The I-T department slaps notices on Indian startups asking fortheir investor’s identity and last three years’ ITRs to verify their creditworthiness and genuineness of the transactions. Ashneer Grover jumped on X to question the pragmatism of this notice.
The ITR notices to Indian startups since earlier this year continue to create uncertainty and anxiety for the startups, making it difficult for them to raise funding. The turmoil started following the Income Tax Return (ITR) notices that were sent, under Section 68 of the Income Tax Act, 1961, to various startups earlier this year asking for the ITRs of the last three years of their investors and shareholders. The Income Tax Department slapped the notices to seek information about the creditworthiness of their investors and shareholders to verify whether the amount invested aligns with the income declared by them.
The I-T department has been sending these notices to startups that have raised large amounts of money from angel investors or venture capital firms. The I-T department is concerned that some of these investments may be disguised as loans and that the startups may be avoiding paying taxes on the interest income.
Ashneer Grover, former Co-Founder, and Managing Director of BharatPe, took his concern to X to ridicule and raise questions on the grounds on which the notices are being sent. He acknowledged that in the last month, several startups, including some under his portfolio as well, have received the ITR notices seeking the shareholder’s information.
He said, “In the last 1 month, a number of startups (a few in my portfolio as well) have received Income Tax notices asking to furnish information about shareholders.”
Grover even raised questions on how and why would a startup have their shareholders’ last three years’ ITR details and why would the shareholder or individual share the same with a private company.
He said, “Bahut interesting hai (It is very interesting) – they are asking start-up companies to furnish 3 year ITR of all shareholders. 1) How and why will companies have ITR of shareholders? 2) Why would a shareholder/individual share their ITR with a private company?”
In the last 1 month, a number of startups (a few in my portfolio as well) have received Income Tax notices asking to furnish information about shareholders.
Bahut interesting hai – they are asking start-up companies to furnish 3 year ITR of all shareholders. 1) How and why will… pic.twitter.com/f48593uE4T
Replying to Grover’s post, the I-T department clarified that the notices were sent as per Section 68 of the Income Tax Act, 1961, when being asked by an Assessing Officer (AO), it is the responsibility of the company to provide the required information about their investor, their creditworthiness and their legitimacy.
His post also contained an image of the notice issued under Section 142(1) of the Income-Tax Act, 1961 which gives the Assessing Officers (AOs) the power to seek data from those filing the ITRs.
It reads, “Provide documentary evidence to substantiate the identity and ITR of last three years of shareholders to substantiate creditworthiness (of) the shareholders as well as the proof of the genuineness of the transaction in respect of fresh credit of the share capital/premium account,”
The reply from the I-T department on X reads, “Section 68 of Income-tax Act, 1961 (the Act) under which the AO has made the enquiry about the creditworthiness of the shareholder/investor, places the initial onus on the assessee-company to prove the following: the identity of the investor, the creditworthiness of the investor and genuineness of the transaction”
“Finance Act, 2012 mandated that the nature and source of any sum credited as share capital, share premium, etc., in the books of a closely held company (excluding Venture Capital Fund or a Venture Capital Company registered with SEBI) shall be treated as explained u/s 68 only if the source of funds from a resident shareholder is also explained by the investor,” the I-T department added.
The I-T department also mentioned that in this case the notices are sent as the AO has sought to assess the genuineness of the transaction and source of investment by the shareholder or investor. This is to be done to verify if the amount invested is commensurate with the income declared in the ITR of the investor.
However, it was also mentioned by the I-T department that the companies have the liberty to share the PANs of their investors instead, for verification.
“This has been the practice,” the I-T department added.
1.Section 68 of Income-tax Act, 1961 (the Act) under which the Assessing Officer (AO) has made the enquiry about creditworthiness of the shareholder/investor, places initial onus on the assessee-company to prove the following:
PTI reported that Mohandas Rai, Co-founder, of Infosys, who is also an investor, posted on X, tagging Prime Minister Narendra Modi and Prime Minister’s Office (PMO) on Grover’s initial post, to say it was “misleading”. He also added, “Sir tax terrorism is increasing! This is against what you have stood for. Please intervene.”
In the same post, he also tagged a multitude of politicians and ministers, including Tejasvi Surya, MP and BJP Yuva Morcha National President, and PC Mohan, BJP’s Bengaluru Central MP.
In response to the clarification issued by the I-T department, stating that companies have the option to furnish their investor’s PANs as an alternative to their last three years’ ITRs, Rai expressed his disagreement, condemning it – “again this is misleading.” He also tagged the Union Ministry of Finance, Prime Minister Narendra Modi, and Finance Minister Nirmala Sitharaman in his response, which was later reposted by Grover on X.
“Asking for the PAN is the law. But how can you also ask for 3-year tax returns of the investor from the startup? Does the law permit this? @IncomeTaxIndia itself says that Pan is sufficient. Why this overreach?” Rai asked.
There are over a billion successful startups in the world, every startup strives hard to be successful and reach the top, but only a few make it to the list of most valuable startups in the world.
Being the most valuable startup is a perk in itself because the funds they possess happen to be much more compared to their rivals and other companies giving them an extra edge to grow.
Here’s a list of the Top 15 Highest Valued Startups in the world:
Kohlberg Kravis Roberts, SoftBank Group, Sequoia Capital, General Atlantic, and Hillhouse Capital Group.
Products and services
Toutiao, TikTok, BuzzVideo, Vigo Video, Helo, Xigua Video
Lark, Babe
Valuation
$300 Bn (2022)
Bytedance Founder | Zhang Yiming
Bytedance is the most valued startup in the world with a current valuation of $300 billion.
ByteDance Ltd. is a Chinese multinational internet technology company headquartered in Beijing, ByteDance was founded by Zhang Yiming in 2012. ByteDance operates a range of content platforms that inform, educate, entertain, and encourage people across languages, cultures, religions, etc.
ByteDance is the parent company of famous video-sharing social networking services TikTok and Vigo Video and many more, where the infamous app Tiktok crossed 2.6 billion downloads globally on the App Store and Google Play. As of now, it has over 1 billion monthly active users worldwide.
Bytedance is also the parent company of Toutiao which is a news aggregator app that uses AI algorithms to track the habits of the reader and deliver relevant content.
Kuaishou is a short video social platform that is not much popular in western countries. It is a short video-sharing platform that has over 363.4 million daily active users and 626 million monthly active users in 2022. It is listed on most downloaded apps on google play and apps store outside of china, Kuaishou is often referred to as Kwai in overseas markets.
Kuaishou was founded by Su Hua and Cheng Yixiao in march 2011. The direct competitor of Kuaishou is the infamous app Tiktok.
Warburg, Carlyle Group Inc, General Atlantic, Silver Lake Partners LP
Products and services
Online payments platform services, money market fund, Zhima credit, and more
Valuation
$70 Bn – $151 Bn (2022)
Ant Group Founder | Jack Ma
Ant Group is an affiliate company of Chinese e-commerce giant, Alibaba. Previously known as Ant Financial and Alipay, Ant Group is the owner of the largest digital payments platform, Alipay, in China. The latter boasts of serving around 80 million merchants and approximately 1.3 billion users worldwide.
The company is currently valued between $70 billion and $151 billion.
Greylock Partners, SV Angel, Sequoia Capital, Keith Rabois, Ashton Kutcher, Elad Gil, Jeremy Stoppelman, Y Ventures
Products and services
Lodging and Hospitality
Valuation
$57.54 Bn (2022)
Airbnb Founders | Brian Chesky, Joe Gebbia, and Nathan Blecharczyk
Airbnb is nothing but an accommodation marketplace that provides access to over 6 million unique places to stay comfortably and at their leisure in 220+ countries and regions. The company does not own any of the real estate listings, it just acts as a broker and earns a commission from each booking.
Airbnb was founded by Brian CheskyJoe, Gebbia Nathan, and Blecharczyk in August 2008. Airbnb’s valuation dropped to $57.54 billion in 2022 from $130 billion (2021).
Stripe Founders | Patrick Collison and John Collison
Stripe is an online payment processing platform for internet businesses. Stripe provides an API to web developers so that they can integrate payment processing on their websites and mobile applications. Stripe was founded by Patrick Collison and John Collison in 2009 in San Francisco, California, and the United States.
Stripe allows other companies to receive payments over the internet with the help of its platform. Square, Adyen, PayPal, WePay, etc are the competitors of Stripe. As of 2022, 8,000 employees are working for the company.
Google, Fidelity, Draper Fisher Jurvetson, Founders Fund, Valor Equity Partners, and Capricorn.
Products and services
Launch vehicles, rocket engines, Dragon capsules Starship (in development), Starlink, ASDS landing platforms, Orbital rocket launch
Valuation
$127 Bn (2022)
SpaceX Founder | Elon Musk
It’s no surprise that SpaceX made it to the list of the top 10 most valuable startups in the world. SpaceX is a private American aerospace manufacturer and space transportation services company that manufactures rocket engines and thrusters. SpaceX has developed several launch vehicles and spacecraft.
SpaceX was founded by Elon musk who also owns Tesla and PayPal, he founded SpaceX on 6 May 2002 which is now headquartered in Hawthorne, California, United States. SpaceX became the first private space company to launch humans into space. The main aim of SpaceX is to reduce space transportation costs and colonize Mars.
Taxi, Express, Premier, Luxe, Bus, Designated Driving, Enterprise Solutions, Bike Sharing, E-bike Sharing, Automobile Solutions, and Food delivery
Valuation
$17.91 Bn (2022)
Didi Chuxing Founder | Cheng Wei
Didi Chuxing is a world-leading mobile transportation platform. DiDi provides automobile services, including sales, leasing, financing, maintenance, fleet operation, electric vehicle charging, and co-development of vehicles with automakers. Didi uses artificial intelligence technologies and machine learning to optimize the dispatch system and route planning services of the platform.
Didi is similar to the transportation service Uber, but it offers cheaper rides than Uber, DiDi platform provides over 10 billion passenger trips a year. The subsidiaries of Didi include 99, Uber (China) Ltd, DIDI Bus, Xiaoju, Automobile Solutions Co., AssureSec, Qingju Bike, Shanghai Dahuangfeng, Network Information Technology Co. Ltd, Shanghai Shiyuan Technology Co., Ltd.
Klarna, Sweden
Startup Name
Klarna
Headquarter
Stockholm, Sweden
Industry
Online payments, fintech, financial services
Founders
Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson
Founded
2005
Investors
Sequoia Capital, Silver Lake, Bestseller Group, Dragoneer, Permira, Visa, Ant Group
Klarna Founders | Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson
Klarna is a Stockholm, Sweden-based fintech company that offers online payment services to empower digital payments like payments for online storefronts and other direct payments, including post-purchase payments.
