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Startup Newsletter - Sep'22

Updated: Dec 13, 2023

In this issue:

 

Ola Electric's Storm

An entrepreneur with no prior experience of manufacturing cars OR for that matter, manufacturing anything, went on to set up the world’s largest 2-wheeler factory- the FutureFactory to spearhead the EV revolution in our Country through its E-scooters. What Bhavish Aggarwal and Ola Electric have set out to do is inherently more likely to fail than to ever succeed. But then again, the easy route never made an interesting tale. Did it?


Wellll, that’s the romantic bit of it. The fact is, Ola Electric is falling apart and being stitched over and over again. Here’s a brief timeline:


 

Hunger for number - Where's thy growth Byju's?

News Flash: India’s most valuable Startup, Byju’s financial results of FY21 comes after more than a year’s deadlock with the auditors - Deloitte.

Reading Between the Numbers

  • The results send shockwaves across the ecosystem as revenue grew by only 4% despite the much-anticipated Lockdown boom.

  • What’s more, Byju’s revenue from India actually contracted by 40% to ₹987Cr during the year.

  • 1/4th of the losses suffered in FY21 is contributed by WhiteHat Jr. - the coding for kids Startup that Byju’s acquired in Aug 2020.

  • Byju’s spent a massive ₹2,250Cr (2.5 times of FY20) in ads and promotions. This includes the fat sponsorship bills of IPL and Indian Cricket team (appx. 15%).

  • Did the entire Industry fail to capitalize on the Lockdown boom? Guess not. Both Unacademy and Vedantu grew by over 4 times in FY21.

  • All this while its paid subscriber base grew by 57% to 5.5Mn subscribers.

  • AND its valuation ALSO grew by 57% from $8.25Bn in Feb’20 to $13Bn+ in Mar’21 - quite evident on what the investors were interested in.


 

Edtech is Shrinking - Digital learning by compulsion or choice?

With covid induced lockdowns, schools, colleges and tuition centres shut indefinitely, Edtech companies jumped at the opportunity of providing digital means to learning. Investors followed suit, and pumped billions into the sector. Resultantly, for 2 years, Edtech valuation swelled in India. Byju’s emerged as the Edtech behemoth, while several turned unicorn. But were they too naïve to think that digital learning will outlast the pandemic?


 

Around the World in a Blink – Oura Ring

Smart watches are often touted as health bands because of their multitude of features around tracking daily health. But in case you’re someone who doesn’t want to look at yet another screen that does all kinds of techie stuff, you’d be interested to know that Oura Health Oy has been doing things differently. Instead of joining the now crowded space of wrist bands, the Finnish health technology company has developed a Ring that goes into one’s finger to monitor health. Unlike wrist watches, one can wear the ring while bathing and even sleeping, which is also where it first focused viz. sleep tracking. The company believes that lack of sleep has been linked to worsening health conditions including diabetes, cardiac disease, cancer, poor mental health, and more. The ring uses a Sleep Staging algorithm, to provide feedback to the users about the quality of their sleep, in the form of sleep scores. Other than this, it also tracks activities, SpO2 levels, heart rate, body temperature, respiratory rate and sleep data, all collected and transmitted via Bluetooth to smartphone app.

Fast forward, In March 2022, Oura announced that it has sold more than one million rings since it first released its ring in 2015. You can spot the ring in the fingers of athletes in sports leagues like NBA, WNBA and UFC and even on Prince Harry’s finger. After the launch of the third generation of its line, Oura has moved to a subscription-based model since early 2022, and now they’re planning to go for an IPO by the end of this year.

But, on the contrary, one might find it simply inefficient because smart watches do almost all of these and also tell you the time (Genius!). Right?


While we’re at it: Did you know that there’s an Indian startup called Lazy Co. which has been developing a similar technology that solves this very concern – a ring with a screen. It’s called Aina Ring (you can guess where it got its name from). Interestingly the company was acquired by Bangalore based healthtech company Ultrahuman earlier this year, that has recently launched a ring very similar to Oura Ring!


Ps. Unfortunately this is not a paid promotion


 

Stake Grabs in Indian Startups – Sep’22

 

What else is Buzzing?

  • OYO has long Covid – Softbank, the single biggest shareholder of the hospitality unicorn OYO rooms, further cut its valuation to $2.7 Billion after benchmarking it with peers having similar operations. For perspective, the startup was valued at $9.7 Billion in 2019, and then the pandemic changed everything.

  • UpGrad is betting bigger on the B2B space – With fresh fund infusion by marquee investors of $210M, Upgrad is going bigger on the B2B space. The edtech Unicorn recently acquired online learning platform Harappa Education and corporate learning startup Centrum Learning, making these its 13th and 14th acquisitions so far.

  • SEBI is in search for reasons – As new age tech companies continue to perform poorly in the bourses, the market regulator has asked PE and VC firms to disclose funds’ valuation methodology for startups and the qualifications of the professional who carries out the valuation.

  • Speaking of the bourses, Infurnia, the Bengaluru based provider of architecture and interior design software, recently got listed on BSEs Startup Platform. Only 13 other companies are listed on the platform that was launched in 2019.

  • Huge pile of cash – As investors become more picky about the startups they invest in, VCs across the globe are sitting on a record cash pile of $539B, $100B more than last year.

  • ED is on a raiding spree – In the past month,the enforcement directorate raided premises of a Kolkata based gaming company for allegations of money laundering, recovering Rs. 17 crores in cash. It also raided Razaorpay, Cashfree and Paytm in connection with an ongoing probe against illegal Chinese loan apps.

  • EV or ride hailing? – The 12-year-old ride hailing Unicorn OLA recently laid off 1000 employees, while its EV counterpart Ola Electric is aggressively scaling up. Speaking of, on independence day, the company unveiled its first Electric Car, which is touted to be one of the fastest car in India with a range of 100km. Fun fact: OLA owns less than 5% of Ola Electric, whereas Bhavish Aggarwal alone owns 36% of the company.

 

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