Also in this letter:
■ Swiss Re to invest Rs 920 crore in Paytm insurance biz
■ Snap hits 100 million monthly users in India
■ IPO won’t change us, says Policybazaar cofounder
Unicorns hired 1.5 lakh executives in last three quarters, study says
Indian startup unicorns are on an unprecedented hiring spree, executives of various firms told us. This was borne out by two studies.
The numbers: According to a study by EMA Partners in September, India has 70 unicorns which have hired almost 1.5 lakh executives in the past three quarters. They are expected to hire another 1.2 lakh over the next two to three quarters. Another study, by a recruitment and staffing firm CIEL HR Services, puts this number at 1.6 lakh.
Tech focus: A large proportion of the hiring, up to 70%, will be for technology roles. Full stack developers, data scientists, solution architects and principal engineers are among those in high demand. Here’s what three startup unicorns are doing on the hiring front, according to their executives:
- CRED has hired 350 people since the start of the pandemic and currently has more than 500 employees. It plans to hire another 300 people in the coming months, said Amanpreet Kaur, its head of talent and culture.
- Vedantu is looking to hire 1,000 people over the coming months as it plans to debut in international markets in the next 12-15 months.
- BrowserStack, another unicorn, plans to hire about 700 people in the coming months. It plans to double its headcount to about 1,600 in the next 12 to 18 months. It is looking at hiring for positions in sales, product management, marketing, design and finance.
In quotes: “About 45% of these unicorns are on a hiring spree, expanding quickly. Their combined intent is to hire about 160,000 people in 12 months from July 2021,” CIEL HR Services CEO Aditya Misra told us.
Asish Singh, chief HR officer of Meesho, said, “We know that the next wave of growth will only come if we rapidly innovate and increase employee strength, and are hiring more aggressively than ever before.” The company currently has 1,200 full-time employees.
Swiss Re to invest Rs 920 crore in Paytm’s insurance unit
IPO-bound Paytm said today that Zurich-based reinsurance giant Swiss Re will invest Rs 920 crore in its insurance unit, Paytm Insuretech Pvt Ltd, for a 23% stake. We had first reported about Swiss Re’s investment in Paytm’s insurance unit on October 5.
Details: Swiss Re will invest around Rs 397 crore upfront and the rest in tranches, subject to Paytm Insuretech fulfilling certain milestones. The deal is subject to regulatory approval.
“It is an important milestone in our financial services journey of taking general insurance products to the masses. We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market,” said Vijay Shekhar Sharma, chairman of Paytm’s parent firm, One 97 Communications.
Why the alliance? Paytm has been seeking a JV partner for its insurance business as that could make it easier to obtain regulatory clearance for its Rs 568 crore purchase of general insurance company Raheja QBE in July 2020, which is still awaiting approval.
We had reported on July 29 that Paytm was looking at a JV partner for its general insurance business as the insurance regulator would prefer a more diversified ownership structure for a general insurance entity. Raheja QBE, which primarily focuses on corporate covers such as project liabilities, had entered the retail insurance space with auto and health products in February.
Paytm already has an insurance broking licence through a wholly-owned subsidiary, Paytm Insurance Broking. But according to India’s rules, foreign direct investment in insurance is limited at 74%, while overseas investors can own 100% of broking business. Paytm is treated as a foreign company by financial regulators as a majority of its investors are foreign.
IPO bump: We reported earlier today that Paytm has finalised plans to increase its IPO size to around Rs 18,300 crore with a Rs 10,000 crore offer-for-sale component.
ETtech Done deals
■ OSlash, an enterprise software startup, has raised $2.5 million in a seed funding round led by Accel Partners. The fundraising also saw the participation of angel investors, including Dylan Field (CEO and founder of Figma); Akshay Kothari (COO of Notion), Girish Mathrubootham (CEO of Freshworks Inc). Top executives from Quora, Stripe, and Airtable also pitched in.
■ Direct to consumer baby products brand R for Rabbit has raised Rs 40 crore from private equity firm Xponentia Capital Partners. The funds will be used to strengthen the brand, scale distribution and operations in the domestic market, for enhancing the existing product portfolio and for introducing new categories of products.
■ Instoried, which offers artificial intelligence-enabled pre-publication sentiment analysis tools, has raised $8 million in a funding round led by Pritt Investment Partners and 9 Unicorns. The company has now raised a total of $10 million. The latest fundraising also saw the participation of Mumbai Angels, Venture Catalysts Angel Fund, SOSV and a few high networth individuals.
Snap hits 100 million monthly users in India
Evan Spiegel, cofounder and CEO, Snap
Snap Inc., which houses Snapchat, has hit 100 million monthly users in India for the first time, the US company announced today.
Quote: “We have made significant investments to localise the Snapchat experience for the Indian community. We have added culturally relevant content, developed highly active and creative local creator communities, and invested in local products, marketing initiatives, and language support,” said Evan Spiegel, cofounder and CEO, Snap.
