25 unicorns in 8 months

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India shaped its 25th startup unicorn in 2021 – this time in the manufacturing sector. Meanwhile, another unicorn who works in the pandemic hospitality industry was raising funds from a tech giant ahead of its IPO.

Also in this letter:

  • Brief brings in $ 150 million
  • Oyo Rooms raises $ 5 million
  • China headache for big tech

Zetwerk becomes a unicorn with $ 150 million in funding

(from left) Zetwerk co-founders Amrit Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary

Zetwerk Manufacturing raised $ 150 million in a Series E funding round valued at $ 1.5 billion, according to sources. This makes the contract manufacturer the 25th Indian startup to achieve unicorn status this year.

  • In technical jargon, unicorns are privately owned companies valued at $ 1 billion or more.

Offer details: D1 Capital Partners led the fundraiser, which was also attended by existing investors and an early donor partially withdrew, sources told us. “Almost half of the new funding comes from D1 Capital,” sources said.

  • The most recent capital increase comes six months after Zetwerk raised $ 120 million in a Series D round valued at $ 600 million.
  • The company has filed the first set of documents with the Registrar of Companies and will likely file the rest by next week.

The fresh capital will be used for recruitment, technology investments and product expansion.

About the brief: Founded in 2018 by IIT alumni Amrit Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary, Zetwerk helps small and medium-sized enterprises (SMEs) bring their digital designs to life. It currently operates in more than 25 industry segments – from apparel to aerospace.

Finances: In an interview with ETtech in July, CEO Acharya had said that the company’s sales rose almost three times to 949 billion rupees compared to the previous year. He expects the growth momentum to continue in 2020-21 due to an order book of Rs 4,500 billion.

  • Currently, 90% of Zetwerk’s business is concentrated in the Indian market, with the remainder being overseas. Acharya expects this mix to change to 75-25 over the next 18-24 months.

In the meantime, one of the largest unicorns in India raised donations today.Oyo founder Ritesh AgarwalOyo founder Ritesh Agarwal

Microsoft Corp. has invested nearly $ 5 million (approximately Rs 40 billion) in Oyo Hotels & Homes through the issuance of shares and mandatory convertible cumulative preference shares in a private placement. Oyo will issue five shares with a face value of 10 rupees each for cash at an issue price of $ 58,490 per share in Indian rupee.

ET was the first to report a possible deal between Microsoft and Oyo on July 30th.

Why it matters: Funding comes amid reports that Oyo has started work on its draft IPO prospectus, which is due to be filed in October. The Oravel Stays Pvt. Ltd., has entered into discussions with several bankers including JPMorgan, Citi and Kotak Mahindra Capital to manage its public offering.

  • “Work has started and some bankers are done,” sources told us. “They aim to submit the draft Red Hering Prospectus (DRHP) by September.”

ET reported last month that Oyo had secured $ 660 million in debt financing from global institutional investors to service its existing loans. Wall Street investors like Fidelity, Citadel Capital Management and Varde Partners have subscribed to Oyos TLB, also known as Term B Loan.

China takes next step in taming big tech with new data law

China Big Tech
China has passed laws setting stricter rules for how businesses handle user data, a move fueling its campaign to curb the influence of big tech.

The Asian nation’s legislature has approved the Personal Data Protection Act, China Central Television said in a report.

Details of the new legislation were not immediately released, but previous drafts required companies to obtain user consent to collect, use, and share information and provide them with an opportunity to opt out. Companies that break the rules could face fines of up to 50 million yuan ($ 7.7 million), or 5% of their annual sales.

China under President Xi Jinping is taking action against its most powerful tech stars, including Alibaba Group Holding Ltd., Tencent Holdings Ltd and Didi Global Inc., to secure its influence on society.

The government is also moving to address consumer concerns about the gradual erosion of their privacy as tech companies make rapid strides in using tools from facial recognition to big data. (Continue reading)

Tweet of the day

ETtech Deals Digest

Postman became India’s most valued software-as-a-service company this week, which also spawned another unicorn. (Continue reading)offers

Facebook India loan initiative for SMEs

Facebook India MD Ajit MohanFacebook India MD Ajit Mohan

Facebook India has launched an initiative to make it easier for small businesses that advertise on its platforms to access credit from reputable lenders.

Driving the news: Initially, the social network has partnered with Indifi Technologies and will bring more lenders on board to provide security-free loans to small businesses on its platforms – Facebook, WhatsApp and Instagram.

To be sure, Facebook said it would keep an arm’s length from these lenders. Its role, according to the company, is to set the rules for lenders who must disburse loans within five days of the application process being completed.

  • The interest rate is 17-25%. The loan size will be between Rs 5 lakh and Rs 50 lakh.
  • Companies run by women receive a 0.2% discount on the applicable interest rate.

Quote: “It will be a normal market relationship with reputable and reliable lenders, but under a program jointly developed with Facebook,” said Ajit Mohan, Managing Director of Facebook India.

Other top stories we cover

A “war for talent”: Axtria, which added 800 employees during the pandemic, plans to hire 1,000 more over the next 12 to 18 months to meet the company’s surge in demand last year.

“There is a war for talent. There has always been a lot more demand for talent than supply, but it has reached a different level,” said Jaswinder Chadha, CEO of Axtria.

India vs. China, for funding: Indian startups have raised $ 16.9 billion in venture capital so far this year, alongside Chinese counterparts in Asia-Pacific countries, according to a report.

An analysis of GlobalData’s financial transactions database shows that between January and July 2021, a total of 828 VC financing transactions were announced in India, while the total disclosed funding value of these transactions was $ 16.9 billion.

Unloading participation: SoftBank Group Corp. sold 11.4 million shares of DoorDash Inc. marketed by Goldman Sachs at $ 182.95 apiece.

The stock sale comes a week after the grocery delivery startup predicted a seasonal decline in order rates and new customers this quarter in its quarterly earnings report.

Today’s ETtech Top 5 Newsletter was curated by Tushar Deep Singh in Mumbai. Graphics and illustrations by Rahul Awasthi.

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