The Securities and Exchange Board of India (Sebi) has, as anticipated, strengthened the rules pertaining to IPOs for small and medium-sized businesses. The capital market regulator set a cap on shares that could be sold through the offer for sale (OFS) route and implemented profitability standards during its Board meeting on 18 December.
Before submitting their DRHP, SMEs must now demonstrate an operational profit of at least around INR 1 crore for two of the previous three fiscal years. Furthermore, the OFS size shouldn’t exceed 20% of the issue size overall. In addition, through the IPO, these stockholders are not permitted to sell more than 50% of their whole holdings.
Tightening the Lock-In Period
Promoters who hold more than the minimum promoter contribution (MPC) are subject to longer lock-in periods. One year will be the lock-in period for half of such excess holdings, and two years for the other half. In terms of allocation, the main board IPO process and the NII allocation technique for SME IPOs are identical. 15% of the entire issue size, or INR 10 crore, whichever is less, is the maximum amount allotted for general corporate purpose (GCP) in SME IPOs.
According to the new regulations, debts to promoters, promoter groups, or associated parties cannot be repaid with the proceeds of an SME IPO. In addition, the public will now have 21 days to examine and comment on SME IPO DRHPs. The DRHPs will be made available by stock exchanges via QR codes and public notifications.
New Rules Will Change the Business Dynamics
A new set of guidelines for post-IPO compliance has been developed. If SME businesses follow the rules for main board listing, they can still raise money without moving to the main board. SME-listed companies would be subject to the same related party transaction regulations as main board-listed companies, with a lower threshold of 10% of yearly consolidated turnover, or INR 50 crore.
New rules have also been agreed upon by the Sebi board to guarantee that funds raised by mutual funds through New Fund Offers (NFOs) be deployed on schedule. The goal of the new structure is to incentivise AMCs to only collect as much money in NFOs as may be used within an acceptable time limit, typically 30 days.
Reforms to improve the ease of doing business for Debenture Trustees, ESG rating agencies, InvITs, REITs, and SM REITs are among the other improvements that the board has adopted. Sebi chooses to change the rules governing investment banking. On December 18, the Sebi board decided to limit the scope of activity for investment banks and merchant bankers. Under the new regulations, merchant bankers will only engage in activities that the Sebi has approved. Within two years, any activities that are not allowed should be divided into a different legal organisation with a different brand name.
Since more and more individual investors are participating in small and medium-sized business IPOs, the market regulator has suggested at least doubling the minimum subscription amount.
In a consultation document published on 19 November by the Securities and Exchange Board of India (Sebi), the regulator suggested raising the minimum application size for SME IPOs from INR 1 lakh to INR 2 lakh. Sebi even proposed raising the sum to INR 4 lakh in one of the other recommendations.
Over the past few years, there has been a growth in retail individual participation in SME IPOs. Therefore, it is suggested to increase the application size in order to protect the interests of smaller retail investors, given that SME IPOs tend to have a higher element of risk and that investors may become stuck if sentiments change after listing. This is because a larger application size will limit participation by smaller investors and attract investors who are willing to take on more risk, which will increase the SME segment’s overall credibility, as per the paper.
Listing Process and Corporate Governance Norms for SMEs
Sebi said that the action is a component of its larger examination of corporate governance standards and the listing procedure for SMEs, which have seen a sharp increase in IPOs, particularly since 2022. With 196 initial public offerings (IPOs) that raised over INR 6,000 crore, FY24 saw the most SME capital raising and public issues since the creation of SME platforms. Additionally, as of October 15, 159 SME IPOs had raised over INR 5700 crore in FY25, the regulator noted.
It comes as the regulator has repeatedly warned investors about dubious activities in the nation’s SME market and about some SMEs’ exaggerated projections. A notable change in the market supports Sebi’s plan to double the minimum subscription amount. The Sensex and Nifty indices have increased by about 4.5 times since Sebi’s initial structure was implemented more than 14 years ago.
Further Suggestions Made by Sebi
Additionally, Sebi recommended that the “draw of lot” allocation method, which is employed for retail investors in mainboard IPOs, be applied to SME IPOs as well. In order to give smaller investors a greater chance of receiving allocations in the event of oversubscription, it was also suggested to divide the non-institutional investor group into two subcategories according to application size.
The introduction of an obligatory monitoring agency for initial public offerings (IPOs) if the issue exceeds INR 20 crore is one of the paper’s main recommendations. By certifying the use of revenues, these organisations would make sure that money is spent for the reasons specified in the offer contract. A statutory auditor’s certificate would be necessary to verify the use of the proceeds for smaller initial public offerings (IPOs) that fall below this threshold.
In an effort to tighten qualifying requirements, Sebi suggested that businesses looking to list must have made at least INR 3 crore in operating profit (profits before interest and taxes) in two of the previous three fiscal years. For its issued capital and proposed new shares, it also recommended requiring that shares issued in the IPO have a face value of INR 10 each.
Additionally, the capital market regulator suggested that SME-listed businesses be subject to the related-party transaction (RPT) standards found in Sebi’s Listing Obligations and Disclosure Requirements Regulations (LODR). Companies with less than INR 10 crore in paid-up capital and less than INR 25 crore in net worth are an exception.
