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Fosunsells big part of stake in Ixigo FamPayfounders on entrepreneurship culture Rebel Foodsis 31st startup unicornof 2021
TCS and other global IT majors including Capgemini are vying to participate in IT procurement contracts worth $50 billion floated by the US government’s National Institute of Health (NIH).
Details: Official documents that ET has reviewed show the company is bidding for a share in the 75 to 125 contracts through its US subsidiary Tata America International Limited.
These contracts, collectively called CIO-SP4, represent one of the largest technology procurement vehicles to be launched in recent years. It is aimed at meeting the general IT, biomedical and health IT needs of US government agencies across areas such as IT services, outsourcing, cybersecurity, cloud services and software development.
Significance: Even a partial win would help TCS further compete in the massive market for US federal technology procurements, analysts said.
NIH, which called for proposals in May, has stated the goal of CIO-SP4 as “provide government agencies a mechanism for quick ordering of IT solutions and services at fair and reasonable prices…”.
If TCS makes the cut as a vendor in the NIH programme, it is expected to compete fiercely on price, analysts said.
Size matters, so do connections: “TCS certainly has the scale and capability to compete and deliver on this and other bids of this magnitude,” said Peter Bendor-Samuel, chief executive officer of Everest Group, a US-based IT advisory and research firm.
He added, “It remains to be seen if they have the political connections to compete. Successful winners of these bids tend to be consortiums which have invested heavily in lobbying and nurturing the contacts necessary to win.”
Covid growth: TCS bagged deals worth a record $9.2 billion in the fourth quarter of the previous fiscal and ended the year with an order book of $31.6 billion, 17% higher than the previous year.
Last month, it won a 10-year contract from the UK government’s Transport for London to design, implement and operate a cloud-based smart mobility system for administration of London’s 115,000 taxis and private hire vehicles.
The company will announce its second quarter results today, kicking off the earnings season among large Indian IT players.
After Delhivery, China’s Fosun sells part of stake in Ixigo
Ixigo cofounder Aloke Bajpai
China’s Fosun International has sold a large part of its stake in online travel company Ixigo to Invesco’s Emerging Market Innovators Fund for $15 million, three sources told us.
This comes after the online travel company filed its draft prospectus with the Securities and Exchange Board of India (Sebi) in August.
Details: As per the draft prospectus filed with the capital markets regulator, Fosun Kinzon Capital Pte Ltd held 3.69% stake in Ixigo. “The fund has sold most of its stake in the company and now holds 0.5%,” one person said. The secondary sale values Ixigo at $470 million, another source added.
Another source said Fosun is likely to sell its remaining stake in the company before the IPO or through the offer for sale, “but is likely to exit fully one way or the other”.
In July, the company raised $53 million (Rs 395 crore) from investors led by Singapore’s sovereign wealth fund GIC, and participation from investors such as Info Edge Ventures, White Oak, Bay Capital, Orios Venture Partners, Trifecta Capital and Malabar Investments.
The long goodbye: Fosun, which has been caught in the middle of a geopolitical tug-of-war over Chinese investments in Indian companies, is looking to exit most of its investments here.
Last week, we reported that it had sold 1.32% of its stake in Delhivery to Lee Fixel’s Addition and Bay Capital.
IPO plans: Ixigo, which plans to list later this year, said in its draft IPO filing in August that it was looking to raise Rs 750 crore by issuing new shares and another Rs 850 crore through an offer for sale from existing investors.
Revival: After being decimated by the pandemic, the travel industry has seen a gradual revival, with markets such the US and Europe opening. In India, too, airlines and hospitality companies have clocked better occupancy rates since the devastating second wave of Covid.
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Colleges must push entrepreneurship culture: FamPay founders
Sambhav Jain (left) and Kush Taneja, founders, FamPay
Indian colleges must encourage a culture of entrepreneurship by cultivating strong alumni networks and promoting innovation, said Sambhav Jain and Kush Taneja, the founders of teen-focused fintech startup FamPay, which won in the Best on Campus category at the Economic Times Startup Awards 2021.
Taneja and Jain spoke about their experience of building a startup in the middle of the pandemic, pitching to the biggest venture capitalists, and how they were inspired to launch FamPay.
Here are some excerpts from the interview:
You founded FamPay while you were in the final year at IIT-Roorkee. Was it always the plan?
Sambhav Jain: Kush and I have known each other from Day One of college. Right from our first internship, we knew that we wanted to be associated with a startup. Even before FamPay, we were working together on various ideas. We had worked together on a mess management app in our third year, which went on to become the official dining app of IIT Roorkee. By the final year, it was clear that we won’t take up any placements.
Kush Taneja: We were brainstorming every day about several problem areas across the board – be it ride sharing, food management, payments. At the time, we were never thinking about business propositions. It was just brainstorming for the sake of it.
How did you arrive at the idea of launching a fintech startup focused exclusively on teenagers?
