Last August we reported that the Tata group was in talks with a clutch of global investors for an investment in its digital business. But with these investors reluctant to commit funds right now, Tata Digital is looking to tap its parent company Tata Sons for a $500 million infusion as it looks to take on the likes of Amazon, Walmart and Reliance.
Also in this letter:
■ Swiggy hires bankers for $1B IPO
■ Deliveroo to open engineering centre in India
■ EthSign raises $12 million, and other done deals
Tata Digital seeks more funds from Tata Sons for expansion
Tata Digital has sought additional funds from its holding company Tata Sons for its ambitious digital retail initiative.
Why? Negotiations with global firms have been delayed by geopolitical issues, and Tata Digital is understood to have sought working capital funds in recent weeks, officials close to the development said.
Interim investment: The group is expected to make an “interim investment” of around $500 million as Tata Digital needs to expand aggressively to take on incumbents such as Amazon Walmart and Reliance. It will be spread across several tranches, a source told us.
Investors cautious: The Tatas have been in talks with global investors, including sovereign and pension money managers, to fund its digital foray.
- A clutch of long-term investors including Canada Pension Plan Investment Board, Singapore’s Temasek Holdings, SoftBank Group, Abu Dhabi Investment Authority and two European money managers were among those approached for a potential deal, we reported last August.
But investors appear to be reluctant to commit funds until clarity emerges on the consumer response to the official launch of Tata’s super app, which is now expected in April.
The app is currently being tested amongst Tata employees, who have also been asked to rope in extended family members to test it.
Tata Digital has estimated a valuation of $18 billion for the digital entity, which includes Big Basket, online pharma store 1 mg, Croma and Tata Cliq.
JP Morgan, ICICI Sec to deliver Swiggy IPO
Swiggy has hired investment banks JP Morgan and ICICI Securities for the launch of its $800 million-$1 billion IPO, two sources told us.
Swiggy plans to offer a stake of around 10% in the IPO, which may be a mix of primary and secondary offerings, one of the sources said. A couple of merchant banks will be hired later to run the process.
Decacorn: Swiggy, backed by SoftBank Group, had doubled its valuation to $10.7 billion in its latest funding round in January. The $700-million round was led by asset manager Invesco and also involved a host of new investors such as Baron Capital Group, Sumeru Ventures, IIFL AMC Late Stage Tech Fund and Kotak.
Swiggy had raised $1.25 billion from Japan’s SoftBank, Accel and existing investor Prosus, among others, between April and July 2021. Its existing investors include Alpha Wave Global (formerly Falcon Edge Capital), Qatar Investment Authority, ARK Impact and Prosus.
Food feud: Rival food delivery firm Zomato had a stellar market debut last July, when its shares jumped nearly 53% from the issue price of Rs 76 and its market cap crossed Rs 1 lakh crore on BSE. But like other listed Indian tech firms, its shares have since been battered on the bourses. Zomato’s market cap is currently around Rs 61,000 crore.
About 11 tech-driven startups raised over $7.36 billion through IPOs in 2021.
Logistics, not food: Swiggy, which sees itself as a logistics company, has been expanding into new areas such as instant grocery delivery (Instamart), subscription-based delivery of groceries and meat (Supr Daily), and pick-up-and-drop services (Swiggy Genie). The company claims Instamart delivers more than a million orders a week across 18 cities. Swiggy Genie operates in 68 cities, while Supr Daily is available in major cities.
Deliveroo to open engineering centre in India
Multinational food delivery company Deliveroo will set up an engineering centre in Hyderabad.
It will join other international players such as Indonesia’s Gojek, Singapore’s Grab and Japan’s Rakutan that have set up engineering offices in the country despite not operating here.
Tell me more: The centre will have a new team and will be a core part of Deliveroo’s central technology organisation. The company has already started recruiting and plans to employ over 150 engineers in the areas of analytics, platforms, automation and machine learning by the end of the year.
“This is going to be the largest technology hub outside the United Kingdom,” said Devesh Mishra, chief product and technology officer, who joined Deliveroo last year. “This is a massive opportunity for software engineers, data scientists, ML and AI engineers to work on some of the toughest challenges.”
The centre will be headed by Sashi Somavarapu, vice president of engineering, who has led teams at organisations including Amazon, Jio Platforms and Ford Motor Co. He will report to Mishra.
Talent crunch: Deliveroo is vying for India’s techies amid a huge talent crunch for tech firms that’s expected to persist with more companies going digital, as we reported on January 8. India will struggle to meet technology resource requirements for the next three to four years, according to industry data.
TWEET OF THE DAY
EthSign’s cofounders Xin Yan, Potter Li, Jack Xu
■ EthSign has raised $12 million in stablecoin, led by Sequoia Capital India and Mirana Ventures. Sequoia Capital (US) and Sequoia Capital China also participated in the round. Other investors include Amber Group, Hack VC, Circle Ventures, and angel investors including Balaji Srinivasan (former CTO of Coinbase) and Sandeep Nailwal (cofounder of Polygon).
■ Business-to-business logistics tech platform Oorjaa has raised nearly Rs 9 crore in a funding round led by Inflection Point Ventures. The round also involved a clutch of high-net-worth individuals who have invested in their personal capacity and through Vinners angel investing platform.
■ Propdial, a proptech startup that helps NRIs and Indians living in other cities manage their properties from a distance, has raised a top-up of Rs 1 crore by way of compulsory convertible debentures (CCDs). This top-up is a part of the funding round in which Propdial raised Rs 1 crore last November.
MobiKwik expects revenue to hit Rs 600 crore by end of FY22
.jpg "Bipin preet singh_Upasana Taku, Mobikwik founders(2)")
Mobikwik founders Bipin Preet Singh and Upasana Taku
MobiKwik’s total income rose 86% to Rs 396.5 crore in the first nine months of FY22, compared to the same period a year ago.
The company expects to clock annual revenue of Rs 550-600 crore by the end of FY22, nearly double what it raked in last year, MobiKwik cofounder Upasana Taku told us. In FY21, MobiKwik had registered a total income of Rs 302 crore, according to its regulatory filings.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) losses widened to Rs 78.4 crore for the first nine months compared to Rs 57.9 crore in Ebitda loss for the same period in FY21. The losses were on account of MobiKwik’s growth being affected during the first two quarters of FY22 due to the second Covid-19 wave, Taku said.
The company, which received approval from markets regulator, the Securities and Exchange Board of India (Sebi) for its Rs 1,900 crore initial public offering in October last year, is looking to turn profitable in FY23.
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Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.