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  • Shiprocket and CSC to Operate Export Hubs for E-commerce in Delhi Region

    According to a senior official on November 14, the government has chosen the logistics aggregator Shiprocket and the air cargo handling company Cargo Service Centre (CSC) to establish e-commerce export hubs in the nation on a pilot basis.

    Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi informed reporters that the e-commerce export hubs (EECH) will arrive in and around Delhi airport and start operations in February of next year. The CSC is based in Mumbai, whereas Shiprocket has its headquarters in Gurugram. According to Sarangi, two agencies have been given permission by Foreign Trade to establish experimental e-commerce export hubs in Delhi.

    Hubs Will be Equipped with State-Of-The-Art Facilities

    The hubs will be equipped with internal expedited customs and security clearing services. They will also have space for certification and quality assurance organisations. He noted that it will also feature an easy-to-implement re-import policy. This policy will allow e-commerce consignments and rejects to be returned without incurring import duties.

    Sarangi went on to say that the government will release comprehensive guidelines to establish additional of these hubs throughout the nation depending on the input these companies provide on how these pilots are operating. Different departments will need to make adjustments to their policies or regulations in order to comply with these principles. According to Sarangi, Trade anticipates that many of these centres will be operational throughout the nation following the pilot’s successful launch and subsequent scaling up.

    E-Commerce Exports are Expected to Reach $100 Billion

    According to Sarangi, e-commerce exports could reach over $100 billion by 2030 and then $200–250 billion in the years to follow. Global e-commerce exports are currently valued at $800 billion, but forecasts indicate that they may reach $2 trillion by 2030. China sells $250 billion a year through this channel, while India barely exports $5 billion.

    China is a leader in e-commerce exports and a pioneer in e-commerce export hubs. In 2023, this route accounted for 6.4% of China’s total merchandise exports. ECEH will play a crucial role in increasing the nation’s exports and enabling exporters from the countryside to ship a wide range of commodities. Pharmaceuticals, textiles, home textiles, clothing, jewellery, Ayush items, and cosmetics might all be included. Thus, the DGFT elaborated, there is a wide variety of possible outcomes.

    The purpose of establishing e-commerce export hubs was described in the Foreign Trade Policy of 2023, along with a road map for their establishment. Late in the month of August, the applications for establishing these hubs for the purpose of running pilots were called.

    Nazara Tech and Nikhil Kamath’s WTFund Back Two New Gaming Startups
    Nazara Tech and Nikhil Kamath’s WTFund invest in two emerging gaming startups, aiming to accelerate growth and innovation in the gaming industry.
    StartupTalkyNitin Konde

  • Nazara Tech and Nikhil Kamath’s WTFund are Investing in Two New Gaming Startups

    On November 15, Nazara Technologies and Zerodha co-founder Nikhil Kamath’s WTFund promised to invest a total of INR 2 crore in two gaming firms, Xigma Games and Norian Games. In order to improve India’s reputation in the international gaming industry, they are investing in the next generation of domestic gaming companies. According to a joint announcement from the companies, Norian Games and Xigma Games will receive financial support as well as access to mentorship and strategic direction as a result of this investment.

    According to Kamath, this fund is a first step towards helping businesses that have established themselves with their inventive games, and he said that he is very excited to watch them continue to push their boundaries.

    WTFund was Launched to Nurture Young Entrepreneurs

    The establishment of the WTFund, a non-dilutive grant-agnostic fund aimed at fostering young entrepreneurs under 25, was announced by Kamath in April. By investing in entrepreneurs in a variety of industries, the fund helps them grow. Nitish Mittersain, the founder of Nazara Technologies, added that the multifaceted gaming and sports media company is dedicated to developing India’s future gaming talent. “Aldian of Ancients,” a dinosaur survival simulation game for PC and console, is being developed by Norian Games, a startup based in Kerala.

    In the meantime, the Bengaluru-based game development company Xigma Games has published games like “The Bonfire: Forsaken Lands” and “The Bonfire 2: Uncharted Shores,” which together have received over 10 million downloads. The games are presently accessible on Steam, the Apple App Store, and the Google Play Store. “Metal Haven,” the studio’s most recent release, is a sci-fi action-strategy game that can be played for free.