In 2021, it raised funds valued at $639 Mn led by Softbank Vision Fund II and some other investors, which had shot its valuation to $46 Bn. But Klarna’s valuation dropped to $6.7 Bn from $45.6 Bn in July 2022.
Andreessen Horowitz, Greenspring Associates, Temasek Holdings, Tencent Holdings, Greylock Partners, Tiger Global Management, Index Ventures, Meritech Capital Partners, and Kleiner Perkins
Products and services
Games and Roblox
Valuation
$15.18 Bn (2022)
Roblox Corporation Founders | David Baszucki, and Erik Cassel
Roblox Corporation is a video game developer from America with headquarters in San Mateo, California. Roblox Corporation is best known for developing Roblox, an online gaming platform and game creation system, in 2006.
Roblox’s valuation dropped to $15.18 billion in 2022 from $41.9 billion (2021).
Grab is a multinational ride-hailing company based in Singapore. It operates in South Asian countries and it is dubbed as its region’sfirst Decacorn (a startup with a valuation of over $10 billion). It provides services like transportation, on-demand delivery, and financial services on a single mobile platform.
Canva online and app for graphic designing, Canva Pro, Canva for Enterprise
Valuation
$26 Bn (2022)
Canva Founders | Melanie Perkins, Cliff Obrecht, and Cameron Adams
Canva is a graphics design platform founded by Melanie Perkins, Cliff Obrecht, and Cameron Adams in Perth and headquartered in Sydney, Australia. The users can use this platform to design their website banners, presentations, social media, documents, or any other visual content online or through the Canva app. Canva also provides a wide range of templates for free. Furthermore, the app also offers paid subscriptions like Canva Pro and Canva for Enterprise containing a broad spectrum of additional content and other functionalities.
Instacart Founders | Apoorva Mehta, Max Mullen, and Brandon Leonardo
Instacart is a popular grocery delivery and pick-up service renowned for its services in the USA and Canada. With the wide range of grocery retailers that Instacart collaborates with customers need not wait for too long to order their groceries online and shop smoothly and conveniently with the help of a personal shopper.
Ali Ghodsi, Andy Konwinski, Ion Stoica, Matei Zaharia, Patrick Wendell, Reynold Xin, and Scott Shenker
Founded
2013
Investors
Microsoft, Andreessen Horowitz, Alkeon Capital Management
Products and services
Helps in pulling data from Azure Blob Storage, AWS S3, Azure SQL Data Warehouse, Azure Data Lake Store, and numerous other NoSQL data stores
Valuation
$38 Bn (2022)
Databricks Founders | Ali Ghodsi, Andy Konwinski, Ion Stoica, Matei Zaharia, Patrick Wendell, Reynold Xin, and Scott Shenker
Created by Apache Spark, Databricks is an enterprise software company that acts as a web-based platform that works with Spark, thereby offering automated cluster management services and IPython-style notebooks. Some of the open-source projects that the company has created include Delta Lake, MLflow, and Koalas, mostly spanning data engineering, data science, and machine learning.
AI Center Action Center Apps, Assistant Automation Hub, Automation Platform, Document Understanding Insights, Orchestrator Process Mining, StudioX Test Suite
Valuation
$6.89 Bn (2022)
UiPath Founders | Daniel Dines, and Marius Tîrcă
The Romanian company UiPath is a global software company headquartered in New York City, USA. UiPath uses Robotic process automation (RPA) and monitors user activities, to help automate repetitive tasks in both the front and the back ends of companies. UiPath’s automation is including but is not limited to customer relationship management.
Banking services including GBP and EUR bank accounts, debit cards, fee-free currency exchange, stock trading, cryptocurrency exchange, and peer-to-peer payments
Valuation
$33+ Bn (2022)
Revolut Founders | Nikolay Storonsky, and Vlad Yatsenko
Headquartered in London, England, Revolut is a financial technology company that offers banking services. Revolut offers a wide range of services including accounts featuring currency exchange, debit cards, virtual cards, Apple Pay, interest-bearing “vaults”, commission-free stock trading, crypto, commodities, and more. Founded in 2015 Revolut has shown incredible growth throughout the years and expanded to various markets across countries including Japan. Furthermore, it has also been successful in amassing around 3500 employees, who work for the organization.
With $5.10 billion, as estimated in November 2020, Revolut emerged as the UK’s most valuable fintech. The company is presently valued at $33+ billion, which makes it Europe’s most-valued startup, surpassing Checkout.com.
Conclusion
This is the list of the Top 15 Highest Valued Startups in the world. Hope you have enjoyed reading it. Feel free to let us know what you think about our content and also mention any more content ideas that you think might be helpful for readers, budding startups, entrepreneurs, and other individuals!
FAQs
Which is the most valued startup in the world?
With over $300 billion valuation, ByteDance – the parent company of TikTok, is the most valued startup in the world.
Which types of startups are most profitable?
Some of the most profitable startups are:
E-commerce
Business Consulting
Tech Support and Consulting
Real Estate
Online courses
Website, Logo, and Graphic Design Services
What types of startups are in demand?
Some of the startups in demand are:
Vehicle Renting Services
Trucking & Delivery Services
Food Delivery Services
Grocery Delivery Services
Vacation Rental Services
Learning Apps
Do 90% of startups fail?
Yes, 90% of startups fail. Only a few startups are successful by overcoming the obstacles and challenges on their way.
The startup scene in Canada has been growing in recent years, with a number of successful companies emerging in a variety of industries. Canada has a strong economy and a well-educated workforce, which has helped to create a favorable environment for startups. In addition, the government has implemented various initiatives to support the growth of startups, including funding programs and tax credits.
The technology sector is particularly strong in Canada, with many startups focusing on areas such as artificial intelligence, cloud computing, and e-commerce. However, there are also a number of startups in other industries, such as healthcare, finance, and retail.
Overall, the startup ecosystem in Canada is thriving and there are many opportunities for entrepreneurs to launch and grow successful companies.
Every year around 95,000 new businesses are started in Canada, a few make a fortune. Let’s take a look at some of the Top successful Canadian Startups in 2023.
Loopio is one of Canada’s Fastest Growing Companies with three-year revenue growth of 268%. It has been ranked in Canada’s Top Growing Companies consecutively for four years by Globe and Mail’s Report on Business. It has twice secured its spot on the Deloitte Technology Fast 50™ list and LinkedIn’s Top Startups.
Loopio is a startup that helps companies answer RFPs, Security Questionnaires, and more. It helps the team to be very responsive, improves response quality, and helps them win more business.
2. Opencare
Co-founder
Cameron Howieson
Founded
2012
Headquarters
Toronto, ON, Canada
Industry
Health, Wellness & Fitness
Company size
11-50 employees
Total Funding Amount
$24.6 Mn
Co-founder of Opencare | Cameron Howieson
Open care’s vision is to connect users with top local dentists based on their own choices. It is a modern change that has a command over the traditional industry. Through connecting with specialized dentists in the area, Open care is highly focused on optimal health and is growing by leaps and bounds.
Opencare has built a selected network of top-rated dentists across North America. They are committed to delivering outstanding oral wellness.
3. Connected
Co-founder
Mike Stern
Founded
2014
Headquarters
Toronto, Ontario, Canada
Industry
Software Development
Company size
51-200 employees
Total Funding Amount
–
Co-founder of Connected | Mike Stern
Not particularly a design agency or consultant, Connected (now part of Thoughtworks) is a platform that helps brands build software products used in the research and development phase. The company has an access to a share option plan, where employees own shares in their company. It ranked one of LinkedIn’s top 25 startups, in Canada in 2019.
Company culture is widely built. Each Connected employee experiences an equal amount of respect and as a result, Connected is considered the best workplace. And the greatness includes a house for each employee if needed, along with progressive competitions amongst the groups periodically.
4. Ritual
Co-founder
Ray Reddy
Founded
2014
Headquarters
Toronto, Ontario, Canada
Industry
Consumer Services
Company size
201-500 employees
Total Funding Amount
$134.8 Mn
Co-founder of Ritual | Ray Reddy
Ritual is perhaps one of Canada’s best-known startup apps that helps users to get their pre-ordered foods from their favorite restaurants and coffee houses. With Ritual, there is no need to fight the crowds or stand in long queues.
Unlike India’s Zomato and Swiggy, this pre-ordering app is also known for its suitability and reliability. It also has the advantage of piggybacking on orders, where one of your mates can pick up more than one order on behalf of multiple people.
5. League
Founder
Michael Serbinis
Founded
2014
Headquarters
Toronto, Ontario, Canada
Industry
Hospitals and Health Care
Company size
501-1,000 employees
Total Funding Amount
$171.1 Mn
Founder of League | Michael Serbinis
League is a one-to-one platform for employees to engage with their lifestyle, health, and benefit programs. According to Linked in’s annual rankings, the rapidly growing hub is counted in Canada’s top startups-three years running.
Since its 7 years founding, League’s members have reached over 40 million and the company has raised $220 million to date. It grabbed The Next HealthTech Unicorn Award in 2021.
6. Maple
Co-founder
Brett Belchetz
Founded
2015
Headquarters
Toronto, Ontario, Canada
Industry
Hospitals and Health Care
Company size
51-200 employees
Total Funding Amount
$71.7 Mn
Co-founder of Maple | Brett Belchetz
With Maple, you can connect with Canadian licensed doctors for medical help 24/7. Online consultation isn’t new, but the Maple app takes things to a whole new level, providing immediate help from doctors and specialists.
On the contrary, with the launch of Maple, it has become way too easier to deal with immediate medical support from the healthcare professionals of your choice. Notably, a click of a button away. The two most recent investors are Loblaw Companies Limited and RBC Ventures, and the company raised $73 million in a sequence of funding.
7. integrate.ai
Founder
Steve Irvine
Founded
2017
Headquarters
Toronto, Ontario, Canada
Industry
Software Development
Company size
11-50 employees
Total Funding Amount
$49.6 Mn
Founder of Integrate.ai | Steve Irvine
Integrate.ai is one of the most talked about cross-industry in today’s technological world, which implies machine learning and innovative intelligence to target customer necessities before it is felt. However, a lot of people have already started implementing this technology app to improve their quality and outputs.
As customer data becomes increasingly on trend, integrate.ai became the world’s first AI-powered cross-industry intelligence network to master Design Certification. The Former Facebook and Instagram executive Steve Irvine is the founder and CEO of the company.
