Investors infused some $1.15 billion into Indian start-ups in the first three months of this year, down almost a quarter on a sequential basis.
Venture capital (VC) and private equity (PE) firms cut investments in Indian start-ups by almost a quarter on a sequential basis in the three months to March, the second consecutive quarter they did so, as investors starved of exits and fearful of souring bets hold back cash.
Investors infused some $1.15 billion into Indian start-ups in the first quarter of this year, down as much as 24% from the December quarter, which itself had seen a slump in investments of 48% from the preceding three months, according to a joint report by KPMG and CB Insights.
The $1.15 billion reported by KPMG includes at least $150 million of secondary share sales that went from one set of investors in Snapdeal (Jasper Infotech Pvt. Ltd) to another.
The number of start-up deals fell 4% to 116 in the quarter, the report said.
The largest deals in the January quarter included $150 million received by online grocer BigBasket; $150 million raised by online marketplace Shopclues; and $50 million raised by Snapdeal, India’s second most valuable e-commerce firm.
“With mounting investor hesitation and concerns of overvaluation, Indian investment continued to decline in the first quarter,” KPMG and CB Insights said in the report.
After pumping more than $9 billion into Indian start-ups since the beginning of 2014, investors started pulling back late last year because of a mix of global macroeconomic factors such as a growth slowdown in China, as well as concerns over massive losses incurred by start-ups.
This year, investor caution has increased manifold, resulting in an acute slowdown in funding, fall in valuations and delayed deal closures.
“We have not been in contact with investors to raise funds but the sense we are getting is that there is a wait-and-watch situation that is going on,” said Ashish Goel, chief executive at online furniture retailer UrbanLadder. “There is definitely lesser investment in early-stage start-ups when compared to the last 4-5 months and (the number of) deals have certainly reduced.”
Even India’s top start-ups are struggling to raise cash at their current valuations.
Mint reported on 14 April that Flipkart Ltd and Snapdeal have held funding talks with several investors over the past six months, all of whom have refused to invest in the companies at their preferred valuations of $15 billion and $6.5 billion, respectively.
Both denied that they have been trying to raise fresh funds.
There are two main reasons why companies are struggling to raise money, said Aseem Khare, co-founder of home services start-up Taskbob, which raised Rs.28 crore in February.
“First, companies have been using investor money for giving away discounts that have beefed up top-line numbers but have not been able to create brand loyalty. Due to this, the percentage of revenue that comes through discounts is very high and has put doubts on the business model. The second reason is that of unit economics. There are businesses that are solving a problem, but the margins are too low for them to be sustainable or operationally profitable,” Khare said. By unit economics, Khare’s reference is to the cost and revenue from one transaction—say, a food delivery order taken online, and fulfilled.
The funding slowdown is not restricted to Indian start-ups alone, said Varun Khaitan, chief executive at home service app UrbanClap.
“The US has much bigger problems. And since some of the biggest investors are US-based, this problem has flowed into India. But if a company is doing well, then irrespective of the environment, it will attract investors,” he said.
The report by KPMG and CB Insights confirmed Khaitan’s views and said start-up deals in the US were much lower in the first quarter compared with the peak levels seen in 2015.
This article was originally published in Live Mint
Here are ten powerful quotes from Indian entrepreneurs that will recharge your energies and once again encourage you to dream big!
Oprah Winfrey was right when she said, “Don’t worry about success. Worry about being significant and the success will naturally follow”.
Here are ten powerful quotes from Indian entrepreneurs that will recharge your energies and once again encourage you to dream big!
1.
Crackverbal is a startup offering GMAT and GRE coaching and application services.
Author’s Take: What Arjun said is absolutely true. When I got the chance to work on an arts and crafts startup, my first day at work entailed safai, jhaado and duster intact! There is no peon going to hand you chai in the initial days of your startup, so be prepared to take on the fancies and the frivolities, both with equal responsibility.
2.
Saumil Majumdar is personally engaged with over 100,000 children, 50,000 parents and over 200 schools in the sports domain over the last decade. He is an alumnus of IIT Mumbai and Indian Institute of Management, Bangalore.
