Scoop: PhonePe may acquire ZestMoney; Aditya Birla Fashion close to buying Bewakoof; and Koo’s new funding round

When ZestMoney raised $50 million from Prosus-owned PayU and Australian fintech Zip Co in September 2021, the buy-now-pay-later (BNPL) phase was booming thanks to a pandemic-induced spike in on-line purchasing.

More than a yr later the sector is in turmoil, with Zip Co’s market cap down 93% since February 2021. Now, sources have advised us Walmart-owned PhonePe is on the verge of buying ZestMoney in what’s a misery sale. More particulars in a packed version of ETtech Morning Dispatch.

Also on this letter:
■ Birla Fashion close to buying Bewakoof in D2C foray
■ Haven’t sacked any staff, Amazon India tells labour ministry
■ Six funded satellites within the works, says Pixxel founder


PhonePe may acquire ZestMoney as consolidation begins in lending sector

PhonePe ZestMoney

PhonePe, majority owned by Walmart, is close to acquiring buy-now-pay-later (BNPL) platform ZestMoney amid a worldwide reset within the sector owing to rate of interest hikes and a squeeze in shopper spending, two sources advised us.

If the transaction goes by way of, it will likely be the largest consolidation within the new-age lending sector, which has of late confronted main regulatory roadblocks in India. In September, the Reserve Bank of India introduced a set of rules for online lenders.

No funds: ZestMoney has been on the lookout for a purchaser for a number of months, having struggled to elevate recent funds as tech buyers have turned overly skittish, particularly on fintech startups, these individuals mentioned. “The talks are fairly serious and likely to close in a few weeks,” mentioned one other supply.

Distress sale: We couldn’t verify the dimensions of the deal however a number of individuals conscious of the event mentioned it will seemingly be a “distress sale”, at a valuation a lot decrease than the $400 million ZestMoney commanded when it raised funds final yr. The firm’s money runway has shortened because it burnt round $5 million monthly. The massive blow for ZestMoney got here as Australia’s Zip Co, which was supposed to lead its $100 million final yr, has itself been hit by the downturn.

BNPL meltdown: The firm, based in 2015 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman, final raised $50 million from Prosus-owned PayU and Australian fintech Zip Co in September 2021, amid a increase in BNPL sector fuelled by an enormous uptick in on-line purchasing.

But the potential sale comes amid a rout for BNPL shares worldwide. Zip Co’s market capitalisation has nosedived 93% since February 2021, hit by greater rates of interest. Other BNPL biggies akin to Sweden’s Klarna, and PayPal cofounder Max Levchin’s Affirm have struggled to maintain on to their valuations.


Aditya Birla Fashion close to buying Bewakoof in D2C foray

Bewakoof

Aditya Birla Fashion & Retail (ABFRL) is in the final stages of acquiring a controlling stake in attire and equipment model Bewakoof for about Rs 100 crore, marking its entry into direct-to-consumer (D2C) gross sales.

State of play: “Both companies have signed a non-disclosure agreement and have also finished due diligence. The team at Bewakoof is also moving to join Aditya Birla’s new firm,” mentioned a senior govt, who didn’t want to be recognized.

Founded in 2012, Bewakoof is likely one of the first D2C manufacturers within the nation, with annual revenues of about Rs 250 crore. In complete, it has raised Rs 160 crore in funding from buyers together with InvestCorp, IvyCap Ventures and Spring Marketing Capital.

D2C foray: In June, ABFRL arrange its D2C entity, referred to as TMRW, and mentioned it will acquire and incubate 30 manufacturers within the subsequent three years. The new agency, which is buying Bewakoof, is part of ABFRL’s technique to construct a portfolio of new-age, digital manufacturers throughout vogue, magnificence and life-style.

During its earnings name final quarter, ABFRL mentioned it will make eight to 10 investments in early-stage, digital-first manufacturers by the tip of the monetary yr and that its preliminary focus can be on vogue.

More to come? Dhianu Das, cofounder of Agility Ventures, mentioned, “We are surely going to see a lot more such deals happening in the near future. This also helps early-stage investors get exit opportunities at a time when larger funding rounds look a tad challenging.”

Aprameya Radhakrishna

Koo cofounder & CEO Aprameya Radhakrishna

Koo’s valuation may double: Meanwhile, homegrown social media platform Koo has kicked off a fundraising exercise, trying to decide up about $15-20 million in a round that might double its valuation to $250-$300 million, sources briefed on the matter mentioned.

