Weekly Wrap: India’s Venture Engines Catch Fire + China’s $3.3B Deal
The sparks are flying in India’s dynamic startup and venture scene from Silicon Valley. Norwest Venture Partners, a global investor with a spin towards India, has raised $1.2 billion for its 13th fund. Storm Ventures has launched a $10 million fund for SaaS startups in India, taking advantage of India Prime Minister Modi’s policies to boost startups.
The startup engines are seeing a further power surge as Kalaari Capital targets a $290 million fund, Nexus Venture Partners raises $400-500 million and IDG Ventures India eyes a new fund as well, less than one year after closing a $250 million fund in 2015. Sequoia Capital India and Tiger Global, meanwhile, are investing multi-billion dollar funds in India.
On top of this, new government initiatives to support India’s startup ecosystem have just been launched, including a $1.5 billion fund for young entrepreneurial businesses, a three-year tax break for both startups and investors and 80% rebates on the cost of patents.
These government-led developments to spur growth in one of the world’s top startup hotspots come after Modi toured Silicon Valley a few months ago and met with Google, Apple and Facebook executives. Such government initiatives are new to India and their impact remain to be seen. They come at a time when venture funding slowed during the fourth quarter of 2015 and as several startups, among them TinyOwl, Zomato and Housing.com have laid off employees.
Market opportunities remain tremendous in this huge market of 400 million Internet users. Homegrown Internet companies such as Flipkart, Snapdeal, Zomato and Ola are hailed as success stories in India’s technology industry. Merrill Lynch has predicted that e-commerce in India will reach $220 billion by 2025, nearly 20 times the $11 billion market in 2015.
Lufax, the Internet financial arm of China’s Ping An Insurance Group, has closed a funding round valuing it as the world’s most valuable fintech startup at $18.5 billion– up from $10 billion in March 2015. Ahead of an anticipated IPO, the P2P lending platform plans to use the money to diversify into new areas such as wealth management. The growth comes at a time when the space heats up as Chinese tech companies Baidu, Alibaba and Tencent expand their financial service offerings.
As China’s largest group deals site and its largest on-demand services provider, Meituan-Dianping has closed a $3.3 billion round at an $18 billion valuation. Investors including DST Global, Temasek Holdings, Capital Today and China Pension Plan Investment Board have joined existing backer Tencent. The site claimed $26 billion in gross merchandise volume and 150 million monthly active users in 2015 and was formed by a merger between then-rivals Tencent-backed Dianping and Alibaba-backed Meituan.
Indonesia-based RedDoorz, which seeks to crack the standardized budget hotel market and focuses on mobile, has landed $2 million in pre-Series A funding from 500 Startups to expand into Thailand, Singapore and Kuala Lumpur. Since its launch in July 2015, the platform has raised funds from Jungle Ventures and grown to cover around 200 properties across Indonesia. Its CEO, Amit Saberwal, was formerly the Chief Business Officer of India’s travel booking giant MakeMyTrip.
India’s food delivery startup Swiggy has raised a $35 million Series C round from investors including existing backers SAIF Partners, Accel Partners and Norwest Venture Partners, bringing its total funds to $53 million. Swiggy covers some 5000 restaurants and is approaching 1 million orders each month across eight cities, in a domestic food ordering service market that has seen several food tech startups scale back operations since late 2015.
Indian e-commerce platform KartRocket has pulled in a $6 million round from Bertelsmann India Investments, with participation from existing investors 500 Startups, Nirvana Digital India Fund and Japanese investor Teruhide Sato’s Beenext. The site, which helps SME merchants go online through services such as payments, logistics and marketing, plans to use the fresh funds for product, talent and marketing increases.
MUBI, a London-based indie film streaming firm, launched in China by partnering with Hong Kong-listed Huanxi Media Group, which finances films for the Chinese market. The deal will see Huanxi invest $50 million and hold 8 percent of Mubi and 70 percent of the newly formed MUBI China. By partnering, Mubi beats competitor Netflix in entering China.
Singapore-based crowdfunding platform Fundnel has launched, allowing startups on its platform to choose from four fundraising models: equity, debit, convertible bonds and revenue sharing. Since its soft launch in early 2015, the platform has completed six deals worth $5 million, including Hong Kong-based Snapask, which raised $1.8 million for its on-demand tutor app.
– Silicon Dragon digest by Ying-Ying Lu
