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Startup Funding

SMB Sector And The Ban On 1000 And 500 Rupees Notes

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What are the estimated amounts of Black money that would be recovered or curbed with this automatic reaction? Some experts say the ban to be a gimmick. Some others question about the introduction of the 2000 rupees note. Economic and the social value addition towards the introduction of the 2000 rupees notes must be revealed to the common person. If there are real benefits expected out of the move, the figures must be made public. Real estate shares are stumbling badly to about 20% in each trading.

Deflation triggered

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Demand supply balance determines the market price in the real estate sector. This industrial sector has no standard mark of pricing like what you see in case of Gold pricing. Obviously, this market will see a sharp decline, and then there will be gradual recovery, over a period. Black money was mostly speculated in the land purchases so far. There have been no big purchases made in this industrial sector, for so many reasons. Big business firms and the many other structured and organized players in the industry are using bank channel. Yet, how about those small and medium sector industry where the cash-to-cash transactions are inevitable, conventionally since so many years now? This is one something that needs a resolve at this crucial juncture.

Working class of the society is affected badly. Imagine the plight of the drivers, the house cleaners, and the cooks or the electricians as well as the plumbers. They do provide services that are confined to the informal sector, where the payments are mad fortnightly. These are cash payments too. How do they get their money exchanged and when to meet their immediate commitments, could be a matter of concern.

Tumbled real estate sector

Small business owners, who are getting cash from the clients as payments in the rural parts of the country, where only cash transactions are only in place, even all until now, gets affected seriously. Almost any household of the mediocre social status and the upper class in the rural areas would have a lot of cash money in hand to be readily available for distribution to meet various needs, locally. Right from the salary distribution to the workers, payment for fuels of the logistics, payment for the service providers, and many other needs, will want ready cash. They do have cash in reserves to be distributed into all these channels on a daily basis, to keep their operations active. There are thousands of villages, towns and town panchayats all over the country, where you can see such communities to thrive and sustain in the same format.

All these people are sure to be affected severely, knowing what to do in the next few days to not to be able to get money in these denominations, or to offer money in these denominations. To exchange all the money in hand before the stipulated period, will also be difficult as there are slabs for exchange amount. Surely, because of this, their business operations will be affected. The next level of last grade laborers, who are relying on these people for money, will be affected worse in turn. They are not going to get their wages in hundreds rupees notes of fifty rupees notes readily right away as the owners are not having it enough in hand as reserves anymore.

They have to struggle for a quite few more weeks ahead, to lead their routine life with sufficient cash flow in hand. They can even be left to starve. Last level laborers who rely on the daily wages, from the small business owners, will be affected worse, as there will not be too much loose cash left out in the kitty of these owners to be distributed to the laborers.

SME and the 2 days transition phase

Prices of gold will decline sharply with the deflation that is created with the ban of 1000 rupees notes, and the 500 rupees notes, all of sudden. It is possible to get only 4000 rupees exchanged in the banks, even for at least next ten days to come. Imagine the number of people that are to stand in queue. Imagine the amount of time, and efforts that we ought to spend to get this small change done in the banks from day after tomorrow.

When the plight of the common person could be made miserable for the next few days with no big cash flow, permitted, deflation is the natural. With the limitations imposed at this juncture, those who have stacked 500 rupees notes and 1000 rupees notes in the homes and country side villas, privately, have to either come up with explanation to exchange their notes, paying taxes or waste the money. When the currency flow is cut down dramatically, and the supply is just the same, naturally, value for money increases. If you are getting a widget for a dollar earlier, you may get a couple for a dollar. Yeah, that is the rule. It is the case for rupees.

Quarterly profits retarded

That is what the common person needs too. Yet, from the SMB sector perspective; this is not a healthy move, for they are sure to struggle bad at least for quite some more days to come. The situation can be like putting these sector owners particularly in shackles without being able to do their transactions freely. The amount of money that revolves around as cash in the small and medium sector business operations is quite a large. It is the case with the rural small business owners too.

