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Xpressbees, an Indian logistics firm that works with several e-commerce firms in the country, said on Monday it has raised $110 million in a new financing round as online shopping booms in the world’s second largest internet market.
The Pune-headquartered startup’s Series E financing round was led by private equity firms Investcorp, Norwest Venture Partners and Gaja Capital, the five-year-old startup said. Xpressbees, which concluded its Series D round three years ago, has raised $175.8 million to date, according to research firm Tracxn. The new round valued the startup at over $350 million.
Xpressbees helps more than 1,000 customers — including financial and e-commerce services giant Paytm, social commerce startup Meesho, eyewear seller Lenskart, phone maker Xiaomi, online pharmacy NetMeds, and online marketplace Snapdeal — deliver their products across the country. It has presence in over 2,000 cities and towns, and it processes over 2.5 million orders a day — up from about 600,000 daily orders last year.
“We have been truly impressed by their strong customer centricity and capital efficiency which has resulted in exceptional feedback from top players in the e-commerce sector!” said Niren Shah, Managing Director and Head of Norwest Venture Partners in India, in a statement.
Xpressbees started its journey within Firstcry, an e-commerce for baby products, in 2012. But in 2015, it became an independent company with Amitava Saha, co-founder and chief operating officer of FirstCry, moving out of FirstCry to become chief executive of Xpressbees. Supam Maheshwari, who co-founded Firstcry and serves its chief executive, is the other co-founder of Xpressbees.
The startup said it plans to deploy the fresh capital to further automate its hubs and sorting centres, and expand its delivery footprint to cover the entire country. “ I am delighted to see the impact we are making in the logistics ecosystem in the country,” said Saha in a statement
At stake is India’s growing logistics industry, which NVP’s Shah estimated to be worth $200 billion. “We continue to believe that new age technology led logistics players such as Xpressbees will continue to play a pivotal role both in the growth of the e-commerce sector in India,” he added.
E-commerce sales, which account for less than 5% of all retail sales in India, skyrocketed during the pandemic after New Delhi enforced a two-month nationwide lockdown. During their festival sales last month, Amazon India and Walmart-owned Flipkart reported record surge in their sales. The firms have created over 150,000 seasonal jobs to accommodate the growing demand of orders. Xpressbees works with over 30,000 delivery staff.
Xpressbees competes with a handful of established firms and startups including SoftBank-backed Delhivery, which became a unicorn last year, and Ecom Express, which has presence in about 2,400 Indian cities and towns.
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India’s antitrust watchdog has opened an investigation into Google for allegedly abusing the dominant position of its app store and Android mobile operating system to promote its payments service in the world’s second largest internet market.
In its Monday announcement (PDF) about opening an antitrust case against Google, Indian watchdog Competition Commission of India (CCI) said it would review claims whether Google “unfairly” skews the search results on the Play Store in favor of Google Pay app over others; prominently promotes Google Pay during the setup of an Android smartphone; and if Play Store’s billing system is designed “to the disadvantage of both i.e. apps facilitating payment through UPI, as well as users.”
The informant, who has not been identified, alleged that in addition to Google Play Store’s billing system favoring Google Pay app, in-app purchases for apps downloaded through Play Store are also mandated to support Google Pay service “if they want to be listed on the Play Store.”
Google “rigs its feature app lists such as ‘Editor’s Choice Apps’, ‘User Choice Apps’ and ‘Top Free apps’ … demonstrating clear bias in favor of its own app; by manipulating the search advertisements algorithm on the Play Store in favour of Google Pay; and by pre-installing and prominently placing Google Pay on Android smartphones at the time of initial set-up resulting in a ‘status-quo bias’ to the detriment of other apps facilitating payments through UPI as well,” the informant was quoted as saying by the Indian watchdog.
“The informant pointed out similarities between the conducts of Apple in Europe and Google in India i.e. like Apple (as set out in the Press Release of EC), as a mandatory requirement for listing on the Play Store, Google requires the app developers to exclusively use Google Play Store’s payment system and Google Play In-App Billing for charging users who purchase apps on the Play Store or buy goods/services from inside an app (i.e. IAP), and further like Apple, Google charges app developers a 30% commission for allowing them to use the Play Store’s payment system and Google Play In-App Billing,” the Indian watchdog said.
Google told CCI that Android “is not dominant in India and it faces significant competition from feature phones operating systems,” the Indian watchdog revealed. According to research firm Counterpoint, Android powers 99% of all smartphones in India. Google also disputed all the other allegations as well. For instance, it said, “Google’s 30% (and in certain circumstances, 15%) service fee is not arbitrary. It is market based, legitimate, and pro-competitive as the service fee allows Google to cover third party fees and support its significant and continued investments in Play, including the vast resources it develops for developers.”
