StartupTalky

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  • The Fintech Business PayU is Being Considered for IPO by Prosus in 2025

    According to a November 13 media report, Prosus, which recently saw a healthy return on its investment in Swiggy at the food delivery startup’s initial public offering (IPO), plans to list PayU, its payments and fintech business in India, in 2025. Ervin Tu, the group chief investment officer for Prosus, was quoted in the report as saying that the listing might occur at a valuation between $5 billion and $7 billion.

    A renowned media outlet reports that UBS just increased PayU’s valuation from $3.7 billion to $4.2 billion, citing improved trading multiples in the global payments market. Listed in Amsterdam and a member of South Africa’s Naspers, Prosus is regarded as one of the largest long-term technology investors globally.

    PayU Was Planned to Get Listed in 2023

    Since late 2023, PayU had planned to go public at a valuation of $5 billion to $7 billion. It was permitted to function as a payment aggregator in April after just escaping a 15-month regulatory prohibition on hiring new merchants. For its primary payments function, it faces competition from companies like Walmart-owned PhonePe and Tiger Global-backed Razorpay. PayU also helps small enterprises and consumers get loans.

    Rapid Expansion of India’s Digital Payment Market is Attracting Investors

    According to Prosus’ 2024 annual report, retail digital transactions in India, one of the world’s fastest-growing digital payments markets, grew 44% year over year in FY24, while payment volume rose 20%.

    India is a “pillar” of the Dutch investor’s strategy, according to Tu. “We have great optimism about the future for India and for us.”

    His remarks follow the successful market debut of Swiggy, another portfolio business, on November 13. Prosus, which still owns a 25% share in the food and grocery delivery company, claimed in a statement that it had made $2 billion from its investment. Fabricio Bloisi, the CEO of Prosus, stated last month that he anticipates more of the companies in his Indian portfolio going public within the next 12 to 18 months. Among other Indian businesses, it owns shares in Meesho, an online marketplace, and Urban Company, a home services provider.

    Sriharsha Majety, the founder and group CEO of Swiggy, stated on the sidelines of the company’s successful initial public offering (IPO) that the Prosus team has been a crucial part of Swiggy’s path to reach this milestone, helping the business at every turn since it started working with it in 2017. Their steadfast faith in Swiggy’s mission has been essential to the company’s success in the quick commerce sector as well as its food and 1P delivery platforms. Swiggy has learnt a lot and garnered useful insights from Prosus’ vast global exposure to the food industry. Swiggy looks forward to strengthening its partnership and leveraging Prosus’ global insights and industry expertise as it continues to develop, expand, and change as a publicly traded company.

    PayU Collaborates With Amazon Pay Later to Provide Immediate Digital Credit
    A strategic alliance between PayU, a provider of digital financial services, and Amazon Pay Later will increase the availability of digital credit to millions of customers in India.
    StartupTalkyNitin Konde

  • Problems for Ola Electric: A Consumer Watchdog Recommends that Complaints be Looked into

    The Central Consumer Protection Authority (CCPA) has ordered a thorough investigation into suspected “deficiencies” in Ola Electric’s services and products, particularly with regard to its scooters, indicating further difficulty for the company. This action comes after Ola addressed previous regulatory notifications about outstanding customer complaints.

    Nidhi Khare, the consumer affairs secretary, announced on 14 November 2024 that the Bureau of Indian Standards (BIS) has been instructed by the top consumer rights regulator to confirm the company’s statements about how it resolves customer complaints.

    The investigation was formally started on November 6, and the BIS director general, acting as the ex-officio Director General of Investigation, has been given 15 days to provide a detailed report.

    Plethora of Complaints Triggered the Investigation

    The National Consumer Helpline (NCH) received 10,644 complaints against Ola Electric between September 2023 and August 2024, which sparked the investigation. According to a response from Ola Electric dated October 21, 99.1% of consumers were satisfied with the company’s complaint resolution procedure. A sample of consumers was then contacted by the CCPA to get their opinions on grievance redressal.

    According to an investigative official, 130 of the 287 customers that the NCH call agents dealt with were dissatisfied with the company’s answer (79.2%). It was merely a sample test to confirm Ola’s claims. Their claim of 99% satisfaction ought to have been mirrored in the cross-verification as well.

