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ETtech Top 5: Investors woo B2B fintech startups, Razorpay & Bounce raise funds and more – ETtech.com


ETtech Top 5: Investors woo B2B fintech startups, Razorpay & Bounce raise funds and more
B2B Fintech startups attract investor attention

What’s the news?

Financial technology startups catering to the requirements of enterprises are increasingly grabbing investor attention. Multiple companies have managed to snap large-sized investments in the business-to-business financial services space over the last two years and few are looking to raise fresh rounds in the current financial year.

Why does it matter?

The enterprise solutions business is a massive opportunity for fintech startups, since there is enough scope for disruption and digitization. Venture Capital investors who had started with big bang investments in the consumer internet space like mobile wallets, e-commerce, personal loans are now shifting focus to more B2B companies like corporate payments, payroll management, SME lending, treasury management. These companies take time to scale, hence they grabbed attention later. But unlike consumer-facing companies they scale slowly but steadily, success rates are higher and the road to profitability is visible.

On the flip side, MSME in India is highly fragmented, far less digitized and also operate beyond the formal economy in many cases. If investors can understand the business, and fund them well, they will be able to grab new clients create unique businesses in niche areas and who knows the next unicorn might be hiding here only. Udaan, Freshworks, Zoho all have managed to create a space for themselves in the B2B enterprise business. Will we see the fourth name from the fintech space? Will it happen soon? Perhaps it is still a couple of years away but the journey has begun. Read more.

ETtech Top 5: Investors woo B2B fintech startups, Razorpay & Bounce raise funds and more
No multi-brand retailing by foreign e-comm firms

What’s the news?

Commerce and industry minister Piyush Goyal has said the government would not allow multi-brand retail trade by foreign e-commerce companies and that they could only be agnostic platforms.

What’s the significance?

In December last year, the Department for Promotion of Industry and Internal Trade (DPIIT) had tightened the foreign direct investment (FDI) rules for e-commerce companies through a Press Note. It barred marketplaces from selling products from sellers in which they have an equity interest and entering into deals with brands to sell product exclusively on their platforms. These rules had a direct bearing on Amazon and Flipkart’s operations in the country.

This development comes ahead of the G-20 Leaders Summit in Japan, where several countries are keen to negotiate on global rules in the e-commerce sector. It also comes in the wake of a draft policy on e-commerce in which the government has proposed regulating cross-border data flows, locating computing facilities within the country to ensure job creation and setting up a dedicated data authority for issues related to sharing of community data. Read more.

ETtech Top 5: Investors woo B2B fintech startups, Razorpay & Bounce raise funds and more
Razorpay gets $75 million

What’s the news?

Razorpay has raised $75 million in its latest round of equity financing, led by financial technology-focused investment firm Ribbit Capital, which will see the Bengaluru-based business-to-business payment solutions company double down on its new business lines.

What’s the plan?

Razorpay plans to use the proceeds on strengthening its two new business lines – neo-banking platform Razorpay X and its lending arm Razorpay Credit.

Razorpay X is an expanded product suite that accepts payments, manages cash flows, reconciles transactions and provides flexible payouts. It has about 1,500 merchants on board in the beta phase and is expected to go live in the next three months. Under Razorpay credit, the company has seen an annual disbursal rate of $100 million.

Razorpay CEO Harshil Mathur said they expect the company’s non-payment gateway businesses to contribute an estimated 40% to its overall revenue over the next two years. Read more.

ETtech Top 5: Investors woo B2B fintech startups, Razorpay & Bounce raise funds and more
WhatsApp message fingerprinting request

What’s the news?

India has asked WhatsApp to digitally fingerprint every message sent on its platform without breaking its encryption, as it seeks to ensure traceability of all content shared on the Facebook-owned messaging application.

WhatsApp should be able to identify where a message originated and how many people have read and forwarded it without having to read the message, senior government officials told ET.

Why is this important?

The government has been insistent in its demand for traceability of WhatsApp messages after misinformation and rumours around child kidnappings on the platform led to a spate of lynchings across India last year. Law enforcement officials have long complained that the metadata (name, display image and number of people on chat groups) provided by WhatsApp is not sufficient to apprehend perpetrators.

WhatsApp, however, has maintained that its end-to-end encryption does not allow for traceability. That said, Draft amendments to intermediary guidelines of the Information Technology Act released in December 2018 require all internet platforms to ensure traceability of the origin of all content shared through them. Read more.

ETtech Top 5: Investors woo B2B fintech startups, Razorpay & Bounce raise funds and more
Bounce lands $72 million

What’s the news?

Scooter rental startup Bounce has raised $72 million in fresh funding, led by Singapore-based B Capital Group and New York-based hedge fund Falcon Edge Capital, valuing the company at a little over $200 million.

What’s next?

Bounce co-founder Vivekananda HR said the capital raised would largely be put behind R&D for internet-of-things-based innovations and to hire people to build these technologies. Bounce and other scooter sharing startups are currently slugging it out in a war for niche talent due to a limited pool in the country.

The sector which has emerged as an alternative for last-mile mobility especially in cities like Bengaluru, is also ripe for a new regulatory framework as these startups chart out ambitious expansion plans. Bounce itself plans to foray into 10 new cities over the coming months and add as many as 1,00,000 scooters in the next 12-18 months. Read more.



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