India is growing, one reel at a time, on social media. At present, India holds the second spot in the world for active social media users–a staggering 755.47 million users! If small businesses don’t wake up to this stat soon, they might lose many prospective serviceable customers. At present, India is at the top of the table—in fact, even above the world average—when it comes to social media hours. Indians spend 2.8 hours on social media each day. A survey by the government’s citizen initiative platform, MyGovIndia, shows the number of digital transactions jumped to 89.5 million in 2022. India’s booming internet economy is only expected to grow further to $1 trillion by 2030, according to a joint survey by Google, Temasek and Bain & Company.
With millions of eyeballs vying for content, online existence is not an option anymore for small and medium enterprises. Instead, the more pertinent question is about gaining visibility and leveraging the high internet usage in the country. According to the Global Social Media Trends Report 2023 by Hubspot, 90% of digital marketers surveyed said building an active online community is “critical” to success in 2023.
StartupTalky spoke to a few small business owners who seemed to have cracked the code on using social media effectively for business. Read on to get their inside bait.
Social media is a great way to add to some branding real estate for your business. But using your social media handles to genuinely connect with people and share your insights on your business can do a lot more than you can imagine. “LinkedIn is a platform where you have to be present as a founder. Have a good LinkedIn profile. LinkedIn is a profession-to-professional connection. It is about telling people what you are doing or what your thoughts are about the ecosystem. A lot of my businesses happen on LinkedIn. I got listed on Blinkit through LinkedIn. Harvinder (Singh, previously manager at Bkinkit) put up a post. I commented on the post and my comment got about 80 likes. So I grabbed his attention and sent him an email,” said Sairaj Dhond, founder of Wakao Foods, who is well known for his appearance on Shark Tank.
Global Social Media Users Over the Years
Be Consistent
Simply posting content about your business regularly can help you reach your potential customers. “Businesses should at least post one reel every day. Content is king, and therefore we try to put educational reels that viewers can relate to. They should try to make it as simple and as easily understandable for the viewer as possible,” said Sumeet Salve, Chief Marketing Officer at ithrive, a health consultation platform.
Get Innovative
You know your product or service the best. Trying to add a dash of novelty to your subject matter or product can catch your attention and also reach out to your audience. Take, for instance, designer Jasleen Kaur from Design Machines, who went viral for her ‘Just Looking Like a Wow’ reel. Her nomenclatures for names of dress colors be it ladoo peela, baingani purple, or mouse brown, have taken the internet by storm. Kaur has not only made an appearance on the hit reality TV show Bigg Boss but has also reportedly admitted that her business opportunities have taken off.
Be Authentic
Staged performances are best left for the movies. For an entrepreneur, being real can help connect with your audience.
For me, it’s always been about relativity. If I like some trending audio, I just pick it up and then make a reel. No one’s life is as fancy as they show on Instagram. I don’t have a big warehouse; I work from home and I am the only person who works. I wanted to debunk the myth that you are a successful business only if you have employed 100 people, said Shraddha Mishra from Letters by Shraddha.
Shraddha started her first Instagram post during the pandemic and has amassed over 15,000 followers on Instagram in just three years since she began her social media page. She has even given a TEDx talk on her entrepreneurial journey.
Conclusion
Social media is the new mall, and it is here to stay. If you are not on this digital dukaan, then it could very well sound like the death knell. Donning the hat of your customer can sometimes give perspective on what a customer is thinking and what he or she would like more of from your brand, leading to more viral ideas and trending reels. Lastly, having fun and being authentic could go a long way toward connecting with the ecosystem as a whole.
Countries across the globe are doing their best to improve the condition of MSME and hence, the economy. Small and medium businesses or companies are corporations whose staff and outputs aren’t huge. The abbreviation SME (Small and Medium Enterprises) is used by societies, organizations, and institutions worldwide. Some examples include the United Nations, IMF, etc. SMEs are now challenging big corporations in their domains and taking value creation to new heights.
In July 2011, the EU Commission announced it’d unlock a gathering on the outline of SMEs in 2012. And it identified three parameters to define the eligibility of an SME:
Micro commodities are corporations with up to 10 workers.
Small corporations employ up to 50 labourers.
Medium-sized investments have up to 250 employees.
Here are 9 business ideas to start out as a micro, small, or medium enterprise:
The EU explanation of SME is, “The classification of micro, small, and medium-sized investments comprises companies which assign rarer than 250 employees and which retain an annual turnover not surpassing 50 million euro. And/or an annual proportion sheet entire not outweighing 43 million euros.” The explanation in Germany gave birth to a threshold of 255 workers, while in Belgium it could amass 100.
MSMEs take advantage of a major position in economic and social improvement, thereby empowering flip to entrepreneurship, as they need intrinsic factors of being creative and conscious of altering market dynamics.
The Micro, small and medium enterprises (MSME) sector has emerged as a highly active and emotional area of the Indian thrift. It is widely celebrated as a machine of economic development, particularly within the context of Make in India by the Government.
