Also in this letter:
Big venture capital funds turn bullish on electric vehicle startups amid slowing funding
■ Global news media start-up Semafor opens up to partner India for local edition
■ Mitigate risk before going the IPO route, says Kris Gopalakrishnan
SBM Bank bans fintechs from onboarding new users
State Bank of Mauritius (SBM) India, one of the most active partner banks for fintech companies, has asked its fintech-card partners to immediately stop onboarding new users for its co-branded prepaid credit card product.
This has impacted several startups in the industry, including Slice, Uni, and LazyPay.
“They (SBM) have sent a note on new user additions. They are quite concerned to follow the RBI guidelines last week, but meetings are scheduled with the bank later this week. For now, the memo talks about pausing new user onboarding,” one person briefed on the matter said.
RBI guidelines: The development comes after the Reserve Bank of India (RBI) issued guidelines on digital lending last week.
Under the new rules, all loan disbursements and repayments must be executed between the borrower’s bank account and the regulated entity.
Industry sources said there was no clarity yet on what happens to existing users of prepaid cards such as Slice, but a clear picture may emerge following a proposed meeting. later this week.
Last bank standing: We reported on June 23 that SBM was one of the only banks to continue to support the card-fintech industry after the RBI sent a communication to industry stakeholders to prevent the loading of prepaid payment instruments (PPIs) through lines credit.
Prepaid cards issued by Slice, Uni and LazyPay had slipped below the 100,000 mark after the RBI banned the industry from charging lines of credit to wallets and other prepaid payment instruments (PPIs), we wrote. us on July 19.
Big venture capital funds get bullish on electric vehicle startups amid slowing funding
Traditional venture capital (VC) funds have increasingly deployed funds in the e-mobility space, even as funding in the broader startup ecosystem has seen a slowdown in recent months.
Lightspeed Venture Partners announced its first bet on an electric vehicle (EV) startup by leading a $13 million funding round in Bengaluru-based fast-charging startup Exponent Energy on July 17.
In June, battery-swapping startup Battery Smart said it raised $25 million led by New York-based investment firm Tiger Global, with participation from Blume Ventures and Orios Ventures.
It was Tiger Global’s third investment in the electric vehicle sector after backing Ather Energy in 2016 and Ola Electric in March 2019.
VCs have traditionally stayed away from electric vehicle companies because they are not scalable like startups that build software, fintech, or consumer technology platforms.
This is most evident in the vehicle manufacturing sector, as startups compete not only with well-funded players like Ola Electric and Ather Energy, but also with traditional auto companies.
But that’s changing as EV startups are raising more money than ever before.
According to data from startup industry tracker Venture Intelligence, the amount of investment in electric vehicle companies in India has already reached $555 million this year, up from $371 million in 2021.
By comparison, domestic startup funding fell 37% in the second quarter of this year to $6.9 billion, ET reported on July 5.
Global news media startup Semafor opens up to partner India for local edition
Justin SmithIn January, former Bloomberg Media chief executive Justin Smith said he was leaving his top job to launch a news startup that would serve “unbiased journalism” to a global audience.
Seven months later, the media company – Semafor – has raised $25 million in seed funding and has hired more than 35 top journalists, business executives, products and technologies.
What is happening? Semafor has ambitious plans undeterred by the onslaught facing most digital media companies due to tech giants Google and Facebook hogging most advertising dollars. Instead, the startup will double its hiring, grow its team size to 70 by October when it goes live, unaffected by macroeconomic headwinds that have led to job cuts and a major slowdown. in businesses around the world.
The Indian edition is coming? Semafor is looking to strike partnerships in India to enter with a local edition very soon, Smith told ET in conversation during a visit to Mumbai recently. Indian regulations do not allow international publications to operate independently due to restrictions on foreign direct investment (FDI). “An Indian edition is really our plan over time, and we look forward to partnering with a media company here to pursue this opportunity together,” Smith said.
TWEET OF THE DAY
Mitigate Risk Before Going the IPO Route, Says Kris Gopalakrishnan
S (Kris) Gopalakrishnan
India’s startup ecosystem, facing a funding crisis and layoffs, is going through “difficult times”, said S (Kris) Gopalakrishnan, co-founder of Infosys and chairman of Axilor Ventures, a fund that supports startups in startup.
In an interview, Gopalakrishnan also welcomed the government’s decision to review the personal data protection bill and touched on a range of other issues. Here are some edited excerpts:
You’ve always favored startups for IPOs, but there are too few winners for retail investors right now.
[Startups] should only consider an IPO in cases where the risks are largely mitigated. Only if you have full visibility into your business for three years – from a revenue and profitability perspective – should you venture into the IPO stage.
What do you think of the startup funding winter?
These are cycles in the economy. We are going through a difficult period because of Covid-19, the Ukraine-Russia war and inflation. I do not care.
IT companies delay offering rollouts amid recession concerns
Amid concerns about a macroeconomic slowdown, fewer IT workers are juggling multiple job offers and rejection rates for open offers have also fallen, experts said.
It comes after Big Tech companies like Google, Amazon, Microsoft and Apple also signaled a pause in their hiring plans.
As a result, IT services companies are hiring more employees, after onboarding rates fell to around 44% in the January-May period.
In the June quarter, rates stabilized at around 58% for mid-level employees, according to data from HanDigital Solutions, an IT-BPM recruitment research firm.
Other Top Stories by our journalists
Flipkart’s venture arm to support six startups: Flipkart Ventures, the venture capital arm of Flipkart, will back six startups under its accelerator program, Flipkart Leap Ahead, as it seeks to expand its investments in startups and take on rival Amazon.
Tiger Global directs new funding to Jar: Jar, a fintech app for savings, said it raised $22.6 million in its Series B funding round led by existing investor Tiger Global at a valuation of $300 million.
India pilots Google Play: After being one of the top app downloaders, India will soon become the number one country for app development as well, Aditya Swamy, Director of Play Partnerships, Google India, told ET in an interview.
Global Choices We Read
■ Ethereum “merger” is a big deal for crypto — and the planet (Cable)
■ How to prevent autocorrect from crouching (The Washington Post)
■ Americans spent more time streaming than watching cable TV in July — a first (WSJ)