Also in today’s letter:
Amazon gets on boardSmallcase - China rebukes 43 apps over data misuse
Ather Energy warns of fake website
Postman overtakes BrowserStack as India’s most valued SaaS startup
(From left) Postman cofounders Abhijit Kane, Abhinav Asthana and Ankit Sobti
SaaS startup Postman has raised $225 million at a post-money valuation of $5.6 billion, thus overtaking BrowserStack as India’s most valued software-as-a-service enterprise.
The investors: Existing investor Insight Partners led the latest fundraise as well, which saw participation of new backers Coatue Management, Mary Meeker’s Bond Capital and Battery Ventures.
- Bond Capital is now a common investor in both BrowserStack and Postman.
- Their rival and Indian SaaS posterboy Freshworks is valued at $3.5 billion. It is currently drawing up plans to list in the US.
The company: Founded in 2014 by Abhinav Asthana, Abhijit Kane and Ankit Sobti in Bengaluru, Postman creates application programming interfaces, or APIs, that enable interactions between apps as well as functionalities within apps. It has around 17 million users and 500,000 organisations on its platform.
- Postman added more than 300 employees across 13 countries since the beginning of last year, more than doubling its headcount.
- About 98% of Fortune 500 firms and the likes of Salesforce, Stripe, Kroger, Cisco, PayPal, and Microsoft are among its customers.
Postman was among the top five nominees in the ‘Startup of the Year’ category at The Economic Times Startup Awards 2020.
- The company plans to use the new capital to expand its team spread across sales, marketing, product, and engineering. It will also invest in its community of developers across the globe, support students through its API literacy programmes, and contribute towards open-source projects for a stronger API ecosystem.
The SaaS gold rush: The new investment comes at a time when Indian SaaS startups are seeing increased investor interest.
- On June 8, ET reported that Zenoti has raised $80 million in a funding round led by US-based private equity firm TPG, at a post-money valuation of $1.5 billion.
- On June 17, BrowserStack raised $200 million in a funding round led by Mary Meeker’s Bond Capital, valuing the company at $4 billion.
- On the same day, ET reported that SoftBank Vision Fund is set to invest $100 million in Mindtickle, turning the SaaS startup into a unicorn.
According to a Bain & Co. report last December, revenues of Indian SaaS companies are expected to touch $18-$20 billion by 2022, doubling their share in the global market to around 7-9%.
For more on the SaaS gold rush, click here.
Amazon backs Smallcase in maiden wealth management bet
Smallcase Technologies, a fintech platform providing wealth management services, has raised $40 million in a Series C funding round at an undisclosed valuation.
- The company has now received a total of $60 million in funding.
Deal details: Faering Capital led the fundraise, which saw participation of Azim Premji’s Premji Invest and Amazon.com Inc.
This is Amazon’s maiden investment in India’s wealth management sector, made through its $250-million, early-stage fund Amazon SMBhav Venture Fund. The company has previously invested in Acko General Insurance and Capital Float, and is reportedly in talks to back neobank Open as well.
- Existing investors, including Sequoia Capital India, Blume Ventures, HDFC Group and Rare Enterprises’ Utpal Sheth also participated in the fundraising.
- Sameer Shroff, cofounder and managing director of Faering Capital, will join the board of smallcase once the transaction is closed.
What are the funds for? More investment products for retail investors.
About Smallcase: Founded in 2015 by IIT Kharagpur graduates Vasanth Kamath, Anugrah Shrivastava and Rohan Gupta, Bengaluru-based Smallcase improves digital access to capital markets by offering weighted portfolios of stocks and exchange traded funds from in-house licensed professionals as well as access to independent investment managers, brokerages and wealth platforms. It has tie-ups with a dozen brokerages in the country, and distributes its products via broker partners, wealth advisers and offline agents.
Quote: “We are focused on expanding our offerings to cement smallcase’s position as the premier portfolio investing layer across asset classes for the retail investor…” Kamath said.