If the allegations provided by the informant are found credible, Google’s practices could be in violation of various provisions of Section 4 of India’s Competition Act of 2002.
Google Pay, formerly known as Tez, is one of the most popular payments services in India. It competes with Walmart’s PhonePe, Paytm, and a range of other apps. As of last month, Walmart’s PhonePe was slightly ahead of Google Pay in India. Both the apps individually process roughly 40% of all transactions on UPI, a payments infrastructure built by large banks in the country. UPI is the most popular digital payments solution in India.
Google Play Store supports a range of payments methods, including credit cards, mobile wallets, internet banking, and UPI. But, as the informant alleges, “UPI based digital payment apps are more convenient, secured, economical, etc. over other digital payment solutions.” Based on such distinct features, the Indian watchdog said, “the Informant has averred that the market for apps facilitating payment through UPI is a separate relevant market as users do not regard apps facilitating payment through UPI as interchangeable or substitutable with other modes of digital payment.”
The new antitrust case is the latest headache for Google in India, its biggest market by users. In recent months, the dominant position of Android has also irked many startups in the country, who have formed an informal coalition to fight back the Android maker. Following the backlash in India, Google postponed the enforcement of its new Play Store billing rule in India to April 2022.
Google did not immediately respond to a request for comment.
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Amazon will invest about $2.8 billion in Telangana to set up a new AWS Cloud region in the southern state of India, a top Indian politician announced on Friday.
The investment will allow Amazon to launch an AWS Cloud region in Hyderabad city by mid-2022, said K. T. Rama Rao, Minister for Information Technology, Electronics & Communications, Municipal Administration and Urban Development and Industries & Commerce Departments, Government of Telangana.
The new AWS Asia Region will be Amazon’s second infrastructure region in India, Amazon said in a press release. It did not disclose the size of the investment.
“The new AWS Asia Pacific (Hyderabad) Region will enable even more developers, startups, and enterprises as well as government, education, and non-profit organizations to run their applications and serve end users from data centers located in India,” the e-commerce giant said.
“Businesses in India are embracing cloud computing to reduce costs, increase agility, and enable rapid innovation to meet the needs of billions of customers in India and abroad,” said Peter DeSantis, Senior Vice President of Global Infrastructure and Customer Support, Amazon Web Services, in a statement. “Together with our AWS Asia Pacific (Mumbai) Region, we’re providing customers with more flexibility and choice, while allowing them to architect their infrastructure for even greater fault tolerance, resiliency, and availability across geographic locations.”
The investment illustrates the opportunities Amazon, which has poured over $6.5 billion in its India operations to date and leads the cloud market in the nation, sees in the world’s second largest internet market.
“This is a big win for the state government of Telangana for attracting this level of investment,” said Jayanth Kolla, chief analyst at consultancy firm Convergence Catalyst. He told TechCrunch that the move will also help Amazon better comply with India’s data localization policy. “We could see states launch their own similar laws in the future.”
AWS has courted several high-profile businesses as customers in recent years. Some of these include automobile giant Ashok Leyland, life insurance firm Aditya Birla Capital, edtech giant Byju’s, Axis Bank, Bajaj Capital, ClearTax, Dream11, Druva, Edelweiss, Edunext, Extramarks, Freshworks, HDFC Life, Mahindra Electric, Ola, Oyo, Policybazaar, Quantela, RBL Bank, redBus, Sharda University, Swiggy, Tata Sky, and Zerodha.
More to follow…
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PUBG Mobile, the sleeper hit title that was banned in India two months ago over cybersecurity concerns, is plotting to make a return in the world’s second largest internet market, two sources familiar with the matter told TechCrunch.
The South Korean firm has engaged with global cloud service providers in recent weeks to store Indian users’ data within the country to allay New Delhi’s concerns about user data residency and security, one of the sources said.
The gaming giant has privately informed some high-profile streamers in the country that it expects to resume the service in India before the end of this year, the other source said. Both the sources requested anonymity as they are not authorized to speak to the press. PUBG Corporation did not respond to a request for comment Thursday.
The company could make an announcement about its future plans for India as soon as this week. It also plans to run a marketing campaign in the country during the festival of Diwali next week, one of the sources said.
In recent weeks, PUBG has also engaged with a number of local firms including SoftBank-backed Paytm and telecom giant Airtel to explore whether they would be interested in publishing the popular mobile game in the country, an industry executive said. A Paytm spokesperson declined to comment.
