mindset too. Now they are looking for outcomes in the public markets rather than planning for an exit through acquisitions or mergers.

Bahl, for instance, foresees a massive 100X surge in public listings can be expected in the next few years as Indian founders are showing a different kind of intent, as seen by the headlines this week — see below.

“We are already seeing signs of this in the startup ecosystem, but I believe it is still very much the tip of the iceberg. 2,500 listed startups by 2030 sounds ambitious right now because we have only 30 or 40 listed startups, but remember, people didn’t think we’d even reach that number a few years ago,” he added.

The thumbs-up for India from global investment bankers is only going to add to the momentum. “Domestic capital inflows remain strong and are getting stronger. While foreign investment inflows have been sporadic, I think that was also expected. And the market today is held together, in large parts, by domestic institutions, which was not the case a couple of years ago,” Anuj Bhargava, partner at Lightspeed India, told Inc42.

Now, imagine when foreign investors recalibrate their India outlook and index more heavily on the momentum being seen on the ground today. “Taken together, we believe dedicated exposure to India could prove rewarding for global investors in the long run with the country on its path to become a global economic superpower,” UBS adds in its report.

Still need proof to make a bull case for Indian startups?

New-Age Tech Stock In Focus: Cartrade’s Super Week

Shares of CarTrade Tech reached their all-time high market value amid a four-day surge this past week, which followed the company’s stellar performance in the third quarter of FY25 (Q3 FY25).

CarTrade shares shot up by a massive 32% from its opening price on Monday, January 27, and eclipsed its previous peak as well as the broader automobile sector on the stock exchange. The automobile marketplace stock’s performance metrics indicate sustained momentum in the secondary market as investors chase the upside.

The upward surge was unsurprising, given CarTrade posted a consolidated net profit of INR 45.53 Cr in Q3 against a loss of INR 23.55 Cr in the year-ago quarter. This performance boost tracks with the share price. Over the past year, CarTrade has delivered an impressive 118.58% return, significantly outpacing the BSE Sensex, which recorded a 7.45% increase.

Other Top Gainers & Losers

Among the new-age tech stocks listed in India, ideaForge had a week to forget — more on this below  — while besides CarTrade, there were big gains for ixigo and Unicommerce this past week.

Brokerage Corner: “Near Term Pain For ideaForge” – JM Financial

As drone tech company ideaForge slipped into the red in Q3 — reporting a consolidated net loss of INR 24.02 Cr — several questions were raised about the company’s order books and drying revenue pipeline.

Even operating revenue crashed 81% to INR 17.61 Cr during the quarter under review. It’s no wonder then that investment banking firm JM Financial claimed that ideaForge’s lower order book should worry investors vis-a-vis near-term revenue visibility. The order book stands at INR 20.7 Cr, vs INR 1,800 Cr one year ago.

Future growth is highly dependent on the company locking in orders worth INR 4,000 Cr, where it is currently in the L1 stage. Another large order is expected to be finalised in the near term, according to ideaForge, which could well shore up the company’s bottom line in the next year.

Having said that, JM Financial advised investors to buy the stock anticipating a spike in the mid-to-long term with a target price of INR 540. Incidentally, on the Budget day, ideaForge saw a 3.15% gain in share price and closed at INR 480.05 apiece on the BSE.

Interview: Captain Fresh’s IPO Playbook

Inc42: Captain Fresh is going public when it’s already profitable. How do you see this growing in the next few years? 

Captain Fresh founder and CEO Utham Gowda: “The IPO is obviously the primary goal. We believe we can do an IPO because we have been profitable and we see clear levers of how this profit can nearly double in the next four to six years. We believe this is the right time to go to the public market because of the runway in terms of the prospects of profitability.”