    Customers are Not Satisfied With the Resolution

    According to numerous clients, problems continued even after complaints were resolved, and some cases were closed too soon without being satisfactorily resolved, the official continued. Ola Electric insisted in a regulatory filing that it has settled 99.1% of the CCPA’s objections. The company also stated that it had submitted comprehensive responses to a show-cause notice issued by the CCPA on 7 October, which detailed alleged consumer rights violations, misleading advertising, and abusive trade practices.

    Who is BIS?

    The Bureau of Indian Standards (BIS) is India’s national standards body. BIS is in charge of the smooth operation of the standardisation, marking, and quality certification of goods processes as well as any related or incidental issues. 

    The national economy has benefited from BIS’s primary functions of standardisation and conformance assessment by supplying safe, dependable, and high-quality products; reducing consumer health risks; safeguarding the environment; encouraging imports and exports as alternatives; managing the overabundance of varieties, etc. In addition to helping consumers and businesses, BIS’s standards and certification programme also assist a number of public policies, including those pertaining to building and construction, consumer protection, food safety, product safety, and the environment.

    Through its standardisation and certification efforts, BIS has recently sought to directly address a number of national priorities as well as other government projects, including Digital India, Make in India, Swacch Bharat Abhiyan, and ease of doing business. When developing standards, BIS keeps up with the latest developments in technology, climate change, energy and environmental conservation, health and safety conditions, and trade facilitation. 

    Rapido Success Story | Valuation | Funding | Unicorn | Business Model | Founders
    Rapido has entered the unicorn club by receiving $120 million in funding from Westbridge Capital in July 2024. Check out the full story here! Know more about it on Rapido Wiki.
    StartupTalkyPurbalee Dutta

  • Razorpay Collaborates with Lightspeed and Peak XV to Finance and Guide B2B Startups

    In partnership with venture capital firms Peak XV and Lightspeed, fintech company Razorpay announced the Razorpay Venture Investment Programme on November 13, 2024. The programme will invest in more than 50 early-stage business-to-business (B2B) enterprises.

     Every year, the company and its venture capital partners will invest in ten to fifteen early-stage startups, offering B2B startups at different stages of development financial, technological, and leadership support. The initiative has the potential to raise up to $1 million for early-stage enterprises.

     Based in Bengaluru, Razorpay is a business-to-business (B2B) omnichannel banking and payment platform. Over the next five years, India is expected to welcome an additional 10-15 unicorns in the B2B sector due to the rising interest in assisting entrepreneurs in this field, the business said in a statement.

    Companies Benefiting from  Razorpay’s Application Programming Interface

    Razorpay‘s sandbox environments and API (Application Programming Interface) stack will be accessible to early-stage finance startups. This will cover product alliances, customer relationships, and introductions to the distribution network.

    The company’s founders and other members of the executive team will advise the entrepreneurs one-on-one. The programme for the entrepreneurs will be run by Vishnu Acharya, Razorpay’s head of strategy and corporate development. According to Razorpay, the business-to-business market is still one of the most promising sectors with significant development potential. According to Harshil Mathur, co-founder and CEO of Razorpay, the company hopes to facilitate this process with the Razorpay Venture Investment Programme by giving founders access to the appropriate technology, partnerships, and coaching to enable them to innovate and scale more quickly.

    Startups Will Get Guidance from Around 3000 Founders

    Razorpay intends to use the programme to provide one-on-one coaching from its founders and other executives, as well as to expand access to its API stack and integrate it with its tech platform. Additionally, startups will get access to the Razorpay Rize network, which consists of more than 3,000 entrepreneurs and companies. 

    Ishaan Mittal of Peak XV and Dev Khare of Lightspeed expressed excitement about the programme, pointing out that it has the ability to promote ideas aimed at SMEs by utilising Razorpay’s payment infrastructure and wide-ranging SME network.

    B2B Startups In India

    The magnitude of India’s mostly unorganised B2B industry and disjointed supply chain, according to a report by Bessemer Venture Partners, makes B2B markets extremely promising. B2B e-commerce made up only 1% of India’s total B2B market in 2022, which is a sharp contrast to its very small share in 2019. The adoption of B2B e-commerce is expected to have a notable uptick, nevertheless, with estimates suggesting that by 2030, its proportion of the market would be just less than 5%.