8. Borrowell
Founders
Eva Wong, Andrew Graham
Founded
2014
Headquarters
Toronto, Ontario, Canada
Industry
Financial Services
Company size
51-200 employees
Total Funding Amount
$92 Mn
Founders of Borrowell | Eva Wong, Andrew Graham
Borrowell is a financial technology company that offers Canadians free access to their credit score, including recommendations for financial tips and tools to improve credit scores. Listed as the World’s top financial technology company for its transparency, Borrowell will be a trailblazer for many such factual ideas.
Borrowell has been named one of the Best Workplaces in Canada every year since 2019. It has been recognized as Globe and Mail’s Top Growing Companies (2021), LinkedIn’s Top 15 Startups in Canada (2021), and CB Insights’ Top 250 Fintechs (2021). It is trusted by over 2 million Canadians.
9. Mejuri
Co-founder
Noura Sakkijha
Founded
2013
Headquarters
Toronto, Ontario, Canada
Industry
Retail Luxury Goods and Jewelry
Company size
201-500 employees
Total Funding Amount
$28 Mn
Co-founder of Mejuri | Noura Sakkijha
Mejuri is Canada’s most popular marketing-targeted company that deals directly with the consumer. Mejuri sells fine jewelry at comparatively-low prices and has expanded as a far-reaching jewelry house. The brand operates directly to consumers (online), to sell through brick-and-mortar storefronts. Re-launched in 2015, the company has female employees in maximum.
“I founded Mejuri because I saw a jewelry industry that was built for men gifting women and not women celebrating themselves. To me, the truest expression of Mejuri is mutual uplift: all of us supporting each other, and you, our community, feeling empowered to invest in yourself and, in turn, the community around you.” – Noura Sakkijha, CEO
10. Ada
Co-founder
Mike Murchison
Founded
2016
Headquarters
Toronto, Ontario, Canada
Industry
Software Development
Company size
201-500 employees
Total Funding Amount
$190.6 Mn
Co-founder of Ada | Mike Murchison
Ada is an artificial intelligence where businesses are allowed to speak directly with prospective customers through a chat box. As mountains of businesses pile up, customers feel discomfort, and thereby any businesses in particular need to be properly explained and analyzed, to be able to make better business decisions.
Ada’s growth has been augmented to date. To focus on issues of greater impact, Ada allows live agents too, providing a support role for any queries that customers have. It is recognized as one of the best leading customer service automation companies.
Conclusion
Canadian startups are growing abruptly, we see many new startups lining up in the space. Hence there is a sense of innovation to maintain a competitive edge, probably for the recognition of a leading sector and for the brand familiarity to reach across various platforms shortly.
FAQs
Is Canada good for a startup?
Yes, Canada is a financially safe place to do business as it has a stable economy, and there is support from both the national and local levels for the startup.
Which country is best for startups?
The United States is considered the best country for startups.
Which country has the most entrepreneurs?
The United States has the most number of entrepreneurs.
How many startups fail in Canada?
Business failure statistics show that about 96% of small businesses survive for one full year, 85% survive for three years and 70% survive for five years.
Just because of valuation, startups often take the limelight as unicorns even when they are losing hefty amounts of money. This may seem strange, but older businesses are not regarded as strongly as startups, and in most cases, these existing businesses are valued well below their genuine value.
Every day, businesses of every kind face an unpredicted plethora of threats. It is important to recognize that losses can be either caused by temporary (short-term or medium-term) or some continuous long-term issues.
Number of Funding Deals for Startups Across India from 2015 to 2022
Unicorns in India, or companies valued at $1 billion or more, are contradicting the traditional wisdom that valuations are based on future earnings. As their losses mount, private investors are compensating them with progressively greater values. While lots of businesses continue to lose money quarter after quarter, a select handful achieves enormous success and become national brands. The trick, of course, is determining which of these businesses will make the transition to profitability and blue-chip position.
Valuing a loss-making business can be a difficult task. A business with negative earnings or incredibly low earnings is considerably more difficult to appraise than one with positive earnings. In reality, rather than basic assessments, loss-making enterprises are valued primarily on hopes.
In this article, we are going to discuss why we see that startups with the most valuation have the least profit.
In simple words, startup valuation is the way of assessing a firm’s value, or valuation. An individual investor in a startup trades for a portion of the company’s stock during the seed fundraising round. This is why valuation is crucial for entrepreneurs since it allows them to determine how much ownership they must provide a seed investor in return for their financing. It’s also crucial for an investor, who needs to know how much of the company’s stock they will get in exchange for the money they put in during the early stages. As a result, startup valuation can be a deal-maker or a deal-breaker, which is why it does not include any speculation based on the valuation of other comparable businesses.
Furthermore, before assessing a firm’s real worth, creators must have a thorough understanding of how the entire startup valuation process works. If there is little to no revenue-generating, founders tend to quote an excessively high amount to investors to raise seed funding, so the expectations will be rather high. However, if a firm is unable to fulfill the lofty targets, it may have to secure funding at a reduced valuation in the next round.
This could backfire in the long term, and the startup or entrepreneur may have a difficult time persuading other seed financiers or companies to finance them. In contrast, if the business quotes are too low, it may wind up offering investors a larger portion of the company’s equity, which will be a negative factor.
Startups are not anxious about their losses or lack of profit-making capacity. Instead of focusing on this, they continue to advertise their long-term vision of expected profit generation. Founders of such startups tend to showcase their different techniques, technologies, and solutions to attract investors. They are good at storytelling and selling.
Investors get inspired by the founders and their exclusive pitch and make startup investment risks with the hope of gaining profits in the future. Here, both the startups and the investors work based on future assumptions. The hope remains on the fact that the startup would be able to kill its competition and create its market. But when reality hits and things do not go as per the plans, these startups with high valuations (because of the huge investments) start going low on profit-making.
It is the brand name and its worth that attracts investors to invest, taking the valuation of a startup to another level. For example- Groww (an investing platform), even with the least profits, raised a funding round in October 2021, which skyrocketed its valuation to $3 billion. However, Zerodha (financial services company), one of its biggest competitors, is highly profitable yet its valuation stands lower than Groww.
According to Kunal Shah (CEO of CRED), “Unicorn tag, high valuation are all vanity metrics till the company delivers profits”.
The discounted cash flow is the explanation for this unusual valuation. The discounted cash technique is used to value and evaluate the worth of the startups. When valuing a company, the discounted cash flow technique is used to forecast cash flow as well as the anticipated rate of return on investment. Businesses that are inevitably destined to fail in terms of income flow generation are given a higher discount rate.
Such startups simply continue to be overvalued by executing a couple more spectacular funding rounds. After which the investors understand or anticipate that they’re not going to be successful after analyzing the stats and other relevant information and pulling any additional funding. These businesses will likely close or downsize their operations, leading to widespread job losses and a repeat of the 2008 financial crisis unless they figure up some sort of magical formula.
Cases of High Valuation Low-Profit Startups
Zomato
The revenue of Zomato has soared by a significant percentage year over year, and losses have also risen by a substantial proportion. However, when you look at the overall picture, Zomato is present in 24 countries, including India. Furthermore, it has a monopoly in Restaurant Search in India, despite the presence of competitors making it more likely to succeed. Advertisements, classifieds, internet shopping, and consulting are further sources of its revenue.
Revenue and Loss of Zomato from FY 2018 to FY 2022
In FY22, Zomato recorded a revenue of $505.76 million, whereas its loss stood at $145.92 million. As a result, instead of seeing losses as a determining factor in funding, we perceive its brand value.
Flipkart
Although this is one of the most difficult startups to evaluate, the basics stay the same. Flipkart is attempting to instill in Indians the habit of shopping online. This is also being funded by investors. Online retail sales in India currently account for only 1% of total retail sales. If it were to rise to even 7-8% (as it is in the United States), E-tailer revenues in India would soar by a significant percentage. This is the expectation of investors.
In FY22, Flipkart India’s revenue reached $6.034 billion, and losses widened by 40% to $410.75 million.
Ola/Uber
We usually went down, asked for multiple buses and taxis, and got refused by a majority of them when there was no Ola/Uber. But, thanks to Ola, we can now book a cab from the comfort of our own homes or offices and only get out when they arrive. It has made our lives more convenient with the added benefits of being cashless and air-conditioned. As a result, we have developed a strong trust and habit in them, which is exactly what they desire.
Revenue and Loss of Ola Cabs from FY 2017 to FY 2021
In FY21, Ola Cabs’s revenue was $125.41 million, and its loss was $101.27 million.
These are some of the names that stand in full pride with huge valuations as they have gained the trust of investors as well as the masses but at the same time continue to make lesser profits.
Conclusion
A startup’s worth is based on its potential to generate future cash flows, how much potential it has for future aspects, and keeping other essential factors constant. Apart from revenue generation, job generation statistics also matter. Investors believe that the startup they are investing in will grow to be a giant one day and that they will be able to make a profit of nearly ten times their initial investment. This risk allows them to stay competitive and keeps them in the play. Therefore, when valuing or comprehending startups, their prospects are perceived rather than the losses.
FAQs
What is startup valuation?
It is the process of evaluating a company’s worth in the market based on different factors like profit-making capacity, growth potential, market conditions, etc.
What are startup valuation methods?
Popular methods include:
Berkus Approach
Market Multiple Approach
Risk Factor Summation Approach
Which is the highest-valued company in India in 2022?
Reliance Industries is the highest-valued company in India in 2022 with a $202 billion valuation, followed by Tata Consultancy Services ($139 Bn) and HDFC Bank ($97 Bn).
Are all Indian unicorn startups profitable?
Only 23 out of 100 Indian unicorn startups are profitable. These include Mamaearth, Lenskart, Nykaa, Zerodha, etc.
Australia ranks among the leading countries for startups worldwide. With a score of 22.45, Australia ranks the 8th best country for startups in 2022. Its physical infrastructure, internal market dynamics, and commercial and legal infrastructure are favorable to the startup environment.
Australia is known for its diversified and technologically advanced economy. Australia continues to encourage the development of several local startups nationally with an international launch. It is also considered one of the quickest countries in the world to start a business. Thus the startup ecosystem in Australia is now one of the fastest-growing globally, with the startup rate being one of the highest in the world.
Venture Capital Fundraising in Australia from 2010 to 2022
As of August 2022, the value of Australian-based venture capital funds was over $539.34 million and around $331.73 million in 2021. With an innovative approach, the startups have gained global market reach taking pride in their “Unicorn” status which is worth more than a billion US dollars. For a more elaborate view, let’s take a look at our favorite startups, piling up more information on each company and its counterparts.