Startup IPOs Watch

• WeWork Files DRHP: The coworking major has gone to capital markets regulator SEBI with its draft papers for the IPO comprising an offer-for-sale of up to 4.3 Cr (43,753,952) equity shares
• Droom Revs Up Listing Plans: Used car marketplace Droom is looking to file its DRHP for an INR 1,000 Cr IPO by June this year, with half of this expected to be a fresh issue
• OfBusiness Makes Big Change: The B2B marketplace unicorn has converted itself into a public company ahead of its potential mega $1 Bn IPO later this year
• Lenskart’s IPO Vision: Lenskart is finalising bankers for its much-awaited IPO, with Kotak Mahindra Bank and Morgan Stanley in talks with the eyewear giant
• Servify Gunning For Gold: Mumbai-based Servify is close to finalising its IPO plans and has roped in bankers as it plans to raise $400 Mn to $500 Mn at a valuation of $1.5 Bn, sources told Inc42
• Pine Labs Preps DRHP: The fintech major is gearing up to file its draft red herring prospectus for an initial public offering by the middle of next month, after it completes the redomiciling process from Singapore to India
• Curefoods Eyes $400 Mn Listing: The Accel-backed cloud kitchen startup is likely to float its IPO in late 2025 or early 2026 and is looking to raise up to $400 Mn via the public offer

The post The Bull Case For Indian Startups appeared first on Inc42 Media.

Remember that scene from Christopher Nolan’s Inception? One of the main characters takes another on a walk up a staircase, but the stairs actually lead to the bottom and end in a loop. ‘It’s a paradox,’ says the one character to the other.

Knowing that this was a reference to the ‘Penrose stairs’ created by M.C. Escher is one thing, but seeing it come to life on screen actually felt magical. And that line sealed the illusory effect.

After the past year, Zomato-owned Blinkit finds itself on its own Penrose step. The company seemed to have found vindication and denied the naysayers with its fantastic financial performance in FY24.

But the story in FY25 has been anything but smooth. Competition is taking its toll on Blinkit, so is the company’s push to grow and expand. In fact, Blinkit is building the very Penrose stairs it’s standing on. The more steps it adds, the more it finds itself going back to the start.

This is the Blinkit paradox — but also true for any quick commerce company fooling itself with the notion that it has won the market. Let’s dive in, but after a look at the key stories from our newsroom this past week:

• NRAI Renews Foodtech Battle: Restaurant body NRAI is mulling legal action against both foodtech majors over the launch of 10-minute food delivery ‘private labels’ by Zomato and Swiggy. Here’s the latest chapter in this long-drawn battle
• The Game Of Drones: A day after DroneAcharya signed a term sheet with AVPL for a merger, the former’s founder Prateek Srivastava said the deal will act as a “force multiplier” for both the companies. Here’s why the listed drone giant is brimming with optimism
• Netflix Steps Into the Ring: Netflix is set to stream WWE content in India starting in April, its first major deal in the sports streaming industry. Is this a turning point for the digital media giant as it looks to find an edge against JioCinema?

Weighing On Zomato’s Neck

Soon after Zomato reported lower profits for Q3 FY25, all eyes were on Blinkit. Consolidated net profits declined 57.2% to INR 59 Cr in Q3, and even on a QoQ basis, the PAT was down by 66%.

That by itself is not an alarming figure, but besides a slowdown in the food delivery segment, the higher losses are due to an increase in Blinkit’s adjusted EBITDA loss as the company shifted gears and accelerated its expansion plans in the tail end of 2024.

Zomato CFO Akshant Goyal said that losses will continue in the near term for Blinkit, as the company expedites its expansion plan. “Our networks may have to carry a greater load of under-utilised stores which will impact near-term profits in the next one or two quarters. These investments will however also likely result in GOV growth remaining meaningfully above 100%, at least for FY25 and FY26,” the finance head added.

While Zomato’s operating revenue surged over 64% to INR 5,405 Cr during the quarter under review, it’s clear that food delivery is lagging behind in terms of growth. So not only does Zomato have to contend with growth pains and expenses for Blinkit, it also has to watch out for food delivery slipping further.

At this moment, there’s no reason to hit the alarm bells, but a keener eye on the quarter-on-quarter numbers from now till H1 FY26 is warranted.

Rakesh Ranjan, CEO of Zomato’s food delivery business, is confident of staying on track for the 20% YoY growth guidance for the gross order value on food delivery, but noted that there is a broad-based slowdown in demand from November 2024.

Blinkit Loses The Edge

Amid the rising competition in the quick commerce segment, Blinkit’s adjusted EBITDA loss surged over 13X QoQ to INR 103 Cr in Q3 on account of upfront investments made during the period.  On a year-on-year basis, this loss grew by 15.7%, which highlights that Blinkit has lost the profitability edge that many had assumed it had sharpened last year.

