Lenskart eyes $250M funding; BigBasket bags Rs 1,000 crore; N Chandrasekaran is Tata Digital chairman

By Kevin Colleran On Apr 13, 2022

Amid the slowdown in startup funding since the start of the year, Lenskart, the omni-channel eyewear retailer, is in advanced talks to raise a quarter of a billion dollars from Alpha Wave and others at a valuation of up to $5 billion. But its IPO plans, like those of other startups, are on hold until market conditions improve.

Also in this letter:
■ BigBasket gets Rs 1,000 crore from holding company
■ Uber, Ola hike cab fares in major cities as fuel prices soar
■ Arkam Ventures closes maiden fund at $106 million

Lenskart nears $250-million funding at $4.5-5 billion valuation

Lenskart is in advanced talks to close a $200-250 million funding round that could boost its valuation to $4.5-5 billion, multiple sources told us. The round is being led by Alpha Wave Global and will also include a secondary share sale, the sources said.

A portion of the funds raised will be directed to the company’s Thrasio-style direct-to-consumer (D2C) roll up business, they added.

Alpha Wave has already infused around $100 million in primary capital in Lenskart, according to the latest regulatory filings sourced from Tofler.

Existing investors such as Temasek, Schroder Adveq and others are also participating in this round, which comes around eight months after the SoftBank-backed startup closed a $315 million round last year.

Falling valuations: Lenskart’s financing comes as late-stage startups have started to see a decline in aggressive valuations for large deals amid global corrections in startup funding.

Lenskart had also planned an initial public offering (IPO) but those plans are now on hold.

Lenskart Factsheet:

Founded: 2010
Funds raised: $915 million (includes secondary share sale)
Latest valuation: $2.5 billion
Key markets: India, Southeast Asia, Middle East

Top Investors as of Nov 2021

SoftBank: 19.5%
Premji Invest: 10.8%
Kedaara Capital: 9.2%
TR Capital: 9%

Source: Tracxn

ETtech Done Deals

■ Artificial intelligence startup Observe.ai has raised $125 million in a new round of funding led by Softbank Vision Fund 2, with participation from video conferencing platform Zoom. The round also saw participation from its existing investors Menlo Ventures, Scale Venture Partners, and Nexus Venture Partners.

■ Wipro has acquired Convergence Acceleration Solutions (CAS), a US-based consulting and programme management company. The deal is for acquiring 100% shares in the company for a cash consideration of $50 million and contingent consideration of $30 million to be payable over three years.

■ LimeChat, which offers an artificial intelligence (AI)-powered chatbot, has raised $4.2 million in a funding round led by Stellaris Venture Partners, with participation from Pi Ventures, Titan Capital, and marquee angel investors.

■ Bengaluru-based fintech startup iTribe has raised $1 million in a funding round from investors such as Eximius Ventures, Kunal Shah (Cred), Incisive Ventures, and several angel investors.

■ Deep tech software-as-a-service (SaaS) company Spyne has raised $7 million in a funding round led by US venture capital firm Accel, with participation from existing investors including Storm Ventures, Smile Group, Pentathlon Ventures and Core91.

BigBasket gets Rs 1,000-crore investment from holding company

Tata-owned Innovative Retail Concepts, which runs BigBasket, has received an infusion of Rs 1,000 crore from holding company Supermarket Grocery Supplies, according to regulatory filings sourced from Tofler. The transaction was approved on March 31.

Tata Digital owns around 64% in Supermarket Grocery. Innovative Retail Concepts was made a subsidiary of Supermarket Grocery after Tata Digital acquired the BigBasket operator, we reported last October.

The investment comes soon after Tata Digital finally launched its super app, Tata Neu. BigBasket is one of its key online businesses and is also providing key logistics infrastructure for delivery of other Tata brands, too.

We reported on March 23 that the Bengaluru-based firm plans to offer multiple delivery timelines to consumers, including one-hour delivery with BB Express and its recently launched 10-20 minute delivery service BB Now.