    Report further predicts that tech-enabled, online-first B2B marketplaces will offer an incredible $200 billion business opportunity by 2030. It’s crucial to remember that, despite this tremendous development, online B2B gross merchandise value (GMV) would still only make up around 5% of all B2B transactions in India, which is far less than the penetration in other nations.

    Business Model of Razorpay | How Does Razorpay Make Money?
    Razorpay is a leading payment gateway in India that enables businesses to accept online payments. Here, let’s understand how Razorpay makes money.
    StartupTalkyAbinaya Arangarajan

  • Nykaa is Concentrating on 10-Minute Delivery That is Faster But Not Ultrafast

    Nykaa, a significant player in the beauty and fashion e-commerce space, is not concentrating on 10-minute delivery, despite the nation’s increasing quick-commerce craze. For other, in-demand cosmetic products, the company is instead aiming for a delivery window of 30 minutes to 2 hours.

    “Ultrafast shipping isn’t always consistent with Nykaa’s service because its beauty consumers frequently need time to select the right products, such as the right shade of foundation.” The CEO of Nykaa’s beauty e-commerce division, Anchit Nayar, stated on the company’s conference call following its earnings.

    Not Compromising With Consumers’ Experience

    While Nykaa would provide speedier delivery choices, Nayar underlined that in areas that demand more thought, the consumer experience will not be compromised. Nevertheless, Nykaa is eager to gain profit from SKUs that are more suitable for prompt delivery, such as everyday essentials and fast-moving items. These goods, like widely used cosmetics, are in great demand and constitute a significant part of the company’s operations. 

    In order to guarantee competitive delivery speeds in these categories without materially reducing its margins, Nykaa is launching speedy delivery services in a few major cities. Relevantly, it was announced last month that the business was testing a 10-minute delivery service in certain areas of Mumbai, which would cover 10% of its SKUs. During the call, Nykaa CEO Falguni Nayar stated that the company’s infrastructure investment, particularly its network of warehouses spread throughout India’s state capitals, had already improved delivery times. 

    Logistical Dynamics of Nykaa

    Nykaa claims that 70% of its orders are delivered the following day thanks to the increased network, which is a 45% improvement over previous results. According to Nykaa’s investor presentation, 70% of deliveries in the top 110 cities nationwide and 80% of deliveries in the top 12 cities are covered by its same-day and next-day delivery services. Falguni Nayar added that during the first half of FY25, no extra funds were spent on growing its network of warehouses. She asserts that Nykaa’s high average order value supports the company’s infrastructure investment, which does not present a significant capital expenditure burden and is anticipated to increase margins.

    The business thinks that rather than diluting its margins, this expansion will boost their business operations. Due to robust development in the beauty and personal care (BPC) vertical, Nykaa’s consolidated net profit increased 66.3% to INR 12.97 Cr in Q2 FY25 from INR 7.8 Cr in the same period last year.

    Quick Commerce Fever Rising In India

    The delivery of small orders quickly is known as “quick commerce,” and it is expanding far more quickly than regular e-commerce. According to a survey by financial services company Chryseum, revenues of India’s rapid commerce sector have increased by more than 280% in the last two years, indicating the industry’s impressive expansion. 

    As per the survey’s findings, fast commerce’s Gross Merchandise Value (GMV) in India grew by 280% from USD 0.5 billion in FY22 to an astounding USD 3.3 billion in FY24. 

    Nykaa Success Story | Business Model | Revenue Model
    Nykaa is a lifestyle D2C consumer products Ecommerce retail brand for fashion & wellness products. Know about Nykaa history, logo, success story, business model, revenue model, founded, founders, and more. Visit Nykaa Wikipedia for more details.
    StartupTalkyAnik Banerjee

  • After Four Years, Stoa, an Alternative to Traditional MBA Programmes, Closes Its Doors

    After four years of business operations, Stoa, a business that provided an alternative to conventional MBA programmes, has shut down. Co-founder Raj Kunkolienkar made the statement on social media, signalling the end of an endeavour that sought to offer accessible business education to a large audience.

