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Indian startups raised $9.3 billion in 2020

The coronavirus pandemic — and a handful of other factors — slowed dealmaking for startups in India this year.
Compared to their record $14.5 billion fundraise last year, Indian startups are ending 2020 with about $9.3 billion. This is the first time since 2016 that startups in India, one of the world’s largest startup communities, has raised less than $10 billion in a year, according to consultancy firm Tracxn.
The number of deals fell from 1,185 last year to 1,088 in 2020. There were fewer larger sized rounds, too. Rounds with dealsize $100 million or larger fell from 26 in 2019 to 20 (these rounds delivered $3.6 billion this year, compared to $7.5 billion last …

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Reliance Retail buys Urban Ladder for $24.4 million

Reliance Retail has acquired a majority stake in furniture and decor platform Urban Ladder, making a broader push into e-commerce as the largest retail chain in India gears up to fight Amazon and Flipkart.

In a filing to the local stock exchange, Reliance Retail said it had acquired a 96% stake in Urban Ladder for about $24.43 million. The Indian retail giant, which retains the option to acquire the remainder stake in the seven-and-a-half-years-old startup, said it has proposed to invest up to $10.06 million more in Urban Ladder by December 2023.

Founded in early 2012, Urban Ladder sells home furniture and decor products online. It also operates a chain of physical retail stores in several Indian cities. The deal size suggests that it was a fire sale.

The startup had raised about $115 million from Sequoia Capital, SAIF Partners, Steadview Capital, and MIT and other investors, according to Crunchbase and Tracxn. In the financial year that ended in March, the Indian startup reported a loss of $6.63 million on a turnover of $58.2 million.

Reliance Retail said (PDF) the investment “will further enable the group’s digital and new commerce initiatives and widen the bouquet of consumer products provided by the group, while enhancing user engagement and experience across its retail offerings.”

Urban Ladder is the latest acquisition for Reliance Retail, which earlier this year said it had entered into a $3.4 billion deal with Future Group to buy several of India’s second largest retail chain’s businesses. In August, Reliance acquired a 60% stake in pharma marketplace Netmeds’ parent firm Vitalic for about $83.2 million.

Reliance Retail, which is part of Reliance Industries (India’s most valued firm), has raised about $6.4 billion in recent months after its sister subsidiary, Jio Platforms, secured over $20 billion this year from Facebook and Google among other high-profile investors.

Reliance Retail, which serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country, entered the e-commerce space with JioMart through a joint venture with Jio Platforms. JioMart now has a presence in over 200 Indian cities and towns, and it also maintains a partnership with Facebook for WhatsApp integration.

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India’s WareIQ raises $1.65M for its Amazon-like delivery platform for sellers

Despite e-commerce firms Amazon and Walmart and others pouring billions of dollars in India, offline retail still commands more than 95% of all sales in the world’s second largest internet market.

The giants have acknowledged the strong hold neighborhood stores (mom and pop shops) have in the country, and in recent quarters scrambled for ways to work with them. Mukesh Ambani, India’s richest man, has made the dynamics more interesting in the past year as he works to help these neighborhood stores sell online.

But the market opportunity is still too large, and there are many aspects of the old retail business that could use some tech. That’s the bet WareIQ, a Bangalore-headquartered, Y Combinator-backed startup is making. And it has just raised a $1.65 million Seed financing round from YC, FundersClub, Pioneer Fund, Soma Capital, Emles Venture Advisors, and founders of Flexport.

The one-year-old startup operates a platform to leverage the warehouses across the country. It has built a management system for these warehouses, most of which largely engage in offline business-to-business commerce and have had little to no prior e-commerce exposure.

“We connect these warehouses across India to our platform and utilize their infrastructure for e-commerce order processing,” said Harsh Vaidya, co-founder and chief executive of WareIQ, in an interview with TechCrunch. The company offers this as a service to retail businesses.

Who are these businesses? Third-party sellers, some of whom sell to Amazon and Flipkart and use WareIQ to speed up their delivery, e-commerce firms, social commerce platforms as well as neighborhood stores, and social media influencers.

Any online store, for instance, can send its products to WareIQ, which has integrations with several popular e-commerce platforms and marketplaces. It works with courier partners to move items from one warehouse to another to offer the fastest delivery, explained Vaidya.

The infrastructure stitched together by WareIQ also enables an online seller to set up their own store and engage with customers directly, thereby saving fees they would have paid to Amazon and other established e-commerce players.

“The sellers were not able do this on their own before because it required them to talk directly to warehousing companies that maintain their own rigid contracts, and high-security deposits, and they still needed to work with multiple technology providers to complete the tech-stack,” he said. WareIQ also offers these sellers last-mile delivery, cash collection, and fraud detection among several other services.

“In a way, we are building an open source Amazon fulfilment service, where any seller can send their goods to any of our warehouses and we fulfil their Amazon orders, Myntra orders, Flipkart orders, or their own website orders. We also comply with the standard of these individual marketplaces, so our sellers get a Prime tag on Amazon,” he said.

WareIQ is free for anyone to sign up with any charge and it takes a cut by the volume of orders it processes. The startup today works with over 40 fulfilment centres and it plans to deploy the fresh capital to expand its network to tier 2 and tier 3 cities, he said. It’s also hiring for a number of tech roles.

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India’s Flipkart buys over $200 million stake in Aditya Birla Fashion and Retail

Flipkart is acquiring a 7.8% stake in Aditya Birla Fashion as the Walmart-owned Indian e-commerce firm makes further push into the fashion category in one of the world’s largest retail markets.

The e-commerce group will pay $203.8 million for its stake in Aditya Birla Fashion and Retail, a conglomerate that operates over 3,000 stores including the Pantaloons brand. As part of the “landmark partnership,” Flipkart will also sell and distribute various Aditya Birla Fashion and Retail’s brands products.

“This partnership is an emphatic endorsement of the growth potential of India,” said Kumar Mangalam Birla, Chairman of Aditya Birla Group, which operates the fashion retail firm in a filing to the stock exchange. “It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 billion in the next 5 years.”

Kalyan Krishnamurthy, CEO of Flipkart Group, said the two companies will work toward “making available a wide range of products for fashion-conscious consumers across different retail formats across the country. We look forward to working with ABFRL and its well established and comprehensive fashion and retail infrastructure as we address the promising opportunity of the apparel industry in India.”

In July, Flipkart also invested $35 million in $35 million in Arvind Fashions, one of the decades-old Indian firm’s subsidiaries.

More to follow…

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