List of MSME Business Ideas in India:
1. Jute Shopping Bags
Jute Bags
Jute fabrics are tough, reliable, light, desirable, and more inexpensive than most of the textures earned from fibres. There is an extremely easy sewing appliance/device available for creating jute bags. There is a reasonable need for jute bags in India which makes it one of the best MSME businesses in India.
Jute bags retain decent export potentiality. Raw materials expected for preparing Jute bags are cotton strings and Jute fibre fabric. It can be stored in a grassland carton and shipped. The common jute bag model attained a significance of US$ 1.4 Billion in 2016 and showed a CAGR of over 11% during the period 2009-16.
The demand is propelled to attain the importance of US$ 2.6 Billion by 2022. Indian jute carry and shopping purses exporters are exporting millions of backpacks every year.
2. High-Temperature Aluminum Established Paint
Heat-resistant aluminium paint and dyes can withstand sickness, blazes, oil, rust and fumes, making them an excellent choice for particular petitions. The paint is instructed by stirring a special binder or binder mixture, solution or solvent mixture, and additions.
Perhaps, a tint or group of tints concurrently is the same way to generate a particular formulation that, when fixed will retain specific properties. The global need for colour and coverings is predicted to surge 3.7 per cent per year to 54.7 million metric tons in 2020, esteemed at $193 billion.
The market has examined a rise in the demand for high-temperature coverings from the automotive enterprise. High-temperature coatings are greatly expended as cookware, stoves, grills, and bakeware since they furnish outstanding opposition against warmness.
3. Pan Masala, Meetha, And Sartha
Pan masala is a proportional recipe of betel layer with lime areca loon, clove, cardamom, mint, tobacco, essence and other components. It generally works as a mouth freshener and is way better than the Western unnatural pan masala (created using artificial ingredients).
As a result, India outperforms the schedule of smokeless tobacco addicts in the world with almost 83% of buyers. Indians are so obsessed with flavoured tobacco pan masala and gutkha despite the ban on its trade and sale in 11 governments to date.
Shoppers are however buying grip of their everyday fix, courtesy contraband sales. Among the several categories of pan masala functional within the Indian market, pan masala containing tobacco depicts the dominating category analysis for over 50% of the entire demand. As an amount, there’s a good expanse for a replacement entrepreneur to subsidize in this industry.
4. Turmeric, Dhania, and Chilli Powder
Turmeric, Dhaniya and Chilli Powder
Seasonings affect odour, colour, and flavour to a large extent. The unstable oils from seasonings give the odour and the oleoresin imparts the flavour. Spices are a non-leafy portion of grains utilized as a flavouring or sauce, although several also can be utilized as a herbal treatment.
The Indian spices demand is propelled and reached nearly USD 18 billion in 2020, and expansion within the area is anticipated to be overseen by branded spices and spice combinations. The Indian government is aggressively stimulating spice exports through several enterprises.
Spice gardens offer widespread processing capabilities to both makers and exporters. This is one of the top MSME business ideas and there’s a good extent for an early age entrepreneur to invest in this business.
5. Neem Oil
Neem Oil
Neem oil is attained from the cereals of the Azadirachta indica. Utilization of the neem plant is to be established with the crisis of institution of standardized exhibition and crushing of grains. Neem oil extractive, the residue from the neem oil refining process, is a beneficial mosquito larvicide. The substance acts as an immediate assassin of the first instar larvae of culex fatigans at 0.04% attention whereas, at deeper attention, it had halted toxicity.
Azadirachtin, a full-of-life compound obtained from neem seeds and different portions, has insecticidal properties. It’s an alternative to artificial pesticides. Projected development within the common biopesticide demand at a CAGR of 15.8 percent from 2012 to 2017 may be a standpoint development driver for neem as a commodity.
6. Cow Urine Processing And Packaging
Gomutra is not a harmful waste substance. 95% of it is gas, 2.5% comprises urea, and the remaining 2.5% is a variety of minerals, salts, hormones and enzymes. Gomutra is urine from cows and is employed for remedial bases in informal Indian therapy, Ayurveda, and also for cleansing in Vaastu Sastra.
Cow urine has a bio enhancing trait for Rifampicin, the beginning line anti-tubercular medication used against tuberculosis, and boosts its action up to sevenfold against Escherichia coli, and up to 11 crumples against Gram-positive bacteria.
Cow urine is in demand not only in India but around the world. An excellent SME business idea is given that cow urine is getting even more recognition now for its benefits.
7. Sanitary Napkins
Sanitary Napkins appear under nonwoven textures, which as a good come under specialized material. In expansion to sanitary napkins, the non-woven cloth is furthermore obtained in various other commodities like cigarette filters, leads, airlines disposables, surgical disposables, and non-woven wipes.
The Indian Kotex market attained a significance of about US$ 414 million in 2016. The popularity and need for eco-friendly, bio-degradable feminine hygiene products are growing tremendously. The market is expected to exceed US$ 596 million by 2022, rising at a CAGR of over 6%.
By taking up this initiative, you’ll be empowering millions of girls and women to practice and achieve the right hygiene standards.
8. Cashew Nut Shell Oil
Cashew
Cashew Nut Shell Liquid (CNSL) is an adaptable by-product of the cashew fruit. The nut has a husk of nearly 1/8 inch density inside which is a delicate honeycomb configuration comprising an opaque reddish-brown viscous fluid. It’s named cashew nutshell fluid and is the pericarp liquid of the loon.
