Also in this letter:
■ Funding, M&As return as food industry recovers to pre-Covid levels
■ Lightspeed, Moore invest in Razorpay’s $75M secondary share sale
■ 9Unicorns may extend maiden fund to $120 million
Flipkart to shut one of its seller fulfillment services
Flipkart is shutting down one of its seller services, called Smart Fulfillment, it said in a note to sellers who use the service.
Under Smart Fulfillment, sellers would allocate a separate area for their products at their own warehouse or place of business, which would be linked to Flipkart’s systems so these goods could be delivered more quickly. Sellers would maintain these warehouses according to the company’s standards, and these products would be with a “F-Assured” tag on Flipkart.
Why? Discontinuing Smart Fulfillment means sellers will have only two choices – store their goods at Flipkart’s warehouses or handle the logistics on their own. Moving more inventory to Flipkart warehouses will enable faster delivery and reduce costs, a source told us.
“We have found that Smart Fulfillment is leading to additional cost for sellers due to dedicated manpower, additional rented space, and third-party software to cut short the operational challenges,” Flipkart said in the note.
Yes, but: Three sellers ET spoke with said that though the move may help some sellers ship goods faster, they may have to pay more for this service.
“I will end up paying Rs 4-5 extra per order from now on for renting space in Flipkart’s warehouse and their other services,” one of the sellers said. “For sellers moving small shipment volumes, that won’t be helpful,” he added.
Flipkart’s rival Amazon also has a similar service to Flipkart’s Smart called Amazon Seller Flex, which is available to all its sellers across the world.
Seeking more sellers: Last month Flipkart said it had made changes to its marketplace policy and added features to attract new sellers.
The changes included reducing the payment settlement cycle from 15 days to 7-10 days, 10-minute seller onboarding, and guaranteed returns through sales from advertisements placed on Flipkart. It currently has over 4.2 lakh sellers on the marketplace.
Funding, M&As return as food industry recovers to pre-Covid levels
Investor interest, fundraising and mergers and acquisitions are back in the fine dining, quick service and cafes sectors after a two-year pandemic-induced downturn, executives said.
The Rs 4.2 lakh crore food services industry, which saw more than 25% of restaurants shut for good during the pandemic, has recovered to pre-Covid numbers, attracting investor interest, executives said.
What’s cooking? At least a dozen deals are in the pipeline, and interest has picked up from private equity players for funding. Established chains are also looking to buy small businesses, startups and cloud kitchens.
Ashish Kapur, promoter of premium bar chains Whisky Samba and The Wine Company, said the group has set aside Rs 150-200 crore to acquire a mix of upscale regional and international brands.
Riyaaz Amlani, managing director of Impresario Handmade Restaurants, which owns Social and Smoke House Deli, said though there is still a degree of caution, investor interest is very much back. “We are in talks with multiple private equity players for fund raise and inorganic opportunities,” Amlani said.
Tiger Global-backed Wow Momo Foods is in advanced talks to close funding in the range of Rs 150-200 crore in the next four-five weeks, the QSR chain’s cofounder Sagar Daryani said.
Delivery-only platforms and cloud kitchen companies have also perked up. Foodtech platform FreshMenu said it would spend over Rs 20 crore on expansion, scaling up sub-brands and introducing private labels.
Others like Canada-based cafe and QSR chain Tim Hortons, which is debuting with its first store in India next month, have signed a master franchise agreement with AG Cafe, the joint venture between fashion and lifestyle retail group Apparel Group and investment manager Gateway Partners.
Lightspeed, Moore invest in Razorpay’s $75M secondary share sale
Lightspeed Venture Partners and Moore Strategic Ventures have picked up a stake in digital payments firm Razorpay as part of a $75 million secondary share sale, the company said.
We first reported on April 22 that venture capital firm Lightspeed Venture Partners, which has backed startups like Udaan, Byju’s, Oyo, among many others, was in the final stages of talks to invest in the Bengaluru-based unicorn. We also reported that other investors may join the funding round.