Author’s Take: Many business owners boast about the turnover of their enterprises, but according to Saumil, rightly, the word reeks of vanity. Profit is still a more realistic interpretation of how a business is performing. But the real thing is definitely the cash.
3.
What: Freshdesk is a cloud-based customer support software that lets you support customers through traditional channels like phone and email. It serves some 30,000 customers worldwide including Hugo Boss, UNICEF, Good Reads, University of Pennsylvania, etc.
Author’s Take: Girish’s comments once again remind us of the need to be good to others, even if you are exceptional at what you do.
4.
Venture Partner, Seed Fund; Advisor at Ojas Venture Partners, Sanjay has over 25 years experience as entrepreneur, corporate executive, venture capitalist, angel investor, teacher, advisor and mentor. He is an advisor to early stage funds and also overlooks a social fund.
Author’s Take: Any entrepreneur who is more interested in the money than his own vision of his product is not a true entrepreneur. When you are pitching to VCs or even to a customer, what you should sell is not just the product, but your vision, your dream.
5.
Kalpana Rao of Pari’s created a specialty store in Bangalore that deals in clothes made up of natural, environment-friendly dyes.
Author’s Take: For all those who sometimes get bogged down in the long, tiresome and lonesome journey of entrepreneurship, this one is for you!
6.
RJS is a leading game and app development company based out of Kolkata, India.
Author’s Take: Involve customers and your social community whenever you can. One reason why the AAP was hailed as a disruptive political party when it started was that it involved its supporters whenever it could. Learn from that.
7.
For those awesome companies that want to attract the finest minds and play the game beyond HR, plugHR drives hiring, motivation and performance, and automates people management in minutes. It also innovates for culture development in organizations.
Author’s Take: Any organization that really wants to succeed loses or wins half the battle if it is able or not able to hire the right talent. Therefore, don’t just account the experience and qualifications of the person, peer inside and try to hire him for the person that you make of him.
8.
Practo is an innovative health startup which schedules appointments of patients with doctors online. Practo’s technology significantly improves patient experience and allows better functioning of clinics.
Author’s Take: As a new startup, you should polish the product and make it such that customers are themselves pulled by the magnetism of the product. A sales officer/team should be set up only to scale operations later.
9.
GoodWorkLABS is a new-age boutique software lab offering solutions in Software Development, Mobile Apps and Games, UX and UI Design and enterprise solutions.
Author’s Take: The home loans, car loans and other things your batch mates and colleagues are managing will be a struggle for another day’; for now, you’ve got a baby at hand!
10.
Vaatsalya is an award winning social enterprise, focused on building a network of hospitals in Tier II and Tier III towns in India.
Author’s Take: Be a firm believer in the adage that winners aren’t those who never fall, but those stand up and fight again!
This article was originally published in MensXP.com
The Stand Up India scheme, launched on April 5, ensures that women and SC/ST entrepreneurs have a fair chance at setting up their own businesses.
In January 2016, Prime Minister Narendra Modi had launched the Start-Up India scheme, which gave new entrepreneurs a chance at making it big. Under the scheme, entrepreneurs could get loans from banks to kick start their businesses. Now, a new scheme, launching on April 5, will shift the focus to SC/ST and women entrepreneurs, to promote inclusivity.
The Stand Up India scheme provides loans to entrepreneurs of the Scheduled Caste and Scheduled Tribes, as well as women. The loans range from Rs 10 lakh to Rs 1 crore. According to the government, these are sectors of the population that are often underprivileged or under-served. Both these sectors are upcoming, and fast. The scheme helps them out by facilitating loans for non-farm sector entrepreneurship.
Loans for Women Entrepreneurs
Women entrepreneurs in India find it difficult to get funding for their startups. Global Entrepreneurship and Development Institute (GEDI) published a global ranking that looked at how female entrepreneurs fare in the world. India was placed in the last five among the 30 countries that were analysed. It stated that about 73% women entrepreneurs failed to get funding from Venture Capitalists (VC). A study based in Karnataka found that about 90% women had only their own funding to rely on, while 68% found it tougher to get bank loans. All that is set to change once the Stand Up India scheme comes into action.
