Deal Roundup: Reliance snaps up NowFloats in a busy week for startup dealmaking

It was a relatively busy week in terms of funding activity in India’s technology startup market, but the week closed with a bang courtesy the acquisition of SaaS platform NowFloats Technologies by Mukesh Ambani-led Reliance Industries.

Reliance Strategic Business Ventures, a wholly owned subsidiary of Reliance Industries, scooped up an 85% stake in the Hyderabad-based company for about $20 million. The acquisition creates fairly profitable exits for NowFloats’ early investors, including Mumbai-based venture capital firm Blume Ventures. 

Reliance has quickly emerged as one of the most prolific corporate strategic investors in India’s startup market, chiefly to bulk up capabilities for its Jio platform. 

Overall, funding activity in the second week of December remained robust with technology startups from across sectors such as B2B marketplaces, personal care, education, agri-tech and co-living drawing capital from multiple investors. A total of 16 companies raised a combined $128 million-plus during the week. The most notable deal of the week was Seattle-headquartered Walmart’s joint investment with Flipkart in B2B agri-tech startup Ninjacart. The size of the investment was not disclosed. Among disclosed deals, the largest ticket size was $32 million and the lowest was $0.35 million. Over 30% of the investments were at the Series A stage and 25% at the Series B stage.  

While the funding activity may have been modest, the market saw a major windfall in terms of early stage funds raised. As many as five venture capital firms raised new funds focused on India. A combined $400 million-plus in now waiting to be deployed in the market, courtesy these new funds. The most interesting among the lot is Princeton, New Jersey headquartered SOSV, which plans to scale up investments in the country’s emerging deep-tech ecosystem. 

Top Funding Deals

Ninjacart: US retail giant Walmart and its Indian ecommerce arm Flipkart made a joint investment in 63Ideas Infolabs-owned Ninjacart, a B2B marketplace for agriclutural produce that connects farmers and retailers. While the financial details of the deal were undisclosed, the transaction is expected to close by the end of this month.

Zetwerk: An online marketplace for buyers and sellers of manufacturing services, Zetwerk, raised $32 million in a Series B round led by Lightspeed Venture Partners and Greenoaks Capital. Sequoia Capital India, Kae Capital and Accel were returning investors in the round.The company plans to use the Series B capital for business expansion in domestic and overseas markets with a focus on the US and Southeast Asia, co-founder Amrit Acharya told TechCircle.

Purplle: Mumbai-based online beauty products platform Purplle, raised $27.4 million in a growth round from New York headquartered investment bank Goldman Sachs. The company till date has raised a total of $43 million in equity and debt capital. The fundraising comes after Manash Lifestyle, the parent company of Purplle, reported a 3X growth in its revenues for the financial year ended March 31, 2019, to Rs 100 crore, a tad lower than its total spends at Rs 105 crore.

Observe.ai: San Francisco-headquartered voice solutions provider Observe.ai, raised $26 million in a Series A round led by Scale Venture Partners. Hedge fund Steadview Capital, venture capital firms Nexus Venture Partners and 01 Advisors, and private investment firm Emergent Ventures were returning investors in the round. The capital raised will be used to hire talent and accelerate product development, the startup said.

Stanza Living: New Delhi-based student housing startup Stanza Living, raised $5.7 million in venture debt from Alteria Capital. This is the second debt infusion the startup has received from Alteria Capital in nine months. The company had, in March this year, raised $4.3 million debt from the venture debt firm. The company will use the fresh capital on accelerating its expansion across markets through organic and inorganic measures.

Cuemath: Bengaluru-based math education platform Cuemath, raised $5.5 million in a Series B round from London-based VC firm Manta Ray Ventures and returning investors CapitalG and Sequoia Capital India. The capital raised in the latest round will be used for capital expenditure or to meet the operational expenses in line with the company’s business plan. Founded in 2013 by Jagjit Kurma and Manan Khurma, Cuemath offers math classes on a franchisee model. It uses physical and gadget-based content for students from lower kindergarten to matriculation.

m.Paani: Local retailer digitisation platform m.Paani, raised $5.5 million in a Series A investment round from a group of new and existing investors. The round was led by AC Ventures, the corporate venture capital arm of Mexican beverage firm Arca Continental; Germany-based consumer goods firm Henkel; and British entrepreneur Nick Candy’s investment firm Candy Ventures. Mumbai-based m.Paani plans to use the fresh funds to invest in product development, accelerated growth and expansion, and key hires.

