Also in this letter:
■ MoEngage raises $77 million, and other done deals
■ WhatsApp banned 16.66 lakh Indian accounts in April
■ Binance’s venture arm closes $500 million crypto fund
Meesho looks to cut costs, extend cash runaway with new seller policies
Social commerce startup Meesho, which took on bigger rivals Amazon and Flipkart after entering the consumer-facing ecommerce segment a year ago, is now shifting gears.
What’s happening? The company is bracing for slower growth amid a slowdown in big-ticket funding and an adverse macroeconomic situation.
The SoftBank-backed company is aiming to cut its monthly cash burn to $25 million from about $40-45 million.
The company has told at least one of its third-party logistics partners that it expects shipment volumes to fall by about 25-30% in the next two quarters.
The e-tailer, which focuses on the low-end of the market, will push the pedal during the festive season, and has begun preparing for the big sales on Amazon and Flipkart.
Project Unbundle: Sources told us that an internal initiative at Meesho called ‘Project Unbundle’ – which focuses on monetisation and reducing costs – has become crucial for the company.
“Unbundling means unbundling the price as much as possible to offer a no-frills service, like budget airline tickets,” said a person close to the company.
Meesho, which was last valued at $4.9 billion, started working on ‘Project Unbundle’ in 2020, but implemented it only from January this year.
Also Read: Meesho changes seller policy to attract more vendors as it takes on Amazon, Flipkart
Funding on hold: The new policies come at a time when Meesho has put its fundraising plans on hold over a valuation mismatch after setting out to raise at least $500 million, the sources added.
We reported on May 30 that rising interest rates in the US and a pullback from foreign investors have made it difficult for startups to close large financing rounds.
Layoffs: Meesho is one of several Indian startups that have laid off employees over the past few months. On April 11 we reported that Meesho had sacked 150 employees from its grocery business.
Also Read: How Meesho is eyeing a bigger share of the branded goods market
ETtech Done Deals
■ Customer engagement platform MoEngage has raised $77 million in Series E funding, led by Goldman Sachs Asset Management and B Capital. This is Goldman Sachs Asset Management’s first investment in an Indian software-as-a-service (SaaS) company.
■ Math tutoring startup Cuemath has raised $57 million in a round led by US-based Alpha Wave Global at a valuation of $407 million. This, it claims, is twice the valuation it commanded in its last funding round in December 2020.
■ Card-based lending and payment solutions provider Slice has raised $50 million as part of new fundraise led by existing investor Tiger Global. Japan-based GMO Venture Partners has come in as a new investor.
■ Bengaluru-based Bellatrix Aerospace has concluded an $8 million funding round led by BASF Venture Capital GmbH, and early-stage VC Inflexor Ventures.
14 new unicorns in Jan-June: India saw 14 companies join the unicorn club from January 1 to June 1, 2022, according to data from market intelligence provider Tracxn. The same period last year saw 13 companies turn unicorn, Tracxn said.
Also Read: SaaS firm Kovai aims for unicorn status by 2030
Edtech startup Udayy sacks employees and shuts down
Edtech startup Udayy has fired 100-120 employees and shut down. The company’s business has slowed since physical schools began to reopen.
Why? “We had enough capital in our books, but the business no longer made sense in the offline world, customer acquisition cost became very expensive,” cofounder Saumya Yadav told us. “We had enough capital, but post-pandemic lot of parents started asking for refunds, and kids did not have time as schools opened up.”
Yadav said all employees including teachers have been paid severance amounts and almost everyone has been placed elsewhere.
Founded in 2019 by Karan Varshney, Mahak Garg and Yadav, the Gurugram-based startup offers learning and education services for students in the kindergarten to eighth class and catered to around 5,000 students each month.
It had raised around $10 million from US-based Norwest Venture Partners in February and $2.5 million in seed funding a year ago.
In February, edtech startup Lido Learning announced that it was shutting down for similar reasons. Many other startups have laid off employees over the past few months, including Unacedemy, Trell, Meesho, Cars24, FrontRow and Mfine.
TWEET OF THE DAY
WhatsApp banned 16.66 lakh Indian accounts in April for violations
WhatsApp banned 16.66 lakh Indian accounts in April for violating its usage policies, according to a compliance report released on Wednesday.
In the report, WhatsApp said it received a total of 844 reports in April for a variety of grievances such as account support, ban appeal, product, and other support. It took action on 123 such reports.
During the month, WhatsApp received ban appeals from 670 accounts, and overturned the ban of 122 accounts.
“In addition to responding to and actioning on user complaints through the grievance channel, WhatsApp also deploys tools and resources to prevent harmful behaviour on the platform. The abuse detection operates at three stages of an account’s lifestyle: at registration, during messaging, and in response to negative feedback, which we receive in the form of user reports and blocks,” WhatsApp said in its monthly report.
These reports must be submitted by all social media companies under India’s Information Technology Rules, 2021.
Binance’s venture arm closes $500 million crypto fund
Binance Labs, the venture capital and incubation arm of crypto exchange Binance, has closed a $500 million fund from investors such as DST Global, Breyer Capital and others.
The new fund will invest in projects that aim to extend the use cases of cryptocurrencies and increase the adoption of Web3 and blockchain technology.
Launched in 2018, Binance Labs has incubated over 100 crypto projects from more than 25 countries. Its portfolio includes popular projects like Polygon and Axie Infinity.
Big on crypto: A few days ago, VC giant Andreessen Horowitz announced a $4.5 billion crypto fund, signalling strong demand for digital currencies among investors despite the recent Terra crash.
India still waits for crypto rules: But it looks like India’s crypto industry will have to wait a long time for regulations.
On Monday, we reported that the union government is planning a fresh consultation paper on cryptocurrencies soon, though a law on the digital assets is likely to take time, according to secretary of economic affairs Ajay Seth.
Last December, the government listed a cryptocurrency bill during the winter session of Parliament but it was not introduced.
In the budget for 2022-23, it imposed a 30% tax on gains made from virtual digital assets, along with a 1% tax deducted at source on all crypto transactions. It later clarified that taxation did not mean legalisation.
Other Top Stories By Our Reporters
Aditya Birla house of brands: The Aditya Birla Group has announced the launch of its new ‘house of brands’ entity, Tmrw. Over the next three years, it will acquire and incubate more than 30 brands in the fashion and lifestyle segment.
Slack launches in India: Workplace communication app Slack has officially entered India, with the aim of helping companies smoothly manage operations amid growing adoption of a hybrid working model.
MXPlayer launches ‘watch now, pay later’: Video streaming platform MX Player will allow its users to choose its premium ad-free service but pay later, unlike other platforms, on which users must pay upfront for monthly or annual subscriptions.
Global Picks We Are Reading
■ Sheryl Sandberg stepping down as Meta’s COO after 14 years (Bloomberg)
■ Google’s Owner Paid $296,000 to a Typical Worker. Here’s What Other Firms Pay (WSJ)
■ Elon Musk tells Tesla, SpaceX workers to go back to office or go away (The Washington Post)