A lot of this is due to the quick commerce platform surpassing the 1,000-store mark in Q3 with 216 new dark stores added just between September and December. Leveraging Zomato’s recent INR 500 Cr infusion, Blinkit would be looking to double this to 2,000 stores by December 2025, and it is likely going to   add to the new 1.3 Mn sq ft of warehousing space opened up in FY25.

“The higher capex is also the key reason behind the quarterly increase in depreciation. As mentioned earlier, we expect the steady-state impact of depreciation to be about 0.5-1% of GOV,” Blinkit CEO Albinder Dhindsa revealed in the earnings call.

But the growing competition has not fazed Dhindsa, Deepinder Goyal & Co. This is despite the fact that there’s a definite dent in margins and profitability is not a given during this phase of expansion, even for currently profitable dark stores.

The Densification Of Blinkit

Blinkit says the expansion phase was part of a “densification in existing cities”, where new stores are added to zones that are underserved from a supply point of view. This continues Blinkit’s focus on its top markets — more than 50% of the new stores came in the top eight cities, and only 20% were in new cities. Blinkit also added new stores in non-serviceable areas in the hope of testing the waters there.

The top eight cities currently bring in more than 80% of Blinkit’s revenues and also have the highest percentage of profitable stores.

But new store addition also slows profitability for existing stores in these top cities. Growing density of stores means existing stores see a drop in order volumes, even though overall Blinkit volumes would grow. Blinkit has the advantage of lower last-mile delivery and procurement costs, thanks to the growing store density in existing cities, but this advantage is yet to manifest itself fully.

In the short term, though, Blinkit has to eat the cost of this expansion. And all this while also battling competition in terms of customer acquisition and retention and supply of new brands and categories. The quick commerce giant admitted that take rates have gone down as there is heightened competition in the space, which results in some discounting on delivery fees.

As CFO Goyal said, since new stores and warehouses take a few months to ramp-up, they end up being margin dilutive in the short term. But what was unsaid is the impact on existing profitable stores. For the time being, this impact is showing itself as higher losses for Blinkit.

Having said that, scale is not a guarantee of profits. There will be stores that shut down and some cities would require a restructuring of resources and supply chain. The company is banking on its existing playbook for new cities, but competition may test Zomato’s patience.

Zepto and Swiggy are investing heavily in expansion as well, while Amazon, Flipkart, JioMart, BigBasket and others are splurging to acquire new users and to expand their footprint as well. Even the likes of Ola and PhonePe are testing quick commerce models to take advantage of their reach and scale.

Brokerage HSBC Global Research has reportedly said in a note that the massive addition in dark store count has hurt the bottom line across the quick commerce sector because of which it expects giant players to go slow on their expansion plans.

This is quick commerce’s Cambrian era, so Zomato cannot afford to take its foot off the accelerator. And indeed, it has to continue walking into the Blinkit paradox in search of the profitability that would justify all this investment and all this effort.

How far away is that point on Blinkit’s trek up the stairs?

Sunday Roundup: Tech Stocks, Startup Funding & More 

• Fintech Giants In Crypto Net: Paytm, Razorpay and Easebuzz have denied reports that claimed that the Enforcement Directorate was probing them in connection with a scam linked to the HPZ Token crypto app
• Funding Spikes: January 2025 saw a big uptick in investments in India, as the total startup funding raised by Indian startups has already crossed the $1 Bn mark
• Tata’s Big Play: Tata Electronics has picked up a controlling 60% stake in Apple manufacturing partner Pegatron, strengthening its position in India’s electronics manufacturing space

• Wingify Deal: Private equity firm Everstone has finalised a deal to acquire a majority stake in bootstrapped SaaS major Wingify for around $200 Mn
• Paytm Waiting For Revival: Paytm narrowed its net loss in Q3 FY25, but it’s still not completely out of the water one year after the RBI action disrupted its fintech empire

The post The Blinkit Paradox appeared first on Inc42 Media.

It’s been a curious past year for Paytm. Even as the fintech giant has shown improved financial performance on paper over the past two quarters, the real picture lies between the lines.

Let’s take the Q3 numbers, for instance: Paytm narrowed its net loss by 6% on a YoY basis to INR 208.5 Cr in the quarter ending December 2024 (Q3 FY25), but revenue from operations declined by 36% to INR 1,827.8 Cr compared to Q3 FY24.

Even though Paytm managed to reduce its indirect expenses by roughly 7.5% to INR 1,000 Cr in Q3, direct costs grew by 13% on a QoQ basis. In contrast, on a sequential basis, revenue grew at a slower rate of 10% from INR 1,659 Cr.