Competition: Zerodha, Groww, Upstox and Paytm Money.
In other deals news:
■ RaRa Delivery, an instant delivery startup based in Singapore, has raised $3.25 million in a funding round led by Sequoia Surge and Indonesia’s East Ventures.
■ Charcoal Eats, a quick-service restaurant brand, has raised Rs 1 crore in growth capital from revenue-based financier GetVantage to expand its menu and spend on marketing.
■ Games24x7 has made a strategic investment in CricHeroes, a performance analysis platform focused on grassroots cricket. Financial terms of the deal were not disclosed.
Tweet of the day
China rebukes 43 apps for breaking data transfer rules
China’s Ministry of Industry and Information Technology (MIIT) has found that 43 homegrown apps, including WeChat, illegally transferred user data, and ordered their parent companies to make rectifications.
- The development comes a day after Chinese government authorities published a set of draft rules aimed at improving fair competition, banning practices such as fake reviews and inflated public metrics.
What’s the issue: The 43 apps had illegally transferred users’ contact list and location data, while also harassing them with pop-up windows. The apps will have until Aug. 25 to make rectifications, or else they will be punished in accordance with relevant laws and regulations.
Meanwhile, Republican Senator Marco Rubio has called on President Joe Biden to block TikTok in the US after China took an ownership stake in a key subsidiary of ByteDance Inc., the Beijing-based parent company of the short-video platform.
- “Beijing’s aggressiveness makes clear that the regime sees TikTok as an extension of the party-state, and the US needs to treat it that way,” Rubio said.
Corporate records show that the Chinese government has taken a 1% stake and a board seat in Beijing ByteDance Technology, which holds some of the licences for Douyin, the Chinese version of TikTok.
‘TikTok’ in itself is not available in China.
“TikTok is led by an executive team in the US and Singapore,” TikTok said in a statement, adding that “the China-based subsidiary of ByteDance Ltd. referenced has no ownership of TikTok.”
Ather Energy warns of fake website in a public notice
Ather Energy, in a newspaper notice published on Wednesday, warned readers of a fake website that’s deceptively similar to theirs.
“It has come to our knowledge that some fraudulent person(s) have created a fake website(s) deceptively similar to our website, using name and trademarks,” the notice put out by the electric scooter maker read. “Those website(s) also provide a link to apply and make payments. They have been taking fake vehicle bookings, issuing fake ‘Letter of Intents’ offering ‘Ather Dealerships’ and demanding money towards registration, security, etc.”
“Please be informed that www.atherenergy.com is the one and only official website of the Company and you should use or visit only this website for any information about our Company and/or its products,” the notice read.
The fraudster: The website attempting to imitate Ather is ‘atherenergydealership.com’. It urges customers to place an order for an Ather scooter by making a payment of Rs 2,999 that it says is fully refundable.
The Hero MotoCorp-backed firm has initiated legal action to take down the fake website.
“We have filed a complaint reporting cyber fraud. There are a handful of customers who have made the payment (of Rs 2,999). The authorities are looking into it. We are trying to close the issue at the earliest,” said a spokesperson for the company.
KPIT identifies key acquisition areas for long-term growth
KPIT Technologies Ltd., which provides software-based solutions for automakers, is eyeing acquisitions in sectors such as semiconductors and ecommerce for better insights into how it can create value for its customers.
“More and more software will get defined through the chipset, so this is one area where we want to do more acquisitions, which will give us more insights,” Sachin Tikekar, president at KPIT Technologies, said.
The company is working on long-term monetisation solutions—for example, ecommerce through connected cars—and this is another area where it may look at acquisitions in the future. “Monetisation will not just be selling the car; they are also looking at the potential for commerce and how connected vehicles can become avenues for revenue generation,” Tikekar said.
Today’s ETtech Top 5 newsletter was written by Tushar Deep Singh and edited by Karan Dhar in Mumbai.
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