Blume Ventures closes its largest fund at $250M; Vedantu sacks 385 in fourth round of layoffs this year

Credit: Tenor

Also in this letter:
■ RBI announces new feature to make UPI payments easier
■ I&B ministry asks Google to comply with advisory on betting ads
■ IT, services firms add hybrid jobs to tap talent

Blume Ventures closes its largest India-dedicated fund at $250 million

Early-stage venture capital firm Blume Ventures has made the final close of its fourth India-dedicated fund with a corpus of $250 million, its biggest so far.

Details: Indian limited partners (LPs) — predominantly large family offices and SIDBI — accounted for 40% of the money raised in Fund-IV, with the rest coming from family offices overseas, foundations, sovereign funds and corporates.

Strategy: Founded by Kartik Reddy and Sanjay Nath, Blume typically invests in pre-seed to pre-Series A funding rounds of technology companies. Its portfolio includes edtech firm Unacademy, quick-commerce platform Dunzo, fintech firm Slice, used-car selling platform Spinny, beauty e-tailer Purplle, and full-stack customer engagement platform Exotel.

With this fund, the firm plans to back 30-35 companies across technology verticals such as fintech, deep-tech, robotics and artificial intelligence, healthcare, and consumer internet.

Previous funds: Blume’s first three funds had a corpus of $20 million, $60 million and $102 million and were closed in 2011, 2015-16 and 2018-19, respectively. The fourth fund’s first close of $105 million was announced in November 2021.

Blume also manages continuity funds, which include secondary funds (Fund I winners), opportunity funds (Fund I and II winners) and SPVs.

VC raising record sums: Despite the global macroeconomic downturn, many venture funds focused on the region have been raising record amounts of capital.

Prominent VC firms, including Accel, Elevation Capital and Sequoia Capital, have raised record capital to back opportunities in India and Southeast Asia.

Early-stage investors Axilor Ventures and Athera Venture Partners (formerly Inventus India) also launched their funds recently.

Vedantu cuts 385 jobs in fourth round of layoffs this year

Vedantu has laid off another 385 employees in its fourth round of layoffs this year, as the pressure to cut costs and turn profitable mounts on Indian edtech firms, multiple people told us.

Vedantu’s cofounders and some senior executives have also taken a 50% pay cut, the sources added.

“Employees in functions across sales, human resources (HR), learning and content have been affected by the recent layoffs,” a person aware of the discussions told us.

Rounds 1, 2 & 3: The company had previously laid off 100-full time employees in its sales team in July and another 624 full-time and contractual employees in two batches in May.

Edtech carnage: Arch-rival Byju’s also announced a ‘rationalisation exercise’ in October, sacking 2,500 employees in one of the biggest layoff rounds by an Indian startup.

Last month, test preparation major Unacademy said that it was cutting as many as 350 jobs in its second tranche of layoffs this year. It had previously fired around 1,000 contractual and full-time employees, as we reported in April.

RBI announces new feature to make UPI payments easier

The Reserve Bank of India (RBI) has announced a new feature for UPI payments, through which a merchant can make multiple debits from a customer’s account, up to a specified maximum, once the customer consents to block this sum in their bank account.

What’s this for? The new functionality will make it easier for customers to pay for goods and services online.

For instance, if you book a hotel room, you might be first required to pay a booking amount before making the full payment at the end of your stay. With the new feature, the hotel will be able to create a mandate to deduct both amounts from your account at the correct time without you having to open your UPI app twice.

This will only be done after the merchant receives your consent to block those funds in your account.

The new feature is similar to UPI Autopay, which also allows merchants to create a one-time mandate for recurring payments such as mutual fund SIPs and online subscriptions.

Market share rules postponed: We reported last Friday that the National Payments Corporation of India (NPCI), which manages UPI, has decided to postpone the deadline for complying with its rules capping the market share of individual UPI apps to December 31, 2024.

The contentious rules, announced in 2020, say no single UPI app can have a market share of more than 30%. They were originally scheduled to take effect from January 1, 2023.

I&B ministry asks Google to comply with advisory on betting ads

The information and broadcasting ministry has asked Google to stop displaying betting ads to Indian users. Last week, the ministry issued a letter to Google asking for its compliance after a violation of the October 3 advisory by the tech giant came to its notice.

The advisory: The ministry had issued an elaborate advisory asking TV channels, OTT platforms, digital news publishers and social media intermediaries to stop airing/displaying online betting ads and surrogate ads of such platforms.

Big spenders: Online betting platforms have emerged as one of the biggest advertisers in recent years. Offshore online betting platforms Fairplay, PariMatch, Betway, Wolf 777, and 1xBet have been advertising on TV and digital platforms through surrogate news websites.

Govt plans to regulate all real-money games: The Indian government’s planned regulation of online gaming will apply to all real-money games after the prime minister’s office overruled a proposal to only regulate games of skill and leave out games of chance, Reuters reported on December 4.

Infographic Insight: World’s biggest gaming nations

There are an estimated 2.5 billion gamers in the world, according to a report titled Statista Digital Market Outlook, with Japan and the UK having the highest estimated user penetration in video games at 58%, closely followed by South Korea at 57%.

The report also forecasts the UK will be at first place in 2027, having surpassed Japan. Interestingly, Nigeria – which wasn’t among the top 5 in 2017 and 2022 – is projected to be the fifth-biggest gaming nation in 2027 with 63% user penetration.

Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in Delhi. Graphics and illustrations by Rahul Awasthi.