    The choice, according to Kunkolienkar, was “gut-wrenching,” as the company had first concentrated on online learning in order to reach a greater number of students. But after the pandemic, he observed a drop in online learning participation, which eventually affected their choice not to switch to an offline, physical model. He clarified that Stoa’s mission could not be financially supported by an offline strategy.

    The Ken Hinted About this Move

    This information comes five months after The Ken reported that Stoa was closing. According to Stoa’s CEO Aditya Kulkarni at the time, the business was only halting operations and weighing its options for the future. Stoa released “Zeus,” an AI-powered enterprise agent platform, in response to this revelation.

    Zeus and Stoa were supposed to work together, but no additional Stoa cohorts were launched. In the past, Kunkolienkar has emphasised Zeus’s capabilities by saying that it would handle a variety of jobs, such as research, work assignments, and meeting minutes. Zeus’s operational state is still unknown, though.

    Financial Report Card of Stoa

    Kulkarni, Raj Kunkolienkar, and Manoj Kambadur founded Stoa in 2020. During its years of operation, the school served more than 1,500 students in 15 cohorts, making a major effect. With a revenue of INR 15.9 crore (about $1.9 million USD) in fiscal year 2023, the company showed significant financial growth. This is a significant 160.6% increase over the INR 6.1 crore (around $0.7 million USD) earned in the previous fiscal year. Additionally, they were able to cut their losses from INR 78.2 lakh (about $95,000 USD) in FY22 to INR 43.9 lakh (around $53,000 USD) in FY23, a 43.8% reduction.

    Prominent investors Nithin Kamath, Kunal Shah, and Raveen Sastry of Myntra had contributed $1.5 million to Stoa’s seed fundraising. Other alternative business schools, such as Masters’ Union and Mesa School of Business, were competitors of the startup.

    Challenges Faced by Online Education Providers

    The difficulties experienced by online education providers, especially in the wake of the pandemic, are brought to light by Stoa’s closure. Even though the company’s revenue increased significantly and its losses decreased, it decided to shut down its operations due to a shift in learning preferences and the financial realities of running an internet business. It’s unclear what the future holds for Zeus, the AI platform.

    For other educational companies, Stoa’s experience serves as a case study, highlighting the necessity of flexibility and meticulous financial planning in a market that is continuously changing. Nonetheless, the company’s influence on more than 1500 students is evidence of its early success in offering an alternative route to business school. It is yet unclear how this closure will affect the alternative MBA industry in the long run.

    BCCI May Request NCLT to Withdraw Byju’s Bankruptcy Case
    BCCI may petition the NCLT to withdraw its bankruptcy claim against edtech firm Byju’s, seeking to resolve issues outside of court, according to media sources.
    StartupTalkyNitin Konde

  • With Swiggy’s IPO, 5,000 Employees will have Access to INR 9,000 Core in Esop

    On November 13, 2024, Swiggy went public on the NSE at a price of INR 420, 7.69% higher than its IPO price of INR 390. At INR 412 on the BSE, it made its debut at a premium of 5.64%.

    According to various published reports, the company’s listing is set to open up employee stock option plans worth INR 9,000 crore and propel the meal delivery company’s approximately 500 employees into the “crorepati” league. One of the biggest wealth-creation initiatives in India’s startup sector is expected to benefit 5,000 present and past employees of the Bengaluru-based company.

    At a price of INR 390 per share, the highest price range of its initial public offering (IPO), which opened for subscriptions on November 6, Swiggy’s whole Esop pool is estimated to be INR 9,000 crore. Through the buyback of Esops in July of this year, the company has already provided its employees with cash totalling more than INR 500 crore.

    Exemption from Lock-In

    Swiggy obtained a one-year lock-in period exemption from the Securities and Exchange Board of India (Sebi) in July of this year. This exemption would also enable Swiggy’s employees to sell shares one month following the initial public offering (IPO), increasing their opportunities to build wealth. Over the years, e-commerce giant Flipkart, one of the largest wealth producers in the online economy, has carried out $1.5 billion in Esop buybacks in multiple tranches.