    India’s Gaming Market

    According to Niko Partners, a market research and consultancy organisation that focuses on video games, e-sports, and streaming in Asia, India is the fastest-growing gaming market in the region in terms of both revenue and players.

    In 2024, it is anticipated that the combined revenue from mobile, PC, and console gaming will reach $943 million, an increase of 13.6% from the year before. According to the report, the market is anticipated to generate more than $1 billion in sales by 2025 and $1.4 billion in 2028, representing a compound annual growth rate of 11.1% over the next five years. These numbers exclude export and real-money gaming income.

    The online gaming industry is having problems because of the regulatory ambiguity under the IT Amendment Rules, 2023, according to Aruna Sharma, a Practitioner Development Economist and former secretary, Ministry of Electronics and Information Technology (MeitY). This is because the establishment of self-regulatory bodies (SRB) was only partially completed, and there is no central regulatory authority to address the industry’s concerns. Furthermore, it is challenging for respectable domestic and foreign gaming businesses to run efficiently because of the absence of distinction between games of skill and games of chance.

    The industry has been severely impacted financially by the GST hike from 18% to 28% as well as punitive tax applications. Taxation has been a major issue for the sector, according to Parth Chadha, co-founder and CEO of STAN. Owing to this, numerous online gaming businesses were forced to close their doors and lay off employees.

    Top 10 Gaming Startups in India in 2023
    Gaming is one of the fastest-growing industries in India. Explore now the top 10 gaming startups in India to know about Indian gaming industry.
    StartupTalkyAnagha S

  • 80–100 Employees are Laid Off by Kuku FM as Part of Reorganisation Effort

    While reorganising its operations last week, 80–100 workers were let off by Mumbai-based audiobook platform Kuku FM. Additionally, contracted staff were affected by the exercise. According to the reports, 300 workers, both on and off the roll, lost their jobs overall. The exercise had the biggest effect on the content team, which consists of authors and producers.

    According to the sources, there may have been even more workers laid off throughout the exercise. Repots said that Kuku FM implemented the layoffs in order to save expenses. For content creation, the startup will probably use artificial intelligence (AI).

    Financial Dynamics of Kuku FM

    In the fiscal year 2023-2024 (FY24), Kuku FM’s income more than doubled to INR 88 Cr from INR 41.1 Cr in the prior fiscal year. From INR 116 Cr in FY23, its loss decreased by 18% to INR 96 Cr. While its content development costs more than tripled to INR 11.2 Cr, its marketing expenditures increased 37% year over year to INR 48 Cr. Kuku FM, which was founded in 2018 by Bisu, Vikas Goyal, and Vinod Kumar Meena, provides audio programming in a variety of categories, including news, education, entertainment, self-help, personal finance, mythology, spirituality, and inspiration.

    At the moment, it asserts that its platform hosts over 150K hours of content in a variety of formats. The startup provides audiobooks in a number of regional languages, including Tamil, Hindi, Bengali, and Marathi. It contains English-language information as well. 

    Funding Raised

    Nearly a year has passed since the business raised $25 million in its Series C fundraising round, which was co-led by International Finance Corporation and The Fundamentum Partnership and included Vertex Ventures.  To date, it has raised $72 million in investment. Among its investors are Krafton and Shunwei Capital. It should be noted that the reorganisation process was carried out about a month after Pocket FM, a rival of Kuku FM, announced layoffs. According to reports, Pocket FM fired about 50 workers worldwide in a variety of roles. Earlier this year, Pocket FM had let go of almost 200 journalists working in the United States.

    Layoffs a Common Scenario in Indian Startup Sector

    In the first half of 2024, Indian startups laid off fewer workers than they did in the same period last year, suggesting that the industry may be nearing the end of its worst layoffs, albeit it is still far from done.

    According to data from executive search agency Longhouse Consulting, startups reduced employment by approximately 11,250 between January and June of this year, compared to 21,000 in the first half of 2023 and 15,000 in the second half.

    While layoffs may have decreased from their 2023 highs, industry executives and hiring experts warned that they are still happening as startups face a tight funding environment and an emphasis on cost-cutting, particularly for those getting ready for an IPO.