Cash to cash transactions will be severely affected and there arises a sense of urgency to clear all the notes that in reserve by hook or crook. Unfortunately, there is no one to take it except the banks and a few other institutions. With that said, it is a tough ask to get their money redeemed for its fullest value in this time. Some might run into losses too. Else, considerable amount of time has to be spent on exchanging the money from the banks from next week onwards, which again is only to affect their businesses bad.

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Startup Funding

JustRide Raises $3 Million From Y Combinator and Other Investors

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A car sharing platform, headquartered at Bengaluru – JustRide, has raised $3 million from Y Combinator and other investors like Axan Ventures, Susa Ventures based in San Francisco, IT-Farm from Japan, Kima Ventures and London based SCH Holdings.

This raised capital will be invested to magnify JustRide’s sharing platform Yabber and JustConnect, an IoT device which is a device based on Smart Vehicle Technology of the company. The start-up had raised funds worth  $1 million last year in a participation from IAN co-founder Niraj Singh, Palaash Venture, Punit K Goyal, Alok Mittal, Nikunj Jain, Rohit Chokhan, , Zishaan Hayath and Rohit Chokhan.

Under the guidance of the Launchpad Accelerator program of Google, JustRide takes care of both peer-to-peer individuals and vendors. The vendors give their vehicles on lease to them and are guaranteed a fixed return by JustRide.

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The customers can rent SVT upgraded vehicles from JustRide for a small service charge. The company boasts of delivering vehicles within 10 minutes from the time of booking. The SVT helps to know the actual location and performance of vehicle, from load on engine to tire pressure.

CEO and Co-Founder, Ashwarya Singh says, leasing their cars to JustRide could get people double what they usually earn in a month from the car.

Growth metrics and revenue

There are around 150,000 users in Benagluru, Pune and Mumbai combined which is increasing by 40% each month. There is a growth of 40% in the revenue of the start-up every month. The company saw revenue of $1.5 million last year and expects this to increase 3 or 4 times by next year. There are just 55 employees in their company.

A single car used by atleast 13 customers gets them about 50,000 to 60,000, said co-founder Abhishek Mahajan. They aim in increasing their fleet of cars to 2000.

Market opportunity

As per Ken Research, car sharing market in India is expected to have a growth of 15% every year till 2018, which means there is much prospect for those looking to invest in this sector.

Carzonrent, Revv and Zoomcar founded by Sequoia are the car rentals that give competition to JustRide. This August, Zoomcar managed to raise $24 million in its B round of investment, Carzonrent managed Rs. 80 crore from WestBridge Capital, Sidbi Venture Capital and other investors. Revv was funded by Ananth Narayana, CEO of Myntra, about 10 directors and partners of Mckinsey also invested in Revv.

JustRide plans to get a funding of about $7 to 8 million from some global investors to devote in its Smart Vehicle Technology.

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Startup FundingStartup News

OIL India to Fund 50 Crores in New Projects Related to Oil and Gas Sector

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There is a 50 crore fund set aside for the “out of box” ideas for the start-up companies related to oil and gas sectors specifically in the Northeast, by OIL India.

Utpal Bora, the major chairman and managing director of the oil exploration company publicized in a press conference that this initiative was taken keeping in mind the ‘Start-up India’ initiative taken by the Central government.

Bora also said that the OIL start-up fund is meant to inspire the budding entrepreneurs and institutions to come up with new and creative ideas which could profit the oil and gas sector which plays an important role in the economic growth of the country.

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The idea was to fashion an ecosystem which was favorable for the development of start-ups in the oil and gas segment, which has enormous possibilities of ideas that are technology enabled.

Bora added that the present sector of oil and gas faces several dire situations and fresh ideas and inventions are needed to suppress these challenges. OIL will be making alliances with institutes in the Northeast such as IIT Guwahati so that this initiative can be taken ahead, whereas the institutes will expedite ‘idea incubation’ to carry out various studies and experiments.

The company also has plans to build a website exclusively for this Start-up initiative taken by them, to invite applications with new project ideas besides sending invites in the region in the form of newspaper ads where students coming for technical institutions and universities will be given special attention.

These applications or project ideas received will be weighed and scrutinized by a special screening committee which would comprise of specialists within OIL and from outside as well, said Bora. He also added that the known areas of thrust had environmental issues, enhanced oil recovery, ageing pipelines, gas flaring in remote areas and renewable.