This indicates that the revenue growth has come as a result of higher spending on payments processing charges, cashback and incentive costs and other direct expenses. In fact, much of this spending has gone towards reclaiming the market share lost after the RBI action on Paytm Payments Bank.

In the meanwhile, the competition has caught up to Paytm in terms of revenue and we can expect an intense battle in the year ahead from the cohort of super apps in India. From PhonePe to CRED to Flipkart-backed Super.Money, Navi and others, a number of fintech heavyweights have looked to capture Paytm’s lost market share in UPI, personal and merchant loans, merchant services and even digital commerce.

These companies are building from a position of strength in many cases, whereas Paytm is looking to revive its brand and flywheel after the setback over the past year. How far behind is Paytm today?

Paytm Picks Profitability Over Growth 

Outside the quarter-on-quarter comparison, it must be noted that Paytm has consistently reduced expenses on a YoY basis in FY25 in line with slow growth guidance after the RBI action on Paytm Payments Bank. This has resulted in improved profitability, but at the expense of revenue and customer growth.

Maintaining this profitability will be a huge challenge for Paytm, especially because future payments revenue growth is highly dependent on sales employees.

Even though the company hired close to 2,000 sales employees between September and December 2024, the overall costs for sales employees have fallen marginally in the quarter.

For instance, overall employee cost (excluding ESOPs) fell by 6% QoQ and 29% YoY to INR 575 Cr.  Employee costs in FY25 (April to December) fell by INR 451 Cr compared to the same period in FY24, in line with Paytm’s guidance in January 2024 of having to cut employee costs by INR 400 Cr – INR 500 Cr.

Even non-sales employee costs —  business, operations, technology and support roles —  fell by 11% QoQ and 36% YoY, Paytm said, on the back of AI adoption for improving productivity across businesses.

The clear indication is that Paytm’s salaries and incentives for its salesforce and non-sales teams have fallen considerably in the past quarter. The big question is whether the company can accelerate growth while continuing to reduce employee costs, spending on marketing and customer acquisition?

Paytm In The Fintech Super App Race

There’s little doubt that the cost-cutting has led to slower revenue growth in FY25 for Paytm. The company is not even close to the Q3 FY24 revenue mark, and it’s becoming increasingly clear that the RBI action on Paytm Payments Bank has set Paytm back by more than a year in terms of the revenue expectations.

And it’s given competition a huge advantage and opened up the path for the likes of PhonePe or CRED to take over from Paytm. Even as Paytm has battled business slowdown and attrition of customers, rivals such as PhonePe, CRED and others have continued to make great strides in terms of revenue and profitability.

For the sake of the comparison, we will be considering FY24 numbers for PhonePe and CRED, both of which also reported losses in FY24 like Paytm. While both these rivals had lower revenue than Paytm, the headwinds of the past one year have slowed down the Delhi NCR-based giant significantly.

Like Paytm, PhonePe and CRED have both adopted a super app model banking on cross-selling services such as personal and merchant loans, insurance, digital commerce, travel bookings and more. For all three apps, the UPI payments service is a means to attract customers at the top of the funnel, then cross-sell services to the most active of these customers.

Given the poor revenue dynamics for UPI payments — zero MDR and high cost of operations — all three super apps need to build significant bridges to other services to further leverage UPI customers.

In terms of the revenue scale (as of FY24), Paytm is well ahead of these two rivals. However the past year has resulted in grave growth challenges for Paytm, which threatens to weaken its position as the largest fintech company in India by revenue.

CRED’s operating revenue jumped 71% to INR 2,397 Cr in FY24, while PhonePe reported operating revenue of INR 5,064 Cr in FY24, up 74% from the previous fiscal. In comparison, Paytm reported income of INR 9,978 Cr in FY24, comfortably more than the two rivals combined.

But, after three quarters of FY25, Paytm is well shy of PhonePe’s FY24 revenue. Paytm’s quarterly revenue for Q1, Q2 and Q3 FY25 has been trending 35% lower than the respective quarters in FY24. If this trend continues, Paytm could finish FY25 with around 30%-35% lower revenue than FY24, which would put its annual income in the ballpark of INR 5,300 Cr

So in effect, Paytm’s revenue in FY25 could be similar to what PhonePe reported in FY24. In fact, if the Bengaluru-based unicorn maintains the revenue growth rate seen in FY23 and FY24 — 77% and 74% respectively — PhonePe could well emerge as the leading fintech app in India by revenue as of March 2025.

