ISSUE NO 6, 15 FEB 2021

ISSUE NO 6 15 FEBRUARY 2021

STARTUP POLICIES

Start-up Seed Fund Scheme of the extension of lockdown and continuing dis- ruption on account of COVID-19, all lending insti- Press Information Bureau: February 08, 2021 tutions were permitted to extend the moratorium Start-up India Seed Fund Scheme (SISFS) has by another three months i.e. from June 1, 2020 been approved for the period of next four years to August 31, 2020 on payment of all instalments starting from 2021-22. It will be implemented in respect of term loans. with effect from 1st April 2021. The Scheme ii. In respect of working capital facilities aims to provide financial assistance to start-ups sanctioned in the form of cash credit/overdraft , for proof of concept, prototype development, lending institutions were permitted to defer the product trials, market entry and commercializa- recovery of interest applied in respect of all tion. Rs. 945 Crore (US$ 129.44 million) corpus such facilities during the period from March 1, will be divided over the next 4 years for provid- 2020 up to May 31, 2020. Further extension was ing seed funding to eligible start-ups through granted up to 31st August 2020. eligible incubators across India. The scheme is iii. Kamath Committee: An expert expected to support about 3600 start-ups. committee formed by the Reserve Bank of India A number of measures announced under Atma- (RBI) under the chairmanship of Mr. K.V. Kamath nirbhar Bharat Package are beneficial for Start- made recommendations on the required finan- ups. Some of these benefits are given below: cial parameters to be factored in the resolution Benefits under ‘Atmanirbhar Bharat’ for Start- plans under the ‘Resolution Framework for ups Covid19-related Stress’ along with sector specif- 1) Reserve Bank of India ic benchmark ranges for such parameters. The 1.1. Rescheduling of Payments – Term Loans recommendations of the Committee have been and Working Capital Facilities broadly accepted by RBI. Accordingly, RBI has i. In respect of all term loans (including specified five specific financial ratios and the agricultural term loans, retail and crop loans), sector-specific thresholds for each ratio in re- all commercial banks (including regional rural spect of 26 sectors to be considered while final- banks, small finance banks and local area ising the resolution plans. banks), co-operative banks, all-India Financial 1.2. Easing of Working Capital Financing Institutions, and NBFCs (including housing fi- In respect of working capital facilities sanctioned nance companies) (“lending institutions”) were to borrowers facing stress on account of the permitted to grant a moratorium of three months economic fallout of the pandemic, lending insti- on payment of all instalments falling due be- tutions may recalculate the ‘drawing power’ by HIGH COMMISSION OF INDIA , SINGAPORE 1 STARTUP WATCH tween March 1, 2020 and May 31, 2020. In view ISSUE NO 6, 15 FEB 2021 reducing the margins and/or by reassessing the nities working capital cycle. Further, accounts pro- 2.7 Reliefs through Employee Provident Fund vided relief under these instructions shall be (EPF): Under Pradhan Mantri Garib Kalyan subject to subsequent supervisory review with Package (PMGKP), payment of 12% of employer regard to their justifiability on account of the and 12% employee contributions was made into economic fallout from COVID-19. EPF accounts of eligible establishments. This 2) Measures for businesses including MSMEs was provided earlier for salary months of – These measure would support eligible start- March, April and May 2020. This support was ups extended for another 3 months to salary months 2.1 Rs. 3 lakh crore (US$ 41.09 billion) of June, July and August 2020. This provisioned Emergency Working Capital Facility for Busi- assistance of Rs. 4,860 crore (US$ 665.68 mil- nesses, including MSMEs. lion) to 3.67 lakh establishments, for 72.22 lakh 2.2 Rs. 20,000 crore (US$ 2.74 billion) employees. Subordinate Debt for Stressed MSMEs. 2.8 EPF contribution reduced for Business & 2.3 Rs. 50,000 crore (US$ 6.85 billion) Eq- Workers for 3 months - Under this package the uity infusion for MSMEs through Fund of Funds. statutory rate of EPF contribution of both em- 2.4 New definition of MSME: ployer and employee has been reduced to 10% The definition of micro manufacturing and ser- of basic wages and dearness allowances from vices unit increased to Rs. 1 crore (US$ 136.97 existing rate of 12% for all class of establish- thousand) of investment and Rs. 5 crore (US$ ments covered under the Employees' Provident 684.86 thousand) of turnover. The limit of small Funds & Miscellaneous Provisions Act, 1952. unit increased to Rs. 10 crore (US$ 1.37 million) The reduction in statutory rate of contributions of investment and Rs. 50 crore (US$ 6.85 mil- from 12% to 10% for wage months May 2020, lion) of turnover. Similarly, the limit of a medium June 2020 and July 2020 were notified vide dat- unit increased to Rs. 20 crore (US$ 2.74 million) ed May 18, 2020. This scheme was applicable of investment and Rs. 100 crore (US$ 13.70 mil- for workers who were not eligible for 24% EPF lion) of turnover. The limit for medium man fac- support under PM Garib Kalyan Package and its turing and service units was further increased extension. Reduction in rate of EPF contribu- to Rs. 50 crore (US$ 6.85 million) of investment tions from 12% to 10% of basic wages and Dear- and Rs. 250 crore (US$ 34.24 million) of turno- ness allowances was provisioned to benefit ver. It has also been decided that the turnover both 4.3 crore employees/members and em- with respect to exports will not be counted in ployers of 6.5 lakhs establishments to tide over the limits of turnover for any category of MSME the immediate liquidity crisis during Pandemic units whether micro, small or medium. situation. 2.5 Global tenders has been disallowed up to This information was given by the Minister of Rs. 200 crore (US$ 27.39 million), giving prefer- State in the Ministry of Commerce and Industry, ence to domestic suppliers and boost to start- Mr. Som Parkash, in a written reply in the Rajya ups. Sabha . 2.6 Production-Linked Incentive (PLI)