Refinancing Options
The scheme helps not just those who are in the initial stages of their entrepreneurial plans, but also those who have already set up their company but still fall under the startup category. Under the scheme, the government has opened refinancing options through Small Industries Development Bank of India (SIDBI), at an initial amount of Rs 10,000 crore. Along with that, a corpus (principal amount) of Rs 5000 crore would be created, to ensure credit guarantee through the National Credit Guarantee Trustee Company. Along with the composite loan, they will also be provided with a debit card.
Support and Knowledge
A research done by YourStory in 2014 indicates that about 54% women have no idea what a startup should work like or how to work on problem solving. About 58% women need to be educated about entrepreneurial resources and techniques. However, provisions under the scheme also includes support for both women and SC/ST borrowers, all the way from pre-loan stage to operating stage. Besides familiarising them with bank guidelines and terminology, they will also know about registering online and how to use e-markets, and entrepreneurial practices. To bring together all the information related to the scheme, the government will be setting up a website for Stand Up India.
Substantial Reach for Maximum Benefit
While self-employed women working in the low-skill sector (such as manual labour or street vending) has increased to almost 1 crore between 2000 and 2010, the number of women in higher income entrepreneurship still remains low. To increase this number, the intention of the scheme is to get at least two entrepreneurial projects started in every bank branch in the country. The Stand Up India scheme is expected to benefit about 250,000 potential borrowers, according to its official statement.
Connect Centres Near Home
The number of SC/ST entrepreneurs is growing. For instance, according to The Hindu, there’s been an impressive rise in SC/ST entrepreneurs in Andhra Pradesh. The number of organisations set up by them went from 319 in 2004 to 2275 in 2012. To cater to the growing demand, Stand Up Connect Centres would be established at the offices of SIDBI and National Bank for Agriculture and Rural Development (NABARD). With country-wide presence of more than 15 regional offices and 84 branches accommodating more than 600 clusters, the reach of SIDBI is massive. The SIDBI would join hands with the Dalit Indian Chamber of Commerce and Industry (DICCI), among other institutions, to facilitate the loans.
Compared with just 114 deals during the three months ended December 2015, there were 344 investments during January-March 2016. As many as 388 startups raised funds in the first three months of 2016.
Here is some cheer for startups this year after funding slowed down significantly in the last quarter of 2015. According to a report by venture capital and startup research firm Xeler, Indian startups raised $1.73 billion during January-March 2016.
Compared with just 114 deals during the three months ended December 2015, there were 344 investments during January-March 2016. As many as 388 startups raised funds in the first three months of 2016.
The largest funding rounds during the first three months of 2016 were by online travel venture Ibibo ($250 million), e-commerce major Snapdeal ($200 million), online grocery retailer Big Basket ($150 million), online automobile classified portal Cartrade.com ($145 million) and online retailer Shopclues ($75 million).
“On an average, we have seen at least 4 startup fundings per day between January to march 2016,” Xeler said in a report. Read full report here.
eCommerce, SaaS and health tech have emerged as the top performing investment segements this quarter with a cumulative investment of over USD 810mn across 103 startups that accounts for 47% of the cumulative deal value.
EVC is launching its maiden India focused $50 million fund that will look to back enterprise software, internet and mobile-focused startups.
US Based Investor Entrepreneurship & Venture Capital (EVC) to launch early-stage investment fund for Indian Startups. EVC is launching its maiden India focused $50 million fund that will look to back enterprise software, internet and mobile-focused startups.
Serial entrepreneur and investor Anjli Jain, will lead this venture firm & will primarily focus on startups operating in the education sector, and will also look at backing early-stage ventures in the internet of things, ad-tech, ecommerce, wearables and gaming segments.
“India has emerged as one of the most assuring entrepreneurial landscapes globally, and we have launched the fund looking at opportunities that the country’s ecosystem has to offer, and the gap that we can bridge by supporting new businesses,” said Anjli Jain, managing partner of EVC.
The fund will typically invest $100,000-$5 million in startups, while its accelerator could invest $5,000-$100,000 in exchange for equity in the ventures.