Alex Twigg, Chris Bayliss, David Hornery, Jacqui Colwell, Joseph Healy, Kate Keenan, Mal Hiscock, and Tim Alexander
Founded in
2016
Headquarters
Melbourne, Australia
Industry
Financial services
Total Funding
1.8 billion over 9 funding rounds
Valuation
$970.1 Mn (2022)
Judo Bank Co-founders | Joseph Healy and David Hornery
Judo Bank is an online business bank backed by the SME Guarantee Scheme. With a team of dedicated officials, Judo Bank develops a trustworthy relationship with the proprietors and their SMEs. It provides financial assistance and business loans imperative for each SME. As business is all about striking while the iron is hot, Judo Bank helps SMEs to back their ideas with the funding they need.
Canva
Founders
Melanie Perkins, Cliff Obrecht, and Cameron Adams
Founded in
2013
Headquarters
Sydney, Australia
Industry
Graphic design Software
Total Funding
$572.6 million over 14 funding rounds
Valuation
$26 billion (2022)
Canva Founders | Cliff Obrecht, Melanie Perkins, and Cameron Adams
Canva is the world’s most inclusive graphic design tool that can be used to design and work more seamlessly. Be in logos, web pages, brochures, presentations, social media graphics, business cards, etc. Canva is the most productive digital creator. Available in over 130 languages and on any device, the users can start with one of Canva’s 250,000+ free templates and see where their creativity takes them.
Spaceship
Founder
Kaushik Sen
Founded in
2016
Headquarters
Sydney, Australia
Industry
Fund-investing platform
Total Funding
$54.58 million over 3 funding rounds
Valuation
$360.82 Mn (Jun 2022)
Spaceship Founder Kaushik Sen with Paul Bennetts, Andrew Sellen, and Dave Kuhn
Spaceship is a fund-investing platform designed to help the younger generations to invest in their future. Spaceship offers two portfolios to its customers-Origin and Universe.
Origin is somewhat similar to an index ETF, however, it is not market cap weighted. It invests in 100 Australian and 100 International companies. The minimum fee is 5$. On the contrary, The Universe is more of an active fund. The investment philosophy is based on WWG’s “Where the World is going” principle.
Companies are screened on factors like market cap, future growth potential, management, and even liquidity among other things. The minimum fee is 1$ P/A. With companies such as Amazon, Google, Facebook, and more. Spaceship guides the users to invest in a curated global portfolio.
Uno
Founder
Vincent Turner
Founded in
2016
Headquarters
Surry Hills, New South Wales, Australia
Industry
Financial Services
Total Funding
$36.86 million over 7 funding rounds
Valuation
–
Uno Founder | Vincent Turner
Uno is one of the world’s most authentic platforms that facilitates users with better financial decisions. The best part is that Uno offers online tools to compare loans so that the interest rate does not affect the cost of loans. Whether it is to buy real estate property or to avail of a new loan, Uno can assist with better guidance.
99Designs
Founder
Mark Harbottle
Founded in
2008
Headquarters
Melbourne, Australia
Industry
Design Services
Total Funding
$45 million over 4 funding rounds
Valuation
Acquired by Vista Prints for an undisclosed amount
99designs Founder | Mark Harbottle
99designs is an online platform where you can find designers for clothing and merchandise, art and illustration, packing and labels, magazines, flat-out logos, etc. A bunch of logo designers will throw their hats on their rings and develop various designs based on the specifications you outlined.
However, the whole idea is to have a plethora of options to choose from. The minimum price is $299. Besides collecting briefs from customers online, 99designs offers the services of its community of professional designers to deliver the client’s requirements at the earliest.
Go1
Founder & CEO
Andrew Barnes
Founded in
2015
Headquarters
Brisbane, Queensland, Australia
Industry
E-Learning Providers
Total Funding
$373.25 million over 10 funding rounds
Valuation
$2 Bn+ (2022)
Go1 Founder & CEO | Andrew Barnes
Go1 is one of the most dedicated platforms wherein companies get curated training courses from the world’s skilled training institutions for their employees. It is easily accessible and is one of the ruling eLearning library learning and education that has been famed across countries such as Australia, the United States, South Africa, Vietnam, the United Kingdom, and Malaysia.
Lendi
Founder
Martin Lam
Founded in
2016
Headquarters
Sydney, New South Wales, Australia
Industry
Financial Services
Total Funding
$57.38 million over 4 funding rounds
Valuation
–
Lendi Founder | Martin Lam
Lendi is one of the most reliable online platforms for home loans. Here, users are allowed to choose home loans freely from more than 25 major lenders. Facilitating the acquisition of houses and refinance loans, Lendi thereby negotiates better loans for its users and also empowers them through its online tools and a team of experts.
Power Ledger
Founders
Dr. Jemma Green and John Bulich
Founded in
2016
Headquarters
Perth, Western Australia, Australia
Industry
Software Development
Total Funding
$35 million over 2 funding rounds
Valuation
$57 Mn (2022)
Power Ledger Founder | Dr. Jemma Green
Power Ledger is a tech company that has developed a blockchain-enabled renewable energy trading platform. With market abilities, the company has built a series of products to enable energy trading, renewable asset financing, and moving efficient carbon and renewable carbon credits transactions.
Assembly Payments
Founder and CTO
Simon Jones
Founded in
2013
Headquarters
Victoria, Australia
Industry
Technology, Information, and the Internet
Total Funding
$12.25 million over 8 funding rounds
Valuation
–
Assembly Payments Key People
Assembly Payments is a complete payment gateway that helps businesses manage payment workflows and move funds without any delay. Perhaps it is the perfect way to capture credit cards without a lot of coding on the user’s side. However, Assembly is committed to going beyond excellence to deliver a highly secure system, that meets regulatory standards.
Employment Hero
Founder and CEO
Ben Thompson
Founded in
2014
Headquarters
Sydney, New South Wales, Australia
Industry
Human Resources Services
Total Funding
$290.93 million over 7 funding rounds
Valuation
$837.45 Mn(2022)
Employment Hero Founder & CEO | Ben Thompson
Employment Hero is the best HR software that Australia has to offer. With Employment Hero, SMEs can easily manage HR payroll, employee engagement, and benefits. Along with a team of experts, it has a wide range of products and services lining up for hassle-free compliance with minimum paper works and delivers better employee allowances.
Conclusion
The economy of Australia is growing by leaps and bounds with the technological advancements of its rising startups. While some are fast-moving for completion, others are balls against walls, however, predominantly focused to become the next market leaders.
The series of startups focusing on and winning economic dynamism implies several industries and businesses, but the importance of tech startups is limpid, as enormous companies are either cloud-based platforms or software-based. From professional forums to Financial Technology and from e-commerce to Artificial Intelligence (AI), Australia is no easy feat.
FAQs
What industries are booming in Australia?
Manufacturing Industry, Healthcare Industry, Energy Industry, Food Industry, and Technology Industry.
How many startups fail in Australia?
20% of businesses fail in their first year in Australia.
What is the biggest industry in Australia?
Consumer Goods Retailing in Australia is one of the biggest industries in Australia.
Which country has the most startups?
The United States has the most startups, i.e. more than 70,000 active startups. With a total score of 195.37, the US was by far the best country for startups in 2022.
If you are looking to start your own e-commerce business in India like Amazon or Flipkart, then this is the way to go. To start with, eCommerce is an online process of buying or selling goods and services. There is no paperwork involved in making any transaction here.
One of the best things that most of us like about an e-commerce startup is that we can update and modify it the way we want and make it attractive and appealing to the eyes of the audience. Your customer will have access to your services 24×7 and you don’t need to come out of your door for marketing and other stuff if you are doing it at a small level.
According to a report, in 2019, eCommerce sales accounted for 14.1% of all retail sales worldwide. However, there are some things that you need to care about in your eCommerce business plan.
How to Start an eCommerce Business in India? (A 10-Step Business Plan)
Starting an eCommerce website might sound challenging, but with this easy 10-step business plan, it would hardly be tough. So, let’s dive into the steps:
Step 1: Define your business name
Business names are always important as they give you an identity after identifying what you want to sell. A business name will be the legal identity of your business. This opens a room for marketing your product with ease. The name that you choose should be simple and unique. It is always better to research extensively before you decide upon a particular name for your business. This will let you be safe and secure, and thus, is really important for everyone who would be starting an eCommerce website.
Step 2: Set a domain name
Ideally, there is always diversity in business. The business name acts as the domain name. A domain name system (DNS) stipulates the website address that your business wants to keep.
One of the important factors for an eCommerce business plan is awebsite. A website can be useful in developing different marketing strategies. It acts as a point of contact between you and your customers.
A website is accessible to many people at any given time and creates a climate of trust (credibility). Churning out a website is really convenient as it tells the customers that you exist. Furthermore, the website and the domain name are some of the core steps to proceed with before one can go about launching an eCommerce business.
Step 3: Identify the type of business and register
People engage with businesses as sole proprietorships, partnerships, or cooperation. Each of these has an advantage and disadvantage attached to it. For example, operating as a sole proprietor always subjects you to numerous risks.
You need to weigh before deciding upon a particular type of business that suits you. The income removal system (IRS) allows you to file the structure of your business on your own or get a different filing company to help you.
Step 4: Employer Identification Number (EIN)
You can not operate an e-commerce business without a bank account. To get a bank account you need for your business you need EIN. This number you are given acts as identification. You use it to file taxes for the business. It is always a requirement whether you will operate alone or employ people.
Step 5: Obtain legal documents
Every country has its own policies and procedures that every citizen must adhere to. This is also one of the things you must keep as a priority while creating an eCommerce business plan. If you fail to do that, the government has the mandate to declare your business illegal, after which numerous penalties might be imposed.
Licenses for the business and work permit should be obtained. Confirm with your state what type of taxes you are required to pay in order to operate. Also, you need to Apply for Goods and Service Tax (GST) certification and a Shops and Establishment Licence.
Step 6: Source for vendors
It is not possible to operate without vendors. Everyone needs to identify and keep in contact with different vendors. This way you can derive the best quality and prices for the materials you need to make your products. Conduct a thorough and serious search of the vendors to help you identify who you want to work with.
Step 7: Early marketing
Media platforms are paramount in e-commerce. However, it is also necessary that you have an eCommerce business plan prior to that. Alert customers that there is something good coming up so they can create interest to know. You can even decide to introduce blogging as a tool.
Step 8: Get effective software
E-commerce cannot work without making use of technology. Put every system in place before launching the product. Effective software is what you simply cannot compromise when it comes to building e-commerce websites in India.
Step 9: Keep a smart inventory
Inventory will help you track the information that you need. Ensure the warehouse (store) has enough products so that the customers don’t miss out on what they want. You may not be in a position to tell what will be needed and when but is always safe to keep a decent stock. This will help keep track of the orders you make in the future.