This comparison is of course subject to Paytm and PhonePe holding their current course for the next quarter as well.

What Paytm would be banking on between now and March 2025 is a huge spurt in its lending business, which was severely dented by the RBI’s regulatory action on the payments bank.

But on the basis of the past three quarters, the company has an uphill climb in this regard as well.

What Can Paytm Count On?

The company’s revenue for financial services in the quarter increased 34% on a sequential basis to INR 502 Cr. But for the full fiscal, revenue growth was stifled as a result of the second order impacts from the regulatory challenges.

Personal and merchant loans made by the bulk of this category. Paytm’s financial services business also includes insurance distribution, equity broking and mutual fund distribution.

Revenue from lending was down by 17% YoY, and overall financial services revenue for 9M FY25 was INR 1,158 Cr, 32% lower than the same nine month period FY24.

Even when it comes to the customer and user metrics, it was a challenging quarter for Paytm. The number of financial service customers fell to 590,000 in Q3 FY25 from 810,000 in Q3 FY24.

The only silver lining for Paytm was that the merchant loans portfolio grew 16% QoQ to INR 3,831 Cr as a result of the introduction of default loss guarantee (DLG) terms with lenders in the previous quarter.  The company said it will also increase the DLG offered to lending partner Shriram Microfinance India Credit for merchant loans from INR 225 Cr to INR 350 Cr.

“Our revenue was bolstered by better collection efficiencies and higher revenue from loans distributed under the DLG model in this and the previous quarter. [For Personal Loans] We have been primarily focused on the distribution only model, wherein we have seen reduction in disbursements on account of tightening risk policies by lenders, which is inline with industry trends,” the company said in its earnings release.

The company also said it has resumed personal loans for a select group of customers (new and repeat) with income coming from distribution and collection of loans. “We see increased willingness from lenders to partner for these select customer cohorts and allocate capital in the DLG model, which will help to increase disbursements in the distribution and collection model.”

Optimism Within Paytm’s Ranks

Paytm president Madhur Deora told analysts in the earnings call after the Q3 results that the company has the opportunity of increasing the percentage penetration within merchant loans to maybe 10% to 15% of the total installed merchant device base, compared to around 5%-6% today.

“The ticket sizes have increased and they continue to increase. So I remember three years ago, this number was about INR 1,10,000, while currently the number is about INR 2 Lakh, and part of that is because the value per merchant has grown in Paytm. The merchants obviously are doing a lot more digital payments today than they were doing three years ago, especially our best merchants to whom the loans are sort of qualified for,” Deora added.

Paytm cofounder and CEO Vijay Shekhar Sharma has time and again said that the company is on the verge of turning things around after the past year. Sharma has reiterated multiple times that Paytm is looking at AI-first operations to bring more efficiency to its distribution-led model.

Deora elaborated, “We do expect that FY26 will be better than FY25, especially given that we are going to have additional partners going into FY26 for personal loans, so we do expect an increase in this business and a rebound from the lows that we saw last year.”

While Paytm would be banking on the network effects from its payments services and its ability to cross-sell to improve the financial services metrics further, getting there will not be easy given the stiff competition and the number of players in these spaces.

When it comes to insurance distribution, aggregators such as PB Fintech, InsuranceDekho and others have a clear market share advantage.

On the investment tech side, Paytm will compete against the likes of Groww, Zerodha, Upstox, Angel One and others that have a huge lead in terms of active investors. Groww and Zerodha can count on revenue from their AMC businesses as well, where Paytm does not have a presence.

Plus, these discount brokers are expecting slow volume growth in 2025 as a result of the changes in regulations for futures and options trading introduced in 2024.

And finally on the digital lending side, the entry of Jio Financial Services as well as the growing base of new platforms like Flipkart-backed Super.Money, Adani Group and others has complicated the situation for Paytm. Besides this, dedicated lending platforms such as MoneyView have also raised funds in the past year to target customer acquisition.

These platforms have partnered with the same lenders and would be competing for the personal and merchant lending pie from a different lens than Paytm, including a big push on secured lending, where Paytm has not yet launched products.