    With its INR 9,375 crore IPO in July 2021, Swiggy’s fiercest rival Zomato, one of the first major domestic consumer internet businesses to go public, created 18 millionaires. About 350 employees, both current and past, became crorepatis at the time of Paytm’s first public offering (IPO) in November 2021. The main factor driving the 3.59 subscriptions to Swiggy’s public offering was institutional investors’ interest. For the IPO, the company had specified a price range of INR 371-390 per share.

    Consumer internet companies are particularly affected by the Esop allocation tendency, which was first made well-known by IT services giants like Infosys. Before going public, these companies usually provide founders and top management with more stock options as incentives. However, as Swiggy has shown, the chance to create income for a larger group of workers can have a number of unintended consequences. Many of the recently graduated “crorepatis” frequently decide to launch their businesses alone. Spending on assets like real estate has also increased.

    According to media reports, Swiggy has teamed up with several platforms to finance its employees’ conversion from Esop to stock; this is especially true since they will need to pay taxes before the stocks can be sold on the open market. Employee taxes will be charged to the difference between Swiggy’s current share price and the price at which the Esops were given at the conversion of the Esops.

    Bengaluru Court Restricts Swiggy Over Ex-Employee’s ESOP Rights
    A Bengaluru court has barred Swiggy from alienating a terminated executive’s ESOP, emphasizing employee rights in equity compensation.
    StartupTalkyNitin Konde

  • BCCI May Petition NCLT to Have Byju’s Bankruptcy Proceedings Withdrawn

    According to media sources, the Board of Control for Cricket in India (BCCI) is expected to petition the National Company Law Tribunal (NCLT), located in Bengaluru, to have its bankruptcy claim against the ed-tech company Byju’s withdrawn.

     It may follow the Supreme Court’s decision last month to overturn the National Company Law Appellate Tribunal’s (NCLAT) October 23 verdict authorising a INR 158 crore settlement between Byju’s (Think and Learn Pvt Ltd) and the BCCI.

     The NCLAT’s previous decision, which had stopped Byju’s insolvency procedures after its agreement with the BCCI, is overturned by this ruling. The Supreme Court incorrectly approved the settlement after concluding that the NCLAT had not followed the procedural guidelines set down in the Insolvency and Bankruptcy Code (IBC). The INR 158 crore that the BCCI had placed in an escrow account will now be moved to an escrow account run by the Committee of Creditors (CoC) as a result of this ruling.

    Supreme Court’s Further Instructions

    According to reports, the court rebuked the NCLAT for ending the Corporate Insolvency Resolution Process (CIRP) too soon. The court further explained that any withdrawal request must be submitted via the Interim Resolution Professional (IRP) rather than by the parties themselves.

     According to reports, Byju’s US lenders have demanded that the Committee of Creditors be reorganised and that the IRP assigned to Byju’s be removed. Arguments in this matter are anticipated to be heard by the NCLT on November 18.

     Byju Raveendran, the founder of the struggling education technology business Byju’s, declared last month that the once-highest valued startup in India now has no value and that the former empire should be rebuilt from the ground up, brick by brick.

    Downfall of Byju’s

    Byju’s was valued at $22 billion in 2022, but its fortunes have declined because of a severe financial shortage, regulatory problems, and investor disagreements. One such dispute involved a fight with US bankers for $1 billion in outstanding debts, which ultimately led to the company’s insolvency.

    “To be successful, I simply need to see a 1% likelihood. The outcome of the court order doesn’t worry me. No matter what, I’ll find a way out.” Raveendran recently informed the media from his home in Dubai that there is no problem in the world that cannot be solved.

    Current Market Dynamics of Edtech Startups in India

    In the last year, over a dozen Indian edtech startups have been bought out, highlighting a difficult funding environment for smaller businesses and causing a wave of consolidation throughout the troubled sector.

    The list of recent deals includes the acquisition of test prep company Ekagrata Eduserv by Google-backed edtech startup Adda247, the acquisition of Housing.com cofounder Advitiya Sharma’s startup Genius Teacher by Noida-based Schoolnet, the acquisition of Doubtnut by Peak XV-backed Allen Career Institute, and the acquisition of Macmillan Learning India by mid-tier IT services company Happiest Minds. According to industry leaders, the fact that smaller businesses frequently provide distinctive offerings and specialise in specialised fields is what is driving the consolidation.