The Bengaluru-based firm, which is pitching itself in its place to the US-based microblogging website, is predicted to double its valuation to $250-$300 million after the funding round. Sources mentioned the corporate, which just lately expanded to Brazil, is trying to close a smaller round to safe capital it wants within the brief run for India and abroad growth because it may not fetch the specified valuation in a much bigger round proper now.


A MESSAGE FROM APPSFLYER

AppsFlyer’s ‘MAMA India – The Digital Bharat 2.0’

MaMa

Economic Times Digital is partnering with AppsFlyer to bring you ‘MAMA India – The Digital Bharat 2.0’, an invite-only occasion that can carry collectively cell app product leaders, cell advertising and marketing influencers, startup founders, marquee buyers and coverage makers to foster definitive dialog that can educate and empower companies to faucet into the expansion alternatives obtainable within the more and more mobile-first, app-centric Indian market.

“The Indian app economy is the fastest-growing in the world and promises tremendous opportunities for growth as India realizes its vision of becoming a digitally empowered society with Digital India 2.0. AppsFlyer is committed to helping the Indian app ecosystem unlock its full potential. The MAMA India – The Digital Bharat 2.0 event is one such initiative to empower marketers, startups, product developers, and innovators to win in India’s fast-growing app economy,” mentioned Ronen Mense, President & MD, APAC, AppsFlyer.


ET Ecommerce Index

We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to observe the efficiency of just lately listed tech companies. Here’s how they’ve fared thus far.

ET Ecommerce Tracker

Haven’t sacked any staff, Amazon India tells labour ministry

Amazon layoffs

Amazon India has told labour ministry officials it has not sacked any staff and has solely let go of those that opted for its separation programme voluntarily by accepting a severance bundle.

Catch up fast: The ministry had sought Amazon’s response after Pune-based worker union Nascent Information Technology Employees Senate (NITES) petitioned union labour minister Bhupender Yadav, claiming the web retailer had forcibly terminated numerous staff in India.

Amazon’s representatives appeared earlier than the deputy chief labour commissioner in Bengaluru on Wednesday and denied the allegations, in accordance to individuals briefed on the matter. No one, nevertheless, represented the union at Wednesday’s listening to. The authorities have determined to decide after listening to the union’s views.

Amazon to shut edtech enterprise: Meanwhile, Amazon said it would shut down its edtech business Amazon Academy in phases, beginning August 2023. The firm launched the enterprise in the course of the pandemic, providing programs in math and science for college students getting ready for the engineering entrance examination.

TWEET OF THE DAY


Six funded satellites within the works, says Pixxel founder

Pixxel satellites

Space tech startup Pixxel is lining up six fully funded satellites for launch within the subsequent few quarters, its founder mentioned.

Saturday demo: Pixxel will launch its third demo satellite tv for pc on Saturday, as high-resolution photographs from its micro-satellites are discovering takers throughout a variety of sectors from agri-tech, local weather care to oil and fuel.

In April, the Bengaluru-based firm launched a 15-kg low earth orbit (LEO) satellite on a SpaceX rocket.

“We are building six fully funded commercial satellites. These are much larger [compared to the demo satellites], with much longer lifetime, and from which we will be able to do daily coverage almost every two days,” founder and chief govt Awais Ahmed advised us.


Other Top Stories By Our Reporters

Swiggy Zomato

Swiggy trails Zomato regardless of larger reductions: India’s food-delivery race noticed Gurugram-based Zomato gaining market share over its Bengaluru-based rival Swiggy in January-June 2022 although Swiggy has been providing larger reductions, in accordance to a analysis observe printed by Jefferies on Thursday.

CoinDCX publishes proof-of-reserves report: Indian crypto change CoinDCX has published its proof of reserves report in partnership with crypto portfolio monitoring platform Nansen. At the time of publishing on Thursday, CoinDCX had almost $130 million in property, as per Nansen. Crypto exchanges and buying and selling platforms around the globe have been publishing their proof of reserves because the collapse of FTX, one of many largest cryptocurrency exchanges on this planet.


Global Picks We Are Reading

■ Twitter exodus hits groups tasked with regulatory, content material points globally (WSJ)
■ FTX’s Bahamas crypto empire: Stimulants, subterfuge and a spectacular collapse (The Washington Post)
■ The Hibernator’s Guide to the Galaxy (Wired)

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