In that regard, the next quarter will be one of the most significant periods in the lifetime of the company. Can Paytm push forward from this position of competitive weakness and get back to its former self to dictate the terms of the fintech market in India?

The post Paytm: No Close To Revival One Year After RBI Action appeared first on Inc42 Media.

Despite showing signs of a funding revival, the Indian startup ecosystem is in a peculiar place now. Most of the capital has been raised by companies in the public markets, which skewed the mergers and acquisitions (M&As) market in 2024. But will this have any ramifications on startup M&As in 2025?

With only 71 such deals recorded in 2024, it was the worst year for M&A deals in the Indian startup ecosystem over the decade. The second-lowest number in terms of M&As in the last 10 years was 82 in 2020. Post this, there was a funding revival which spurred on consolidation in key sectors like edtech, digital media and entertainment, and ecommerce.

In 2022, for instance, the number of M&As in the Indian startup ecosystem shot up to 240, before halving in 2023 and then further falling in 2024 to the nadir.

But looking beyond that, startup M&As are likely to shoot up by 58% in 2025, as more and more listed companies flex their capital. Sectors that are expected to witness the most number of M&As include — AI, edtech, ecommerce and consumer services as well as fintech.

One of the key reasons is the fact that most companies are looking to integrate automation into their operations and become AI-first, even as they experiment with new distribution channels and new products. This includes listed giants like PB Fintech, Nykaa, Paytm, Zomato, Swiggy, Nazara, Zaggle among others.

These listed new-age companies are expected to flex their muscles and dictate the terms of the M&A market in the coming year.

Listed Giants To Pursue Strategic M&As In 2025

While the trend of distress sales or fire sales will likely continue for startups that have hit hard times, one new factor could very well emerge in 2025.

That’s listed new-age companies eyeing growth-stage startups with proven business models, and a measurable revenue boost. Sectors like fintech, enterprise tech, and consumer services are most likely to see this wave of established players acquiring startups either for the tech or to add new verticals. Which is where the QIP wave of 2024 gives us a hint or two.

In 2024, Zomato raised INR 8,500 Cr through a QIP, followed by Nazara’s INR 855 Cr preferential placement, and Zaggle which netted INR 595 Cr from its QIP. In 2025, we expect several such QIPs from the cohort of startups that went public between 2021 and 2023.

Listed companies in competitive sectors such as fintech and consumer tech segments prefer QIPs for fundraising as a means to reduce the regulatory and financial burden compared to options such as debt, secondary or rights issues. For instance, a QIP round would suit companies in competitive sectors such as Paytm or Nykaa, or even those like PB Fintech which are looking to expand into new segments.

Typically, such funds are allocated to new lines of business that came up after the public listing, such as acquisitions of adjacent or new verticals, investments in technology infrastructure (AI, in this day and age) or just for customer acquisition and brand-building for the long-term.

SaaS Startups, Edtech Consolidation On The Cards

The line between traditional SaaS and AI is fast blurring, as evidenced by the transformation seen by large SaaS giants such as Salesforce, Freshworks and Zoho. Other Indian SaaS companies are also busy integrating AI capabilities across their product suites to stay relevant in 2025.

In 2025, investors expect M&As to grow for sectors such as enterprise tech which are going through the AI churn and revolution. SaaS companies are shopping for tech capabilities, focussing on IP-led tech acquisitions. Watch for consolidation in areas like cybersecurity, cloud computing, and AI-enabled enterprise applications.

The edtech sector is also expected to be in for significant consolidation in 2025, with even unicorns likely to be acquired, particularly with continued speculation around Unacademy.

The market is maturing beyond the pandemic boom, and with the focus on sustainable business models, there’s little room for the splurging VC dollars as seen in the past. Watch for interesting combinations of online and offline models, particularly in test preparation and skill development segments.

The public listing of PhysicsWallah is also likely to be preceded by a few acquisitions, especially as the edtech giant continues its multi-product strategy.

Industry watchers expect more M&As to get through in 2025 as smaller startups become streamlined thanks to the adoption of AI models and after cost-cutting in key areas.

Analysts say that the bigger companies may keep an eye out for acquisitions in niche verticals as expansion will play out majorly in 2025. However, valuations may continue to see a big downward correction, relative to 2021-2022 numbers.

“Investors are now looking for real growth metrics in any edtech up for sale instead of vanity metrics like MAUs, DAUs. They also need a track record of financial discipline over the last couple of years rather than a sudden dip in costs,” according to a partner at a Delhi-based early stage VC firm.