    Nykaa Allocates 1.80 Lakh Equity Shares Under ESOP Plan
    Nykaa allots 1.80 lakh equity shares under its Employee Stock Option Plan (ESOP), enhancing employee ownership and engagement in the company.
    StartupTalkyNitin Konde

  • Disney and Reliance Unite to Create a Joint Venture Worth INR 70,352 crore

    With the launch of JioStar.com as their official website, Reliance Industries and The Walt Disney Company announced on 15 November that their media merger in India was complete.

    Instead of being a streaming platform as was previously speculated, JioStar.com, the company’s new digital destination, exhibits the merger’s tagline “forging a new path to inspire a billion imaginations” and is currently the company’s webpage.

    Following the resolution of domain issues, there is speculation that the joint venture between Reliance Jio and Disney may eventually use JioHotstar for their unified streaming platform.

    Jainam and Jivika, siblings from Dubai, currently own the JioHotstar.com name. They purchased it from a developer in Delhi who first requested INR 1 crore from Reliance to finance his MBA at Cambridge University. The siblings have offered to give Reliance the domain at no cost. “We have complete control over this. We have not received any correspondence or pressure from Reliance or any legal organisation,” the siblings said on their website.

    The Jio-Disney Combination Unifies Two OTT Platforms and More Than 100 TV Channels

    With the merger of JioCinema and Viacom18’s media activities with Star India Private Limited, the INR 70,352 crore (~US$8.5 billion) joint venture brings together India’s top entertainment companies. An additional INR 11,500 crore (about US$1.4 billion) in growth capital has been invested in the company by Reliance.

    The joint venture will run more than 100 TV stations and generate more than 30,000 hours of TV content annually under the direction of recently appointed Chairperson Nita M. Ambani and Vice Chairperson Uday Shankar. The combined company includes JioCinema and Hotstar, two well-known streaming services with a combined user base of more than 50 million.

    Three CEOs Will Spearhead Various Operations

    Kevin Vaz will handle entertainment, Kiran Mani will lead digital operations, and Sanjog Gupta will oversee sports content. These three CEOs will drive various facets of the company. According to the ownership structure of the joint venture, Viacom18 owns 46.82% of the company, Disney 36.84%, and RIL 16.34%.

    Disney CEO Bob Iger emphasised the venture’s ability to provide an improved content portfolio to Indian audiences, while RIL Chairman Mukesh Ambani referred to it as a “transformational era” for Indian media. Several regulatory bodies, including the Competition Commission of India, granted the merger the necessary approvals.

    With a pro forma combined revenue of almost INR 26,000 crore (USD 3.1 billion) for the fiscal year that ends in March 2024, the joint venture is ranked among the biggest media and entertainment businesses in India.

     According to RIL Chairman and Managing Director Mukesh Ambani, the establishment of this joint venture marks the beginning of a revolutionary period for the Indian media and entertainment sector. Reliance will guarantee unrivalled entertainment options at reasonable costs for Indian viewers because of its extensive creative experience, partnership with Disney, and unique comprehension of the Indian market. “The firm is very excited about the future of the JV and wishes it all the best,” Ambani added.

    Reliance Acquires TagZ Foods for INR 28 Crore
    Reliance acquires TagZ Foods for INR 28 crore, marking a strategic expansion into the FMCG snack segment with this promising food brand.
    StartupTalkyNitin Konde

  • Zomato Aims For a $1 billion QIP Debut in December

    According to many media sources, food delivery and fast commerce giant Zomato Ltd. has selected investment bank Morgan Stanley and started developing its projected qualified institutional placement (QIP) offering of up to INR 8,500 crore (about $1 billion).

    Depending on the state of the market, Zomato plans to deploy the QIP in December. According to the sources, the syndicate may be expanded to include one or two additional investment institutions. According to them, the final sale size might fall between $800 million and $1 billion. The Zomato QIP proposal follows its rival Swiggy Ltd.’s massive INR 11,327 crore IPO, which went public on the stock exchanges on November 13 with a 7.69% gain. Over the IPO price of INR 390, the stock made its NSE debut at INR 420 per share.