Step 10: Be compliant
Always be smart with deadlines in terms of taxes, licenses and permits needed. Always ensure you abide by the law of the land. Staying compliant is the key to starting an eCommerce store or an online business and making it successful.
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How to Build an eCommerce Startup?
The Ecommerce industry is on the boom for the past few years, and why not? It is ultimately a sector with big opportunities and low barriers to entry. The total valuation of the e-commerce industry in India was last recorded at $46.2 million and is expected to rise to $188 billion by 2025. Such a sector that is ever so growing, certainly consists of a lot of opportunities.
Currently, there are hundreds of e-commerce sites selling products and services and thousands are on the way. Probably you also want to have one. Well, the e-commerce industry is so dynamic now, that you need to be agile and alert. So, keep monitoring the activities, events, discussions, and changes going on in your niche.
Now e-commerce is not about selling a product but a solution. Your potential customer must see the clear benefit of buying from you. Here are some tips to follow if you are starting up or already have an existing startup in the e-commerce domain.
Find a niche
If you get an idea for e-commerce, there is a fair chance that many startups are operating in that niche and many are coming up. That is why it is important to break the initial idea, segment them a little further or get a niche that is not explored yet and work on that with full focus.
If you think you can compete against Flipkart or Snapdeal that’s not going to happen if you plan to start with the same business model.
Take sandal. When the company launched, it was an online portal for deals and coupons. This was a very focused play. They didn’t immediately start selling physical goods. Make your unique selling proposition, find your target “janta” or customers, and sell your product to them.
Experiment
As you have started out, the world seems very new to you. Nobody except you can tell what works best for you. So, experiment with different Pitches, Distribution channels, and more. Do this until you find out a solid sales strategy.
Listen to your customer
As it is always said worship customers like gods. Always remember that if there is any service you want to provide, then that should always be a customer satisfaction service. Your behaviour towards the customer after the sale would make all the difference.
This will help you in customer retention and thus make more sales. Once a sale is made. Talk to them, get feedback and see what changes they want. Even if it doesn’t comply with want you want just change it.
Learn from the mistakes of competitors
Do you have lots of competitors? Having too many competitors is not so good news for businesses but every bad thing has got something good in it. So, if you have quite some competitors already in the same space where you would be starting your own eCommerce business, you can try to analyze their website design, pricing, and marketing strategies on a regular basis to get useful insights for future action. Go through their social media profile to see what activities have helped them gain traction a lot and what has failed for them. In this way, pick up all that they have done good, and try to avoid all the mistakes that they have done.
Use digital marketing
74% of adults who are online, use social networking sites, and among them, it has been found that 71% of online adults use Facebook. Being a startup you don’t have much marketing budget. Here, starting with social media platforms for marketing purposes will indeed be of great help. Optimising the content and regularly sharing them on social platforms certainly is rewarding for brands and businesses. This will not only let you reach to large audience economically but also help you to get analytics to learn about the users. It is also a great way to listen to what customers are saying about your brand.
Number of social network users in India from 2015 to 2020
Operation
Make sure you always have enough inventory of the highest-selling product. Make sure that you keep a track of all the products that belong to the highest-selling and lowest-selling categories. Figure out what is making the highest product sell the highest and what makes the others the lowest-selling products. This will help you a great deal!
Looking at what similar companies are using. Add a mascot on the site that guides the users about the site and the products, is an interesting way to get the attention of customers (like Zendesk). Use only those plugins that are necessary.
Hire trained customer care executives to resolve customer queries over calls and emails. A toll-free number and support email is crucial too. Solve the problems that the customer is facing, to ensure the efficiency of the website.
Content marketing
The content is important for an e-commerce website and is good for marketing the brand. Putting up a blog or posts will surely bring up more traffic than ever. Content marketing will stand as one of the primary requisites as soon as you start an eCommerce store or an eCommerce website in India.
Social Media Marketing
Social media is the key to climbing the ladder and getting the exposure one wants in the public eye, so creating social media accounts is the key to helping the brand reach the eyes of the world. Keep the followers updated with new products and give ways to get more followers. Meme marketing is also a great way to engage your customers (Millennials).
Influencer’s utilization
The influencers are the best people in the game especially, in terms of product branding and making the future of a product. Hence, hire some influencers who are the best in the marketing game, which your brand focuses on, and pay them to put the ad on their social media. This will help increase your brand reach, thereby helping it to reach thousands and millions, who would then be able to see what your brand and its products are all about and people will pop up on the website for sure, giving you more website traffic and multiplying your revenues for sure.
How to Compete in the eCommerce Market?
Every day is new and brings changes in people’s needs and desires. Luckily, this is where small and upcoming startups can still win in the midst of other eCommerce giants. Here, is how to compete in the E-commerce market.
We are aware of how Amazon and eBay have driven many small and medium companies to extinction. But the other side of the reality is also that new interventions are always abundant and there’s always a new idea, product concept, or methodology that can topple the market leaders as we know them, or at least create a comfortably sweet spot in the market for themselves-which is just where your startup needs to reach.
If your startup is introducing a new product or service altogether, there is a very different approach you might need to take as compared to a start-up that is re-offering the existing product or service to bridge the demand-supply gap.
Be very clear as to who you are, what your offer is, and what your target is. Make sure that your core team and your entire organization have this understanding to ensure that the combined effort of the entire workforce maximizes the results.
It is a hopeful time to be as Amazon and the likes do cater everything to everyone. But the digital age has made it possible for everyone to co-exist as people’s tastes are ever-evolving and start-ups targeting the niche will be able to carve out their own space.
Read on for sage advice on how you can stand out in a crowded marketplace and reap the maximum benefit of being a newcomer to the industry.
Create Your Own Service
Your chance to be victorious in the game is to be an innovator and make your own market rather than depending on the existing marketplace. It is a harder approach to what you are already doing but will take you miles ahead of others.
See a Need, Fill a Need
We have seen time and again that certain brands launch big after years of testing and planning, however, once the brand is not received well they start to fizzle out. The ones who make it successfully are often seen using the feedback from the customers and dedicating some resources to perfecting common complaints and difficulties consumers are experiencing. They don’t quit, rather, they use real-time data as the major source of what the next step is inspired.
In fact, building on what the customer conveyed as your shortcoming can also forge a trustworthy and loyal bond with them, which is a great way to market yourself. Instead of resisting the feedback, be open to them and make your way to their hearts by listening and acting on it. Create your own trend rather than following the norm.
Champion the Mobile App
Make sure that your customer is having a seamless mobile experience on your app and is likely to check out under 60 seconds after preparing the cart or choosing the service without any in-built interruptions. Fast times require faster solutions! In addition, make sure your startup belongs on platforms like Snapchat and Instagram that have made the visual world fun and directly accessible.
Design Thinking promotes that design is an elementary part of any system. Design your product, service, or systems within the organization always prioritizing the user needs and user practices.
Get inside not just the mind of the end-user, but also their daily lifestyle, their influences, their dreams and aspirations, their environment, and their culture, depending on the nature of your services.
Customer is more likely to trust your brand if they think you thought of them specifically while making the product or service. This gives them confidence that you will understand them and will stand as a good choice for them.
Better Incentive Programs
Your incentives can come in the form of discounts, rebates, points earned toward a discount, points earned toward prizes, or any of many other plans. The worst-designed incentive plans have ambiguity in the stated rules.
An incentive is likely to shape your customer’s behaviour and drive them to your desired action. These incentives are thus, really valuable for an eCommerce company, especially if you are wanting to start an online store in India. If they are rewarded for their purchase, they feel like they ‘earned’ it. Keep a close eye on what other e-commerce companies in India are offering and if you are to compete with them, you must outdo their offer every time.
Better Customer Service
A common Amazon trait that has made it wildly popular in the e-commerce service is how they value each customer. Similarly, if you also want to start an eCommerce business, then you must first start to value each and every customer the same. While you can’t crush e-commerce giants given that they have bigger marketing budgets and bigger control of their product lines, operations and sales, it is certainly a trait you can imbibe in your company. Each satisfied customer means five people who will hear about you from him, which is great marketing for you at no actual cost.
Customer Data Is The Key to Ultimate Business Growth
A former Amazon company worker stated that Amazon has the ability to track both what people are buying as well as what they search for and can’t find.
This is a part of their success story. Companies that use customer data to better their practices are more likely to increase their sales and their gross margins than those who ignore the data.
Even if you don’t have big budgets to acquire data like e-com giants, do make absolute use of the behavioural data you already have in their database to improve customer satisfaction and customer retention.
How do eCommerce Sites Make Money?
Everyone wants an extra income to meet their needs and upkeep their standard of living. Furthermore, buying and selling goods and services via the Internet is the new trend to earn money, and the websites that make them possible are none other than Ecommerce websites. The Ecommerce websites are offering a free platform for the sellers and the buyers to get in touch with each other.
One can easily list their products on e-commerce websites and potential buyers can buy the products hassle-free sitting in any part of the world. The whole online buying and selling chain appears to be a very easy and economical process.
Although, you must have wondered as they offer free services to sellers and buyers thenhow these e-commerce websites like OLX, Quikr, Craigslist, and Gumtree make money online.
E-commerce websites, such as OLX, Quikr, and other leading sites provide an online portal to advertise your product or service offerings and find the buyer for them.
Almost all emerging e-commerce websites offer free services to users. However, they still make high-tech TV commercials and disburse lucrative salaries to their employees. How? So, let’s get the answer by analyzing the revenue-generating strategies of a few leading e-commerce websites and comparing their revenue plan with others.
Olx
OLX is one of the most popular and well-structured e-commerce websites. It offers a variety of features to its users, such as sellers can directly chat with a buyer, can easily bargain, etc. eBay is one of its competitors of OLX. OLX opts for the following methods to earn money:
Google AdSense Banner Ads
Google offers to all bloggers and website owners a very easy platform to get advertisements on their sites. Google AdSense is a platform where you can register your website and after verification, Google will show related advertisements. Hence, OLX effectively runs Google ads to reach its target audience. The earnings through ads depend, upon the number of clicks they get which is called CPC (cost per click model).
Featured Listing
OLX offers a featured listing option to the sellers. Featured links are those links that you see on the top, whereas, in a normal listing Ads are placed in OLX depending on how recently the Ad has been placed.
Featured Ads will always appear on top of the list irrespective of any factors. Ideally all such should be mentioned as featured/sponsored/ads so that users don’t get an illusion. In a featured listing, your ad will show up at the top of the search list and your ad will be shown first to the buyers whenever they search for anything on OLX. The sponsored links appear depending on the keywords targeted by the advertisers. Being at the top of the list gives advertisers a way to get more leads.
Quikr
Quikr is yet another e-commerce, which is very popular in India and somehow looks and works similarly to OLX. While the featured listing is one way to make money Quikr also follows a different route here.