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Startup FundingStartup News

Studies Show Investors Hesitate to Invest in Start-Ups

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Investors are now becoming thoughtful before making an investment in the start-ups.

Professor of Department of Management Studies, Indian Institute of Technology- Madras, Thillai Rajan says that there are only around 8.3% new ventures that successfully get funded because of insufficient funds and he released the India Venture Capital and Private Equity Report 2016, bearing title ‘Inspiration and Momentum for the Gladiators’ at TiECON 2016.

According to their reports, Rajan said, only one from the 875 start-ups that are started can manage to get atleast four rounds of funding.

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There are 6% start-ups that take up incubation or accelerator programme and around in the 875, 75 manage to get the first funding, 15 make it to the second round and 5 drag to the third round of funding.

Rajan, who was a co-author in the study, said that start-ups between 2005 and 2015 was estimated to Rs 1, 11,700 crore. There was a 42% annual growth rate with more than 10,000 start-ups being funded.

Angel Funding

Between 2008 and 2015 there has been an annual average growth of 124% in the country shown by Angel deals. Angel deals have helped in increasing the annual growth rate of 205% in the estimated amount invested from 2008 to 2015. There has also been an increase in the investors of Angel deals which has risen to 107% annually on an average.

Rajan, also pointed out in the steady decrease in the average age of the start-up when angel investment started funding in 2008 which was 4.77 to 0.54 years in 2015. When the start-ups received funding from angel their age was the highest at Chennai when compared to other big cities.

Senior Charter Member of TiE Chenna and Vice Chairman of Cognizant, Lakshmi Narayanan said that investment got from an angel by a start-up has gone up, in 2009 the amount funded was Rs.10.63 million which has gone up to Rs. 46.76 million in 2015. An average angel investor now invests Rs. 16.95 million which was Rs.2.15 million in 2009.

About two-thirds of angel’s funding goes to six tier 1 cities which is around Rs. 661.29 billion, tier 2 cities got 306 billion while tier 3 cities were funded with Rs. 19.74 billion.

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Startup Funding

Healthcare Aggregator LetsMD raises Rs.1 crore from Calcutta Angel Network

LetsMD Founders

Calcutta Angels, with a target to achieve more than double its equity support plan in 2016-17, is picking up 8% stake in LetsMD ( a health tech startup based out of Delhi). This investment which is slightly above Rs. 1 crore bracket in the health aggregator is considered to be biggest by Calcutta Angel Network (CAN). Calcutta Angels Network, a three-year-old strong network of 68 investors for start-ups is the largest angel network in the east. It is going to be CAN’s 12th investment in a startup. Around 25% of the stake in the company is getting diluted by the promoters for an undisclosed amount. Prashnt  Jalan and S Dudhoria has Led this fund raising round for Calcutta Angel Network.

In December 2015, LetsMD was founded by serial entrepreneurs Nivesh Khandelwal, Prakhar Gupta and Tenzin Thargay with heavy experience across many sectors; Nivesh Khandelwal with more than 12 years of experience in entrepreneurial sectors is a Wharton MBA. While Prakhar Gupta a Purdue university alumnus has a heavy startup experience across India and Silicon Valley. Tenzin Thargay an IIM-B graduate possesses more than a decade experience across digital healthcare platforms and consumer internet sector.

LetsMD Founders
LetsMD Founders

LetsMD through a marketplace based approach focuses mainly on the discovery, transparency and affordability problem in healthcare segment. LetsMD has convinced around 300 hospitals to come on board and  specialty chains in Delhi-NCR as partners for the Health care marketplace. It now includes big names like Fortis Healthcare, Apollo Hospitals and BLK Hospital. “Apart from Calcutta Angel Network, a clutch of other investors, including Anupam Mittal of Shaadi.com invested in the health technology firm,” confirmed a source.

Nivesh Khandelwal shared, “LetsMD will now enable accessibility and affordability of tertiary level healthcare sector in India. We believe Calcutta Angel Network, with its huge and different network of investors will play an important role in aiding relationship procurement for LetsMD. This fund will be utilized to develop a more potent team, build the next level of technology and promotions.”