    Recent Performance at BSE

    Even though Zomato‘s stock price is down 9.6% from its 52-week peak of INR 298.2 on September 24, the company’s stock has increased by about 118% so far this year. On November 14, Zomato’s shares ended the day up 4.27% at INR 269.6 per share on the BSE. Zomato’s funding proposal is presently awaiting shareholder approval. Up until November 22, shareholders have the opportunity to vote in favour or against the proposal.

    Justification for Fundraising

    Zomato told its investors that the $1 billion fundraise was necessary to bolster its balance sheet at this time and that it has no plans to acquire any minority businesses or make any minority investments. In around three years, Zomato’s consolidated annualised adjusted revenue has increased fourfold, from INR 4,640 crore at the time of its July 2021 IPO to INR 20,508 crore at this time (Q2FY25 annualised). Zomato informed its shareholders in a notice asking for their vote on the fundraising proposal, “Our cash balance has decreased from INR 14,400 crore to approximately INR 10,800 crore in the same time period (primarily due to funding past quick commerce losses and some equity investments and acquisitions).”

    Given the competitive environment and the considerably greater scale of Zomato’s business now, it further stated that even though the company is currently making money (as opposed to a losing business at the time of the IPO), it feels that it needs to improve its cash balance. “The company wants to make sure that Zomato is on an even playing field with its rivals, who are raising more money, but it also thinks that capital alone does not grant anyone the right to succeed (and that service quality is the primary determinant of success),” the company stated.

    Blinkit’s 10-Minute Delivery Fleet Now Includes PS5 and More
    Blinkit expands its 10-minute delivery service to include popular items like the PS5 and baggage, enhancing fast access to essential and high-demand products.
    StartupTalkyNitin Konde

  • Three Bankers Join boAT for $300–500 Million IPO

    According to reports, boAt, a manufacturer of smartwatches and audio goods, has selected a number of bankers for an IPO that will cost between $300 and $500 million next year.

     According to media sources, ICICI Securities, Goldman Sachs, and Nomura have joined the business as IPO bankers. The report also stated that although final numbers may change closer to the IPO filing, boAt may aim for a valuation of more than $1.5 billion. Regarding the development, boAt has refrained from commenting. 

    Second Attempt by the Startups to Launch IPO

    It’s important to remember that this is the startup’s second attempt at an initial public offering. The company submitted its draft red herring prospectus (DRHP) for a public offering of INR 2,000 crore to the Securities and Exchange Board of India (SEBI) in 2022. Cofounder Aman Gupta stated last year that boAt was not in a hurry to pursue an IPO for the “next couple of years,” but eventually scrapped the plans. Rather than moving forward, boAt chose to raise $60 million in private funding from new investor Malabar Investments and current investor Warburg Pincus through convertible preferred shares, with a valuation cap of about $1.2 billion.

    Roadmap to Launch its IPO

    With plans to file for the upcoming fiscal year, the reports also stated that ICICI Securities would serve as the issue’s lead banker. The business has chosen four bankers in all. The news coincides with a severe slump in boAt’s wearables category, which saw its consolidated operating revenue drop by more than 7% to INR 3,117.7 Cr in the financial year 2023-24 (FY24) from INR 3,376.8 Cr in the previous fiscal year. The wearables segment saw a roughly 40% decline in sales, from INR 910.6 Cr in FY23 to INR 550.3 Cr in the reviewed year. However, revenue for boAt’s audio products segment, which makes up the majority of its total sales, increased by just 5% from INR 2,350.8 Cr in FY23 to INR 2,459.2 Cr in FY23.

    Nevertheless, boAt was able to reduce its loss in FY24 in spite of the drop in its income. During the year, the net loss of the Aman Gupta-led venture decreased by more than 38% to INR 79.7 Cr, a decrease from INR 129.4 Cr in FY23. Gupta and Sameer Mehta founded boAt in 2015, and it sells speakers, smart watches, headphones, and other items in the broader wearables and audio sectors. It has raised over $177 million in capital to date and is supported by companies including Qualcomm Ventures, Ranveer Singh, and Warburg Pincus, among others. One of the leading brands of audio devices in India, boAt faces competition from industry titans like JBL, Sony, Samsung, OnePlus, Noise, and a number of up-and-coming new-age businesses.