They also generate revenue by generating leads for businesses. It makes a gainful amount of money for Quikr. Recently Quikr has acquired a few startups to diversify in different fields like Jobs, spas, and salons where they provide leads to these service providers.
Craigslist
Craigslist is also a popular rental listing website. It is mainly popular in the USA. But the company doesn’t earn as much revenue when compared to other websites. The company only makes revenue equal to its operation charges.
It charges $10 for a rental listing in New York and $25 for a job listing to occur in any of the major U.S. cities. If in the San Francisco area, you need to pay a $75 fee for a job to be listed.
The company is trying to consider Google AdSense and paid advertisements to generate more revenue, but it is still worried about the quality and clutter on the website due to ads, which is the main priority of the company.
There are other similar eCommerce websites present, like Gumtree and BookSellBuy. They also earn through a basic business model, that is, by providing premium membership Ads wherein the features depend on their own model, by featured ads and paid listings. So, almost every website uses paid ads to generate money.
Conclusion
Now, building an eCommerce website is the trend. It definitely takes a lot of effort and hard work, but once created and branded properly, it will surely open a whole lot of doors for growth. It is not an easy task to run an e-commerce business in India in the current age of competition. Starting an eCommerce company or an eCommerce business in India is certainly achievable if one has the focus and grit to understand the customer and the people who are in the organization.
Use your data efficiently and always make the customers happy at the end of each transaction. Comment on your favourite e-commerce site or your story of launching your own e-commerce site in the comment down below.
FAQs
What are the 3 types of e-commerce?
The three types of Ecommerce are Business-to-Business (B2B), Business-to-Consumer (B2C), and Mobile Commerce (M-Commerce).
What is the future of e-commerce?
The eCommerce industry was last valued at $46.2 bn in 2020 and is expected to rise to $188 billion by 2025, and would soar to become $350 billion by 2030.
Which is the largest e-commerce company in the world?
Amazon is the largest e-commerce company in the world.
How much does it cost to start an e-commerce business in India?
To start an e-commerce business in India you need approximately at least 5 – 10 lacs of investment.
How to start an eCommerce website, store, or eCommerce business?
Whether you want to start an eCommerce store/site or an eCommerce business, it is evident that you first need to research the industry and the market potential before starting up. Starting an eCommerce company in India would need you to:
Build a fast, comprehensive, and informative website
Create a viable business and revenue model
Decide a relevant domain name
Host the website properly
Market your website, its products, and services
Monitor the performance
What are some of the eCommerce business ideas?
Some of the best ideas if you want to create an eCommerce website or an eCommerce business in India would include grocery delivery, cosmetic and beauty products eCommerce business, refurbished or second-hand products business, fashion, jewellery, food tech and more.
What are some things that you should never forget while trying to set up an eCommerce business in India?
Setting up an eCommerce business in India is the dream of many, but only some eCommerce businesses in India actually see the light of day. Here are some of the easiest steps that you need to remember while setting up an eCommerce company in India:
Chalking out a workable business and revenue model
Branding your brand well
Registering the business
Opening a bank account and linking the business to the same
Creating and launching a simple but secure eCommerce website
Keeping the pandemic in mind, startups had to rethink their goals. With the benefits of agility came an increase in competition, which drove startups to rise rapidly. Lastly, it gave people time to think and pursue what they truly believed in. In addition to the great resignation period that gave birth to other startups, this helped to solve many problems.
Startups have been thriving despite the pandemic; the possible reasons given by the experts are mainly due to the fact that change and growth come hand in hand. Moreover, as rightly pointed out, a shaky economy is a helpful catalyst for startups’ growth and innovation. Startups are believed to be more successful in the United States than in other places. And they have been growing at a fast pace.
Best Growing Startups in the US
Here’s a list of the top 15 fastest-growing startups in the United States:
Founders: Thierry Cruanes, Marcin Zukowski, Benoit Dageville Headquarters: Bozeman, Montana, US Established: 2012 Industry: Cloud Computing
Snowflake’s Market Share & Annual Revenue
Snowflake operates as a software development company designed for the cloud, helping people mobilize the world’s data. The founders built the global force from scratch, intending to harness the power of the cloud. Further, engineering the platform that powers and provides access to the Data Cloud.
With snowflakes, platforms can access, explore, share, and unlock the true value of their data. With their data cloud managing 515 million data workloads each day and giving their customers an excellent ROI (Rate of interest). With over 1300 partners, they leverage its flexibility with integrations and collaboration with their technology partners.
Snowflake has been recognized for its workplace culture and product innovation.
Electric
Founder: Ryan Denehy Headquarters: New York, the USA Established: 2016 Industry: IT Services, IT Consulting
Electric
Electric is setting new standards for IT Solutions by giving real-time support, centralized IT management, cutting down the cost of IT spending and standardized security across devices, apps, and networks reshaping the way businesses manage their IT. The company has a creative and elite team with strong core values. The company is backed by investors such as Slack, GGV Capital, Vintage Investment Partners, Harmonic Growth Partners, and more. Electric AI has made it its mission to revolutionize the IT space by making it accessible, simple, and cost-effective to firms all around the world.
Founder: Keyvan Mohajer Headquarters: Santa Clara, California, the USA Established: 2005 Industry: Sound & Audio Recognition
Sound Hound’s Marketing Channels Distribution & Funding
Sound Hound creates custom voice assistants for companies working with their strategic partners, fulfilling their belief that every brand should have a voice and making interaction with products around the people more natural. The company has its presence across the globe to create a world with more conversations with its innovative technology. It’s a leading innovator in conversational intelligence that helps people extend their brands. Globally trusted by companies like Hyundai, Mercedes-Benz, Pandora, Deutsche Telekom, Snap, VIZIO, KIA, and Stellaris.
People.ai
Founder: Oleg Rogynskyy Headquarters: Redwood City, California, the USA Established: 2016 Industry: Software Development
People.ai
People.ai combines Artificial Intelligence (AI) and real-world expertise to help their customers generate more revenue. The firm values its clients, end-to-end ownership, having a single person in charge of a project, making decisions based on data using technology, and tackling problems with time and teamwork. Firmly believing that every issue has a solution. Companies including AppDynamics, DataRobot, Ivanti, Okta, and Zoom depend upon software platforms to unlock their full potential. The company is backed by Y Combinator and Silicon Valley’s top investors.
Otter.ai
Founders: Sam Liang Headquarters: Mountain View, California, the USA Established: 2016 Industry: Transcription Software
Otter.ai
Otter.ai is designed to make productivity easier with its recording and transcription service. Helping students, businesses, and people create automatic notes for meetings, interviews, work, classes, and more. One can share the meeting summary with their teammates to keep everyone in sync. Making the note-taking process more engaging with AI. You can highlight, add pictures, edit and revisit the transcribed notes by scrolling up. With Otter sharing and collaborating with others, transcribing in real-time with high accuracy is made super easy with the meeting gems panel to capture all your highlights from the meetings.
Whatnot
Founders: Grant LaFontaine and Logan Head Headquarters: Los Angeles, California, the USA Established: 2019 Industry: Live Market, Information Services (B2C)
Whatnot’s Demographics & Marketing Channels Distribution
Whatnot gives you the experience of live shopping. The community marketplace of collectors supports conducting live auctions or hosting a card break. The products sold on the platform are verified to make sure you get what you are looking for. Hand-verification of expensive items to avoid scams and ensure safety. Its catalogue has a range of authentic products like Funko Pops, Pokémon Cards, Sports Cards, FiigPins, Funko Sodas, and many more.
Daring
Founder: Ross Mackay Headquarters: Los Angeles, California, US Established: 2018 Industry: Food and Beverage
Daring
With one mission: to make chicken better for people and the planet, Daring foods are packed high in protein and are 100% plant-based made with non-GMO plants and low calories and have perfect flavour and texture. Their website has over 480 positive reviews that confirm the goodness the company stands for. The company offers breaded, cajun, lemon, and herb plant chicken pieces as well. The startup has caught the attention of the world and urged people to turn to plant-based chicken and has been featured on BuzzFeed, Bloomberg, Thrillist, Fast Company, The Business Wire, and more.
Founders: Eric Schiermeyer, Wright Thurston, Michael McCarthy Headquarters: The Interwebs, US Established: 2018 Industry: Computer Gaming
Gala Games
Unlike other blockchain games, Gala Games is a Free to play blockchain game with simple mechanics for all players in a blockchain game. When players win NFT collectables, they are able to trade them with another player or use them within the game. Gives control to gamers with its decentralized Gala Games ecosystem with more than 16,000 player-run nodes. A vibrant community exists on the Discord platform, where players can post their suggestions and give power to those in the Gala Games network based on a player-owned node ecosystem. The most expensive NFT sold on the platform is worth 3 million and has an active monthly user base of about 1.3 million.
Ellevest
Founders: Sallie Krawcheck, Charlie Kroll Headquarters: New York, the US Established: 2018 Industry: Finance
Ellevest
With the main aim of “by women, for women” Ellevest startup is a financial company helping women achieve their financial goals in life. The company was set up in 2014, having a team of industry experts with deep passion and extensive working experience for the Wall Street Journal. With almost forty sales force ventures and AME Cloud Ventures being some notable investors, it has raised almost 53 million as of April 2022. Now, their community consists of more than 3 million people. Creating an engaging experience that makes investing and achieving financing goals for women easier, closing the gender gap.
Goodleap
Founder: Hayes Barnard Headquarters: Roseville, California, the US Established: 2003 Industry: Financial Software, Consumer Finance
Goodleap
Goodleap is a go-to-go place for sustainable home financing solutions for people looking to upgrade their homes in a simple and fast way. Founded by Hayes Barnard, the startup is making it easy to lead a sustainable lifestyle with a wide range of sustainable products and cutting-edge technology. Specializing in clean energy financing, solar loans, fintech, and mortgage loans. Helping build a valuable bond with their customers as well as their partners.
Instacart
Founders: Apoorva Mehta, Max Mullen, Brandon Leonard Headquarters: San Fransico, California, US Established: 2012 Industry: Retail
Instacart
Instacart offers safe contactless and free delivery options on the same day. With a hassle-free way to order essentials and other household items with same-day delivery across the USA. Instacart was founded in the early 2010s by Apoorva Mehta, Max Mullen and Brandon Leonardo later launched in 2012. Introducing a revolutionary model for online grocery shopping, transforming the way people shop. Giving their retail merchants a complete suite of enterprise-grade services and technology to perform all their tasks. Apart from this, the startup is also committed to serving the community by partnering with different non-profits with the aim of giving all people the food they love.