“We look forward to working with some passionate entrepreneurs and bring forth ground-breaking ideas alive,” Jain said, adding that the venture capital firm is considering registering the fund under markets regulator Securities and Exchange Board’s Alternative Investment Fund regulations.
The venture capital firm also operates an accelerator programme in Gurgaon that provides physical and virtual co-working space and operational mentorship to ventures. It operates a second accelerator in Cleveland, Ohio.
Prior to launching the fund, India-born, Columbia University educated Jain had founded and invested in Kryptos Mobile, a cloudbased, self-service mobile app development and publishing platform, LookingGlass Platform, a provider of an integrated, software-as-a-service enterprise apps, portal and content management systems, and BlackbeltHelp, an information technology helpdesk and student services provider, among others.
With the softening of valuations and the famous Flipkart markdown, is there still a large internet opportunity in India?
I was at a conference the other day, speaking on a panel with VCs and angels, when we were asked a question: With the softening of valuations and the famous Flipkart markdown, is there still a large internet opportunity in India?
My friend and co-panelist from a large VC fund jumped up and trotted out the now-standard schtick: that the combined market cap of Chinese internet firms is half a trillion dollars and as of now the combined market cap of all Indian internet firms is just around $30 billion – so yes, there is loads of room to grow. Maybe 10x or 15x or more.
But I believe there’s something terribly wrong with this logic, and the sooner we realise this, the better off we all will be.
Because you really can’t compare the internet opportunity in China and in India.
The Chinese market is a walled garden of sorts, open mostly only to Chinese businesses – after all, Google, Facebook and Twitter haven’t been allowed to freely operate in China. So Baidu ended up being the Google of China, RenRen is the Facebook of China and Weibo is the Twitter of China. And even Amazon has faced a huge uphill task there.
The Chinese have built their businesses without much global competition – that half-trillion dollar market cap came much easier, after much government protection. Sure Alibaba beat eBay – but that is one exception. There are significant regulatory, political and language barriers for non-Chinese internet firms to win in China.
It’s the same in Russia. Yandex is the Google of Russia and vKontakte is the Facebook of Russia.
While, in India, the regulatory barriers are almost non-existent, our internet is still mostly in English and our politicians aren’t able to control digital media companies like the Chinese and Russians can do in their countries.
The result of our openness?
The Facebook of India is Facebook, the Google of India is Google, and the Twitter of India is Twitter.
And it’s just as likely that that Amazon – not Flipkart, will be the Amazon of India; that Uber – not Ola, will be the Uber of India; and that Tinder – not TrulyMadly will be the Tinder of India. And so on.
This has a few implications. First – if you want to see the size of the Indian internet economy, you MUST include chunks of Google, Facebook, Twitter and others in it – because these are India’s leading internet companies.
There are several ways to do it- one is to look at global revenues and market caps of these companies and attribute the Indian market cap to the share of Indian revenue in the global pie. I tried that, but came up across a big issue- not knowing the Indian revenues of many of these firms, because it’s not separately called out.
I tried it a second way – to attribute the India-linked market cap to the Indian share of the firm’s global users – and that data was a little more accessible. I took all data from public sources like press releases, or estimates from SimilarWeb and the like. Wherever available, I took user or customer numbers (in regular font below) and where not available, I’ve taken traffic numbers (in italics below). And instead of private company valuations which would count Uber and such – I’ve taken more conservative public company valuations. Oh, and further, all mistakes are mine alone.
Here’s what I came up with.
The top 10 global internet companies have a combined market cap of over $1.3 trillion. But one can attribute up to $150 billion to Indian users.
Yes, of course, there is a large caveat here. First that, as said before, the Indian share of global revenues will give a more accurate picture. And our share of revenues will certainly be less than our share of traffic or users. So you can discount this number by 25%, 50% or even 75% to adjust for that – but the final number is still significant. Though I do think market caps are not just a function of revenues – user base is also a prime consideration – after all that’s where the growth will come from.
Now if you add the $30 billion or so of market cap of our local unicorns to this $150 billion, we’ll end up with around $180 billion of market cap for our current Internet economy.