This secondary share sale has also seen Razorpay’s early angel investors divesting their stake in the firm.
Valuation: Razorpay was valued at $7.5 billion in December 2021 after a $375 million funding round. Sources said the secondary transaction has taken place at a valuation of around $6.5 billion.
Secondary transactions typically happen at a discount over the most recent primary funding round. In a secondary share sale, existing investors, employees with stock options sell their shares to new investors and the money doesn’t go to the company.
Razorpay said about 650 current and former employees have sold their stock options as part of this share sale. According to the company, this is its fourth and biggest stock options buyback since it started operations in 2014.
Stocks take a beating, but Paytm, Nykaa grant fresh Esops, shares
The parent companies of Paytm and Nykaa have granted new stock options and equity shares to their employees even as their stocks continue to fall.
Paytm: One97 Communications has granted 3.97 million new stock options to its employees, according to a stock exchange filing by the company.
The exercise price of these stock options is Rs 9 each, the company informed the exchanges.
The company has also allotted 177,114 equity shares to employees who exercised their options.
Nykaa: FSN Ecommerce allotted 1,00,150 equity shares to employees who have vested their options, filings showed.
Neither company named the individuals who have been granted the stock options in their filings.
Battered stocks: Since listing in November last year, One97’s stock has been pummelled and is down around 75% from its IPO price of Rs 2,150 a share. It closed on Monday at Rs 556, 2.11% down on the day.
Nykaa’s stock closed at Rs 1,433 at close on Monday, up 21% from its IPO price of Rs 1,125 but down from its listing price of Rs 2,054.
9Unicorns may extend maiden fund to $120 million
Venture fund 9Unicorns, which focuses on idea- to seed-stage companies, is expected to increase its maiden fund size to $120 million, according to a top official at the fund. The fund has shored up $100 million to date.
Quote: “We are looking at a 7% or higher stake in the startup we invest in,” the investment firm’s founding partner Apoorva Ranjan Sharma told us.
Portfolio: Sharma said 9Unicorns has invested close to $45-50 million across various startups, such as Vedantu, Shiprocket, Biddano, BluSmart, IGP.com, Faarms, Instoried and GoQii.
Other Done Deals
■ Skillmatics, a direct-to-consumer (D2C) brand for educational products and games, has raised $16 million in a funding round led by Sofina Ventures, with participation from existing investors Sequoia Capital India and the Jalaj Dani Family Office.
■ Travel and hospitality technology platform Oyo said it has concluded the acquisition of Europe-based company ‘Direct Booker’ with the transaction valuing the latter at around $5.5 million (Rs 40 crore). Direct Booker has over 3,200 homes and serviced 20 lakh customers so far, Oyo said.
■ Gemba Capital a micro venture capital firm said it has made an initial close of Rs 75 crore for its maiden fund. Gemba had announced an inaugural corpus of $10 million (Rs 77.48 crore) in September last year. As much as 50% of the capital will be invested in fintech and SaaS startups while the balance will be deployed across a variety of industries, including web3, gaming, deep tech, healthcare and B2B commerce.
TWEET OF THE DAY
Other Top Stories By Our Reporters
Salesforce bullish on India: American cloud-based software company Salesforce believes India represents a “huge white space” that provides massive headroom for growth, and has been ramping up its employee count to tap this opportunity, Arun Parameswaran, senior VP and managing director for sales & distribution at Salesforce India told ET.
Uber to cut costs, CEO tells staff: Uber will cut costs and focus on becoming a leaner company in response to a “seismic shift” in investor sentiment, according to an email to employees from CEO Dara Khosrowshahi.
Global Picks We Are Reading
■ India’s VPN crackdown demonstrates a growing focus on mass surveillance (Rest of World)
■‘Crypto muggings’: thieves in London target digital investors by taking phones (The Guardian)
■ Apple’s China engineers keep products flowing as Covid shuts out US staff (WSJ)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.
