Happy Monday! We ended last week with which made the quick-commerce company 2023’s first unicorn. We now turn our attention to late-stage startups that are refusing to accept cuts in their valuations, something that’s keeping SoftBank Vision Fund at bay. This and more in today’s ETtech Morning Dispatch.
■ Karnataka IT minister Priyank Kharge on policies for tech firms ■ The moon is now open for business ■ AI will augment human ingenuity, not replace it: Adobe CEO SoftBank founder Masayoshi Son said earlier this month in the company’s earnings press conference that its Vision Fund will start cutting cheques again. The fund is, however, before it starts deploying locally. A senior executive at the fund told ETtech that Indian late-stage startups with adequate capital are still sticking to their 2021 valuations, while their global counterparts have undertaken significant cuts, deterring SVF from deploying fresh funds in this market.
Sumer Juneja, managing partner, India & EMEA (Europe, Middle East, and Africa) at SoftBank Investment Advisers (SBIA), said most of the top technology companies in India are well capitalised, have cut costs over the past year, and are unwilling to opt for a down round. “The top 30-40 companies still have 2021 valuations, so we passed. They are good companies, but we can’t have those valuations,” Juneja said.
He added that the situation in Europe is vastly different. “Maybe because of the maturity of the market, we have started seeing entrepreneurs and cap tables being very reasonable with down rounds, and that has opened up the deal flow there quite nicely. In the US, too, high-quality companies that were over-valued have now taken big cuts,” he added.
Juneja, with investment directors Sarthak Misra and Narendra Rathi, leads the India investment team at SBIA. Since he set up shop in 2018, Vision Fund-I and II have deployed more than $4 billion across 14-15 companies. “Our strategy has been to come in at a $1-1.
5 billion valuation post-money, so the exit should be around $5-6 billion. We have not made $1 billion investments, but put $50-250 million and not owned more than 15-20% in a company, because exit post that becomes hard in India,” he said. Late-stage deals have been negligible and no new unicorn was minted this year, till quick-commerce startup Zepto announced a $200 million fundraise at a $1.
4 billion valuation last week. Large-sized rounds have been hard to come by, as shown by Tracxn’s weekly data. Over the past few months, early-stage deals have comprised 70-80% of the total funding on average.
Former PayU Finance India CEO Prashanth Ranganathan, who left the Prosus-owned firm earlier this year and is currently on gardening leave, . He is expected to launch it by February next year. Focusing on the eduwealth space, the venture will help Indian parents to save funds across various financial instruments to help with their child’s higher education.
While the final contours of the deal are yet to be decided, Ranganathan is expected to raise $20-25 million for his latest startup. The round is currently being discussed at a valuation of almost $100 million, three sources told ET, requesting anonymity. The discussions are still at an early stage.
Having previously co-founded consumer lending venture PaySense, which was sold to PayU for $185 million in January 2020, Ranganathan has engaged with venture firm Nexus Venture Partners and a couple of US and Singapore-based funds to invest in the round, at least two people told ET requesting anonymity. Nexus was an investor in Paysense. In an exclusive that on the back of PayU selling its global operations to Israel-based fintech service provider Rapyd, its global chief executive Laurent Le Moal and chief financial officer Aakash Moondhra may be moving out of the organisation.
The Indian Space Research Organisation on Sunday made the from the Chandrayaan-3 mission. ChaSTE or Chandra’s Surface Thermophysical Experiment measures the temperature profile of the lunar topsoil around the pole, to understand the thermal behaviour of the moon’s surface. It has a temperature probe equipped with a controlled penetration mechanism capable of reaching a depth of 10 cm beneath the surface.
“This is the first such profile for the lunar south pole. Detailed observations are underway,” Isro said. Chandrayaan-3 landed on the moon on August 23 and the mission life is one lunar day or 14 earth days.
When India successfully landed Chandrayaan-3 on the moon last week, it scripted history and the whole nation cheered. It is believed that this mission will give us a clear picture on how our planet was formed. But that’s not all; the mission .
Space experts and executives in the sector believe the lunar mission will lead to innovative spin-off technologies, and will help the private sector get more investments in future. Prof Somak Raychaudhury, vice-chancellor, Ashoka University, and a noted astrophysicist, told ET, “The now-proven propulsion and landing capability, planned studies, and experiments to explore resources like water and helium-3 on the moon will help make the satellite a base for future habitation and exploration. ” Chandrayaan-3 will open up new markets, foster collaborations, and attract investments, Sanjay Nekkanti, chief executive and co-founder, Dhruva Space, told ET.
The moon mission may prove to be . Just hours ahead of the Vikram lander’s descent towards the lunar surface, the stocks of 13 companies in the space sector added more than $2. 5 billion in market value.
Claiming to know the “pain” of the startup industry, Karnataka IT minister Priyank Kharge called so that new ventures could grow in the state. “Sometimes, just because the government does not understand the technology, we panic and we ban it; we say your business is illegal,” Kharge said in his keynote address at the ET Soonicorns Summit on Saturday. “We have a lot of examples, like Ola, Uber, and Rapido.
They’ve often faced bans in different cities just because we don’t fully understand ride sharing,” the minister added. The minister asked startups and industry executives to collaborate with the state government in its upskilling initiatives in sectors like cybersecurity, internet of things, agri-innovation, data science, and artificial intelligence (AI). The event, focusing on startups that are likely to soon top $1 billion in valuation and become unicorns, hosted a number of panel discussions.
In a discussion on the recent spate of governance issues at startups, Ritesh Banglani, partner at Stellaris Venture Partners, said he found that a majority of founders are ethical. “We don’t treat founders as potential criminals. ” Vishnu Rajeev, investment principal at Speciale Invest, talked about the difficulties of finding deeptech startups to invest in.
“When making investments in deeptech, the team matters a lot. Then there is the technology that can move the needle. The third aspect is the market size.
A deeptech investment needs to have large opportunities,” he explained during a panel discussion. Amid scares that AI is coming after our jobs, Shantanu Narayen, CEO of Adobe Inc, believes that the technology . He warns against rushing to regulate AI and limiting its advancements.
In a wide-ranging interview with us, he also talked about the role that Adobe India is playing in building the next-gen AI-led products. Key excerpts: My perspective is that it will actually be a massive tailwind for the creative industry. I fundamentally believe that this will enable creatives to be more creative.
Second, it’ll allow more people to participate in the creative profession and make that a profession if they want. A global coalition of multilateral organisations including the World Bank and the IMF will take India’s , Nandan Nilekani, chairman of Infosys and the founder chairman of the Aadhaar project, said. Global IT bellwether and consulting giant Accenture is witnessing a “historic high” in terms of deal bookings as the clients are seeking cloud-offerings, data and analytics and also experimenting new operating models, according to a top executive.
The focus on environmental, social and corporate governance (ESG) is not about moral good, social good, or “wokeness” – , said Punit Renjen, deputy chairperson-supervisory board, SAP SE. ■ Why The Chainsmokers invest in—and party with—niche cybersecurity companies ( ) ■ Tech giants race to alter online operations as EU digital rules bite ( ) ■ Online ratings are broken ( ).