The Moms Co: The Moms Co, an omnichannel baby care products, raised $5 million in a Series B round led by returning investors DSG Consumer Partners and Saama Capital.

According to a statement issued by the company, the Series B capital will be used to grow the brand to Rs 100 crore revenues in next 12-18 months. It will expand its range of solutions, beef up technology and grow its offline presence. The startup offers natural products for pre and post-natal care. It has diversified its offerings across categories such as face care, hair care, and others, with over 25 stock keeping units.

Box8: Mumbai-based on-demand food delivery services platform Box8, raised $1.6 million in a debt round from venture lender Trifecta Capital in three equal tranches during August, October and December. The company has raised $27 million till date. Prior to this round, Box8 had raised $15 million in a Series C round led by Alibaba Group-backed technology vehicle eWTP Ecosystem Fund with participation from existing investors Mayfield and IIFL Seed Ventures Fund. Box8 was founded in 2012 by Amit Raj and Anshul Gupta. It’s a full-stack online food delivery player where it controls every aspect of its service including preparation and delivery of the dishes.

TapChief: Bengaluru-based professional networking and consulting platform, TapChief, secured $1.5 million in a seed round from the homegrown investment firm, Blume Ventures. The infusion follows an angel round this year in January that saw TapChief raise $650,000 from investors including Paytm, Kunal Shah, Mekin Maheshwari and 500 Startups among others. The company will use the fresh capital to scale its technology, improve existing people management systems and bolster the network of professionals on the platform.

Venture Capital Funds

1Crowd: Equity crowdfunding platform 1Crowd marked the second close of its debut angel fund at Rs 50 crore or approximately $7 million (at current foreign exchange rates). The SEBI-registered fund has a target corpus of Rs 75 crore ($10.5 mn) including a greenshoe option of Rs 25 crore ($3.5 mn). 

The firm raised the capital predominantly from individual investors or HNIs (high networth individuals) and a few family offices also participated. 1Crowd hit the first close for the fund at Rs 23 crore in March last year. Owned by Mumbai-based Zeva Capsol, 1Crowd currently run a sector agnostic early stage investment platform. The fund co-invests alongside the investor community registered with the platform.

SoSV: Princeton, New Jersey headquartered early stage venture capital firm SOSV marked the final close of its fourth successive fund, dubbed SOSV IV, at $277 million, even as it closes in on five new deals in India, a key market for the firm’s ‘accelerator VC’ strategy. The latest fund, which will continue to have a big focus on deep-tech startups, is nearly double the size of its previous fund. Limited partners or investors in the new fund include Tiedemann Advisors, Davy Group, HP Tech Ventures, ZX Ventures (AB Inbev) and Honda Motors. The latest fund takes SOSV’s total funds under management to over $700 million.

3one4 Capital: Bengaluru-based venture capital firm 3one4 Capital raised $118.5 million across two separate funds, dubbed Continuum-I and Rising-I, to invest in early stage technology business. The fund will invest anywhere between $3 million and $5 million in startups in which 3one4 Capital already has prior investments.

Stride Ventures: Delhi-headquartered venture lender Stride Ventures raised commitments worth $14.1 million as part of the first close of its debut fund. The fund has a final target corpus of $70.5 million. Limited partners or investors in the fund include several unnamed HNIs (high net-worth individuals) and family offices. Sector agnostic Stride, founded this year by former banker Ishpreet Gandhi, plans to invest in 35-40 startups over the next three years.

Anthill: Hyderabad-based early stage investment firm Anthill Ventures launched Urban-i, a programme targeted at consumer startups in areas such as personal care, fashion and accessories, food and beverages, health and nutrition, consumer technology and ecommerce. Through the programme, the firm will invest up to $1 million in 5-9 selected startups. The startups will receive an initial sum as an upfront investment and the balance will be deployed in tranches. Some companies may receive additional syndicated capital up to $3 million. The programme was launched in Mumbai by actor Rana Duggubati, who is one of the mentors that such startups can access during the programme.