Also in this letter:
■ MCA probing Chinese loan apps
■ ETtech Explainer on Mistral AI
■ Report on India’s AI growth
Large businesses must nurture startups: Zomato CEO Deepinder Goyal
Zomato chief Deepinder Goyal is of the view that established businesses need to nurture and invest in startups but not with an intention of owning them. He was speaking at the curtain raiser event of the Startup Mahakumbh, slated for March 18-20.
Word by word: “I think established businesses need to nurture startups…and I don’t think we have that kind of a culture yet,” Goyal said.
Meanwhile, calling startups the backbone of new India, Goyal asked entrepreneurs to make the most of opportunities as the country transitions towards a $35 trillion economy by 2047.
“I believe startups will be the backbone of new India. This is our time under the sun, and the sun is rising,” he said. “I hope we don’t miss the bus. I hope the message goes loud and clear to all startups not to lose this opportunity.”
March Mahakumbh: The central government is organising the Startup Mahakumbh event as a congregation of more than 1,000 startups and over 1,000 investors including high networth individuals, angel investors, venture capitalists as well as family offices.
On the panel: Info Edge India vice chairman Sanjeev Bikhchandani, Accel partner Prashanth Prakash, Sanjay Nayar, founder and chairman of Sorin Investments, and Rukam Capital managing partner Archana Jahagirdar are on the organising committee of the event.
“We are going to have startups from different states and districts in India, and also a bit of an international touch. The whole Mahakumbh has been broken into 10 verticals…from climate and D2C to B2B and SaaS,” said Nayar, who is also the former CEO of KKR India.
Capillary Tech extends latest funding round, raises $95 million in secondary
Ahead of plans for a public listing in the next 18 months, customer engagement and loyalty software provider Capillary Technologies has extended its latest Series D round to $140 million and raised $95 million in secondary transactions.
Funding details: The company has also picked up an additional $6 million in equity funding from the likes of Ajay Gupta, former senior partner at McKinsey & Company; Hal Brierley, founder of Brierley+Partners, among others.
With this, the startup has raised $45 million in equity and $95 million in secondary funding, as a part of the Series D round.
Secondary exits: The secondary portion saw participation from 57Stars, Pantheon, Unigestion, The Evolvence Group, which are also limited partners of one of its largest shareholders, Avataar Ventures.
With the secondary raise, Capillary’s existing investors like American Express and Warburg Pincus who invested before 2016 are taking full and partial exits respectively, along with angel investors.
Quote, unquote: “The secondary transaction in our case priced at a premium of the primary, given the gap of six months and growth seen by the company. With the secondary raise, we now have almost 15-17% of our captable comprising pre-2015 investors. Going forward most of our funding will be to give exit to our investors,” company founder and MD Aneesh Reddy told ET.
ETtech Done deals
Zeno Health raises $25 million: Generic medicine startup Zeno Health, erstwhile called Generico, has secured $25 million in funding led by Korean private equity investor STIC Investments. Existing investor Lightbox is a significant participant in the round.
MSwipe raises $20 million: Merchant-focused payments provider, Mswipe Technologies on Tuesday said that it has raised $20 million in growth equity capital from its existing investors led by Alpha Wave Global. The proceeds from the ongoing fundraise will be deployed by the company to increase its merchant payment network, strengthen its product and technology infrastructure, the company said in a statement.
MCA in advanced investigations on Chinese firms linked to loan apps
The ministry of corporate affairs (MCA) is probing several Chinese companies, particularly those with links to loan apps, for alleged violations, and some of these investigations are at an advanced stage, news agency PTI reported Tuesday citing government sources.
Driving the news: The ministry is mainly looking at whether frauds have been committed at these companies and some of the cases are being probed by the Serious Fraud Investigation Office (SFIO), the report added.
Regulatory measures: The ministry receives complaints from the Reserve Bank of India (RBI) and the Ministry of Electronics and Information Technology (MeitY), among other entities, following which enquiries are initiated against the companies concerned.
The RBI has also issued guidelines to firm up the regulatory framework for digital lending while enhancing customer protection and making the digital lending ecosystem more secure.
Also read | ETtech Explainer: why are quick-loan apps under the government scanner?
Catch-up quick: Earlier this month, Centre told Parliament that Google suspended or removed over 2,200 fraudulent loan apps from its Play Store between September 2022 and August 2023.
In March 2023, ED filed a charge sheet against payment gateway Razorpay, three fintech companies controlled by Chinese nationals, and as many NBFCs.
In February 2023, the Centre banned 94 quick loan-providing apps on an “urgent” and “emergency” basis for “improper data storage and transfer” to other countries and money laundering. The order was revoked for some apps such as LazyPay and Kissht.
ETtech Explainer: All you need to know about OpenAI’s rival Mistral AI
A French generative artificial intelligence (AI) startup called Mistral AI run by former Meta and Google Deepmind employees is making waves and garnering strong investor interest, including from the likes of Microsoft and Google. The startup has inked a deal with Microsoft to use the tech giant’s Azure cloud computing platform for its AI models.
The Microsoft deal: Mistral’s latest model, Mistral Large, will be first available to Azure customers as part of the deal. Azure customers will be able to use several AI models from Mistral, which will also see its technology hosted on Microsoft’s cloud computing platform.
Microsoft, which owns a stake in rival OpenAI, will acquire a minority stake in Mistral AI, as per a Reuters report.
Mistral’s LLMs: In December, Mistral quietly dropped the Mixtral 8x7B model in a post on X which claims to surpass the capabilities of Open AI’s GPT 3.5 and Meta’s Llama 2 large language models (LLMs) on several performance benchmarks.
In September, the company unveiled its first large language model, dubbed ‘Mistral 7B’ and has since become one of the fastest European startups to claim unicorn status.
India’s AI market set to grow at 25% CAGR until 2027: Report
India’s market for AI is set to expand at a compound annual growth rate (CAGR) of 25% until 2027, driven not only by increased investments but also by a burgeoning talent pool and concerted efforts by companies to upskill their workforce, finds a joint report by IT industry body Nasscom and BCG.
Report details: Leading firms have recognised the importance of human capital in the AI journey and invested heavily in upskilling and reskilling their workforce in AI.
The report reveals that 90% of the top 25 providers have made significant commitments to upskilling their workforce in generative AI (GenAI) and other AI-related technologies, with some allocating $1 billion over the next three years to upskilling.
Today’s ETtech Top 5 newsletter was curated by Gaurab Dasgupta in New Delhi.