Then, adjust for the fact that China has 720 million internet users and India has exactly half, 360 million users. $520 billion of Chinese market cap per head across 720 million users is $722 per user. Our number turns out to $180 billion of market cap across 360 million users – or $500 per user.
So the real difference between the Chinese internet potential and Indian internet potential is not 10x or 15x – but perhaps closer to 40% or 1.4x. Or you can be pessimistic and call it 2x if you like. But 10x it isn’t.
What are the takeaways here?
First that there just isn’t as much headroom for growth in the broad internet economy for startups in India as you’ve been told there is. The $180 billion may grow over a few years to $300 billion – but $200 billion to $250 billion of that will accrue to non-Indian firms. Leaving $50 to $100 billion for Indian startups. Please adjust your expectations accordingly.
So a more apt way of looking at the Indian potential is to see us like the 51st state of the US. Or like a United Kingdom. Large market for global companies – not necessarily a large market for local firms.
So I’d say much of the growth assumed for our current unicorns is probably vastly over-estimated. Especially if the Indian unicorn has global competition in its way.
Second, the nature of Internet businesses is largely a winner-take-all in any niche. If you see the market share that Google ended up with in search, Gmail in email, Facebook in social networking, Twitter in microblogging, YouTube in video etc – they’re all well above 80%. So if you take on a niche – you either end up the leader with 80% of it, or a distant number 2 with 8% of it or a non-player with 0.8% of it. This is where the chips largely tend to fall – though there are a few exceptions.
So your likely playbook if you take on a global internet company are (a) to be bought by the global player or (b) to end up eventually as the 8% play.
So what’s going to happen to Flipkart now that Amazon and Alibaba have declined to buy it? Or to Ola now that Uber has declined to buy it? It may not be the nicest of news, I believe.
Which leads to the third take-away. If you want to build a large Internet business in India – then do it out of the way of the globals. Build something where the globals aren’t. From my own portfolio, I’d suggest that RedBus, CarWale, MyDentist, Chumbak and others have picked the right areas. Other firms like InMobi, Naukri and PayTM are on paths outside the globals’ footprints too. This is a good place to be, over the long term – unless you’re sure you can sell out to a global like Baazee did to eBay. I personally believe this is extremely risky – as the global firm may just turn around and say “nope, I’ll build it myself” as many are increasingly doing so.
In other words – try not to be the X of India. Try to be the yourself of the world. This is easier said than done, both because we have a long entrepreneurial history in India of building copy-paste businesses, from independence till now. And second, because most investors in Indian internet firms work for US or other firms who wrongly believe they can simply fund and build the “X of India” – and have some comfort in funding copy-pastes rather than backing originals. But I do see signs of this groupthink slowly giving way to backing original companies.
And the fourth takeaway is for these firms to go global too. Naukri has expanded to West Asia. Chumbak is in Japan. InMobi is all over. And we’ll do better to expand to 2nd and 3rd world countries than taking on the first world. Because the nature of our markets and products is typically more suited to those economies than to winning in the US.
This is how you get long-term traction – do to local firms in those countries what the globals are doing to us. Sure, we might not get the market caps the US firms get right away. But it will come to us, eventually.
Is this piece a downer on the start-up excitement in India? I hope not. Our unicorns can and must happen – but should happen in original areas. Alibaba didn’t copy anybody – it started in China and rules the world, Skype didn’t copy anybody – it started in Estonia and rules the world. And that should be our inspiration. Can we build great, global internet companies out of India? Yes, for sure we can. But perhaps not in the way we’re doing so currently.
Anyway, thought I’d pen this piece and see if it might trigger a few thoughts of your own – I’d love to hear those too!
The Department of Industrial Policy and Promotion(DIPP) on Thursday launched a portal and mobile app through which start-ups can gather all latest updates on various notifications, circulars issued by various departments and different funding agencies.
The Department of Industrial Policy and Promotion(DIPP) on Thursday launched a portal and mobile app through which start-ups can gather all latest updates on various notifications, circulars issued by various departments and different funding agencies.
Secretary in the DIPP, Ramesh Abhishek said the portal and app were launched as an integral component of an action plan.
