India’s youngest unicorn founder Ritesh Agarwal has become the latest Indian entrepreneur to set up a personal investment vehicle to back startups.

Meanwhile, Big Tech CEOs prepare their arguments ahead of a historic antitrust congressional hearing in the US.

ETtech Top 5: Ritesh Agarwal to back startups, Big Tech vs US Congress & more
Investor Ritesh Agarwal

Oyo Hotels & Homes group chief executive Ritesh Agarwal has set up a new entity, Aroa Ventures, that plans to place bets on early to growth-stage startups.

Aroa Ventures will look to invest between $500,000 and $5 million, and is eyeing opportunities across the consumer, technology and leisure infrastructure sectors. Former Innov8 chief operating officer Gaurav Gulati will head the venture.

Agarwal, along with a clutch of senior Oyo executives, had also set up Raaga Partners LLP last year, to pool their individual angel investments.

Startup founders and their investment vehicles

  • Kunal Bahl and Rohit Bansal, who are among the most active angel investors in the country, have set up Titan Capital, an investment holding company for all their personal bets.
  • Flipkart co-founders Sachin Bansal and Binny Bansal had also created Sabin Advisors for a similar purpose.
  • Kunal Shah and Sanjeev Tandon had set up Whiteboard Capital to house their portfolio of startup investments.
  • Paytm CEO Vijay Shekhar Sharma is reported to have set up two new entities – VSS Investco and VSS Holdings – to host and make personal investments.

Read our coverage:

ETtech Top 5: Ritesh Agarwal to back startups, Big Tech vs US Congress & more
Big Tech vs US Congress

As chief executives of four large tech firms including Amazon, Facebook, Alphabet, and Apple gear up to testify in the landmark US congressional hearing on antitrust, they provided a glimpse into their plan to defend themselves.

Mark Zuckerberg: Facebook faces intense competition globally and the company’s size doesn’t guarantee success. Companies shouldn’t be making so many judgments about important issues, hence governments and regulators need to have a more active role along with updated rules for the internet. Read full testimony (pdf)

Jeff Bezos: Amazon accounts for less than 4% of retail in the U.S. and less than 1% of the $25 trillion global retail market. Unlike industries that are winner-take-all, there’s room in retail for many winners. Walmart is twice its size and its online sales are growing. Just like the world needs small companies, it also needs large ones. There are things small companies simply can’t do. Read full testimony.

Sundar Pichai: Google’s continued success is not guaranteed. It operates in highly competitive global markets. Today’s competitive landscape looks nothing like it did 5 years ago. A competitive digital ad marketplace gives publishers and advertisers, and therefore consumers, an enormous amount of choice. Read full testimony (pdf)

Tim Cook: Apple does not have a dominant market share in any market where we do business. Apple’s commissions are comparable or lower than commissions charged by the majority of competitors. For the vast majority of apps on the App Store, developers keep 100% of the money they make. In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee. In fact, we have reduced them for subscriptions and exempted additional categories of apps. Read full testimony (pdf)

ETtech Top 5: Ritesh Agarwal to back startups, Big Tech vs US Congress & more
Soaring order values

Customers ordering food online are spending about 25-30% more per takeaway, even as overall volumes continue to recover, touching about half of pre-Covid-19 numbers, say food delivery platforms, restaurants, and analysts.

The recovery in order volumes, along with an increase in order value, has led to overall sales bouncing back by 60-65%, they said.

This comes after food ordering apps like Zomato and Swiggy saw a significant dip in orders to less than 3,00,000 per day in April as restaurant supply and overall customer demand cratered during the Covid-19-induced lockdown. At its peak in October last year, the sector had witnessed 3.2-3.5 million deliveries a day.

ETtech Top 5: Ritesh Agarwal to back startups, Big Tech vs US Congress & more
What’s the reason?

  • Several families working from home has led to larger quantities being ordered from food delivery platforms, increasing the order value.
  • Sustained intent by consumers to buy from known brands with a set hygiene protocol.
  • Launch of home delivery by many premium restaurants who were earlier strictly dine-in.
  • Promotions and discounts making a comeback. Read more

ETtech Top 5: Ritesh Agarwal to back startups, Big Tech vs US Congress & more
Consumer protection rules for digital services

India’s new consumer protection rules for ecommerce platforms that were notified on July 23 will also apply to online services such as ride-hailing, online ticketing, and video streaming services. The rules also specify the duties and liabilities of marketplace and inventory models of online commerce.

For instance, in food delivery, the individual restaurant would be considered the seller and the food as the product while in ride-hailing, the driver is the seller or service provider offering a trip to the customer while ride-hailing platforms are the ecommerce entities.

While the model of online services could be a little more complicated than the ubiquitous e-retail model, the applicability of rules remains the same, a senior government official told ET.

Why does it matter?

  • Ride-hailing platforms such as Uber and Ola will no longer be able to charge consumers a cancellation fee even after a ride is confirmed, unless these platforms bear a similar charge in case they cancel the service on their own.
  • Online services such as MakeMyTrip, Oyo, and even online ticketing services from airlines such as Indigo, Vistara, and SpiceJet will have to set up an adequate grievance redressal mechanism along with appointing a grievance officer who will redress the complaint within one month of receiving it. Read more.

ETtech Top 5: Ritesh Agarwal to back startups, Big Tech vs US Congress & more
Edtech funding frenzy

Edtech firms continue to see unprecedented interest from investors and Toppr is the latest startup to benefit from it.

It has raised Rs 350 crore in a fresh round of financing led by Gulf-based investment firm Foundation Holdings with participation from Kaizen Private Equity and other “long-time partners”. Toppr counts SAIF Partners, Helion Ventures, and Eight Roads Ventures among its investors and has now raised an estimated Rs 700 crore till date.

Where will the money go?

Toppr plans to ramp up its adaptive AI learning product, and launch new platforms for coding and schools. It also plans to develop the AI-based Toppr School Operating System, a platform that integrates in-school and after-school learning to create a standardised and personalised experience

Edtech deal flow

  • Vedantu has raised $100 million led by US-based Coatue Management with participation from existing investors Tiger Global, GGV Capital, Omidyar and Westbridge Capital.
  • Unacademy is in talks to pick up about $100-$150 million at a $1 billion valuation. It has also snapped up medical entrance preparation platform PrepLadder and online learning platform Mastree.
  • Byju’s landed funds from Mary Meeker’s Bond Capital at a valuation of $10.5 billion last month. It has made a $300 million offer to buy smaller peer Whitehat Jr and is in advanced stages of talks to acquire learning app Doubtnut.
  • Whitehat Jr is also in talks with Steadview Capital and Tiger Global to pull in new capital at a valuation of $350 million.

(Illustrations and graphics by Rahul Awasthi)

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