Also in this letter:
■ Magicpin cofounder joins Prime VP
■ Fintech startup Axio raises $20 million
■ Credit line on UPI on the rise
Fully back need for tech, but wary of opaque ecommerce ops: Piyush Goyal
Commerce and industry minister Piyush Goyal told ET that large ecommerce companies should better engage with small kirana stores and integrate them into their supply chain as they are now operating in an opaque fashion. Excerpts from the exclusive interview:
On ecommerce: “I am in favour of ensuring that technology becomes an enabler for innovation, enabler for better competence, comfort, convenience and jobs. But I do believe that we will have to respect the letter and spirit of the law. Everybody has to do that, big and small.”
On geopolitics and export target: Goyal remains optimistic about reaching the $2-trillion export target despite ongoing geopolitical issues. “I am confident for three or four reasons. One, despite these problems, India continues to be an oasis in the desert. We continue to have nominal growth upward of 11%, constant prices upward of 7%.” He added, “While there is global uncertainty, there are problems, I keep telling the export community, goods and services, that the world market is still $30-35 trillion.”
Also Read | Growth of ecommerce in India ‘matter of concern, nothing to be proud of’, says Piyush Goyal
Concerns over equipment import: The minister addressed concerns about importing equipment from China. “There’s a whole wide world from where industry can get equipment. For those who have already bought in the past, we’re trying to be as accommodative as we can be. For the others, I think they should buy better-quality, high-quality, long-lasting equipment. It’s available across the world.”
Update on Tesla investment: On the Tesla investment buzz, Goyal said, “We have come out with a policy. We are open to any company investing under that policy or even otherwise. That policy is only an enabler. If somebody wishes to import, we have given the possibility that you can import and market in India prior to even setting up the factory.”
Also Read | Changes likely in India’s new EV policy, may benefit legacy car companies
Centre charges up EV space with PLI approvals
The Centre has greenlit 50 out of 74 applications from automakers for its productivity-linked incentive (PLI) scheme, aimed at accelerating electric vehicle (EV) production. The remaining 24 applications are currently under review.
Driving the news: These approvals come in the backdrop of EV sales sputtering globally over the past few quarters.
- Bajaj Auto is the sole automaker to get approvals for all 13 applications filed for its electric scooter Chetak and three-wheelers
- Ola Electric received PLI approval for its 3 KwH (kilowatt hour) and 4 KwH versions of Ola S1X
- Mahindra & Mahindra got approvals for 16 out of 23 applications
Subsidy push: Through the PLI incentive scheme, automakers are eligible to receive a government subsidy equivalent to 13-15% of their annual electric vehicle (EV) sales revenue. This boosts the company’s total revenue and helps offset the higher costs associated with investing in new technology, thereby bridging the margin gap between ICE (internal combustion engine) and EVs.
Also, if a company achieves sales of more than Rs 10,000 crore within five years of the PLI period, it becomes eligible for an additional 2% government support.
Yes, and: With green mobility being a key focus for the government, the third edition of the FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme may also be on the anvil, ET had reported in May.
Fintech startup Axio raises $20 million from Amazon Smbhav Venture Fund
Axio founders Sashank Rishyasringa (left) and Gaurav Hinduja
Bengaluru-based fintech lending startup Axio has raised $20 million in an equity funding round by Amazon Smbhav Venture Fund.
Details: Axio, formerly Capital Float, operates with a non-banking finance company (NBFC) license, and offers loans through its own books and via co-lending partnerships with banks and other NBFCs. Prior to this round, it had raised $137 million in equity and $671 million in debt.
The company said it will use the capital to drive growth, scale lending operations and expand use cases for checkout finance.
Context: This comes as equity deals gain pace in the digital lending sector focused on micro, small, and medium enterprises (MSMEs). On August 14, ET reported that Flexiloans is in talks with a bunch of global and domestic investors to raise around $35 million in fresh funding. Similarly, Indifi Technologies, another MSME lender, secured around $35 million last year.
Verbatim: “This investment will enable us to further scale our loan book, enhance our checkout finance offering, and expand credit offerings to existing customers. By combining product innovation with robust underwriting and risk controls, we aim to unlock access to credit for the next 200 million customers across India,” Sashank Rishyasringa and Gaurav Hinduja, cofounders of Axio, said in a joint statement.
Magicpin cofounder Brij Bhushan joins Prime Venture Partners
Brij Bhushan, cofounder of hyperlocal ecommerce startup Magicpin, has joined Prime Venture Partners as a venture partner.
New role: The fund said Bhushan will be a key member of the investment team, contributing to the firm’s investment decisions, portfolio management and fundraising. He said early-stage startups need more than just funding – they need a real team member.
Background: Before founding Zomato-backed Magicpin with Anshoo Sharma in 2015, Bhushan served as vice president at Nexus Venture Partners. He announced his departure from Magicpin in a LinkedIn post in April this year. The company last raised $60 million in an institutional round in November 2021 led by Lightspeed India and Zomato.
Internal promotion: Recently, the firm has promoted Gaurav Ranjan from vice president to principal-investments. He has been involved in sourcing and co-evaluating about 2,000 startups and has worked with more than a dozen early-stage portfolio companies, including Gallabox, OTO, Capital, Poshn and HitWicket.
Credit line on UPI could cross $1 trillion in transaction value by 2030: Zeta
Credit line on UPI could surpass the $1 trillion in transaction value by 2030, Zeta, a banking tech unicorn, has forecast.
Tell me more: The credit line provides 80% of pre-approved, inactive credit customers on the UPI network with instant access to credit lines. After it was first launched in August 2016, UPI took a little over 3 years to reach 1 billion transactions in a month. Less than 5 years later, UPI clocked 13 billion transactions in April 2024.
Also Read | How fintech startups are dealing with bleak credit cards outlook
Future prospect: “Riding on UPI rails, credit line on UPI adoption will be exponentially higher than other on-demand credit products like overdrafts and even credit cards,” the report stated.
Zeta identifies three key factors driving this – growth in demand for credit, a shift towards digital payments, and enhancements in the discovery, activation, and utilisation of credit.
Current scenario: India’s credit-to-GDP ratio of 40% is still one of the lowest among emerging markets, with 60% of new credit originations coming from tier-II cities and rural areas. Despite this demand, banks have been unable to service them effectively due to a lack of visibility and reach.
Also Read | Top fintechs dial NBFCs for secured credit partnerships
Today’s ETtech Top 5 newsletter was curated by Riya Roy Chowdhury and Vaibhavi Khanwalkar in Bengaluru.