    Prosus Considers 2025 IPO for Fintech Firm PayU
    Prosus considers a 2025 IPO for its fintech company PayU, aiming to bring the digital payments leader to the public market.
    StartupTalkyNitin Konde

  • CAIT Claims Quick Commerce Platforms Violate Competition Law and FDI Standards

    On 13 November, the Confederation of All India Traders (CAIT) accused rapid commerce platforms of breaking a number of national laws, such as the Competition Act, the Consumer Protection Act, and Foreign Direct Investment (FDI) regulations.

    The trade group stated in a white paper that more than INR 54,000 crore in foreign direct investment (FDI) funds have been given to the nation’s top three rapid commerce platforms: Zepto, Swiggy’s Instamart, and Blinkit, which is owned by Zomato.  Just INR 1,300 crore, or 2.5%, of this has gone towards the creation of tangible assets. According to the report, operating losses brought on by predatory pricing practices may have accounted for more than half of the foreign direct investment.

    It further stated that this is against FDI standards, which were designed to promote long-term growth through the development of infrastructure and assets. 

    Since retail trade is a state matter, CAIT will distribute copies of this white paper to the Ministry of Consumer Affairs, the Competition Commission of India, and the chief ministers of every state, according to CAIT secretary general Praveen Khandelwal.

    Ignoring FDI Norms

    According to the CAIT’s research, these platforms use a “closed nexus of preferred sellers,” which is against the FDI standards and acts. The CAIT claimed that FDI regulations specifically forbid foreign-backed marketplaces from controlling or holding inventory.

     Additionally, the trade group has asserted that these quick-commerce platforms restrict market access by predatory pricing, deep discounting, and exclusive agreements with specific suppliers, all of which are violations of the Competition Act. According to the report, they are driving small retailers and kirana shops out of the market by giving chosen vendors free or drastically reduced storage and delivery services. 

    CAIT claims that Blinkit uses five major vendors, including Superwell Comtrade, TAMS Global, and Kemexel Ecommerce. Among other companies, Swiggy Insatmart depends on PYD Retail, Bhagwati Stores, Getmax Globe, and FOCLO Technologies. As an inventory-based e-commerce company, Zepto, on the other hand, directly supplies products, completely avoiding third-party vendors.

    Vertical Agreement With Preferred Players

    According to the white paper, these platforms have vertical agreements with their favoured vendors, giving them complete control over price, distribution, storage, production, and supply. This restricts consumer options, affects purchase costs, and hinders independent sellers’ access to the market. Furthermore, it asserts that the platforms are violating the Consumer Protection Act by not giving customers clear information about the merchants. According to the trade group, these activities are putting the livelihoods of 3 crore kirana shopkeepers in jeopardy and forcing over 25% of them to close. 

     The white paper was released at a time when regulators are looking more closely at platforms for quick commerce. The Food Safety & Standards Authority of India (FSSAI) requested on 12 November that operators of e-commerce and quick-commerce food businesses guarantee a minimum shelf life of 30% or 45 days prior to product expiration at the time of delivery to customers. The Central Consumer Protection Authority (CCPA) also sent notices to e-commerce and quick commerce companies last month for violating the Legal Metrology Packaged Commodity Rules (PCR) 2017 by failing to display the MRP and “best-before” dates for perishable goods on their platforms.

    Ola Electric in Hot Water: Consumer Body Calls for Investigation
    A consumer watchdog urges investigation into complaints about Ola Electric, highlighting rising concerns around product and service issues.
    StartupTalkyNitin Konde

  • Reliance Pays INR 28 Crore to Acquire TagZ Foods

    For about INR 28 crore (about $3.5 million USD), Reliance Consumer Products, a division of Reliance Retail, purchased the direct-to-consumer (D2C) snack company TagZ Foods. This purchase, which some have referred to as a distress sale, is another example of a big company purchasing a smaller direct-to-consumer brand.

