Author: Janice

Fintech startup Slice achieves unicorn status after $220m funding led by Tiger Global

Fintech startup Slice has become India’s latest unicorn after it raised $220 million at a valuation of over $1 billion.

This capital-raising was done as part of Slice’s Series B funding round led by Tiger Global and Insight Partners which are investments firms based in New York.

There were also other investors participating in the funding round, including Sunley House Capital, Anfa, Gunosy, Blume Ventures and more.

Slice has become the 41st Indian startup to achieve unicorn status this year and the 11th fintech startup to achieve it.

They plan to use the funds raised to grow their existing lines of business, invest in newer products and also grow its engineering and design functions. They also plan to fund their non-banking financial company (NBFC) arm and scale their loan book.

Users of Slice can pay bills, manage expense and unlock rewards. The target demographics are new-age millennials and Gen Z, with an average age of 27, as they have largely been refused credit cards by large banks due to inadequate credit scores that are common among this demographic.

The company has issued credit and payment cards, ‘Slice Super Card’, with Visa and SBM Bank India Ltd, that allows users to build credit scores and win rewards and discounts from payments.

“At Slice, we believe that we have built a solid business model and will focus our energies now into growing and scaling the platform. We have been prudent with our business so far and burnt $4.5 million (in capital) over five years. A part of the capital from this fundraise will be invested in our NBFC, as we need to have our own skin in the game, rather than raising debt alone. The remainder will be utilized towards launching new products and scaling the team,” Rajan Bajaj, founder and chief executive officer at Slice, said in an interview.

Bajaj also said that Slice is working on introducing unified payments interface (UPI)-based payments on its app, besides credit card issuances.

For this year alone, the company has increased their monthly credit card issuances tenfold, from 20,000 cards in January to almost 200,000 cards in October.

The credit line on the cards range from 2000 to 10 lakh. They have almost 5 million registered users on the app.

The company has states that new card issuances and users are growing 40% every month. They are also recording an annual revenue run rate of $60 million.

“Slice has built a product that customers love, which we expect will result in the continued growth and market share gains. We are excited to partner with Rajan and the team as they expand access to credit and deliver best-in-class customer experience,” said Alex Cook, partner at Tiger Global.

Slice also has plans to introduce newer products related to wealth management and commerce although they did not give any specific timelines.

“Slice targets an under-penetrated market in India and seamlessly allows users to make online payments, pay bills and more. There is a large opportunity in the credit and payment space in India, and Slice is well-positioned o become the leader in the industry. We look forward to this partnership with Slice as they continue to scale up and grow,” said Deven Parekh, managing director at Insight Partners.

 

 

 

Mensa Brands is India’s fastest unicorn, achieving the status in six months

India’s Mensa Brands breached the billion-dollar valuation mark in just six months from launch, becoming the fastest startup in India to become a unicorn.

“Our deep focus on technology and digital brand building, as well as our people, has allowed us to grow 3x of our initial plan,” Ananth Narayanan, founder, and CEO of Mensa Brands, said in a statement on Tuesday.

Investors include Alpha Wave Ventures, a unit of Falcon Edge Capital; Prosus Ventures; Tiger Global Management; Accel Partners and Norwest Venture Partners. They invested $135 million in the brand aggregator.

Mensa buys majority stakes in digital-first brands that primarily sell their wares on the internet, acting as an umbrella company that owns and operates them. The firm said in a statement that it has invested in 12 brands across the fashion, home, beauty, and personal care categories.

“We are delighted to continue to back Mensa as it becomes the fastest unicorn in Asia,” said Niren Shah, managing director and head of Norwest Venture Partners India, in a statement.

Before starting Mensa, Narayanan, a former McKinsey executive, used to be the CEO of Flipkart-owned online fashion store Myntra. He also had a stint at the helm of online health care platform Medlife that was bought by bigger rival PharmEasy earlier this year.

Mensa is one of the many beneficiaries of the recent investor frenzy to bankroll direct-to-consumer startups and their enablers as the Indian economy goes back to normalcy. India’s gross domestic product is on the recovery path, having contracted 7.3% in the fiscal year 2021 when the first wave of the COVID-19 pandemic overwhelmed the country. In an October report, the International Monetary Fund estimated the Indian economy will grow 9.5% in the current fiscal year and 8.5% in fiscal year 2022.