Will Quick Commerce Giants Acquire Competition?

Vertical-specific quick commerce models are emerging as force breakers, with companies specialising in categories like fresh meat (Meatigo, Licious), medicines (Plazza, 1MG), fashion (Myntra, Slikk, Blip), food (Swiggy, Swish, Zing). While many of these platforms have the scale to sustain these quick commerce operations, several new startups will likely be at the mercy of VC funding to scale up.

Will investors back these new QC models or will these startups just become more acquisition targets for the giants?

Within QC, the focus for major players is shifting from customer acquisition to operational efficiency and sustainable unit economics either through the right product assortment or new categories.

It won’t be a surprise if some of this consolidation happens on the brand front if and when the delivery apps push for more private labels.

Dhruv Kapoor of Anicut Capital highlighted opportunities for vertical growth in quick commerce, where players could specialise in specific categories with streamlined supply chains for faster deliveries.

He noted that investors are now cautious, prioritising differentiation over more players in an already crowded market. This could lead to increased consolidation and new business models in the ecommerce space.

Plus, we can expect a tooth-and-nail battle in India’s metros for 10-minute cafe deliveries with Blinkit Bistro, Swiggy Snacc and Zepto Cafe. But other startups are also emerging, essentially turning the cloud kitchen model on its head by going logistics first.

Expect to see AI-driven demand mapping and automation in the kitchen being billed as moats for these apps. Some of these city-specific startups could fuel the next wave of M&As for well-capitalised giants in the quick commerce segment.

The post Will 2025 Bring Springtime For Startup M&As? appeared first on Inc42 Media.

Zomato and Swiggy walk into a bistro, ask to see the menu and the kitchen, have a ‘Snacc’ or two while taking a peek into the sales register, and simply walk out. That would be the beginning of a joke, except restaurants aren’t happy about being the punch line.

Even though both giants have clarified that Bistro and Snacc, their new food delivery models, are not competing with restaurants, this just masks how they both arrived at these models.

If we have to believe the claims of these two giants, they both launched identical 15-minute food delivery products without relying on the playbooks written by other restaurants that have worked with them over the years. That seems a little too hard to digest, especially as the writing was on the wall already for the past few months.

Whatever said and done, this is the new battlefield for Zomato and Swiggy, as the two companies enter another phase in their longstanding rivalry. We dive into the cafe wars this Sunday, but after a look at the top stories from our newsroom this past week:

• The Best Of 30 Startups: We covered 300 startups throughout 2024 in our 30 Startups to Watch series, and to wrap up the year, here’s a look at the best of the best from the past year. See who made the cut
• Zoomcar’s Challenge: Interim CEO & COO Hiroshi Nishijima outlined a three-pronged strategy to address Zoomcar’s woes and improve cashflow and settle debt. Can he script a turnaround?
• Fintech View In 2025: Although the fintech ecosystem jumped plenty of regulatory hurdles over the years, the sector is likely to see lesser compliance related challenges in 2025 thanks to the maturity reached in 2024

The New Face Of Food Delivery

On the face of it, the 15-minute delivery services seem new and fashionable, but in reality they have been in the making for the past year.

Swiggy and Zepto both launched ‘cafe’ services in Bengaluru and Mumbai respectively way back in 2023, but neither of these experiments took off in any meaningful manner. It was only after the success of quick commerce models after this point that added more conviction to these models.

Since mid-2024, plans for cafe delivery operations went into overdrive. Here’s a brief look at the chronology:

• Swiggy launched 10-15 minute delivery services under the name Bolt in October. But unlike Snacc or Bistro, this utilised existing restaurant partners on Swiggy’s platform
• Zepto then announced that it is separating Zepto Cafe from the main app and spinning it off to scale it up away from the quick commerce operations
• Zomato followed up with 15-minute food delivery model from restaurants in a 2 km radius similar to Bolt
• Then Swiggy launched Snacc also selling fast food, beverages and prepared meals from nearby locations
• And Zomato-owned Blinkit then did the same with Bistro, similar to both Zepto Cafe and Snacc
• Besides this, we saw the launch of individual delivery startups such as Bengaluru-based Swish, and most recently Zing in Gurugram
• Moreover, the likes of Magicpin and Ola Consumer have also launched quick food delivery leveraging the Open Network for Digital Commerce

This has created a huge groundswell for instant food deliveries and given a new headache for restaurants. Not only do they have to partner with the likes of Zomato and Swiggy, but also compete with them to a certain extent.