    Founded in 2019 by Anish Basu Roy and Sagar Bhalotia, TagZ Foods sells a variety of foods, including cookies, gourmet dips, and popped potato chips. The business demonstrated a multi-channel strategy to sales by operating through its website, multiple e-commerce platforms, and physical retail locations. Following their appearance on the well-liked Indian television programme Shark Tank India, their items saw some increase in visibility.

    Overall Funds Raised by TagZ Foods

    According to the company’s financial history, a total of roughly $3.2 million USD was raised across multiple funding rounds. This comprised a $1.2 million USD seed investment round from angel investors in 2020 and a $2 million USD pre-Series A round headed by 9 Unicorns. An undisclosed sum from former Indian cricket player Shikhar Dhawan, who also served as the company’s brand ambassador, was contributed in later investment rounds. Additionally, Dexter Angels, Agility Ventures, Venture Catalysts, and Klub are investors in TagZ Foods.

    But in the last few months, TagZ Foods has encountered many difficulties. According to media citations, the company stopped production a few months ago because it was having trouble growing. As a result, TagZ items were conspicuously absent from both online and physical retail locations. Many workers also left the company as a result of the production standstill.

    According to regulatory documents, the ultimate acquisition price of INR 28 crore could alter after a due diligence procedure. Before publication, neither Reliance Consumer nor TagZ Foods responded to any media enquiries, despite many attempts to reach them for comment on this deal.

    Financial Dynamics of TagZ Foods

    In the fiscal year 2023 (FY23), TagZ Foods reported a net loss of INR 10.7 crore compared to INR 9.6 crore in operating revenue. This highlights the financial strain the business was under prior to the takeover. In a saturated market with well-known brands like Uncle Chips, Lays, Too Yumm, and BRB, the company faces competition.

    This purchase fits with a broader pattern in the D2C industry in India. Due to difficulties faced by numerous smaller direct-to-consumer (D2C) brands, larger, more established Fast-Moving Consumer Goods (FMCG) companies have acquired them. For example, Hindustan Unilever purchased Oziva and Wellbeing Nutrition in 2022, while ITC purchased Yoga Bar in January 2023. These purchases demonstrate the consolidation taking place in India’s quickly changing D2C market.

    The continuous dynamic changes in the Indian D2C food industry are highlighted by Reliance Consumer Products’ acquisition of TagZ Foods. The deal highlights the difficulties encountered by smaller D2C firms and the strategic prospects for larger corporations looking to diversify their product portfolios, even though the final terms are still up for approval. How Reliance incorporates TagZ Foods into its current business operations and if it can effectively turn around the brand’s fortunes will be revealed in the future.

    Swiggy’s IPO Unlocks INR 9,000 Crore ESOPs for 5,000 Employees
    Swiggy’s IPO offers INR 9,000 crore in ESOP value for 5,000 employees, marking a major opportunity for staff as the company goes public.
    StartupTalkyNitin Konde

  • In Just 10 Minutes, Blinkit’s Massive Order Fleet will Bring PS5, Baggage and More

    According to a media report, Blinkit, Zomato’s rapid commerce division, has started a pilot programme to test a large-order fleet intended for delivering heavier consumer goods within the Delhi NCR area.

    Geysers, air purifiers, luggage bags, and PlayStations are among the things handled by the fleet, according to the report, which guarantees delivery within a 10-minute interval.

    Aligning with the Concept of Express Dark Stores

    As the rapid commerce industry faces growing competition to increase average order values (AOV), the initiative is consistent with Blinkit‘s stated aspirations to create express dark stores for 30-minute delivery of high-value items. As of right now, Blinkit’s AOV is INR 660, up 8% from INR 607 during the same quarter previous year. Zomato refused to share more information regarding the experimental programme as stated in the report.

    Swiggy’s Plan            

    The move coincides with rivals in the rapid commerce market investigating new product categories. According to recent remarks made by Swiggy CFO Rahul Bothra about the company’s impending IPO, rival Swiggy Instamart is creating its own infrastructure for longer delivery times for some categories, but it intends to concentrate on kitchen appliances rather than big electronics.

    A broader deployment in other major metropolitan regions where Blinkit works may result from the pilot’s success in Delhi NCR.