Chinese giant Tencent initially published PUBG Mobile apps in India. After New Delhi banned PUBG Mobile, the gaming firm cut publishing ties with Tencent in the country.
Late last month, two months after the ban order, PUBG Mobile terminated its service for Indian users. “Protecting user data has always been a top priority and we have always complied with applicable data protection laws and regulations in India. All users’ gameplay information is processed in a transparent manner as disclosed in our privacy policy,” it said at the time.
With more than 50 million monthly active users in India, PUBG Mobile was by far the most popular mobile game in the country before it was banned. It helped establish an entire ecosystem of esports organisations to teams and even a cottage industry of streamers that made the most of its spectator sport-friendly gameplay, said Rishi Alwani, a long-time analyst of Indian gaming market and publisher of news outlet The Mako Reactor.
PUBG Mobile’s return, however, could complicate matters for several industry players, including some that are currently building similar games to cash in on its absence and their conversations with venture capital firms over ongoing financing rounds.
It would also suggest that more than 200 other Chinese apps that India has banned in recent months could hope to allay New Delhi’s concerns by making some changes to where they store their users data. (That was also the understanding between TikTok and Reliance when they engaged in investment opportunities earlier this year.)
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Rumors have been floating for months that ByteDance is going public with TikTok and Douyin separately. Just last night, Bloomberg reported that ByteDance is seeking a pre-IPO round of $2 billion at a staggering valuation of $180 billion.
Before any of that materializes, ByteDance Chinese rival Kuaishou has moved ahead to file for an initial public offering in Hong Kong Thursday night, and its prospectus is shedding light on a race where both growth and costs are astronomical.
Launched by a former Google engineer in 2011 to share GIFs, Kuaishou has evolved into a nemesis of Douyin, TikTok’s sister in China. 21.5% owned by Tencent, the company reported a net loss of 6.8 billion yuan ($1 billion) in the first six months of 2020 while operating loss stood at 7.57 billion yuan. In contrast, it logged an operating profit of 1.1 billion yuan in the same period just last year.
The increase was in part a result of the company’s aggressive promotion of its lite version Kuaishou Express, which tailors to China’s less tech-savvy demographics. Unlike ByteDance, Kuaishou has had limited success overseas and relies on continuous domestic growth.
Its selling and marketing expenses skyrocketed 354.1% from 3 billion yuan in H1 2019 to 13.7 billion yuan in H1 this year. But the splurge seemed to have paid off: the lite app gained 100 million DAUs within a year. It’s a game of pay-to-play.
The main app Kuaishou itself, as of June, reached 302 million daily users, who spent over 85 minutes on the app per day engrossed in watching clips and live sessions. For comparison, Douyin crossed 400 million DAUs in January.
Though known as a “short-video app”, Kuaishou earns most of its revenue — 68.5% in H1 — from live streaming, during which audiences can send hosts virtual items priced anywhere between 1 and 2,000 yuan. Other monetization avenues include advertising, which accounted for 28% of its revenues, as well as less significant sources like e-commerce and games.
Douyin, on the other hand, pulled in about 67% of its revenues from advertising last year, a source told TechCrunch earlier, while live-streaming made up 17%.
The revenue makeup reflects the core use case of the apps. Kuaishou often prides itself on user engagement; indeed, over a quarter of its 776 million monthly users are creators themselves. That makes Kuaishou more of a social app where the viewers and creators interact frequently through means like live streaming and gifting.
Douyin, with algorithms that favor premium content, acts more like a form of media as some Chinese venture capitalists observed, making it a destination for showing ads.
In terms of revenue size, Kuaishou generated 39.1 billion yuan last year, about one-third of what ByteDance made last year. But one should keep in mind that ByteDance has another cash cow: its news and information aggregator, Jinri Toutiao.
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WhatsApp, which began testing its payments service in India with 1 million users in early 2018, can finally start to expand the feature to more users in the world’s second largest internet market.
National Payments Corporation of India (NPCI), the body that operates the widely popular UPI payments infrastructure, said on Thursday evening that it has granted approval to WhatsApp to roll out UPI-powered payments in India.
Like Google, Samsung, and a number of other firms, WhatsApp has built its payments service atop UPI, a payments infrastructure built by a coalition of large banks in India. NPCI said WhatsApp, which has amassed over 400 million users in India, can expand payments to its users in a “graded manner” and to start with, it can only roll out the payments service to 20 million users and has to work with multiple banking partners.
A WhatsApp spokesperson in India did not immediately respond to a request for comment.