“Mensa’s valuation reflects what Ananth has delivered historically in his earlier avatars and what he has been able to deliver at Mensa,” said Neeraj Shrimali, executive director, digital and technology, at investment bank Avendus. “It also reflects the potential of what this platform can be in the future. This capital will be required towards a core business function, which is acquiring good brands and scaling them up.”

Startup data tracker Tracxn estimated that Indian startups received approximately $3.7 billion from venture investors this year. China’s crackdown on some of the country’s largest technology companies has placed India as a preferred destination in Asia for global pools of capital. The ebullience around public listings by loss-making startups such as Zomato, PolicyBazaar, and Paytm has added to the frenzy, often leading to high valuations– 34 out of 50 unicorn startups crossed $1 billion valuations in 2021.

 

 

Philippine fintech Mynt raises $300m, hitting “double-unicorn” status

The Philippines-based payments app, Mynt, has become the first tech unicorn in the country after raising over $300 million in a funding round that valued the company at over $2 billion.

It is the fintech arm of Globe Telecom and the operator of the popular mobile wallet GCash. It announced that the funding round was co-anchored by global investment giant Warburg Pincus and private equity and venture capital investor Insight Partners.

Other investors that participated in the funding round include existing investors Globe Telecom, Ayalo Corp, and Bow Wave Capital. It also includes angel investor Itai Tsiddon and VC firm Amplo Ventures.

“This is further proof that our growth and achievements have not gone unnoticed,” said Martha Sazon, President and CEO of Mynt.

Founded in 2004, Mynt was 45% owned by Ant Group and Globe Telecom each, while Ayala Corp held the remaining 10% prior to the latest funding round.

Mynt offers many financial services, including credit, savings, insurance, loans, and investments. The assets under management of its GSave product have grown to over P9 billion ($178 million), from P5 billion in 2020.

GCash recorded a gross transaction value of over 1 trillion pesos ($20 billion) last year, spurred by services like online payments, bank cash-in, and money remittance.

Mynt closed a $175 million funding round that valued the company at nearly $1 billion from Bow Wave and existing investors in January. It claimed to have served over 48 million people. The current number of its merchants and social sellers stands at 3 million.

The company also recorded peak daily app log-ins of 19 million and daily active transactions of 12 million.

“We believe that GCash has created the most compelling product to reach the massively underserved market in the Phillippines,” said Deven Parekh, Managing Director at Insight Partners.

Ernest Cu. chairman of the board at Mynt and president and CEO of Globe, said the investment from Warburg Pincus, Insight Partners, and the other investors “further validates the strides” that Mynt has made in providing access to financial services to more Filipinos.

“Together with the continued support of Mynt’s existing shareholders, we are confident of furthering Mynt’s market leadership and creating positive and transformative disruption in the Philippine financial services sector,” he added.

The company has also announced they will be launching “Buy Now, Pay Later” products within the year.

“The investment into Mynt marks our continued commitment and strong belief in the long-term prospects of the Philippines as one of the fastest-growing digital economies in the region,” said Saurabh Agarwal, managing director of Warburg Pincus.

About 70% of the country’s adult population is either unbanked or underbanked with very low penetration of financial products, Agarwal noted. That being said, the country’s economy is growing at 2-3 times the rates of developed markets. As the demand for financial services continues to grow, Agarwal expects much of it to be served digitally.

Grab Now Offers Food and Grocery Deliveries as Ride-Hailing Slows

Digital tech unicorn Grab has been working to put its home delivery service that delivers food and grocery products in the black by the end of this year as it prepares to offer its shares on the Nasdaq stock market.

The Singapore-based company has an application for restaurants, allowing clients to monitor the effectiveness of their advertising and increase their earnings.

“You’re earning 10.5 times what you spent,” reads a message in the app as a marketing representative from Plain Vanilla, a chain of five cafes in Singapore, checks upon the impact of the company’s latest advertisement. The app shows a spend of 40 Singapore dollars ($27.73) helped lift sales by SG$440.

The platform also helps companies tailor their adverts to appear high in customer searches. For Plain Vanilla, this would mean including words such as “coffee” and “bakery”. Clients do see effective results as their sales are boosted.

This tool to offered to partner restaurants as an app or online free of charge and can be accessed by smartphones, allowing users to see data such as sales trends and menu-based sales.

As COVID-19 infections are still high throughout certain countries that Grab operates in, food deliveries often make up for sales declines, especially for small and midsize restaurants. It’s often a great first step for digitization for these restaurants.