    Competition in Quick Commerce Space Getting Stiffer

    Quick Commerce and e-commerce platforms are engaged in a fierce battle in the thriving online retail market, blurring the boundaries between their business models and encroaching on one another’s territory as part of their expansion strategies.

    For example, fast commerce platforms such as Swiggy, Instamart, Zepto, and Zomato’s Blinkit used to be recognised for delivering groceries and necessities in a matter of minutes, but they have since expanded into other categories, including apparel, cosmetics, toys, and presents. Conversely, e-commerce giants like Amazon intend to join the q-commerce market, and Flipkart has already done so, offering product delivery in less than one hour.

    Customers’ purchasing habits have changed as a result of this progression; they now anticipate that every good, from skincare to gifts to dairy products, will arrive at their door in a matter of minutes. The competition’s ultimate winners are shoppers who value convenience.

    In 2020, it all began with the prompt delivery of groceries, food, and other necessities. However, by introducing a variety of categories like fashion, beauty, electronics, toys, home appliances, kitchen supplies, and more, rapid commerce titans like Blinkit and Zepto are stepping into the world of e-commerce. 

    By strengthening the rapid commerce platforms, this plan will make it more difficult for conventional kirana stores and e-commerce competitors Flipkart and Amazon to compete. Expanding their logistics network beyond groceries and necessities calls for greater manpower as well as the availability of dark stores to hold a high number of SKUs for quicker last-mile deliveries.

    Swiggy’s IPO Unlocks INR 9,000 Crore ESOPs for 5,000 Employees
    Swiggy’s IPO offers INR 9,000 crore in ESOP value for 5,000 employees, marking a major opportunity for staff as the company goes public.
    StartupTalkyNitin Konde

  • Under ESOP, Nykaa Allots 1.80 Lakh Equity Shares

    Nykaa, a leading e-commerce company in the beauty and fashion industry, has granted its employees 1.80 lakh equity shares through the Employee Stock Option Plan (ESOP). This follows the startup’s announcement of a 66.3% increase in its consolidated net profit from INR 7.8 Cr to INR 12.97 Cr in the second quarter of FY25. As stated in a filing, “The equity shares so allotted shall rank pari-passu with the existing equity shares of the Company in all respects.”

     It hasn’t, however, revealed the shift in its paid-up capital.  It is relevant to mention that Nykaa incurred employee benefit expenses totalling INR 161.49 Cr in Q2 FY25. Compared to INR 136.32 Cr spent the previous year, this amount represents an 18.5% increase. The broking firm JM Financial has kept its “buy” recommendation for the e-commerce behemoth at INR 250 following the release of its financial results.

    Nykaa Scaling Financial Growth

    The broking firm claims that the startup has achieved growth despite a “unfavourable demand environment.” Nevertheless, broking firm Bernstein kept the startup’s “market-perform” rating, pointing to an 8.6% drop in the EBIDTA margin. It established INR 165 as the goal price. In the September quarter of FY25, Nykaa‘s operating revenue increased 24.4% to INR 1,874.74 Cr from INR 1,746.11 Cr in the second quarter of FY24. Revenue grew 7.2% on a quarter-over-quarter (QoQ) basis from INR 1,753.44 Cr.

    BPC Segment Continues to be Highest Revenue Generator

    The fashion vertical continues to trail behind, despite the beauty and personal care (BPC) segment showcasing a 24.3% YoY gain in revenue to INR 1,702.89 Cr. In Q2 FY25, however, this segment reported a 21.7% YoY increase in revenue to INR 166.10 Cr. The startup’s total costs increased by 7.3% QoQ and 23.7% YoY to INR 1,858.93 Cr. The company’s biggest expenditures were on marketing, personnel benefits, and the acquisition of traded goods.

    ESOP is Gaining Popularity Among Indian Startups

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provide these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021. The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture.

    Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021. Just 14% of founders felt educated about the tax consequences of ESOPs, which is a fairly low level of understanding.

    Nykaa Introduces 10-Minute Delivery—Faster, Not Ultrafast
    Nykaa shifts focus to 10-minute delivery to offer faster service without adopting ultrafast models, enhancing customer convenience while balancing efficiency.
    StartupTalkyNitin Konde