Also in this letter:
- Chatbot makers bullish on WhatsApp’s ecomm ambitions
- Crypto regulations may bring bad news for NFTs
- Shiprocket raises $185 million from Zomato, Temasek, others
With 60% market share, Flipkart has a cracker of a Diwali
The Flipkart Group, including fashion portal Myntra, bagged a market share of around 60% during this year’s Diwali sales, according to data from PGA Labs. Amazon India, meanwhile, accounted for 32% of total sales, compared with around 25% last year.
Festive king: This gap, while noteworthy, shrinks when the annual GMV is considered. PGA Labs estimates that Flipkart Group’s GMV will be around $22 billion in FY22 and was around $18 billion in FY21. For Amazon India, its estimates are $18 billion in FY22 and $15 billion in FY21.
PGA Labs estimates that the size of India’s ecommerce will increase to $60 billion in FY22 and to $75 billion in FY23.
Recap: This year, both Flipkart and Amazon India reacted to each other’s sales moves almost instantly, showing how intense the competition was. Both firms changed the starting dates of their flagship sales over the course of a single weekend to ensure their sale didn’t start after the other’s. Eventually, both sales kicked off on October 3.
Fighting on all fronts: Flipkart and Amazon India are also building their online grocery businesses across India. Tata-owned BigBasket is the largest player in the space, which also includes Zomato-backed Grofers.
No IPO timeline: Walmart chief financial officer Brett Biggs said there was no specific timeline for Flipkart’s initial public offering, even as the online retailer is on its path to profitability, we reported on Wednesday.
“The (Flipkart) business is performing almost exactly like we thought it would. An IPO is still very much on the cards for that business. Just like everything else; it’s the timing. Is the business exactly where you want? Is the market right? All those things have to figure into what you do with an IPO,” Biggs said.
Chatbot makers bullish on WhatsApp’s ecommerce ambitions
WhatsApp is getting into ecommerce in earnest, and chatbot makers couldn’t be happier.
What’s happening? As the world’s largest messaging app’s ecommerce plans take off in India, conversational artificial intelligence (AI) platforms such as Haptik, Yellow.ai, Gupshup and Verloop.io are busy creating chatbots for brands to sell products to customers.
JioMart recently said it customers could now fill their shopping baskets within WhatsApp and pay either via UPI or in cash. Ever since, many direct-to-consumer brands are keen to follow suit, the head of several conversational AI platforms told us.
“WhatsApp is poised to be the WeChat of India,” said Aakrit Vaish, CEO of Haptik, which built JioMart’s WhatsApp chatbot.
He added that he expects “every single brand” to get into WhatsApp ecommerce in the next six to nine months. Vaish also said that he expects 25-30% of Haptik’s estimated revenue of $100 million in the next 3-5 years to come from building for WhatsApp commerce.
D2C heaven: ‘WhatsApp commerce’ will be particularly useful for smaller direct-to-consumer (DTC) brands, because “one of the biggest problems for D2C brands is distribution,” said Rashid Khan, cofounder and chief product officer of Yellow.ai.
Not the first: WhatsApp isn’t the first app to try building an ecommerce layer on top of its core offering. PhonePe and Paytm have also built layers on top of their core payment product, aiming to be India’s first ‘super app’. But WhatsApp is likely to get more engagement for brands than other apps, given that it has 400 million users in India and is one of the most frequently used apps in the country.
Tweet of the day
Crypto regulations may bring bad news for NFTs
India’s cryptocurrency bill may bring bad news for non-fungible tokens or NFTs.
Concerns: The fear in the investor community is how the regulation will define NFTs. The government is looking to categorise cryptocurrencies as commodities, but many feel that putting NFTs into the same bucket would only create more complications. Industry experts say while NFTs are built on the same blockchain technology as cryptocurrencies, they need to be treated differently as they serve different purposes.
NFT boom: The market for NFTs – a type of crypto asset in which each token is entirely unique – is picking up in India, with several celebrities such as Amitabh Bachchan, Kamal Haasan and Salman Khan jumping on the bandwagon.
Fallout: Many Indian exchanges that were looking to launch separate NFT marketplaces have postponed their plans for fear of the impact of the new cryptocurrency law.
Quote: “It’s pretty much a natural progression for any exchange to have NFT, but we will wait for about two quarters for clarity on the regulation around cryptocurrency before we launch this feature,” said Sathvik Vishwanath, cofounder and CEO of Unocoin, a cryptocurrency exchange.
Shiprocket closes $185 million funding from Zomato, Temasek and others
Shiprocket founders (from left) Akshay Ghulati, Vishesh Khurana, Saahil Goel and Gautam Kapoor
Shiprocket, a logistics aggregator, has raised $185 million in a Series E funding round co-led by Zomato, Singapore’s sovereign wealth fund Temasek, and Lightrock India, a senior company executive told us.
ET was the first to report on September 8 that the company planned to raise capital from Temasek and others.