    BYJU’S Faces Legal Challenges: BCCI’s Insolvency Petition Accepted by NCLT
    Explore the latest developments as the country’s education tech giant BYJU’s encounters significant financial and legal issues.
    StartupTalkyNitin Konde

  • Starlink, Owned by Musk, is Pursuing Indian security Clearance for Satellite Broadband

    The telecoms minister stated on 12 November 2024 that Elon Musk’s Starlink is requesting security clearance for a licence to provide satellite internet services in India and will receive permission if all requirements are met.

    When New Delhi announced last month that it will allocate satellite broadband spectrum administratively rather than through an auction, as Musk had requested, Starlink’s long-term aspirations to join India took a significant boost. Mukesh Ambani, a rival Indian telecom mogul, has requested an auction.

    In order to receive security clearance, Starlink must convince New Delhi that it processes and maintains data locally and that its satellite signals are secure, according to Indian telecom minister Jyotiraditya Scindia, who made this announcement recently. “You receive the licence once all the requirements are met. At an event in New Delhi, Scindia stated, “We will be very happy if they (Starlink) do that.”

    Musk’s plans to provide broadband to Indians, a market that Ambani’s Reliance Jio now controls with 14 million wired connections, would be one step closer if Starlink were granted security clearance. According to a media report, Ambani, the richest man in Asia, has over 479 million Indian telecom users. However, he is worried that after investing $19 billion on airwave auctions, he now runs the risk of losing internet customers as well as maybe data and phone clients to Musk as technology develops. A report claims that Reliance already has security clearance to begin offering satellite broadband services.

    According to various media reports, Starlink has informed the Indian government that it is prepared to abide by all of New Delhi’s security regulations.

    To begin providing satellite broadband services, businesses must still acquire spectrum after receiving security clearance. Ambani provided free data on his mobile services, and Musk has used similar forceful strategies. Musk upset regional telecom companies by pricing Starlink at $10 a month in Kenya as opposed to $120 in the US.

    Fierce Competition in Indian Spectrum Satellite Space

    Hours after Elon Musk denounced the auction process that rival billionaire Mukesh Ambani was pursuing as “unprecedented,” the Indian government recently announced that it will distribute spectrum for satellite broadband administratively rather than through an auction.

    The process of allocating spectrum for satellite services in India, a market expected to expand 36% annually to reach $1.9 billion by 2030, has been a divisive topic since last year in what is perceived as a battle between billionaires.

    Musk’s Starlink contends that administrative licence distribution follows a worldwide pattern, while India’s Reliance, which is run by billionaire Mukesh Ambani, claims that an auction is necessary to guarantee fair competition and that Indian law does not specify how individuals can receive satellite broadband services. At a ceremony in New Delhi, Telecoms Minister Jyotiraditya Scindia stated that the telecom watchdog would determine the spectrum’s pricing and that it would be administratively distributed in accordance with Indian law.

    Elon Musk Commits to Delivering Highest Quality of Service in India
    Elon Musk supports India’s administrative decision to allocate satellite spectrum, benefiting Starlink. He vows to provide top-quality service in India.
    StartupTalkyNitin Konde

  • With the Expansion of the ESOP Pool, Ixigo Grants 17.57 Lakh Stock Options

    With the issuance of 17.57 lakh stock options under ESOP 2024, online travel aggregator (OTA) Ixigo has extended its employee stock option plan (ESOP). The company stated in an exchange filing that the issuance of 17,57,156 options under ESOP 2024 was authorised by its nominating and compensation committee.

    Each option will convert into an equal number of equity shares, and they will vest over a four-year period in equal annual increments of 25% each. At an exercise price of INR 93 per share, the options have been granted.

    The Reason Behind This Move

    Ixigo stated that the goal of the allocation is to retain and reward the finest talent, just like it is for issuing ESOPs. Additionally, the business stated that it wishes to provide current staff with additional pushed prizes.