Scheme: For enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atma- STARTUP FEATURE nirbhar Bharat, the PLI Scheme in the 10 key sectors were introduced. This will make Indian India – The Next Datacenter Hub manufacturers globally competitive, attract in- vestment in the areas of core competency and SOURCE:https://community.nasscom.in/communities/ cutting-edge technology; ensure efficiencies; data-science-ai/india-the-next-datacenter create economies of scale; enhance exports The pandemic has pushed the demand for and make India an integral part of the global cloud across the globe with digital transfor- supply chain. It aims to overall growth in the mation accelerating across industries, and in- economy and create huge employment opportu-

HIGH COMMISSION OF INDIA , SINGAPORE 2 STARTUP WATCH ISSUE NO 6, 15 FEB 2021 ternet becoming a lifeline for people both for Covid Impact work as well as entertainment. This shift to-  Increased capacity utilization of existing wards cloud has pushed increased investments outsourced datacentres in hyper-scale datacentres with the global data-  Service providers have fast track their centre market investments expected to reach planned expansions ~$200 billion per annum by 2025. India is also expected to get a share in this growth with in- Major Datacentre Locations and Site Selection vestments in the country expected to reach ~$5 billion per annum by 2025. The report identifies , , Bengaluru, , the various aspects of global and Indian data- (NCR) – as they offer good fiber connectivity, centre market; key trends, drivers and chal- proximity to customers, availability of skilled lenges; a site selection framework for India workforce, and submarine cable connectivity market opportunities; key recommendations for Geographic location, power, fiber connectivity, the India market outlook and the market out- and general construction & operations remain look. the key selection criteria for site selection be- fore setting up a datacenter Global Datacentre Market  Cumulative investments of $1.3 trillion are Outlook and Recommendations expected over 2019-2025 India has a huge potential to take a large share  North America is the leading market in of global datacentre investments if it is able to terms of investments, while MEA & LATAM act fast on implementing the recently an- are the fastest growing markets followed nounced datacentre draft policy growing the by APAC CAGR by 2X-3X, with annual investments reach-  IT Infrastructure accounts for ~77% share ing $6 -$8 billion by 2025 of total datacentre investments; with the Key recommendations include faster implemen- rest being invested in electrical & me- tation of government’s draft policy, encourage chanical infrastructure, and general con- use of renewable resources, level playing struction ground for all players, deemed regulatory ap- provals and digitization of RFPs. Covid Impact  Increased data traffic has pushed the oc- STARTUP FUNDING cupancy rate of colocation datacentres pushing more investments in the sector Edtech Platform upGrad Close To $100 Mn  A temporary halt in construction of data- Funding Round From Temasek, IFC centres during the lockdown, which quick- Source:https://inc42.com/buzz/edtech-platform-upgrad- ly recovered as lockdowns were relaxed close-to-100-mn-funding-round-from-temasek-ifc