It’s often contemplated as an inexpensive component for unsaturated phenols. CNSL and polishes brought about from it are widely utilized for laminations, brake linings, electrical insulation, ground membranes, publishing inks, etc. Indian cashew nut commerce gives birth to an oil demand for CNSL.
CNSL Oil is expended in enterprises. Thus, there is a decent need for industrially expanded nations. The straight and quadratic direction criteria rated India’s cashew nutshell fluid export to be 19,044.47 tonnes and 23,483.48 tonnes for the year 2020 respectively. India is the biggest customer and also the second-largest builder of cashew nutshell fluid in the world.
9. Corrugated Galvanized Sheet
Metal sheets
The corrugated atomic number 26 panes are the most effective, widely recognized, and vastly usable low-cost shelter enclosing entity. Metal sheets are categorized consistent with their density and ground region. These are twirls constructed by roll shaping tools; the density and colour will therefore be unique.
These boards are emphasized with simple structures, high stability, and economical costs. The requirement for sheet metal covering is fulfilled through both regional safety and implication. It was 1,418,399 tons in 2017 and is expected to reach 2,852,906 tons by 2022.
Here is the variation of Micro, small and medium enterprises (MSME) in different countries:
India
The Administration of India authorized the Micro, Small and Medium Enterprises Development Act, 2006 encompassing explanations of micro, small, and medium enterprises as follows:
A standard business is an industry where the enterprise in factory and machinery is more than Rs. 5 crores but doesn’t exceed Rs. 10 crore.
The articles were restricted by the Ministry of Small Scale industries vide an announcement dated October 5, 2006.
Investments committed to giving employment are distinguished by their status of enterprise within the appliance as follows: A microenterprise is an investment where the enterprise in the appliance doesn’t outperform Rs. 10 lakh. A small business is an industry where the involvement within the material is more than Rs. 10 lakhs but accomplishments don’t exceed Rs. 2 crores. The medium investment could be a business where the undertaking within the appliance is around Rs. 2 crores but performance doesn’t exceed Rs. 5 crores.
Nigeria
The prominent bank of Nigeria distinguishes small and medium investments based on the investment and the amount of faculty assigned. The standards are a bargain basis between N5 million and N500 million, and an act of personnel courage between 20 and 300 workers.
Israel
In Israel, an industry is contemplated minor if it remembers not further than 50 workers. A normal industry clenches between 51 to 250 employees.
New Zealand
In New Zealand, 99% of businesses assign 50 or smaller faculty, and the accepted description of an SME is one with 19 or fewer workers.
Australia
In Australia, an SME encompasses 200 or fewer workers. Microbusiness consist of 1-2 workers. A small industry ranges from 3 to 15, a medium one has 16-200 resources, while a large enterprise has 201-500 workers.
Poland
The SME locality in Poland produces nearly 50% of the GDP, and out of that, for instance, micro-companies contributed 29.6%, minor corporations 7.7%, and fair firms 10.4% to the GDP in 2011.
Canada
The Canadian defines a minor industry to have occasionally 100 workers or more. In rare cases, less than 50 labourers qualify as a minor segment. A medium-sized business has around 500 hands.
Choose a product you want to sell, arrange finance, fill out the required documents, set up your store and start selling.
Which industries are included in MSME?
Leather products, Natural Fragrance and Flavours, Training and Educational Institutes, and Beauty Parlours are some of the top industries included in MSME.
Which business is best for MSME?
Gold and Diamond Jewellery, Ladies’ Undergarments, A4 and A3 Size Paper, and Production of Jute Bags are some of the best MSME businesses.
Attributed to Ms. Jesintha Louis, Director, Cloud Solutions, G7CR Technologies India Pvt Ltd.
G7 CR Technologies, a niche technology service provider currently providing disruptive technology solutions for over 900+ business across India and MEA region. The company adopted Cloud earlier on and today is a leading Cloud partner for various businesses. The Company has special focus on SMEs, SMBs and Startups, it has in the past launched program like BEAP that provide technology funding mechanism for development & automation of business processes.
G7 CR has two programs that are exclusive for SMEs, SMBs and Startups.
Cloud Adoption Funding
One of them is CAF,Cloud adoption funding, the program provides funding against Cloud spend for qualifying Startups who are in growth phase. For Growing tech enabled Startup, Cloud spend is generally one the of top 3 spends and CAF allows them to reinvest the Cloud spend on business growth while the Cloud is funded by G7 CR. The maximum funding available is up to $5 million, interested startups can apply for program at G7Cr.in ( g7cr.in > G7CR CAF > Apply Now). Currently the funding is available only to Startups who are running on Microsoft Azure. The company may open up funding options for other Hyperscaler in the future.
Qualifying criteria for CAF program
a) The business should be less than 10 years old b) Cloud spend must account for one of the top 5 expense or the minimum Cloud consumption must be $15,000/- per month.