He said it would also provide information regarding incubators and funding agencies recognised for the purpose of recommending startups as part of startup recognition application.
He also said that the ‘Startup India Hub’, which has been established within Invest India, will be a single point of contact for the entire start-up ecosystem which would enable exchange of knowledge.
“The hub will work in a hub and spoke model with governments, VCs, angel funds, incubators, mentors. It will assist startups through their lifecycle, on all aspects, such as providing mentorship, incubator facilities, IPR support, funding,” he said.
Abhishek said a real-time recognition certificate will be available for download upon completion of the application process. Similarly, small and medium enterprises and start-ups, especially in the communications technology sector, would be able to take advantage of the IPR portal.
Start-ups will also be able to find information regarding various notifications issued by government ministries and information about incubators and funding agencies.
Entities that fulfil the criteria as per the definition of startup and are incorporated/registered in India, can obtain recognition as a startup to avail various benefits listed in the Startup India Action Plan.
“Start-ups have to pay only statutory fees, which is minuscule,” he said, adding the hub would start working from Friday. He added that while the fund was already declared in the Budget and accordingly Rs 2,500 crore each year would be released over next four years to SIDBI. All the tax benefits will be extended to budding entrepreneurs after the passage of the Finance Bill.
“The process of recognition is simple and user friendly and involves a single page application form that a user can fill either through a web interface or through mobile app.
Formats of the recommendation/support letters that need to be attached as part of the application form have been published on the portal and mobile app,” he told reporters here.
Abhishek said that a real time recognition certificate is provided to startups on completion of the application process.
“A digital version of the final certificate of recognition is available for download, through the portal and mobile app. A request for certificate of eligibility for tax exemptions from Inter-ministerial Board will be made simultaneously by selection of a simple option,” he added.
DIPP has also set up an Inter-Ministerial Board to verify the eligibility of startups opting to avail tax and IPR related benefits and to provide a certificate of eligibility to innovative startups.
“The board will not take much time to verify. It will happen at a faster pace,” he said.
The board would meet every week. The DIPP is also holding consultations with the Ministry of Corporate Affairs regarding digital signatures.
According to the FAQs of the DIPP, where a recommendation is issued by an incubator without proper examination or without itself satisfying about the innovative nature of the business it shall be “blacklisted” from giving any future recommendation or receiving any benefit from government
eCommerce in India has attained a lot with the growth of technology and it acts as a strategic factor with the internationalization, shopping experience, mobile-oriented design and social integration.
eCommerce in India has attained a lot with the growth of technology and it acts as a strategic factor with the internationalization, shopping experience, mobile-oriented design and social integration.
Even though all these factors are quite critical, nowadays each of the difference between the eCommerce websites likes to be more qualitative. Importance of project execution become higher when compared to target or base idea so that it is necessary to concentrate on various sector with the increase of online business.
The eCommerce websites gives the best user experience with the faster delivery of the products based on the need of the customers. eCommerce website plays an important role with the maturity of industry with the tools and solutions that are available in the extensive manner.
Maturity in industry standard is important and then everything would be counting with the differentiation so that they are left aside. Customer service along with the complaints handling would be the best assurance for the improvement of eCommerce.
Today there is a great demand in customer so that immediate response using the toll free number, social networks and chat system increases the communication between the eCommerce website and clients. In most of the cases, contact forms become the only way for the customer service. Creating confidence is the main role for the good customer service so that it is convenient for developing the business.
Communication with clients using the eCommerce website acts as a loyalty tool so that it is convenient for improvising the growth rate. Using the multiple screens, it is convenient to follow the need of customers in many different channels and gives the efficient client support system.
When the mobile visitors could not get access to the support chat system due to different language issues, then providing the customer support in all the languages would be preferable. In modern scenario, post purchase process in eCommerce is most important so that the reverse logistics stands as pillar for the loyalty of the programs.
Modern eCommerce website makes sure that building confidence for the future purchases is most important so that it would improve the growth immensely.
Speedy delivery process is maintained so that it would be quite easier for increasing the efficient way for processing the purchase. Innovation in the sales models is quite excellent so that with the competing price makes the online purchase simple.
