Also in this letter:
■ Cult.fit eyes IPO in 12-18 months
■ India well placed to become high-growth Web3 market: Nasscom
■ Ather Energy raises $50 million, and other done deals
India key growth driver amid cloud demand: SAP’s Scott Russell
India is an “innovation engine” for the world and a key driver of growth for SAP, said a top executive at the German technology major, with business expanding rapidly on the back of strong demand for cloud-based services.
Terming India “one of the fastest growing markets (for SAP) in enterprise and mid-market segment,” Scott Russell, executive board member, customer success, told us in an exclusive interview that “(Indian firms) are trying to expand their business in other parts of the world, and we are able to get the benefit of that.
The enterprise software maker clocked triple digit growth in India for three of four quarters in 2021.
India growth story: The company is increasing its dependence on its innovation labs located in India to fuel the next stage of growth. This work draws heavily from relationships with local startups and the digital native community fostered by SAP Labs in India.
Last year, SAP said it would invest up to $500 million to grow its India business, buoyed by the “global reach” of companies as “the momentum remains strong in the Indian market.”
“With large companies like Asian Paints and Tata Motors moving to the cloud, it lets us showcase use of technology and drive a strong narrative,” said Russell.
Large talent pool: The availability of talent, a highly educated workforce and the culture of innovation and risk taking, places Indian businesses on a strong wicket, noted the executive.
Russell said some of the new demand for automation was coming from the shift in business models — with companies wanting to increasingly simplify structures and free up talent that was doing operational tasks.
SAP is also seeing increased demand for environmental, social, and governance (ESG) products and in India too, the demand for sustainable solutions is increasing, in part because it’s a part of globally connected value chains.
Tata-backed Cult.fit looking at IPO in 12-18 months
Cult.fit is aiming for an IPO in 12-18 months as its core gym business has made an operating profit, its business head Naresh Krishnaswamy told us.
He added that Cultfit’s revenue had grown more than 50% from pre-Covid levels.
Focus on core: The company – which counts Tata Digital and Zomato as investors – is doubling down on its core fitness and fitness products business for now, Krishnaswamy added.
“Other businesses like Mind.fit and some of our wellness categories like diagnostics have been put on the backburner,” he added.
The company has also spun off its Care.fit business into Sugar.fit, which he said was doing “extremely well” in the diabetic care space.
How’s business? Cult.fit’s operating revenue was around Rs 161 crore in FY21.
CFO Bishnu Hazari told us that FY22 revenue would be in a similar range because of the pandemic. However, the company is forecasting higher revenue this financial year with business increasing 50% from to pre-pandemic levels.
It was valued at $1.5 billion following Zomato-led $145 million funding round in December 2021.
Cult.fit,which was earlier known as Cure.fit, has made 14 acquisitions over the past few years, including in-home fitness equipment businesses like RPM fitness and Fitkit.
India well placed to become high-growth Web3 market: Nasscom
India’s rapid adoption of new technologies, its growing startup ecosystem, and the potential of its huge, digitally skilled talent pool are the right building blocks for it to emerge as a key player in Web3, according to a report by IT industry association Nasscom.
Web3 leverages blockchain technology to decentralise the web and deliver the use cases that were centrally controlled – with opaque execution – in Web2.
While Web3 is still nascent, India’s economic, demographic, and technology-adoption factors leave it well-positioned to become a high-growth Web3 market, the report said.
By the numbers: There were over 450 Web3 startups in India as of the first half of the calendar year, with over $1.3 billion invested in Web3 since 2020, according to the report, titled The India Web3 Startup Landscape: An Emerging Technology Leadership Frontier.
“One-third of these startups have come up in the past year alone,” said Achyuta Ghosh, senior director and head- insights, Nasscom.
Not just crypto: Indian Web3 startups are working on creating varied solutions across major application areas like finance, decentralised communities, entertainment and infrastructure, and not just on cryptocurrency. Most people associate Web3 with crypto alone, and that needs to be addressed, Ghosh said.
ET Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
ETtech Done Deals
Electric scooter maker Ather Energy has raised $50 million in a round led by existing backer Caladium Investment, regulatory filings sourced from Tofler showed. Herald Square Ventures also participated in the latest round, which valued the company at $700-800 million, according to sources.
Financial modelling software provider for businesses Drivetrain AI has raised $15 million as part of a fresh funding round led by Elevation Capital, Jungle Ventures and Venture Highway. Over 25 startup founders, advisors and investors participated in the round, including Notion’s Akshay Kothari; Whatfix’s Khadim Batti and Amit Sharma; and Chargebee’s Krish Subramanian and Karthik Srinivasan.
Blockchain startup Shardeum has raised $18.2 million in a seed funding round which saw participation from around 50 investors, including Jane Street, Struck Crypto, The Spartan Group, Big Brain Holdings, DFG, Ghaf Capital Partners and Foresight Ventures.
TWEET OF THE DAY
L&T Tech Q2 profit up 22.8%; company upgrades annual guidance
L&T Technology Services’ second-quarter net profit rose 22.8% on-year to Rs 282 crore, driven by the ramping up of previously bagged deals and strong performance across verticals. The software services provider raised its dollar revenue growth forecast for the ongoing fiscal year amid largely robust demand.
Corporate performance: Revenue climbed 24.1% to Rs 1,995 crore as all verticals clocked double-digit growth rates. Sequentially, net profit inched up 3% while revenue was up 6.5%.
Operating margins stood at 18.3%, down 10 basis points (bps) sequentially and 20 bps on year due to the increase in employee compensation.
The company upgraded its dollar revenue growth forecast for this fiscal year from 13.5-15.5% to 15.5-16.5%.
PhonePe FY22 results: Meanwhile, Walmart-owned fintech firm PhonePe said on Tuesday its revenue from operations grew 138% to Rs 1,646 crore in FY22. Losses, excluding employee stock ownership plan (Esop) costs, narrowed marginally to Rs 827 crore in the same period.
Other Top Stories By Our Reporters
Microsoft plans hyperscale data centre in Pune: Microsoft is planning to develop a large hyperscale data centre in Pune as part of its multi-city data centre strategy for India, two people with direct knowledge of the development told us.
Microsoft sacks 1,000 workers: Microsoft has sacked about 1,000 employees in a fresh round of layoffs, according to a report by Axios. This is the third round of layoffs at the Big Tech firm since July. Microsoft fired nearly 1% of its 180,000-strong workforce across offices and product divisions that month as part of a ‘realignment’. It laid off another 200 people in August.
Global Picks We Are Reading
■ The Bruce Willis deepfake Is everyone’s problem (Wired)
■ The hottest app right now? One where teens have to say nice things about each other (WSJ)
■ The mysterious reappearance of China’s missing mega-influencer (Rest of World)