Technology Services Investment
The second program is Technology Services investment. Finding & retaining technical talent is most common challenge and the economics of it does not work out if SMEs, SMBs and Startups try to do it in on their own. Given we live in a competitive world, competing on price & also providing great customer experience requires a lot of invest and the per transaction cost automatically increase if you try to focus on the experience. This is a challenge faced by SMEs, SMBs & Startups in the initial stage and they often end up losing the order because of the cost or will have to compromise on quality of service. With the Technology Services investment from G7 CR, SMEs, SMBs & Startups can bank on the migration, modernization & support expertise of G7 CR and the Company will fund the services and offer it to the Startups at no cost along with other benefits on the Sales & Business-like Sponsoring events, marketing campaigns to promote the products and services offered by the SMEs, SMBs & Startups or helping them achieve industry standard certification like ISO & PCI DSS. The company has already invested over $1 million in the last quarter in 100+ Startups and looks forward to double the investments based on the overwhelming response. The Company is also building strategic alliances with other OEMs to bring more volumetric benefits for the Startups under the program.
Conclusion
“We intend to take the growth journey with Startups, SMEs & SMBs from Start to Scale and our two-investment model are built with the same focus and intent. CAF to support Growth Startups and Technology Investments for Startups in Series A level of funding. But of course the technology funding is open to any Startup, SME or SMB and does not require them to be funded. We will continue to build new partnership and alliances to bring in the power of volumetric benefits for the Startups, SMEs & SMBs who are a part of the program. Collaboration & Trust is the new currency for business and continuing build it will be our aim for the new year 2022.”
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Vayana Network.
With trade prospects diminishing amidst COVID-19, India’s small-and-medium enterprises (SME) sector — one of the largest in the world — could be exposed to life-threatening risks. With the government targeting an ambitious $5 trillion economy, trade was anticipated to climb steadily.
Trade financing could be the answer to a lot of these problems. By giving sellers access to credit lines, helping them discern business demands, using predictive analytics to solve problems, recognize changing consumer trends, and optimizing their supply chain operations, SMEs could better withstand the downturn in business activity. Pune-based Vayana Network — one of India’s biggest trade finance companies – is perfectly positioned to help SMEs do just that, and more.
Vayana strives to provide easy, digital access to low-cost financing to every enterprise – from large corporations to MSMEs – to help manage their working capital, grow business and create employment. Because of the relationships Vayana has cultivated over the years with corporates and financial institutions, most of the applications that it passes on to banks and NBFCs get approved quickly. The company trades on the trust it has built with all of its stakeholders, and it does so swiftly and successfully.
Vayana’s data-driven digital platform enables identification onboarding, financing, and servicing of creditworthy SMEs at significantly superior unit economics compared to traditional lenders. This allows them to create and offer affordable, convenient financing to the entire supply chain. They are also India’s largest GSP and e-invoicing platform.
Vayana Network- Founder
Vayana Network is founded by Ram Iyer.
Vayana Network Founder | Ram Iyer
Ram Iyer | CEO & Founder, Vayana Network
Ram Iyer, Founder & CEO of Vayana Network, is a serial entrepreneur with over 25 years in the Cash and Trade space providing solutions to some of the largest Banks across the globe. At Vayana Network, Ram has led the company’s vision to democratize access to affordable finance for MSMEs. Previously, he was the co-founder and CEO of CashTech Solutions, a leading Cash Management vendor in Asia which was acquired by Nasdaq listed Fundtech (now a part of the Finastra Group). He has previously worked with Accenture in their management consulting business.
He is a management graduate from IIM Ahmedabad and an Engineer from Mumbai University. A guest speaker at various Fintech & Trade forums, Ram brings an exceptional understanding of B2B trade, payment ecosystems, and technology.
Hiring Funda
Irrespective of hierarchical positions, they attract people who see themselves as ‘producers’ and ‘creators’ and not ‘managers’. They also are keen that everyone joining sees their role as something very significant – not just to the company but to their own professional and personal journeys.
Originated from Sanskrit, Vayana represents its vision of building meaningful Trade Financing relationships between Businesses and their Supply Chain partners.
How Vayana Network was Founded
Vayana is not Ram’s first entrepreneurial stint, Ram Iyer was previously the co-founder and CEO of CashTech Solutions, a leading Cash Management vendor in Asia which was acquired by Nasdaq listed, Fundtech in 2004.
After CashTech, he began selling banks systems to help manage companies’ trade finance. That’s when Mr. Iyer realized that there was a need and potential for a company like Vayana after several bankers he worked with told him that even though trade finance was a lucrative proposition, volumes of credit applications were quite low.
Vayana Network was started with a vision to democratize the access to trade finance to the smallest of enterprises. Team Vayana designs tailor-made, affordable, closed-loop programs to meet the financing demands of businesses and their supply chain partners with simplicity and speed.
The employees, partners, and investors fully understand how Vayana Network operates as it is just as crucial as what they accomplish to create value for all stakeholders. Together, Vayana strives to provide easy, digital access to low-cost financing to every enterprise – from large corporations to MSMEs – to help manage their working capital, grow business and create employment.
Vayana Network- Vision and Mission
Vayana Network was started with a vision to democratize the access to low-cost trade finance to the smallest of enterprises. They believe that for an economy like India to achieve momentum, the millions of hard-working small wheels (i.e. Micro and small businesses) must run smoothly and financing is critical to this.