Google and Walmart currently dominate the mobile payments market in India, together commanding roughly 80% of the UPI market share. UPI has emerged as the most popular digital payments method in India, thanks in part to New Delhi’s abrupt move to invalidate more than 85% of the paper cash circulation in the nation in late 2016.
More to follow…
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Google and Walmart have a new challenge ahead of them as they race to expand the reach of their payments apps in India: They won’t be permitted to grow beyond a limit.
National Payments Corporation of India (NPCI), the body that operates the widely popular UPI payments infrastructure, said Thursday evening that it will enforce a cap to ensure that no single payments app processes more than 30% of UPI transactions in a month.
The payments body said the move is aimed at addressing the “risks” and “protecting the UPI ecosystem as it further scales up.” The change goes into effect in January 2021.
UPI is a payments infrastructure built by large banks in India and is backed by the Indian government. It has become the most popular digital payments method in the country in recent years.
The cap of 30% will be calculated based on total volume of UPI transactions processed in the preceding three months, it added.
The move, described by an industry executive as the most absurd thing they have heard in months in India, will severely impact Google and Walmart, whose respective apps already process more than 35% of UPI transactions each.
In fact, Walmart’s PhonePe processed more than 40% of about 2 billion transactions on UPI network last month.
It remains unclear how any payments app will comply with this limit. Let’s say PhonePe or Google Pay has already processed about 650 million transactions in three weeks. Would it just switch off UPI payments on their app for the remainder of the month?
More to follow…
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The Public Investment Fund, which has this year invested $1.5 billion in Mukesh Ambani’s telecom venture Jio Platforms and more than half a billion dollars in his fiber-optic business, has returned to back yet another empire built by India’s richest man.
The sovereign wealth fund is investing $1.3 billion in Reliance Retail for a 2.04% equity stake in the largest retail chain in India. The investment values Reliance Retail, which was founded in 2006, at $62.4 billion, the Indian firm said.
Reliance Retail, which serves more than 3.5 million customers each week (as of early this year) through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country, has now raised over 6.4 billion since September this year.
Ambani (pictured above), who raised more than $20 billion for Jio Platforms this year from a roster of marquee investors including Facebook and Google, is expected to raise another few billion dollars for Reliance Retail by the end of the year. One of the companies that is widely expected to invest in Reliance Retail is Amazon, which has poured in over $6.5 billion in its India business to date.
The two commerce giants are currently stuck in a deadlock over Reliance’s $3.4 billion acquisition of several businesses of Future Retail, the second largest retail chain in India. Amazon, which owns a small stake in one of Future Retail’s subsidiaries, is fighting a legal battle to block the deal between Reliance and Future Retail. Future Retail and Reliance Industries have said that they intend to proceed with their deal.
“We at Reliance have a long-standing relationship with the Kingdom of Saudi Arabia. PIF is at the forefront of the economic transformation of the Kingdom of Saudi Arabia. I welcome PIF as a valued partner in Reliance Retail and look forward to their sustained support and guidance as we continue our ambitious journey to transform India’s retail sector for enriching the lives of 1.3 billion Indians and millions of small merchants,” said Ambani, who runs Reliance Retail’s parent firm, Reliance Industries, in a statement today.
As for Reliance Retail, the retail chain last year entered the e-commerce space with JioMart through a joint venture with Jio Platforms. JioMart now has a presence in over 200 Indian cities and towns, and it also maintains a partnership with Facebook for WhatsApp integration. Facebook, which invested $5.7 billion in Jio Platforms earlier this year, has said it will explore various ways to work with Reliance to digitize the nation’s 60 million mom and pop stores, as well as other small and medium-sized businesses.
“We are pleased to be furthering our trusted partnership with Reliance Industries, the leading player in some of India’s most exciting sectors,” said Yasir Al-Rumayyan, Governor of PIF, in a statement. “This investment further demonstrates PIF’s commitment to generating returns for the Saudi people and driving the economic diversification of Saudi Arabia.”
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The Shanghai and Hong Kong stock exchanges announced postponing Ant Group’s colossal initial public offering, a day after Chinese regulators weighed a slew of new fintech rules and summoned Jack Ma and other top executives to a closed-door meeting.
The rare talk between China’s top financial regulators and Ant, which revealed “major changes in the fintech regulatory environment,” may disqualify the firm from listing on November 5, the bourse said in a statement on the evening of November 3.
It’s unclear what those “changes” are, though the bourse has ordered Ant to disclose them. It’s worth noting that in late October, Ma gave a provoking speech criticizing China’s financial regulation. The conference was attended by China’s senior leaders and later on stirred widespread controversy.