Devoted Health
Founders: Ed Park and Todd Park Headquarters: Waltham, Massachusetts, US Established: 2017 Industry: Health Care
Devoted Health
The team of Devoted Health is on hand to get you the seamless care you deserve. The startup has raised more than 2 billion and has 26 investors that include General Catalyst and GIC. Offering Medicare Advantage plans, building better relationships and support. With focusing on quality over quantity and world-class technology. Partnered with trusted doctors, hospitals, pharmacies, and other providers, to make sure that you get the right care at the right time. The core product is providing better healthcare facilities for everyone.
2021 proved to be a great year for many startups and with the advancement and growing needs of technology, there is no doubt in the fact that 2022 is going to be an even more flourishing year for the startup industry.
Thus, the above-mentioned are the fastest-growing startups in the USA that are gaining popularity in various fields like software, media, gaming, food services, and more. These startups are making wonders in their respective fields and are sure to make a huge name for themselves this year.
FAQs
Which country has the most startups in the world?
The USA has the most startups in the world, totalling a massive 71,153. India is second on the list with only 13,125 startups.
How many Unicorns are there in the USA?
As of March 31, 2022, there were 607 active unicorns in the USA.
How many new companies have been added to the unicorn list in the USA this year?
Since the start of 2022, 75 companies have debuted on the unicorn list in the USA.
Purchasing and starting your own business is a big undertaking. With creative ideas and a pumping workforce, it is necessary to have the legal formalities taken care of to give your business a smooth start! Let us have a detailed look at the legal formalities required in order to start a business.
Starting a business comes with great responsibilities to work on. The first step in starting a business is to get its paperwork done. It is not a myth that establishing a startup requires a number of legal procedures to be done in order to have a legal business. Most entrepreneurs might feel stressed at this stage. Hence, we have simplified the legal procedures one needs to follow while starting a business.
Every business has its own set of rules and requirements. Depending on your domain, it is the duty of the owner to research all the legal requirements and take care of them beforehand. You can take the help of legal attorneys, but it is necessary to figure these things out from the day of formation.
Form a Limited Liability Company (LLC) Or a Corporation
The first step in getting started with the real procedures for the startup is to make a decision for choosing a suitable business structure. Basically, there are two options to consider from. Limited Liability Company and corporation are the two choices made available at the start with both the options carrying their own pros and cons.
The best option in selecting LLC is that it will save you from your personal liability attack. For a simple consideration, when a startup fails and a company goes bankrupt, the personal assets of the person like a car and home will not be affected by it in LLC. One can also file their business revenue as a part of income tax. But they will also be required to pay self-employment tax on the contrary.
The corporation is also termed a C corporation. It is an expensive method to go for and is also quite hectic to create it. Basically, a corporation is a legal entity apart from its owner or owners. And if to be considered, they offer the best personal liability protection.
Agreement for the Shareholders
A Shareholder’s Agreement must be in place whenever your firm is ready to move forward with private financing from angel investors or from venture capital firms, as the case may be.
It is one of the most important startup documents since it determines the shareholders’ rights and obligations, as well as their ability to execute such rights. These contracts are extremely important since they outline the connection between a firm’s shareholders and are crucial if a co-founder decides to leave the company.
A set of rules is always the right place to start if you are starting out a company of your own. Bylaws are these sets of regulations that ensure the smooth functioning of a business both internally and externally. These laws are not only imposed on employees but they also provide a voice for their thoughts and opinions.
These rules are made very meticulously, keeping in mind the requirements of employees at all levels of the corporation. They also specify the election rights to decide the leadership of a company, along with other aspects that can severely impact the internal workings of an organization.
Assignment of Intellectual Property Agreements
Intellectual Property (IP) is one of the most important aspects of any company, big or small. Companies can go to great lengths in order to protect their intellectual property. Failing to do so can lead to losing the value of a startup by the infringement.
There are two different forms of Intellectual Property agreements to consider. A shareholder and a startup enter into a technological assignment agreement. The shareholder assigns his or her intellectual property to the corporation in this case. These are the intellectual properties of individuals prior to the company’s creation.
When a company’s employees create an innovative product or service, invention assignment agreements are important. Invention Assignment Agreements ensure that, in this scenario, the corporation owns all rights to the IP portfolio.
An Intellectual Property Assignment Agreement could be one of the most important legal contracts for your startup, determining whether or not you can get the funding you need to expand. This is especially true for technology companies, as investors and venture capital organizations frequently assess the worth of your IP portfolio.
Trademark
Trademark
Trademarks can be a word, phrases,s or symbols. The prime purpose of a trademark is to differentiate between similar products of different companies. Trademarks are associated with the protection of the company’s intellectual property.
Trademarks are the best method to differentiate and identify your company from others. Registering for a Trademark is equally important as gaining a business license. One can get their trademark registration done by visiting the trademark registration portal or physically visiting the trademark registry offices.
Trademark strengthens and protects the business from any illegal competition or imitation. The disadvantage of the trademark registration process is that when you register a trademark with the trademark office, everyone with a similar-sounding name is notified and given the opportunity to object, so you may find that people who would not have been interested in what you’re doing before suddenly become interested in a specific trademark.
A Non Disclosure Agreement is a necessity for every business deal. It is the first thing you should take care of before finalizing any deals. This NDA not only safeguards your interests but also makes sure that the other party’s privacy is also under safety. These documents are necessary to make sure that no kind of breach can occur midway and that the interests of either party remain unharmed.
Before you go ahead and start discussing the terms and conditions of a deal with any third party, it is always advised to go for an NDA first. All terms of the deal should be stated clearly in this document. In case of any breach or dispute, there should be clear terms for termination present, that would benefit both parties to close the deal without any hassle.
Articles of Incorporation/Association
Before establishing a business it is necessary to have a clear business plan. Most amateur entrepreneurs make similar mistakes that cost them heavily later on. Going for sole ownership of a company is not as easy as it sounds. There are huge tax bills that ultimately fall upon the shoulders of the sole proprietor.
Most businesses that run successfully over long periods tend to have multiple shareholders. Not filing tax returns on time, with the Revenue Service can also result in the owner losing his personal property. It is smart to try to avoid heavy taxes and bills during the starting period of any business.
This can severely hinder growth. However, having a number of shareholders, all responsible for the big decisions can help a company run smoothly without financial troubles.
Get the Required Permits and Licenses
Small Business Administration Website
Another mandatory step in legal formality is to get a business license and permits from the federal and state government in order to start a startup. One can prefer to look for a different license with respect to their field of work and the area of development.
A common list of federal business licenses is given by the Small business administration. One needs to apply for an applicable business license and permit for their desired area. Registering the company with a business license is legal evidence of being approved by the local government. One needs to pay a certain amount of fees in order to avail of their business license.
This amount can vary for different businesses and can also be affected by the place of the startup. All these factors are majorly decided at the state government level.
The above graph shows major challenges faced by entrepreneurs while establishing a startup
Insurance Can Help You Protect Your Company
When the personal liability protections provided by your specific business structure are insufficient, business insurance can help. Not only can business insurance cover your personal assets, but it can also safeguard your company’s assets.
The prime two types of insurance mandated by law are unemployment and disability insurance. It’s also a smart idea to get business insurance to safeguard your company from other threats. The following are some examples of common company insurance policies:
a)General liability insurance: It safeguards your company from a variety of financial losses, such as property damage, injury, medical concerns, and litigation settlements or judgments.
b)Insurance for product liability: If your company sells products, this insurance covers you in the event that one of them is defective and causes a consumer injury.
c) Commercial property insurance: It protects your firm from property loss or damage caused by natural disasters, accidents, or vandalism.
Agreement of the Founders
In the case of startups with numerous founders or founding parties, signing an agreement that describes the working coordination of all parties and forms outlines to establish limits becomes important. It’s to keep any future confrontations at bay. To avoid any disagreements among the startup’s founding members, all co-founders should sign a complete operating agreement.
These startup legal formalities are not a guarantee of success in your business. Nonetheless, proof of your commitment to bringing your startup to new heights with good planning.
For a brighter future as a corporation, it is critical to put some effort into getting the legal formalities out of the way. The above article provides deep insight into the procedures one needs to perform legally in order to get their startup ready for a long race.
FAQs
Does a startup need to be registered?
Yes, registering a startup is one of the most essential steps to be followed while starting s startup. A startup needs to be registered with the respective government body and should also have a legally recognizable status.
What are the legal documents needed before starting a startup in India?
There is a number of legal documents that are needed before starting a startup in India. Some of them are Trademark registration, a nondisclosure agreement, shareholders agreement, founders agreement, and some other documents as per need.
What is the founder’s agreement?
A founders agreement is an agreement done between all the founders of the startup. It is done in order to have clarity of ownership, tasks, disputes, terms to apply in certain situations, etc.
There is hardly anyone in India, who doesn’t know Ratan Tata. Ratan Tata is a well-known and one of the most respected and influential businessmen in the country. He was the former chairman of Tata Sons. He is known for his simple lifestyle and has contributed to the growth of TaTa Group immensely.
From the moment Ratan Tata resigned as the chairman of Tata groups on his 75th birthday, he has been looking out for interesting start-ups to invest in. Ratan Tata has always been a philanthropist and has provided innumerable contributions to various charities throughout his lifetime.
With his new look into the developing startup culture in India, various small start-ups have enquired about how to seek Ratan Tata for investment opportunities. Hundreds of small companies with innovative ideas seek the assistance of the Tata trust for a chance to develop their idea into full-fledged companies. In this article, we will talk about how to raise funds from Ratan Tata. So, let’s take a look at them.
Why Do Startups Look for the Support of Ratan Tata?
The basic reason for any startup to look for big investors is to source funds for their day-to-day activities and also to offer scalability for their products or services. But with the former chairman of Tata groups backing a company for investment, there is something more than just money that the company gets.
The trust and confidence of the people and other investors is the major gain the company gets when it is backed by Tata groups. This provides the company with a unique endorsement that sets it apart from its peers in the same field. It also gives enough traction and publicity for the business without any spending on the promotion of its products or services.
The last and most important part of it is the experience that one gets from the suggestions provided by the former chairman of Tata groups. As it rubs off, the company can look for guidance from the industry giant which gives them a huge leap in business.
There are a few ways that can be used to gain the attention of Ratan Tata regarding investment opportunities. Some of the classical ways are as follows:
1. The easiest way to connect with Ratan Tata would be to speak with someone from Tata Trust that is in charge of dealing with requests for investments. This way can take a long time to get a reply and the process is tedious.