Valuation: The company did not share the expected valuation after the funding round, but people briefed on the matter said it would be $900-950 million.
Deal details: Zomato invested $75 million while Temasek infused $50 million and Lightrock $40 million. Info Edge Ventures pumped in $10 million while Moore Capital invested $5 million. The remaining came from various individual investors.
Of the total $185 million, $25 million was in a secondary share sale, in which some of its early investors, employee stock option holders and angel investors sold some or all of their shares. In a secondary share sale, new investors buy shares from existing investors; the money doesn’t go to the company.
ETtech Done Deals
■ Consulting, technology and managed services provider to the Connectedness vertical, Prodapt announced that it has acquired SLR Dynamics, a UK-based company focussed on digital engineering and automation services in the TMT industry. The size of the deal was not disclosed. This is Prodapt’s second acquisition for the year following its acquisition of Silicon Valley-based Innovative Logic in August.
■ Direct-to-consumer personal and home care products startup Clensta on Thursday said it has raised Rs 20 crore funding from Hem Angels, part of Hem Securities Ltd, Venture Catalysts and Inflection Point Ventures. Existing investors N+1 Capital (RBF) and other investors also invested in the Series A round.
■ Zumutor Biologics, a biotechnology startup in the immuno-oncology space, has raised $6.2 million in fresh funding led by Siana Capital, as it looks to get to phase 1 clinical trials in the US for its lead antibody molecule for prostate cancer (ZM 008) by the middle of next year. The latest round also saw participation from existing investors Accel and Bharat Innovation Fund, bringing the total capital raised by the Boston-headquartered firm so far to $27 million.
MapmyIndia IPO subscribed 2.02 times on day 1
The initial public offering (IPO) of CE Info Systems, which runs MapmyIndia, opened for public subscription on Thursday with a price band of Rs 1,000-1,033 a share. The three-day issue will close on December 13 and the company’s shares are expected to list on exchanges on December 21.
Day 1 details: The offer was fully subscribed within a few hours and by the end of the first day of bidding, it was subscribed 2.02 times. The company received more than 1.42 crore bids across both the stock exchanges for the 70.45 lakh shares on offer.
Here’s the breakup:
- Retail quota: 3.28 times (3,522,381 shares on offer)
- Qualified institutional buyers quota: 0.46 times (2,012,789 shares)
- Non-institutional buyers quota: subscribed 1.17 times (1,509,592 shares)
IPO details: The IPO comprises only an offer for sale (OFS) of up to 10,063,945 equity shares by existing shareholders and promoters. This means the company itself will not receive anything from the IPO. On Wednesday the digital mapping company said it had raised Rs 312 crore from anchor investors ahead of the public issue.
No Razorpay IPO just yet: Meanwhile, RazorPay cofounder and chief executive Harshil Mathur said that an IPO, while very much in the company’s plans, was still a couple of years away. He said he wants to scale the company’s banking and lending arm before going public.
“If you want to go out and raise money in the public markets, it’s better to be a full-fledged financial ecosystem company, rather than just a payments company, which is a core part of our business today,” he said.
US Dept of Labor says Cigniti violated H-1B guidelines
The US Department of Labor has recovered $64,244 from IT services firm Cigniti Technologies for illegally ‘benching’ an H-1B worker in the US, in violation of the visa programme.
Cigniti Technologies in Irving hired a system analyst under the H-1B visa programme, then failed to use and pay the worker the required prevailing wage for non-productive time—an illegal practice known as ‘benching’, the DOL said in a statement.
The investigation by the division’s New Orleans District Office led to the recovery of $64,244 in wages owed to the employee.
Quote: “The department’s Wage and Hour Division determined Cigniti Technologies Inc benched the employee illegally over a 15-month period, and failed to pay the full, pro-rated amount of the worker’s prevailing wage for periods of non-productive work. By doing so, the employer violated the requirements of the federal H-1B visa programme,” it said.
“Employers who hire workers under the H-1B visa programme must comply with all legal requirements, which are clearly detailed in the programme’s application process,” said Wage and Hour District director Troy Mouton in New Orleans
In a statement, Cigniti said it had reached an amicable settlement with the employee.
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Crypto token should be treated as special class of securities: The Confederation of Indian Industries (CII) on Thursday suggested the government treat the crypto tokens as ‘securities’ of a special class. The industry body’s suggestion comes when the government is set to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, in the Winter Session of Parliament.
Covid19, FarmersProtest, TeamIndia were the top tweeted hashtags of 2021: Hashtags Covid19, FarmersProtest, TeamIndia, Tokyo2020, IPL2021, IndVEng, Diwali, Master, Bitcoin and PermissionToDance were the most tweeted hashtags of the year on microblogging platform Twitter while Australian cricketer Pat Cummins’ tweet about his donation for Covid-19 relief in India was the most retweeted tweet of the year. Cricketer Virat Kohli’s tweet announcing the birth of his daughter was the most liked tweet.
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