Swiggy claims that Bolt contributes 5% to its overall food delivery volumes with availability in over 400 cities. Zepto CEO Aadit Palicha claimed Zepto Cafe order volumes have grown from 30,000 orders per day in December to 50,000 orders in early January.

Blinkit CEO Albinder Dhindsa clarified that parent company Zomato will never launch private brands on the main app to compete with its restaurant partners, which is why the Bistro app is launched by Blinkit and is separate from the Zomato app.

Restaurants Raise Alarm Again

But this seems like a thin explanation when one considers that Zomato and Bistro are both under the same roof, and will naturally share plenty of resources and knowledge. If nothing, Bistro will benefit from Zomato’s expertise and talent depth in food delivery.

Dhindsa also claimed that the company won’t be using the Zomato app to market its newly launched 10-minute food offering Bistro.

The Blinkit CEO was responding to concerns raised by the National Restaurant Association of India (NRAI) in light of the 10-minute delivery models. The group is said to be in the process of approaching the Competition Commission of India (CCI) to seek intervention and prevent the creation of private labels by Zomato and Swiggy.

Dhindsa’s clarification is not likely to soothe these nerves. He further added, “All the companies innovating with us on Bistro also work with a number of restaurants and our success at Bistro has the potential to add value for the entire food & restaurant ecosystem.”

Just a few days ago, NRAI even requested the government of giving industry status to the food services sector, to ensure fair play for restaurants, delivery partners as well as consumers against potential exploitative practices of foodtech platforms.

The NRAI is no stranger to taking on the two giants and in the past we have seen the group rally against loyalty programmes and deep discounting. The association previously alleged that the food delivery giants engaged in anticompetitive practices such as bundling of services, exorbitant commissions, delayed payment cycle and imposition of one-sided clauses.

Now the group claims that food delivery giants have access to crucial consumer data but do not share this information with restaurant partners, and are leveraging this data to launch new verticals that compete with restaurants.

Are Zomato, Swiggy Playing It Smart?

Market analysts question the financial viability of these models, because even quick commerce as it stands today does not have a healthy track record of profitability. And that’s with groceries and essentials.

Zomato and Swiggy are betting that new-to-delivery consumers would prefer Bistro or Snacc as a quick experiment and get habituated to online food ordering and graduate to the core app eventually.

But this journey is fraught with a number of points where the consumer could just drop off and never return. Squeezing more deliveries out of potentially overworked delivery workers is also a major problem.

It might suit these companies from the point of view of unit economics, but gig workers are the backbone of delivery services, and any stress here could have a cascading effect on other delivery operations as well.

What the cafe model does offer is a way to shorten the profitabilty timelines of existing dark stores, particularly in high volume cities. As a standalone business, one foresees problems such as low average order value and low retention of users.

If this weren’t enough the three major quick commerce players — Zepto, Blinkit and Swiggy Instamart — have all come under the scanner for their rapid expansion and how this has impacted smaller grocers and retailers in metros and Tier I cities.

We foresee a slew of regulations in 2025 to address this rapid expansion and its impact on the retail FMCG space over the past years. Incidentally, some startups are currently building quick commerce platforms with different models such as a clear retail presence, that might circumvent some of these concerns.

Will the likes of Blinkit, Instamart and Zepto also resort to physical stores in the near future to mitigate the potential regulatory risks?

Sunday Roundup: Tech Stocks, Startup Funding & More

• Funding Bump: Over the past week, Indian startups saw a big uptick in capital infusion more than $432 Mn raised by startups across 20 deals, led by Innovaccer’s $275 Mn round
• upGrad Cofounder Floats New Venture: Mayank Kumar has launched a new talent mobility startup, BorderPlus. The new startup claims to help employees in India land “nursing” jobs in healthcare facilities in Germany

• Ola Electric Vs CCPA: The Central Consumer Protection Authority (CCPA) continues to tighten scrutiny around Ola Electric, and sought more information in connection with an investigation into the company
• Rishen Kapoor Returns To Peak XV: Months after the shutdown of his SaaS startup Toplyne, cofounder and CEO Rishen Kapoor has joined back Peak XV Partners to look at early stage deals

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