One of the founders of LetsMD, Shanti Mohan during the event shared that it addresses two of the major problems of the Indian healthcare sector: timely financing and transparency of price for a huge chunk of uninsured population. “Patients and their families definitely needs such platforms to implicitly compare pricing of procedures and the quality  across the hospitals, and be able to afford to pay for them before it becomes too late,” he added.

The Indian healthcare sector is expected to scale up at a compound annual growth rate (CAGR) of nearly 23.2 percent during 2015-21 to $290 billion as per the reports. Thanks to greater health awareness, rising income levels, hike in precedence of lifestyle diseases and enriched access to insurance would be the key factors for growth.

The private sector has established themselves as a vibrant force in the healthcare industry of India and has accountability for almost 74 % of the country’s full healthcare expenditure. Adding to this, presence of Top world-class hospitals as well as highly skilled medical professionals has reinforced India’s position as a favorite destination for medical tourism.

 

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Startup Funding

Laundry Aggregator PickMyLaundry Raises Funding of $200k (Rs.1.3 Crores)

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New Delhi: Pick My Laundry, The Gurgaon (Delhi) based On-Demand Laundry startup has recently raised $200k (nearly ₹1.3 crore) in a fresh round of angel funding. The aggregator that offers  Quality and Affordable  Dry Cleaning and washing Services through mobile based technology has reportedly landed itself a future commitment of another funding of $300k from a couple of other angel investors.

Pick My laundry was Founded in May 2015 by graduates from BHU and IIT BOMBAY, who hold experience in Operations, Project Management & Supply-Chain. With a 6 People core team, 30 people hub operations staff and target market of Business to Consumer, it aspires to solve the laundry problem through mobile based technology. The laundry aggregator also plans to set up offline stores in future to cut down the last mile logistics cost which is currently at around Rs.100 per order.

PickMyLoundry
PickMyLoundry

Founder Gaurav Agarwal along with Samar Sisodia and Ankur Jain had previously secured $100k from Gaurav Kapoor (The Executive Director of the Gurgaon Based Accelerator). From June 2016, Changing gears from B2C it has also ventured in Business to Business model by providing services to Guest Houses and Hotels. They also intend to offer Overnight service and 24 hours delivery service in future.

Gaurav Agarwal, away from home when started working in Odhisa realized that if you are living on your own, purchasing a washing machine for taking care of your laundry is not an affordable choice to make and foresaw a potential business market for this demand and gap here to find the perfect solution. He did some research on the supply chain side and ultimately founded a reliable laundry service for out of town students and working professionals who are living away from their home. Soon they discovered that Senior citizens, Housewives, HNIs and working couple are also using their services and were reason behind their booming user base.

With an Initial capital of 10 Lakhs, The startup invested on marketing after clearing the rents. Fortunately they did not have to spend a lot on technology and in-house logistics. Before Pick my laundry raised $100k from Pre-Series A round and getting attention from Early stage VCs and few HNIs, They were clocking 2500 plus clothes on a daily basis after associating with more than 12 processing centers. After living up to their promise of Quality and time schedules they have received more than 7,500 app downloads in just two months.

The estimated size of this Laundry market is close to Rs. 2, 20,000 crores, with the unorganized market of maids, Dhobis etc. valued at Rs.5000 crores. This fragmented sector of 767,000 Establishments, 98% of which are nano sized laundries with less than 7 staff strength according to Euromonitor International.

Other players of these segments are Urban Dhobi , LaundryAnna, Tooler, Doormint, Dirk da Dhobi, Urban Dhobi, and Wassup (Invested by Jabong Founder Praveen Sinha).

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Startup Funding

Swiggy raises $15 million in Series D Funding

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Swiggy, the online food-delivery platform owned by Bundl Technologies Pvt. Ltd., raised $15 million in Series D round of financing from Bessemer Venture Partners, and existing investors such as Accel Partners, Norwest Venture Partners, SAIF Partners and Apoletto Asia. The company’s funding after Series D stands at a walloping $75.5 million, second only to Zomato’s $224 million in the list of homegrown online food-delivery platforms.

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