India Datacentre Market  Temasek is looking to invest about $50  Cumulative investments of ~$28 billion ex- Mn, whereas IFC has committed to invest pected over 2019-2025 $45 Mn  In terms of CAGR over 2019-2025, India is  The startup went big on acquisitions in expected to grow at ~5%, 2X faster than 2020 by acquiring Rekrut India and The global Gate Academy The India Advantage  The company reported a revenue of INR  Majority investments focused on Tier IV 163 Cr in FY2020, but with a loss of INR 79 datacentres Cr  Operational and development cost ad-

vantage Mumbai-based higher education-focused  Availability of engineering skills edtech platform upGrad is reportedly in ad-

vanced talks with Singapore-based sovereign HIGH COMMISSION OF INDIA , SINGAPORE 3 STARTUP WATCH ISSUE NO 6, 15 FEB 2021 wealth fund Temasek and World Bank’s Interna- Edtech rival Toppr Technologies tional Finance Corporation (IFC) to raise $100 Mn in a fresh funding round. The company is Source:https://www.livemint.com/companies/start-ups/ byjus-nears-150-million-acquisition-of-edtech-rival-toppr- raising the capital at a valuation of $450 Mn- technologies $500 Mn. According to a Moneycontrol report, which cit- India’s biggest e-learning startup, Byju’s, is ed unnamed sources, Temasek is looking to in- close to signing a deal to acquire rival Toppr vest about $50 Mn in the startup, whereas IFC Technologies Pvt. in a transaction valued at has committed about $45 Mn. However, the roughly $150 million, according to a person fa- three parties are still involved in last-minute ne- miliar with the matter. gotiations and the deal is not yet finalised. Toppr provides online learning materials to stu- Founded in 2015 by Ronnie Screwvala, Mayank dents in grades 5 through 12 and its backers Kumar, Phalgun Kompalli and Ravijot Chugh, include SAIF Partners and Helion Ventures. It is upGrad focuses on higher education courses the latest target for Byju’s, which has been ex- by tying up with universities in India and panding aggressively in recent months to cap- abroad. Besides this, it also provides technical ture the surge in demand for online education skill development training to professionals for triggered by the pandemic. In January, it in-demand jobs. agreed a $1 billion deal to acquire brick-and- mortar test prep leader Aakash Educational STARTUP ACQUISITION Services Ltd.Byju’s and Toppr representatives did not immediately respond to emails seeking

comment.  Sweden-based free-to-play gaming studi- Founded in in 2011, Byju’s has os Stillfront Group will acquire Bengaluru- emerged as India’s leader in online learning. based Moonfrog Labs Private Limited, the The company spent the latter half of 2020 rais- company behind popular games like Teen ing capital from notable names including Mary Patti Gold, Ludo Club, Rummy Gold and Meeker and Yuri Milner. Two separate funding others. The acquisition will be conducted rounds in September, led by Silver Lake and in four tranches, leading to a 100% takeo- BlackRock, respectively, valued the startup at ver. $11 billion.  Online travel and ticketing company Ix- Mumbai-based Toppr takes an app-based ap- igo announced that it will acquire 100% proach to education with video classes, mock stake in train discovery and booking tests, revision cards reminiscent of Instagram startup Confirmtkt. The transaction would Stories and live support for students stuck on a be a through mix of cash and Ixigo stock. question. It provides its services internationally Both companies would continue to oper- and counts more than 16 million students, ac- ate independently after the transaction. cording to its website. Paid subscribers are a  Global platform in motion graphics Lot- fraction of that. It started a code-tutoring unit tieFiles has acquired Surat-based design called Codr last summer. asset marketplace Iconscout for an undis- The deal for Toppr’s takeover is close but has closed amount. “Our goal is to empower not yet been finalized, said the person, who designers and developers and save them asked not to be named due to its private nature. weeks of work by freeing them from creat-

ing, collaborating, testing, and editing de- sign assets. We are grateful to the Icon- Other Developments scout team for coming along on this jour- ney with us and thrilled they too share this  Delhi-based early-stage venture capital common vision,” said LottieFiles’ cofound- firm Kisho Capital has launched a rolling er and CEO Kshitij Minglani. fund to invest INR 1 Cr in 20 Byju’s nears $150 million acquisition of startups working across home automa-