2. The next way would be to use a formally edited e-mail stating the purpose of the mail. It is also necessary to ensure that the idea or request can be clearly understood so that it can be forwarded to Ratan Tata himself if it is worth his time. Some of the e-mail addresses that can be corresponded to are srtt- @tatatrusts.org, rntata@tata.com, rnt@tata.com, or talktous@tatatrusts.org.
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3. Alternatively, contacting Venkatramanan from Tata Trust would give a chance to meet Ratan Tata for presenting the idea. This idea is better and also more professional as all proposals are directed to him before shortlisting the ideas that are worth mentioning to Ratan Tata.
4. The best way to get in touch with the former Tata group chairman would be to write a letter explaining the idea and reasons for seeking investment. Talking about the risks and the opportunities that the idea provides will provide an edge over the thousands of ideas that are directed at him for investment. Since Ratan Tata is a simplistic, down-to-earth person, writing a letter also appeals to the approach. He is one of the popular Angel investors for a reason.
Industries That Have Received Investment From Tata Trusts
Few Companies funded by Ratan Tata
Tata groups have never been confined to one sector or industry under the guidance of Ratan Tata as chairman of the group. The same is followed by the Indian industry giant when he invests in startups and companies. The investment portfolio is never limited to just the tech industry. He looks into ideas that improve the standard of life or provide services that lead to new solutions for existing problems.
Let us take a look at the different companies in each industry that have received backing from the former chairman of Tata groups.
E-commerce
The e-commerce industry is the fastest growing technology-based industry since 2005. The business ideas that received backing from Mr Tata in the e-commerce sector are Snapdeal, Urban Ladder, CarDekho, Paytm, Bluestone, Firstcry, and Zivame. All of these companies were backed by Tata trusts between 2014 and 2016.
Digital Payments
Payment gateways are an important part of any online business nowadays. So, innovative ideas in this field were also backed by Tata groups since 2015. The US-based digital payment transfer company Abra and the Indian cashback and coupon site Cashkaro were the 2 companies supported by Tata in this sector.
On-Demand services
The use of On-demand services has become extensive and is growing more each day due to the busy work schedules of people. Ratan Tata has not left a stone unturned even in this sector. Popular companies like Ola and UrbanClap were once start-ups that were backed by Ratan Tata. Holachef is also a start-up that was supported by Tata Trust way back in 2015 when food-tech startups were emerging in the Indian Market.
Electricals
The Coimbatore-based company Ampere received funding from Tata Trusts in 2015. The company manufactures e-cycles, e-scooters, and special purpose waste management vehicles for the government. Various companies in other sectors and industries like Mobile Tech, Media, Healthcare, etc. also received funding and investment opportunities from the Tata Group.
Conclusion
The most important factor that is needed for the survival of a startup is funds. One can look for investors to invest in their business. Ratan Tata with enthusiasm invested in startups and small businesses that look promising. Through Ratan Tata, you not only get funds for your startups but also it brings a good reputation and somewhat creates a hood image of your company.
FAQs
Who is Ratan Tata?
Ratan Tata is an Indian Businessman and was the former chairman of Tata Sons.
Does Ratan Tata invest on Startups?
Ratan has invested in over 3o startups till now and is known for his generosity.
The mindset of the people has changed from, over the decade, as now people want to be the boss of their own and don’t want to restrict themselves in the walls of 9-to-5 jobs. This decade brought a hit of entrepreneurs and their startups with amazing ideas and execution, that has helped people and has changed the ways, for people living their lives.
15 Best Startups of the Decade (2010-2020)
Here are the 15 best startups in 2010s which have changed the market of the Indian entrepreneurship-
The idea of ordering food online at the start of the decade was an idea that most of the people didn’t think upon but soon the thought changed with the arrival of food-delivering apps like Swiggy.
Launched in 2014, Swiggy is known as the largest and most valuable food ordering and delivering the platform in India, currently operating in more than 100 cities across India. Online food delivery platform, Swiggy, has launched its third series of television commercials and digital campaign, that are reflective of new-age India and its changing culinary culture. Swiggy tagline is “Swiggy karo, phir jo chahe Karo!”
Paytm
Founded: 2019
Paytm Logo | Best Startups of the Decade
Go cashless has been the motto of 2019 and the public is taking it quite effectively. The wave of online transactions hit India in 2010 when Paytm was launched. PAYTM is an e-commerce system, based in Noida, Uttar Pradesh. It is available in 11 Indian languages and offers online use-cases as mobile recharges, utility, bill, payments, travel, movies, and events booking, in-store payments at grocery stores, fruits and vegetable shops, restaurants, parking, tolls, pharmacies, etc.
Oyo Rooms
Founded: 2013
OYO Logo | Best Startups of the Decade
Whenever it comes to book rooms for a vacation, weekend or a party, the one-stop shop is OYO. Founded in 2013, by Ritesh Agarwal, OYO Rooms is an Indian hotel chain and fastest-growing hospitality chain of leased and franchised hotels, homes and living spaces at cheap prices. It is currently UAE, Nepal, China, Brazil, UK, Philippines, Arabia, Sri Lanka, etc.
Finding bus seats can be quite hectic and without a good seat, going to a long ride can be hectic. So, to save the hassle, one can always go for redbus. An online app company, the user can look up to for buses and book tickets accordingly and get confirmed tickets, without struggling for tickets on the way. Redbus was founded by Phanindra Sama, Charan Padmaraju and Sudhakar Pasupunuri in 2006, however, it became famous after 2010 when Indian people were getting introduced to mobile internet.
Ola
Founded: 2010
Ola Logo | Best Startups of the Decade
Traveling was made much easier and better by OLA, which was founded in 2010 by Bhavish Agarwal. Now, it’s one of the largest cab services in India, with over 250,000 cabs and rickshaws in the app running over 85 Indian cities. The company is expanding its reach everyday. As of 2020, it has expanded its services to UK, Australia, and New Zealand.
Zivame
Founded: 2011
Zivame Logo | Best Startups of the Decade
Zivame is an e-retail lingerie brand for women, founded in 2011 by Richa Kar, to empower women to buy lingerie freely without feeling embarrassed as of in normal offline shops, which is generally filled by men. Meaning of Zivame is ‘radiant me’. It has also been known for showing diversity as it has no age -limit. It sells shapewear, sleepwear, and activewear through both online and offline stores.
Who would have thought in 2000s that we would be ordering groceries online? This thought also came into fruition in 2009 by Abhinav Choudhari, Hari Menon and Vipul Parekh. Now, BigBasket is an online food and grocery store that delivers personal and household needs right to customer’s doorstep. As of 2020, BigBasket is available in almost all the cities of India. Shah Rukh Khan is brand ambassador of BigBasket and bigbasket tagline is “I’m bigbasketeer, Are you?”
Byju’s
Founded: 2011
Bigbasket Logo | Best Startups of the Decade
The Bangalore based educational technology platform Byju’s is an online tutoring and coaching firm that was started in the year 2011 and runs on a freemium model. The main aim of Byju’s is to provide coaching through online video lectures for students of class 1 to class 12 and also for people who prepare for competitive exams like IIT – JEE, NEET, CAT, GRE, and GMAT.
Byjus- the Learning app was launched in the year 2015 by Byju Raveendran and since then it has been a huge success. It is used by more than 15 million students all over the world and has 900000 paid subscribers. The app helps the students to learn on their own rather than the traditional culture of spoon-feeding.
Firstcry
Founded: 2010
Firstcry Logo | Best Startups of the Decade
It is an overwhelming feeling for the new parents to buy all the goods for the baby or the newborn. Firstcry was started to fulfill that demand in 2010, by Supam Maheswari, when he couldn’t find quality toys for his new-born daughter. Now, firstcry sells baby products like diapers, cribs, clothes, nursery items, etc. It has become a popular website for buying baby products from online and offline stores.
Freshdesk
Founded: 2010
Freshdesk Logo | Best Startups of the Decade
Cloud-based software is the need of every brand to store all the data of the consumer. But back in the starting days of the decade, there were very few companies dealing with cloud-based software.
One of the most popular company was Freshdesk ( now known as Freshworks), which was launched in 2010. It was started by former ZOHO employees Girish Mathrubootham and Shanmugam Krishnasamy, who teamed up to create better software to help enterprises do after-sales support more effectively. The founder Girish Mathrubootham, is also a mentor and a key figure in the Chennai startup ecosystem.
Freshdesk’s customers in India include Saavn, Decathlon, Grofers, Lenskart, Oyo Rooms, Byju’s, and Goibibo.
Limeroad
Founded: 2012
Limeroad Logo | Best Startups of the Decade
Fashion has always found its way in women’s shelf, one of India’s most popular online boutique is Limeroad. It was founded in 2012 by Suchi Mukherjee and Ankush Mehra. It is known for being specialized in clothing and accessories for men, women or kids. The online store also allows the users to create their look on a virtual scrapbook by using the brand’s products and also allows users to earn from the scrapbook they create and then, they can use the points on the purchase, at the time of checkout.
Shopclues
Founded: 2011
Shopclues Logo | Best Startups of the Decade
Another big brand which started in 2011, was Shopclues. It was founded Sanjay Sethi, along with former wall street analyst Sandeep Agarwal. Both the founders returned from California, decided to go into a new venture. The company has over 6 lakh merchants and 2.8 crore products on its platform serving over 32,000 pin codes across the country. Although, the company didn’t do well in the market, Sandeep Agarwal did inspire many youngsters to get into entrepreneurship through his journey.
Buying furniture online? That was a dream of people in 2000s! But that dream was completed by Ambareesh Murty in 2012. He teamed up with Ashish Shah, one of the former head of eBay Motors in India and the Philippines and launched Pepperfry. It is a dealer of the best quality furniture and delivers it at the doorstep of the buyer. It has soon gained immense popularity in the country.
Snapdeal
Founded: 2010
Snapdeal Logo | Best Startups of the Decade
With the tagline of “unbox Zindagi’, Snapdeal managed to be a home favorite for varieties of goods ranging from home, fashion, electricals, sports, etc. It sells over 3 crores (30 million) products across 800+ diverse categories from over 1,25,000 regional, national and international brands and retailers and a reach of 6,000 towns and cities across the country. Although this ecommerce venture didn’t do as good as others like Flipkart or Amazon, it was still a big success in the early years of this decade.
Hike
Founded: 2012
Hike Logo | Best Startups of the Decade
Once a very popular youth app for messaging, Hike messenger has left an interesting mark on the market. It was founded by Kavin Bharti Mittal. The hike is a cross-platform instant messaging, voice over IP, social media and peer to peer file sharing app, launched on 12 December 2012.
Conclusion
These startups are known to be change force in the world of startups in the decade and are known to inspire many other startups. 2010s is probably the most revolutionary decade in the entrepreneurship world. However, we hope this decade brings more innovation to lives.
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