For example the sale model like curation and subscription tends to be more successful but it is not applicable in most of the cases. The process would be advantage for providing better income stability.
Branding is the key factor for sustaining in the eCommerce competition. Designing and user friendly accessible would be great option in the mature market. However the stakes are much high so that the good looking design will not be competitive advantage.
Leaping further to make difference in purchasing interface would be prominent. Modern 3D technology and video enhancing technology is quite interesting compared to traditional catalog as this new digital version technology would attract customers.
Also, until recently, the only differentiator between a success and failure in eCommerce was funding. Now, the new FDI rules in eCommerce marketplace will ensure that the fittest will survive and not the ones with the funding.
It is also good timing because some of the investors have burnt their fingers by investing on “hype” and they have started demanding performance now. The FDI policy will ensure that performance driven companies will succeed against funding driven companies, and this will give Indian funded companies a great chance to succeed, in a level playing field.
Author: Ameen Khwaja
Mr. Ameen Khwaja is the Founder and CEO of LatestOne.com
LatestOne.com is the brain child of Mr.Ameen. He is the visionary behind its remarkably successful journey beginning from its inception, to acheiving Rs.100 cr turnover business; as it exists today, within a short span of 18 months. Consequently, it took a leap by gaining Rs.50 cr investment. The company is growing consistently with 200 employees, 10000 SKUs, two warehouses, and is adding more.
The ongoing e-commerce war spilled over to Twitter on Friday, when Sachin Bansal, co-founder of India’s largest online retailer Flipkart, made a direct jibe at competitors – Snapdeal and Paytm.
The ongoing e-commerce war spilled over to Twitter on Friday, when Sachin Bansal, co-founder of India’s largest online retailer Flipkart, made a direct jibe at competitors – Snapdeal and Paytm. Bansal tweeted, “Alibaba deciding to start operations directly shows how badly their India investments have done so far.” Recently, Chinese e-commerce giant Alibaba, which has stakes in Snapdeal and Paytm, expressed interest in entering India directly this year.
Alibaba deciding to start operations directly shows how badly their Indian investments have done so far
Snapdeal’s co-founder Kunal Bahl was quick to respond to his arch-rival’s tweet, saying, “Didn’t Morgan Stanley just flush $5 billion worth market cap in Flipkart down the…”, accompanied by a toilet emoticon. “Focus on your business, not commentary,” Bahl tweeted. His comment come on the back of Wall Street powerhouse Morgan Stanley recently marked down Flipkart shares by 27%, bringing down the country’s most valuable privately held tech firm’s its valuation to around $11 billion from $15.2 billion.
Didn’t Morgan Stanley just flush 5bn worth market cap in Flipkart down the ?? Focus on ur business not commentary 🙂 https://t.co/8NpkhWWo2j
This is not the first time Bahl and Bansal have locked horns publicly. Last year, Bahl had said in an interview that he will top Flipkart’s gross merchandise value or GMV by the end of 2015. Flipkart responded immediately through another interview, indicating it will remain the number one player in the Indian e-commerce market.
Alibaba holds around 5% stake in Snapdeal and nearly 40% – directly and via its arm Ant Financial – in online payments major and e-tailer Paytm.
The Indian online retail market is seeing a hotly contested battle being fought among the domestic players like Flipkart, Snapdeal, Paytm and the Jeff Bezos-led Amazon. “This shows that none of the existing e-commerce players show leadership of the market. That’s what makes it such an easy decision for Alibaba to enter. Almost $7 billion of investment has gone and yet there’s no winner in sight. So it’s not just a reflection on Snapdeal and Paytm but the whole sector,” an investor in multiple consumer internet companies said.
Indian e-commerce companies have so far been burning millions of dollars in cash on discounting, logistics and marketing to get to a substantial scale. These subsidies have been financed by investors who have ploughed more than $3 billion and $1.5 billion in Flipkart and Snapdeal, respectively. But with the overall funding environment tightening globally and in India, from here on it won’t be easy for these players to rack up financing and consolidation in the market looks imminent.