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tion, healthtech, social impact, B2B SaaS momentum as the company has increased and fintech segment. its paid-up capital by 3X to INR 1,448 Cr in  Bengaluru-based gourmet meat startup preparation of raising funds in the near Licious has cut down its losses by future. The development coincides with 66% from INR 438.7 Cr in FY2019 to INR the possibility of Zomato raising an addi- 146.3 Cr in FY2020. The company’s reve- tional $500 Mn in a pre-IPO funding round, nue has increased by 77% from INR 78.96 at a valuation of $5.5 Bn. Cr to INR 138 Cr. Despite the supply chain  Zoomcar’s losses have more than doubled being a key focus, Licious’ spending to- in FY20 from FY19’s INR 209 Cr to INR wards maintenance and infrastructure 424.3 Cr. It reported a revenue of INR was low compared to other factors. 294.6 Cr in FY2020, representing an in-  Pepperfry’s revenue grew 26% to INR crease of 10% from previous year’s INR 260.61 Cr in the fiscal year 2020, but with 266.6 Cr. The company’s losses, on the a 72% increase in losses to INR 183.49 Cr. other hand, almost doubled to INR 424.3 Of the company’s total revenue, INR 246 Cr in the same time period due to the 35% Cr was operational revenue. increase in expenses.  Social commerce company Meesho has  Bengaluru-headquartered fintech startup reported a staggering 3X rise in its losses CRED posted operating revenue of just 52 for FY20, as its expenses shot up in the lakh in the fiscal year ended March 31, year. It earned INR 341.6 Cr and spent INR 2020. The company’s total expenses stood 657 Cr, leading to a loss of INR 315.4 Cr. at INR 378.39 C, learning to an after-tax  Payments gateway major Razorpay saw loss stood at INR 360.31 Cr. its losses almost doubled in FY20 as its  Indian payments unicorn Pine Labs saw its advertising and promotional expenses revenue grow 43% to INR 701.62 Cr in the surged by nearly 5x and employee expens- fiscal year ended March 31, 2020 (FY20). es more than doubled from the previous The company’s expenses grew at a slight- year. It’s revenue increased 163% to INR ly faster clip by 56%, leading to a a loss of 519.42 Cr with expenses reaching INR INR 57.72 Cr. 525.41 Cr, leading to a loss of INR 6.15 Cr.   MakeMyTrip is looking to raise $200 Mn · through an issue of senior convertible notes, which will come due in 2028 for the company in the form of shares. “The pric-

ing of $200 million in aggregate principal amount of 0.00 percent convertible senior notes due 2028,” the company said.  Mumbai-based early-stage venture capital firm India Quotient has announced the launch of the fourth fund through which it

is looking to raise $80 Mn to invest in di- rect-to-consumer (D2C), enterprisetech, edtech, fintech and social media startups.  Mumbai-based incubator and Venture Cat- alysts’ early stage startup fund 9Unicorns has raised $14 Mn (INR 100 Cr) from Hal- diram’s and other investors. Snacking and

food giant Haldiram’s had announced a partnership with Venture Catalysts in April 2019, looking to invest in tech startups.  Zomato’s plans to list publicly have gained

HIGH COMMISSION OF INDIA , SINGAPORE 5 STARTUP WATCH ISSUE NO 6, 15 FEB 2021 STARTUP EVENTS >> UPCOMING

Inspreneur Connect–Vector 2 11 March 2021 , India 11:00 am to 1:15 pm IST / 1:30 pm to 3:45 pm SGT Registration Link: https://nasscom-in.zoom.us/webinar/register/WN_z8_zeD7NSIm6D_aOhNEhZg

The High Commission of India, Singapore, in association with Nasscom is organizing Inspreneur Connect-Vector 2.0, the second session of a virtual series to connect Indian Startups with Singa- porean VCs. In the 2nd edition, 7 innovative Indian Startups from the following verticals would be participat- ing:Agri-tech, Enterprise solutions, IOT Hardware, Mobility and Retail tech domains. If you are a VC / CVC / PE investor firm wanting to own innovative businesses during their inception stage from India, then we strongly recommend that you attend this upcoming session. As investors in early-age startups, you are aware that it’s always advisable to get in companies while they are in their infancy to maximize return on capital invested. Join us in our endeavor, where we bring you in personal contact with the most exciting Indian Startups that are causing disruption with their technology and business model.

STARTUP FAQs

1. Can a foreign company entity register under Startup India hub?

Any entity having atleast one registered office in India is welcome to register on the hub as location preferences, for the time being are only created for Indian states. However, we are working on international relations and will soon be able to enable registration for stakeholders from the global ecosystem

2. How do we connect to enablers after creating a profile?

The system is build to connect you to your relevant stakeholders based on your industry and preferred stage. Under the profile of every enabler there will be an option to “connect/apply”. Upon clicking, a request will be sent to the respective profile for ac- ceptance. Once accepted, you will able to see the enabler as a new connection.

Please note that you can connect with upto 3 users per week. source:https://vikaspedia.in/social-welfare/entrepreneurship/startup-india-1/frequently-asked-questions

HIGH COMMISSION OF INDIA , SINGAPORE 6 STARTUP WATCH