This has also resulted in an increase of net new advertisers by 70% in 2020 in India, the Santa Monica, California-based social media major said.
Focus on commerce: After hitting the new milestone, Snap is doubling down on commerce in India and has inked several partnerships with leading platforms like Flipkart, Zomato and others.
Snap said it has entered into a strategic partnership with ecommerce marketplace Flipkart, to develop innovative AR (augmented reality) experiences for online shopping.
- “This will be an India-first ecommerce partnership for Snap, and Snap’s camera kit will be an integral part of Flipkart’s “camera storefront”. Through this partnership, shoppers will be able to begin their shopping and ecommerce engagement journey through Snapchat AR, making the process easy from the comfort of their homes,” the company said.
Snap is also enabling virtual try-ons for Snapchatters with platforms like Sugar Cosmetics and MyGlamm besides inking a partnership with Zomato as well.
Big Tech earnings: Quarterly revenues of tech giants such as Microsoft and Google parent Alphabet soared beyond expectations.
Microsoft Corp beat Wall Street expectations for quarterly revenue, as demand soared for the software giant’s cloud-based services from businesses adopting hybrid work models.
The company’s revenue rose to $45.32 billion in the first quarter ended September 30, from $37.15 billion a year earlier. Analysts on average had expected revenue of about $43.97 billion, according to Refinitiv data.
Alphabet reported higher than expected third-quarter ad sales. Google advertising revenue rose 41% to $53.1 billion during the third quarter. Alphabet’s overall sales jumped to $65.1 billion, above the average estimate of $63.3 billion among analysts tracked by Refinitiv.
Quarterly profit was $18.936 billion or $27.99 per share, beating expectations of $24.08 per share and marking a third-straight quarter of record profit.
Also Read: Sundar Pichai sees JioPhone Next as crucial to Google India business
The trend continued at Twitter, which reported its quarterly revenue grew 37% and avoided the brunt of Apple Inc privacy changes on advertising, which hobbled its rivals. Total revenue, which also includes money that Twitter earns from data licensing, was $1.28 billion.
Advertising revenue was $1.14 billion during the quarter ended September 30, in line with consensus estimates.
Apple and Amazon, which report their earnings later tonight, are expected to continue the positive trend.
Tweet of the day
Policybazaar parent to continue chasing long-term growth after IPO
PB Fintech founders (from left) Yashish Dahiya and Alok Bansal.
PB Fintech, the IPO-bound parent company of online marketplaces Policybazaar and Paisabazaar, will continue to chase growth in the long term over short-term profits even after listing on the stock exchanges, senior company officials told us.
Yashish Dahiya, cofounder and chairman of PB Fintech, said during a press conference ahead of the IPO launch that being listed won’t change the company’s operating style, and that growth, efficiency and experiments will go hand-in-hand.
Quote: “Even in our conversations with prospective anchor investors, we have communicated that we will continue to grow the business as is and we have received tremendous support from them,” said Dahiya. “Our DNA will not change even after listing. We will continue to invest small amounts in experiments and scale up only those where we find success,” he added.
IPO details: The IPO will open on November 1 and close on November 3. It comprises a fresh issue of equity shares worth Rs 3,750 crore and an offer for sale (OFS) of over Rs 1,900 crore—largely by SoftBank. The company has set a price band of Rs 940-980 per share for the IPO.
Shareholders: The startup is backed by investors such as Japan’s SoftBank (15.76%), InfoEdge (14.56%), China’s Tencent (9.16%), Claymore Investment (6.26%) and others including Tiger Global, Falcon Capital and Alpha Wave Incubation.
Offloading stakes: Policybazaar’s founders — Dahiya and other key management — are expected to sell shares worth a combined Rs 585 crore. China’s Tencent, which owns over 9% of PB Fintech, has not been listed as an investor seeking to offload stake during the OFS.
ET reported earlier, citing sources, that the 13-year-old startup could seek a valuation of between $5 billion and $6 billion in the public offering.
Sequoia rethinks venture capital model
Sequoia partner Roelof Botha
Sequoia Capital, the world’s most prominent venture capital firm, will no longer be strictly a venture capital firm. The firm will remake its investment structure in the US and Europe around a single fund, Sequoia partner Roelof Botha said in a statement.
Revamped fund structure: The Sequoia Fund, as it’ll be known, will let the firm invest in a range of asset classes. The changes will not apply to funds in China or India, where capital rules are more stringent.
The Sequoia Fund will be able to invest in and hold public stocks indefinitely, bypassing a basic constraint of venture capital. Sequoia will also register as an investment adviser, which will allow it to expand holdings in cryptocurrencies and young companies seeking seed capital.
“We think the VC model is outdated,” Botha said.
The new fund will serve as the sole investor in a series of Sequoia venture funds. Sequoia’s investors, which includes pension funds and university endowments, will become backers of the Sequoia Fund.
Today’s ETtech Top 5 newsletter was curated by Arun Padmanabhan in New Delhi and Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.
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