    The announcement was made just days after Ixigo released its second-quarter FY25 financial results. In the September quarter of 2024, its consolidated net profit fell 51% to INR 13.08 Cr from INR 26.70 Cr in the same quarter the previous year. On a sequential basis, profit decreased from INR 14.85 Cr by 12%.  The main cause of the earnings drop was an increase in total tax costs, which in Q2 FY25 was INR 5.26 Cr.

    Acquiring 51% Stake in Zoop Web Services

    In addition to its financial results, the firm disclosed that it had paid INR 12.54 Cr ($1.4 Mn) for a 51% investment in train food delivery startup Zoop Web Services, which was acquired through a combination of primary and secondary share transactions.

    Several public startups have announced the issuance of stock options under ESOP programmes in recent months. IdeaForge, a drone business, gave its staff more than 2,600 stock options earlier. The supply chain giant Delhivery also gave its workers roughly 73,000 stock options earlier this month.

    Current ESOP Scenario in India

    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 provides 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.

    Tirunelveli Emerges as a Thriving Hub for Startups
    Tirunelveli is rapidly becoming a thriving center for startups, fostering innovation and growth in South India’s entrepreneurial landscape.
    StartupTalkyNitin Konde

  • By FY27, Apple Aims to Produce 32% of iPhones and 26% of Value in India

    By 2026–2027, a year after the end of the five-year production-linked incentive (PLI) programme for handheld devices, Apple Inc. and its suppliers hope to assemble 32% of the iPhone’s global production volume and 26% of its value in India.

    If global iPhone sales stay at 2023-24 (FY24) levels, this may amount to a production value of more than $34 billion. According to media reports, the figures are based on conversations on product assembly in India between Apple Inc. and its suppliers as well as the federal and state governments. 

    India to Produce 17-18% World’s iPhone

    Apple‘s vendors project a freight-on-board (FOB) production value of $9 billion for the first half of 2024–2025 (FY25). According to projections, India would produce 17–18% of the world’s iPhones by the end of the fiscal year and 14% of their total worth.

    Only 12–14% of the world’s iPhone production volume moved to India in FY24, although the value accounted for more than 10%. The corporation is anticipated to conclude FY25 with a production value of $18 billion (market value around $27 billion), according to vendor planning.

    The Marketing Dynamics of iPhone

    Sales, distribution costs, and dealer margins make up the market value of iPhones, whereas FOB denotes the value at the time of shipment. India’s iPhone production was valued at $14 billion in FY24. Given that iPhones accounted for 51% of Apple Inc.’s $391 billion global revenue in the fiscal year that ended on September 30, 2024, the country stands to gain greatly from the move of iPhone production from China.

    With $201 billion in global sales, the iPhone is 21% more than the Tata Group‘s $165 billion overall revenue and 67% higher than Reliance Industries’ $119 billion revenue for FY24. Worldwide, Apple’s iPhone sales are on par with Microsoft’s ($211 billion) and surpass those of several companies, including Chevron ($200 billion), Honda Motor ($141 billion), Ford Motor ($176 billion), and Nestlé ($103 billion). Therefore, any increase in manufacturing capacity for India would result in significant additional income for the nation. 

    India is Becoming a Centre Stage for iPhone Production

    The significance of this change is demonstrated by the fact that JP Morgan earlier predicted that by 2026–2027, 25–30% of iPhone manufacture would relocate to India. By the fifth year of the PLI scheme, Apple had originally promised to move just 10% of its production to India. But in the scheme’s third year, it has already surpassed that amount. If US President-elect Donald Trump raises taxes on mobile devices (which are presently 15%), especially with regard to China, with whom the US is engaged in a trade war, the scenario could shift even further.

    India, Vietnam, and other Southeast Asian nations may benefit from the punitive tariffs that Trump has suggested may reach 60%. Of course, if the government does not discover more measures to reduce tariff rates on components used in mobile devices, ease labour regulations, and improve logistics, Apple’s vendor targets may alter. This is because China and Vietnam are more affordable than India. Furthermore, the difficulty of reaching value-addition goals of 35–40% by the PLI scheme’s conclusion may make matters more difficult.

    Apple Establishes First Indian R&D Subsidiary
    Apple Inc. establishes its first R&D subsidiary in India, marking a key investment in innovation and technology development within the country.
    StartupTalkyNitin Konde