Besides this, it has also set up franchise stores for assisted shopping and unveiled its Fresho stores, at which it sells fresh supplies, last November.

Chandrasekaran is Tata Digital chairman: Meanwhile, Tata Sons executive chairman N Chandrasekaran has formally taken charge as chairman of Tata Digital. Tata Digital has been his brainchild since he took charge as Tata Sons chairman. He has been closely involved in its growth plans from the beginning as the Mumbai-based conglomerate eyes to make a dent in the Indian ecommerce universe.

Chandrasekaran’s formal appointment is of significance given that it plans to raise funds from external investors. Tata’s digital strategy is currently being spearheaded by CEO Pratik Pal and Mukesh Bansal, founder of Cultfit and Myntra.

Uber, Ola hike cab fares in major cities as fuel prices soar

Aggregator cabs like Ola, Uber can ply only with license: Bombay HC

Uber has raised trip fares in Delhi-NCR, Kolkata, Mumbai and Hyderabad, as fuel prices have breached the Rs 100-mark in several cities.

Ola has also increased fare rates in major cities. We have reviewed a copy of an email sent by the company to its drivers in Hyderabad, according to which fares have been hiked by 16% for its ‘Mini’ and ‘Prime’ cabs.

The hike in rates comes days after Ola and Uber cab drivers went on strike in the national capital, demanding an increase in fares.

“To help cushion drivers from the impact of spike in fuel prices, Uber has raised trip fares in cities such as Delhi-NCR and Kolkata by 12% and in Mumbai and Hyderabad by 15%, respectively,” said Nitish Bhushan, head of central operations, Uber India and South Asia.

“Over the coming weeks, we will continue to track fuel price movements and will take further steps as needed,” he added.

Petrol is at Rs 120.51 a litre in Mumbai, while diesel is at Rs 104 a litre. In Delhi, petrol costs Rs 105 a litre while diesel costs Rs 96 as of April 12. In Kolkata, petrol costs Rs 115.12 while diesel is priced at Rs 99.83.

TWEET OF THE DAY

Arkam Ventures closes maiden fund at $106 million

Early-stage investment fund Arkam Ventures has completed the final close of its maiden investment fund at $106 million. This comes almost two years after the venture capital firm said it had hit the first close at $30 million.

Arkam Ventures was floated by Rahul Chandra, co-founder and former managing partner at Helion Venture Partners, and Kalaari Capital’s Bala Srinivasa.

Institutional investors including UK’s development finance institution, British International Investment Plc, Nippon India Digital Innovation, Dubai-based Evolvence group, Small Industries Development Bank of India (SIDBI), and other global fund-of-funds as well as Indian family offices and high net-worth individuals, have backed the fund.

Individual backers include InfoEdge founder Sanjeev Bikhchandani, Flipkart co-founder Binny Bansal, and Paytm founder Vijay Shekhar Sharma.

Around 40% of the corpus raised by Arkam has come from rupee-denominated capital, Chandra told us. The delay in closing the fund was due to the Covid-19 pandemic and its related uncertainty, especially in 2020, he said.

After Zomato, Ola, Swiggy explore quick food delivery

The quick delivery space is seeing increased activity after Zomato announced it planned to pilot 10-minute food delivery last month.

What’s going on? Ola has begun offering select dishes in some parts of Bengaluru within 10 minutes through its quick commerce arm Ola Dash. Items on the menu include khichdi, pizza and rolls, which Ola described as “freshly prepared”.

Swiggy is also exploring faster food delivery, though it isn’t clear if it is targeting 10 minutes.

CEO steps back: Meanwhile, Ola CEO Bhavish Aggarwal sent an email to employees on March 29, saying he would be stepping back from day-to-day operations at many of the mobility firm’s core businesses.

Aggarwal said he plans to use his time to focus on engineering, product and team building at Ola’s nascent businesses such as electric vehicles (EV) and quick commerce.

He said that Arun GR, Ola’s group chief financial officer, would drive the day-to-day operations across the group. Arun is also CFO at Ola Electric and heads Ola Financial Services, the company’s fintech arm, on an interim basis.