Ant has over the years tried to be in the good graces of the authorities. When it rebranded from Ant Financial to Ant Technology this year, the gesture was seen as an attempt to shed the firm’s image as an intimidating financial giant and stress the one of a benevolent technology provider. The campaign began a few years ago, prompting the firm to devise awkward coinages like “techfin” (as opposed to “fintech”) and declare it wasn’t competing with traditional financial institutions, many of which were state-led.
The promises weren’t merely a show. Ant has slowly grown into an online marketplace matching hundreds of millions of customers with financial products offered by traditional players. It’s also brought on heavyweight state actors like the National Social Security Fund and China International Capital Corporation as shareholders, which are slated for handsome returns from their investments.
But the amount of reassurance did not seem enough. China’s financial authorities released a new wave of proposals on Monday to rein in the fintech sector, days before Ant was scheduled to raise $34.5 billion in the world’s largest initial public offering. The draft, though not explicitly aimed at Ant, coincided with the financial regulators’ meeting with Ant executives.
“Views regarding the health and stability of the financial sector were exchanged,” an Ant spokesperson told TechCrunch earlier in a statement. “Ant Group is committed to implementing the meeting opinions in depth and continuing our course based on the principles of: stable innovation; embrace of regulation; service to the real economy; and win-win cooperation.”
The message was clear: Ant strives to abide by Beijing’s wishes.
“We will continue to improve our capabilities to provide inclusive services and promote economic development to improve the lives of ordinary citizens,” the firm added.
The proposal was just the latest move in China’s ongoing effort to bring stability to its flourishing fintech sector. The draft rules include a ban on interprovincial online loans unless otherwise approved by authorities; a maximum online loan amount of 300,000 yuan ($45,000) for each individual; and a 1 billion yuan registered capital threshold for online microloan lenders.
At issue is Ant’s ballooning lending business, which contributed 41.9 billion yuan or 34.7% to its annual revenue, according to the firm’s IPO prospectus. In the year ended June, Ant had worked with about 100 banks, doling out 1.7 trillion yuan ($250 billion) of consumer loans and 400 billion yuan ($58 billion) of small business loans.
Over the years, China’s financial regulators have dropped numerous other policies limiting the expansion and profitability of fintech players. For instance, Ant’s payments service Alipay and its rivals could no longer generate lucrative interest returns from customer reserve funds starting last year.
Ant has not responded to a request for comment on the IPO halt.
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UPI, a payments infrastructure built by India’s largest banks, surpassed 2 billion transactions last month, exactly a year after hitting the 1 billion monthly transactions milestone.
Driving the transactions for UPI — which has become the most popular digital payments method in India thanks to its open architecture that allows interoperability between all participating payments apps — are Walmart’s PhonePe, Google Pay, Paytm, and Amazon Pay.
But for the first time in more than a year, Google Pay did not drive the most volume of UPI transactions. PhonePe recorded 835 million UPI transactions in October, it said, while Google Pay hit about 820 million, according to people familiar with the matter.
Paytm recorded about 245 million transactions, while Amazon Pay settled with about 125 million, the people said.
In a statement, PhonePe confirmed that it assumed the market leading position with about 40% of all UPI transactions last month. Google and Paytm did not immediately respond to a request for comment.
TechCrunch could not determine how many unique monthly transacting users these payments firms have amassed in the country. In May, Google Pay had about 75 million transacting users, ahead of 60 million on PhonePe and 30 million on Paytm.
Unlike Google Pay, both Paytm and PhonePe also operate a wallet service that is not powered by UPI. PhonePe said overall it processed 925 million transactions last month and had over 100 million monthly active users.
PhonePe has recently seen a surge in its transactions as more offline shops open and merchants and consumers opt for a digital alternative to complete transactions. The app has also added a range of financing services, including 600,000 insurance policies.
“We are on a mission to make digital payments a way of life for every Indian citizen, and our next target is to cross 500 million registered users by Dec 2022. In line with our brand ethos of ‘Karte Ja. Badhte Ja,’ (Hindi for keep working and growing) we continue to launch new and innovative products for every strata of Indian society, as well as enable digital payment acceptance across every merchant in every village and town in India,” said Sameer Nigam, chief executive and founder of PhonePe, in a statement.
India’s mobile payments market is estimated to reach $1 trillion by 2023, according to Credit Suisse. More players are expected to join the race. WhatsApp, which has over 400 million users in India, started testing UPI payments on its app in 2018. It remains stuck in a regulatory maze, however, which has prevented it from rolling out WhatsApp Pay to most of its users in the country.
More to follow…