Vayana’s mission, therefore, is to ensure that every entity on a supply chain, from the largest to the smallest, can access financing affordably and conveniently. They strive to make financing an integral, seamless part of the trade process and not a separate activity.
Through Supply Chain Finance Vayana is looking to address a short-term trade credit gap of $ 260 Bn faced by Small and Micro Enterprises in India.
India has about 63 Mn MSMEs of which only 5% have access to formal sources of financing. The cumulative financing gap faced by MSMEs left out of the formal system, is about $260bn.
SCF market in India today is approx $10 Bn, which is less than 1 % of India’s GDP. In the next 5 years, we expect the market to be roughly 4% of India’s GDP, which is the case today in countries like China. This growth will be backed by the increasing formalization of the economy brought about by GST and E-Invoicing initiatives of the government, RB
[ Sources- IFSC report on Financing MSME, RBI report authored by UK SInha and other sources.]
Vayana Network- Product/ Sevices
Starting from big ‘anchor’ companies at the top of the supply chain, they can detect, analyze and leverage the ‘creditworthy networks’ of downstream buyers, using real-time data. The digital process of onboarding is quick, painless, saving time, effort, and cost
SMEs can access affordable finance easily. A simple one-click process removes friction, enabling high utilization
Banks and FIs gain access to an expanded book from new segments which they could not viably access till now
‘Anchor’ corporates enjoy the benefits of expanded supply chain coverage – predictable cashflows, increased sales, and frictionless supply chain relationships.
And all of this without requiring any change in internal systems and processes.
Vayana’s technology & services platform enables their partner Banks and FIs to build a scalable and profitable portfolio, retain it and grow over time. The entire cycle from sourcing to settlement is managed by Vayana, hence partner institutions pay Vayana a service fee on the financed portfolio. Vayana is also a leading GSP (GST Suvidha Provider) offering a seamless API gateway for Corporates, Institutions, and MSMEs for their GST, EwayBill, and eInvoicing compliance needs; against platform fees.
Vayana Network- Startup Launch
The core emphasis of Vayana Network, when launching the company, was to build a process that is scalable and serves to solve the most critical need of any business i.e. freeing up the cash flow. One of the key needs for this process to run successfully was to create something that is so easy to use that one forgets that it is there.
Initially, a lot of their business was driven via more of one to one interaction, but as they have grown from strength to strength they are now very well entrenched in the psyche of both the corporates as well as their FI partners, who appreciate the know-how and key knowledge we bring to the table for all the concerned parties, thus creating a healthy and meaningful trade network.
Vayana Network- Customers/ Clients
One of the key driving philosophies was to keep the process as simple as possible or as our CEO states “Dal – Chawal will never go out of fashion, as oppose to exquisite continental food that is good but, in the end, you will always crave simple food as it solves for your basic need.” Similarly, there are multiple solutions that are available in the market, but all businesses from large corporates to the SMEs are looking to solve for the key pain area i.e. freeing up their working capital allowing them to do business at a much larger scale and this is where Vayana comes in by managing the entire trade financing network in such a manner that business no longer needs to worry about the credit crunch and concentrate on what they do best, growing the business.
Vayana with its simple & robust processes allows it to onboard large corporates as well as the smallest of MSMEs with equal ease in the shortest possible time thus eliminating long and tedious onboarding processes.
The company is blessed with a strong set of experienced professionals and seasoned entrepreneurs on its Board and advisors like Dr. Marti G Subrahmanyam, Mr. Kannan Ramasamy, and Mr. Kalyan Basu.
Vayana Network- Acquisitions and Mergers
The company is open to acquisition opportunities in allied areas of strategic interest and has already made 2 acquisitions in the last two and a half years. Vayana focuses on lean teams working on some great models/ ideas in the space of facilitating B2B trade and where both teams see a great cultural fitment and commonality of interest. One such acquisition was of SahiGST in 2018 – a leading cloud-based ASP; to further strengthen our GST and E-Way Bill Portfolio. The next acquisition (not yet public) is in the B2B payments space.
Vayana has been recognized as “Fast Learner” Fintech Startup at Fidelity WyAQ Award 2020 and has also won NASSCOM’s ‘Emerge 50’ in the Fintech category in 2019.
Vayana Network- Future Plans
Vayana Network is successfully servicing clients from over 25 industries, further impacting more than 20,000 MSMEs and 300-plus supply chains and processing more than 1.7 million invoices. Vayana has a CAGR of 300 percent, with an organic growth rate of up to 45 percent. The company recently finished financing $USD 5 Bn (Rs 37,000 crores) on their platform.
Currently present in the US, Singapore, Thailand, Malaysia, Vietnam, and Indonesia, the company is targeting either Japan, South Korea, or Taiwan next.
Usually investment firms only fund a startup when they see potential to grow their money. However philanthropic investment firms fund in startups that help achieve their philanthropic endeavors like solving a country’s problems or empowering the civil society.
One such philanthropic investment firm and a non-profit organization is Omidyar Network India, which was established in 2004 by the eBay founder Pierre Omidyar and his wife Pamela Kerr. Omidyar Network India is part of the US based Omidyar Group which is a diverse collection of companies, organizations and initiatives that are dedicated in creating opportunity for people to improve their lives.