Grab receives up to 30% of commissions on the deliveries and actually earns more fees if the sales promotion app helps partner restaurants generate more orders.

For the business year ended December 2020, Grab had adjusted net revenue of $800 million from the delivery business, a fourfold increase from the previous year, thanks in part to strong stay-at-home demand. By contrast, revenue from its ride-hailing business fell to $500 million from $600 million due to restrictions on movement, such as limits on the amount of people allowed in cars, imposed in response to the pandemic.

When Grab announced in April that it was going public, it forecast revenue of $1.2 billion from the delivery business in the current business year, up 50% from the preceding year and a swing to earnings before interest, taxes, depreciation and amortization (EBITDA) of $100 million, versus a loss of $200 million in 2020.

But besides food deliveries, Grab has started to provide home deliveries of perishable foods in September. Through tie-ups with local farmers and suppliers, Grab offers next-day deliveries of fresh food ordered before 5 p.m. Grab already offers 20- to 30-minute delivery of groceries.

The market for online home delivery services is expected to keep expanding. London-based market researcher, Euromonitor International, forecasts the gross merchandise value of online food deliveries in Southeast Asian countries will reach $28.1 billion in 2025, up from $9.4 billion in 2020. Over the same period, the total online grocery retail value is projected to rise from $4.1 billion to $11.9 billion.

Grab is also counting on synergies between its food delivery business and the one for groceries. According to the company, 85% of people who have used its grocery delivery service also have food delivered. At present, the company has only 5% as many grocery delivery customers as food delivery customers.

Grab plans to hold an initial public offering in the U.S. through a merger with an American special-purpose acquisition company before the end of the year. The merger values Grab at $39.6 billion.

Grab has grown on the strength of its ride-hailing business in Southeast Asia until the COVID-19 pandemic hit in 2019. In April to June this year, its ride-hailing service saw adjusted net sales fall 13% from the previous quarter to $146 million.

But thanks to continued growth in its delivery business, Grab predicts adjusted net revenue of $2.2 billion from deliveries in the 2023 business year, up nearly threefold from 2020, bringing its EBITDA to $500 million. If the delivery service turns profitable this year as planned and continues to grow, Grab will be able tout its improving earnings structure to investors.

However, Grab has seen many other rivals trying to compete in the rapidly growing delivery market. They, like Grab, are strengthening their marketing programs. Indonesia’s Gojek, for example, is providing advertising tools such as a hyperlocal targeting feature to reach customers within a 4 km radius of partner restaurants.

Foodpanda, Grab’s rival in Singapore and elsewhere, offers a marketplace for merchants to buy affordable ingredients from suppliers. The U.K.’s Deliveroo offers a loyalty program for restaurants that rewards customers if they place multiple orders with the same restaurant, helping clients expand their customer base.

While two to four companies look set to dominate the food delivery market in Southeast Asia, competition is expected to intensify in ancillary services for restaurants and other clients.

India’s Latest Unicorn, Rebel Foods, Enters The Club After Raising $175m

Cloud kitchen startup Rebel Foods has entered the unicorn club after raising $175 million in its Series F funding round that was led by sovereign wealth fund Qatar Investment Authority (QIA), with a valuation of $1.4 billion. Other investors also include existing investors such as Coatue and Evolvence.

Rebel Foods has said that it is moving towards profitability, with an annual run rate sales of $150 million, growing 100% year-on-year.

“While we are excited about becoming the next unicorn, our focus continue to remain on improving customer experience the Rebel way. This round of funding will be re-invested in building our technology, increasing our global presence and also acquiring new brands. Rebel Foods is working towards an IPO in the next 18 to 24 months,” said Piyush Kakkad, Rebel Foods’ chief financial officer.

The startup was founded in 2011 by INSEAD alumni Jaydeep Barman and Kallol Banerjee.They are the 31st unicorn to emerge from the Indian startup ecosystem this year and the first in the cloud kitchen space. A cloud kitchen restaurant prepares food only for delivery and does not offer dine-in services.

Rebel Goods manages more than 45 brands and 450 kitchens globally across 10 countries and regions. These include India, Indonesia, Malaysia, Singapore, Thailand, the Philippines, the United Arab Emirates, the United Kingdoms, and Bangladesh. It also operates over 4000 internet restaurants.

Goldman Sachs acted as the exclusive financial adviser and Shardul Amarchand Mangaldas acted as the legal adviser to Rebel Foods on the transaction.

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