Indian Startup News 224: PhysicsWallah Launches School of Startups
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00:00 Can PhysicsWallah build a sustainable edtech business?
01:35 Startup investment might pick up in Indian startups soon.
02:35 Quick commerce: Amazon India & BigBasket
04:00 PhonePe turns profitable
05:04 WazirX update
05:40 Funding News
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Can PhysicsWallah Avoid the Mistakes of Byju’s & Unacademy?
Alakh Pandey's PhysicsWallah has launched the PW School of Startups (SOS) to train and mentor budding entrepreneurs across India. Backed by a ₹100 crore fund, PhysicsWallah's SOS aim to support 100 startups over the next five years. The initiative is part of PhysicsWallah's broader expansion, which includes 11 acquisitions and the launch of multiple new products. However, after investing ₹700 crore in FY24, reports suggest the company has slipped into losses and is now looking to raise $150 million. The key question is whether Alakh Pandey's PhysicsWallah can succeed in building a sustainable edtech business or if they’re making the same mistakes that have led Byju’s and Unacademy into troubled waters.
Startup Investment Outlook
Reports indicate that Accel is closing in on a $600 million India-focused fund, which could even exceed $700 million. This potential new fund suggests that India’s startup investment climate might be warming up after a long funding winter. However, the impact of this change could take months or even years to materialize, as the fund is still in the process of being closed. From January to July 2024, Indian startups raised $6.3 billion, a significant increase compared to $4.4 billion during the same period in 2023. While we are still far from the funding highs of 2021, this upward trend is a positive sign for the future.
Quick Commerce Sector Moves
Amazon India is preparing to launch its own quick commerce venture in early 2025, aiming to compete with existing players like Blinkit, Zepto, and Swiggy Instamart. The company plans to leverage its partnership with more stores to reduce delivery times to just 20-30 minutes. On the other hand, Tata-owned BigBasket is pivoting entirely to quick commerce, with plans to expand their SKU count from 10,000 to 25,000-30,000. BigBasket's move reflects a growing consumer demand for rapid delivery services, and the company plans to use Tata’s retail outlets, such as Croma and Cliq, to serve these quick deliveries.
PhonePe’s Profitability
PhonePe has achieved profitability at the adjusted PAT level, reporting a profit of ₹197 crore on a revenue of ₹5,064 crore for FY24. This profitability excludes expenses related to ESOPs and is largely attributed to PhonePe's diversification into multiple businesses, including the ONDC-based e-commerce app Pincode, the trading platform Share.Market, and insurance. Despite this success, PhonePe has no immediate plans to go public, citing uncertainty around UPI market share regulations imposed by the NPCI. PhonePe currently holds a dominant 48% share of the UPI market but must reduce this to 30% by December 2024.
WazirX vs. CoinSwitch Legal Battle
Indian crypto exchange CoinSwitch has filed a lawsuit against WazirX, seeking recovery of ₹81 crore worth of crypto assets stuck on WazirX’s platform after a $230 million security breach. The lawsuit comes after a month of unsuccessful attempts by CoinSwitch to retrieve their assets. Meanwhile, WazirX has filed for a moratorium in the Singapore High Court, a legal move that protects them from creditor actions while they work on restructuring.
Funding News Roundup
This week, Indian startups raised a total of $89 million, continuing a trend of below-average funding for the fourth consecutive week. Here are the top funding highlights:
Yubi (Chennai): $30 million raised
Servify (Mumbai): $10 million raised in Series D round
Pilgrim (Mumbai): $9 million raised in Series B round
HouseEasy (Noida): $7 million raised in Series A round
Convin (Bengaluru): $6.5 million raised in Series A round
Sunfox Technologies (Dehradun): $1.79 million raised in Pre-Series A round
Cambrian Bioworks (Bengaluru): $1.45 million raised in Seed round
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