Omidyar Network India has its headquarters in Mumbai, Maharashtra with over a 50 employees in the country. Omidyar Network invests in innovative organization and bold entrepreneurs that will eventually catalyze economic, social or political change. As of 2017, the firm had invested in more than 60 companies within a decade, and raised more $350 million by 2020.
So far the organization has committed over $992 million to profit, nonprofit and public companies that aim in fostering economic advancement and that are trying to solve the problems of India’s hardest and most difficult problems and challenges.
Omidyar Network India makes equity investments upcoming companies and provide grants to non-profit organizations in the areas of Digital Identity, Education, Emerging Tech, Financial Inclusion, Governance and Citizen Engagement, and Property Rights. The organization invests in 3 levels which are :
Supporting new and upcoming market innovators,
Help in building institutional & market infrastructure and
Working with the Indian Government to promote inclusion, entrepreneurship, competition, and ensure necessary safeguards and protections.
Here are some of the startups funded by Omidyar Network India
Quikr
Quikr is the India’s top online classifies platform that helps people of a particular city meet, trade, buy and sell household goods, cars, bikes, local services and even find jobs, among other services. Quikr was founded in 2008 by Pranay Chulet and has its headquarters based in Bengaluru, Karnataka.
The company is currently has its footprint in 1000 different cities around the world. Quikr aims on empowering people to independently connect with different buyers and sellers. The company has so far raised over $350 million in 7 rounds in order to fulfill its dream of disrupting the ecommerce market in country and empower people.
In 2009, the company raised over Rs 200 million in their second round of funding which was led by Omidyar Network and Matrix Partners India. Quikr has a long list of investors like Tiger global, Kinnevik, Matrix Partners, Omidyar Network, Norwest Venture, Nokia growth Partners, Warburg Pincus and eBay, etc.
HealthKart
HealthKart is known to be India’s largest online nutrition and fitness platform that offers products, services and even expert advice or assistance to fitness enthusiasts. The company also has leading subsidiaries like MuscleBlaze for (sports and fitness) and Healthkart for (health).
HealthKart sells everything from protein supplements to vitamin smoothies at affordable prices. The company has it’s headquarters in Gurgaon and sells more than 200 brand products and authorized vendors that is listed on their website. It is known for nutrition products that are sold especially to elderly people, personal care, chronic care, eye and skin care.
The startup raised over Rs 27 crore in their second round of funding from their existing investor Sequoia Capital and Omidyar Network India. With this the company expanded its product portfolio and is also developing an online magazine about health and fitness.
Dailyhunt is one of the top news and local language content app in India. Currently, the company has over 150 plus million app installations with more than 100,000 news articles that are available in 14 different languages.
The company was founded in 2007 by Virendra Gupta and its parent company is Verse Innovation. Dailyhunt claims to have 150 million monthly users and 27 million daily users. It also has 650 publication partners, while their content is created by machine learning algorithm that delivers real time personalized content.
The company raised over Rs 24.61 crore in series E2 funding from Omidyar Network India, Sequoia Capital and the Renu Sehgal Trust. Omidyar also funds other news aggregators like Pratilipi and Helofy. The competitors of Dailyhunt are NewsDog which is backed by Tencent and Helo backed by Toutiao.
1mg
1mg Website
1mg is one of the top online pharmacy and integrated health application in India and is known for its wide range of medicines, health products, online consultation, booking lab tests and providing information on doctors, clinics, diagnostic centres, pharmacies, etc.
The company promotes transparency around medicine information and is the one stop shop for medical search and transaction experience. During the pandemic, the platform has become popular as it delivers medicines and health products at the safety of the homes in more than 1000 cities across India from Licensed pharmacies.
In 2016, 1mg raised over $15 million in their series B funding round from Maverick Capital Ventures, Sequoia Capital and Omidyar Network India. The company at that time said that it was going to use the funds to expand their online pharmacy and diagnostics and also launch personalized health feeds for their consumers.
Scripbox is an online mutual funds platform, which was founded by Sanjiv Singhal in 2012. The company has its headquarters in Bengaluru, Karnataka and uses proprietary algorithms to curate a portfolio out of 8000 other mutual funds in country, they are then divided into equity, debt and tax savings.
The company aims to educate young working professionals to save and grow their wealth and also encouraging people to explore inflation beating instruments rather than the usual inflation par instruments like fixed deposits and gold. As according to E R Ashok Kumar, the CEO of Scripbox, equities will give people over 15% returns than compared to the traditional forms of investing.
The company raised an undisclosed amount in their series B round investment from Omidyar Network India and Accel partners. The company joins Omidyars’s other investment made in the sector of personal savings such as Juntos from US and Tandem from UK. Scripbox was planning to expand to 1000 cities by 2020 with its funds.
Transerve
Transerve is a platform that offers geospatial tech based SAAS solutions. The platform allows solutions for sustainable growth and urban planning. Transerve is used by both individuals and companies for visualizing and sharing spatial data and map visualization through Map APIs.