Sambhav Jain: We realised that for most teenagers or young adults, the idea of money is a roadblock, rather than an enabler for greater aspirations. One would assume IIT had the smartest kids, but the reality is that most schools and parents have never taught us about money or finance or how to think about it. The cost of learning something at an early age is much lower than earning at a later time. That was the thought behind the concept of a teen-focused banking solution, with payments as the first use case.
Kush Taneja: The concept was easily relatable to us, as we were taking cash from our parents just three years ago. While in college we got access to UPI through our bank accounts. Even the thought that there was a segment just two years younger than us who did not have this access was a stark one.
Rebel Foods enters unicorn club
(From left) Kallol Banerjee, cofounder of Rebel Foods, and Jaydeep Barman, cofounder and CEO
Rebel Foods, which operates a network of cloud kitchens and digital brands, has raised $175 million in a round led by Qatar’s sovereign wealth fund, valuing the startup at $1.4 billion.
- It has become the 31st Indian startup to achieve the unicorn status – those with valuations of $1 billion or more – this year.
What’s next? Rebel Foods said it is on course for an initial public offering (IPO) in the next 18-24 months. It will use the new funds to expand worldwide, build its technology and add more food brands to its existing 45.
How’s business? Founded in 2011 by Jaydeep Barman and Kallol Banerjee, Rebel Foods created brands such as Faasos, Behrouz Biryani, Ovenstory Pizza and Mandarin Oak. Last year, it took over the India franchise of US burger brand Wendy’s.
Rebel Foods currently operates over 450 cloud kitchens in 10 countries, including Indonesia, the United Arab Emirates and the United Kingdom.
The company said it was steadily moving towards profitability with annualised sales of $150 million, growing 100% year-on-year. It said the growth was on the back of brick-and-mortar restaurants using cost-efficient cloud kitchens to scale.
Business is also growing in tier-II towns, which saw higher demand for its services than metro cities between April and July, Raghav Joshi, chief executive of the company’s India unit previously told us.
The cloud kitchen sector in India has seen heightened
Mad, mad year: According to data from Venture Intelligence, Indian startups have raised a record $24.3 billion as of September 30. For comparison, they raised $11.2 billion in all of 2020 and $13 billion in 2019. The average deal size more than doubled to $35 million this year from 2020.
■ Twin Health has bagged $140 million (Rs 1,000 crore) in Series C funding as it is looking to scale its presence in India and the US. The Series C funding round included Sequoia Capital India, ICONIQ Capital, Perceptive Advisors, Corner Ventures, LTS Investments, Helena and Sofina.
■ Stader Labs, a cryptocurrency staking management platform for global investors, has raised $4 million in a funding round led by Pantera Capital. Coinbase Ventures, True Ventures, Jump Capital and Ledgerprime also participated in the round.
■ LetsVenture, a startup investment marketplace, has launched a unified platform for equity management and private market investments – trica. The new business entity has secured $3 million in seed funding from Accel, LC Nueva AIF, Secocha Ventures among others, the company said in a statement.
■ Mohandas Pai’s Aarin Capital Partners-backed startup lender UC Inclusive Credit (UCIC) has received its first external borrowing from the US International Development Finance Corporation. The loan—$5 million—will primarily be used for on-lending to financial inclusion sector firms that support women empowerment.
ADIA, GIC, BlackRock may join Paytm IPO as anchor investors
Multiple sovereign wealth funds and financial investors such as the Abu Dhabi Investment Authority, Singapore’s GIC, and BlackRock have shown interest in joining Paytm’s initial public offering as anchor investors, sources told us.
Others including Canada’s CPPIB have also held talks with Paytm and is considering a bid in the upcoming $2.2 billion IPO of Paytm parent One97 Communications, the sources added.
On Thursday, Bloomberg reported that financial investor Nomura Financials, besides other state-backed funds, were also in talks with the company to become anchor investors.
The SoftBank and Ant Group-backed payments startup is looking at a valuation of $20-$22 billion, people aware of its thinking said.
Paytm’s $2.2 billion IPO — split equally between fresh issuance of shares and secondary share sale (offer for sale or OFS) — is billed as one of the largest IPOs in India in over a decade. It is currently the second-most valued startup in India after ed-tech firm Byju’sand its IPO will be keenly watched coming close on the heels of a successful debut of online food delivery firm Zomato on Dalal Street.
Yes, but: Aswath Damodaran, a globally acclaimed equity valuation expert, feels the company is overvalued. Its rightful valuation, once it lists on Indian stock exchanges, should be less than $20 billion, he wrote in a blog post. He said this is due to Paytm’s inability to generate profits despite spending heavily to expand its product suite over the past 10 years.
Karnataka pitches for faster approvals to ecommerce biz
A report commissioned by the Karnataka government favours a single-window system for processing licences to set up and operate ecommerce businesses.
70 permits: The report, called Karnataka Innovation Vision 2030, says an ecommerce business currently requires about 70 permits, and a single-window system could process approvals quickly. Bengaluru is home to top ecommerce firms including Amazon India and Flipkart, besides being a startup hub.
The report calls for a single service option for those who want to list their ecommerce platforms to get both GST and PAN, which such retailers need for listing.
It also suggests a toll-free number to address grievances of ecommerce businesses.
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