The platform is a data collector, has location intelligence and helps in mapping precisely so the companies can geo locate data and then make smart and accurate decisions. The company also built many apps and platforms like CityOS in order to solve problems which are related to urban setup, Watsan for waters supply and sanitation solutions and deploys Lidar for heritage restoration and highway engineering.
The company aims in providing solutions to modernize a city’s municipal information system, which is why it went on to raise $1.6 million in Series A funding from IL and FS Investment Managers and Omidyar Network.
Vedantu is a well-known Ed tech company that allows teachers to provide Live tuitions to students online. The online tutoring platform has more than 500 of India’s best curated teachers and over 1 million hours to over 40,000 students across 1000 plus cities from 30 countries.
Vedantu uses a built in technology known as WAVE to create a marketplace model for teachers, where students can browse, discover and choose to learn from a particular teacher. So far the app offers teaching classes for 6th to 12th grades and also for co-curricular and competitive examinations.
Vedantu raised $11 million in Series B funding round from Omidyar Network in 2018. It also went on to raise $12.5 million in Series C-1 round of funding from Legend Capital and Omidyar’s Ohana Holding in 2020.
ZestMoney
ZestMoney is India’s fastest growing Fintech startup that was founded in 2015 by Lizzie Chapman, Priya Sharma and Ashish Anantharaman. ZestMoney uses mobile technology, AI and digital banking facilities to make life more affordable to millions of Indians by managing their credit for them and helping them pay in affordable EMIs.
The platform was made with the aim of improving lives of the people who don’t have an access to credit card or other financial option due to insufficient credit history.
The Bengaluru based digital lending startup raised over $20 million funding in Series B round from Quona Capital, Reinventure, Omidyar Network, Ribbit Capital and PayU. The company is said to use these funds for expanding their platform with EMI-based financing for e-commerce and for other online purchases.
Credflow is a New Delhi based Fintech startup, that offers small and medium enterprises (SMEs) solutions for cash flow management. With the help of the platform SMEs can manage their finances better with timely insights of pending amounts by customers, sending regular payment reminders, validating invoices and negotiating discounts for early payment, among others.
So far over 5000 SMEs are said to have used Credflow to process invoices that are worth over Rs 70,000 crore. The main aim of Credflow is to help small businesses grow exponentially by managing their banking, payments, and treasury.
Credflow raised $2.1 million in their seed round of funding from Stellaris Venture, Omidyar Network and Flourish Ventures. The company said that they would use the funds to develop its platform, strengthen its technology and come up with new products in order to expand their customer base.
WhiteHat Jr
WhiteHat Jr Website
WhiteHat Jr is a Mumbai based Edtech startup that offers live online 1:1 classes on coding and math. The platform is also built on the foundational skills like literacy and numeracy from an early stage.
WhiteHat Jr helps in connecting top certified teachers that can teach children topics such as e-learning, coding, early childhood education, computational thinking, logic, algorithmic thinking, etc. After learning the kids are encouraged to come up with creative outcome like animations and apps.
The startup raised over $1.3 million in a seed funding round from Nexus Venture Partners and Omidyar’s Network India in 2018. It also raised $10 million in their Series A funding round by their existing investors Nexus Venture Partners and Omidyar’s Network India in 2019. The company said that they would use the funds to strengthen their platform and expand their curriculum and marketing to increase consumer awareness.
Newslaundry
Newlaundry is a well-known independent news media company that provides its readers with media critique, reportage, satirical commentary, podcasts, documentaries, comics and animation content. The media company was founded by former journalists Abhinandan Sekhri, Madhu Trehan and Prashant Sareen in 2012.
Newslaundry was also the first subscription based website in India, as unlike other news websites like The Wire, The Quint, Scroll, etc the company relies on public subscriptions for revenue instead of advertisements. In 2016, the media company raised Rs 3.1 crore from Omidyar Network, Omidyar now owns 18.4% stake in the company.
Over the years Omidyar Network Indian helped in driving empowerment and social impact at a big scale, by investing in startups and entrepreneurs who aim in providing solutions to solve Indian chronic problems. Even during the Covid 19 pandemic, Omidyar Network funded over Rs. 10.75 crores to 67 projects out of 2000 under the Rapid response funding initiative in 2020. The investment firm will continue to help many upcoming startup grow and bolster a vibrant entrepreneurial ecosystem.
Frequently Asked Questions
What is Omidyar Network India?
Omidyar Network India is part of the US based Omidyar Group which is a diverse collection of companies, organizations and initiatives that are dedicated creating opportunity for people to improve their lives.
Who is the founder of Omidyar Network India?
The philanthropic investment firm and a non-profit organization was founded by Pierre Omidyar (also the founder of eBay) and his wife Pamela Kerr.
What are the areas that Omidyar Network India funds?
The areas in which Omidyar Network India funds are Digital Identity, Education, Emerging Tech, Financial Inclusion, Governance and Citizen Engagement, and Property Rights.
What are some of the Top startups funded by Omidyar Network India?
The startups funded by Omidyar Network India are Newslaundry, WhiteHat Jr, Credflow, ZestMoney, Vedantu, Transerve, Scripbox, Dailyhunt, 1mg, HealthKart and Quikr.
Nitin Konde
