Also in this letter:
■ Tiger Global’s Scott Shleifer is visiting India next week
■ Infosys will introduce 65% variable compensation for the second quarter
■ Unitus Ventures will close its third $100 million fund next year
Didn’t enter the fashion world to justify the rating: Nykaa’s Falguni Nayar
A year after taking her company public, Falguni Nayar, founder and CEO of Nykaa, said the next big goal is to achieve profitability in her fashion and business-to-business (B2B) units with reasonable growth rates , though shares of the company corrected on a broader rout of tech stocks globally and in India.
Nayar, who was adjudged ‘CEO of the Year’ at the 2022 Economic Times Startup Awards, had raised tiny outside capital and made profits in the typically cash-intensive e-commerce sector before participating in a stellar initial public offering .
He spoke to us about the company’s journey to market flotation, the massive shift from euphoria to caution for new-age tech stocks, and Nykaa’s focus on its fashion and B2B businesses.
Here are some edited excerpts:
From a private company to a listed public body, how was the last year for Nykaa? You, as CEO, have seen the stock swing from buoyancy to rout now, especially for tech companies…
Markets have changed in the last year since our IPO and investors are calling for more accountability on short-term numbers, but we have always been focused on our unit economy and path to profitability. So, for us to explain what is happening is not difficult.
The analysis on Nykaa Fashion is that you entered the market to expand your total addressable market (TAM), since beauty alone would not give you that kind of rich valuation…
It was never to justify Nykaa’s assessment. We knew that fashion was five times the TAM of beauty and the customer is the same and we know how they shop. These shoppers know that Nykaa is a trendy brand, so we saw that they were ready to engage with us about fashion, which is why we got into that business.
Click here for the full interview
Tiger Global’s Scott Shleifer is visiting India next week
Scott Shleifer, global head of private investment at Tiger Global, will be in India next week, multiple sources have told us. It will be his first in the country since he took the job of overseeing the fund’s investments in India from Lee Fixel, who moved from Tiger Global in 2019 to start his own venture, Addition.
Winter visit: Shleifer’s visit comes amid a slowdown in venture financing here. He will meet with the founders of various startups — those in Tiger’s portfolio as well as some that he hasn’t invested in — our sources said.
“There are meetings scheduled for next week. He will stay here at least for a few days. Naturally, portfolio companies will update him on their performance and ask for advice on how to weather the stormy economic conditions,” one of the sources said.
Tiger Global is one of the most aggressive investors globally and in India having backed companies like Flipkart, Ola, Razorpay, Upstox and more.
We reported last month that India has emerged as a major highlight for Tiger at a time when it is raising a $6 billion fund, substantially less than the $12.7 billion tech vehicle that closed the last year.
Discount: This, among other things, marks the first major recession for the tech world in more than two decades, and comparisons are drawn to the dotcom bust of 1999-2000.
Venture funding for Indian startups fell to $2.7 billion in the September quarter, from nearly $12 billion in the same period last year, according to data from Venture Intelligence.
ET Ecommerce Index
We have launched three indices – ET Ecommerce, ET Ecommerce Profitable and ET Ecommerce Non-Profitable – to track the performance of recently listed technology companies. Here’s how they’ve fared so far.
Infosys will introduce 65% variable compensation for the second quarter
Infosys employees will receive 65% of their variable compensation for the July-September quarter. Eligible employees receive the sum in the November payroll cycle, according to an internal email.
This is less than the 70% it had given to employees for the April-June quarter.
“The average organization-wide payout is 65% for the second quarter of fiscal year 23. Individual payout percentages will differ based on individual performance and contribution for the quarter,” the company wrote in an email. Wednesday, a copy of which we examined.
For employees in the United States and Canada, the payment will be processed together with the second bi-weekly payroll for November. Employees will receive direct communication about their variable compensation on 17 November.
The others: Tata Consultancy Services (TCS) said it will give 100% variable pay to 70% of its employees for the quarter. The remainder will receive variable pay based on the performance of their business unit.
Infosys’ city rival Wipro also gave 100 percent variable pay for the July-September quarter to employees up to team leader level.
Unitus Ventures will close the third $100 million fund next year
Early-stage venture capital fund Unitus Ventures plans to close its third fund in India with a corpus of $100 million next year, the fund’s cofounder and managing partner Will Poole told us. Unitus has backed startups such as CueMath, GigForce, Masai School and CareerNinja.
Focus: With the third fund, Unitus Ventures will increase its focus on areas such as work technology, enterprise SaaS, sustainability and climate.
There’s more: The VC fund, which has offices in Bengaluru and Seattle, also plans to close a Rs 300 crore opportunity fund, through which it will invest in successful startups from its first two funds.
ETtech Offers concluded
- Edtech company Simplilearn has raised $45 million in a new funding round led by global edtech-focused venture capital firm GSV Ventures, the company said Wednesday. Clal Insurance, DisruptAD and ADQ’s venture capital platform also participated in the round.
- Diabetes care startup BeatO has raised $33 million in a funding round led by Lightrock India, with participation from HealthQuad, Flipkart Ventures and existing investors including Blume Ventures and Leo Capital.
- Bangalore-based CSR technology platform Goodera has raised $10 million from investors including Zoom Ventures, Elevation Capital, Flipkart co-founder Binny Bansal’s Xto10X, Nexus Venture Partners and Omidyar Network. Bansal has also invested in the startup in a personal capacity.
TWEET OF THE DAY
ISMC Analog closes to deal with five banks for $3 billion chip fab near Mysuru
Mumbai-based ISMC Analog, one of the candidates in a government plan to set up semiconductor manufacturing units in the country, is close to finalizing a debt deal with a consortium of five banks led by the State Bank of India (SBI) for its $3-billion project near Mysuru, multiple sources have told us.
Details: They said the consortium of lenders had given “in principle” approval to provide a loan of up to Rs 2,500 crore for the project.
ISMC has received interest from these banks as semiconductor manufacturing is an “industry in dawn,” one of the sources said.
“The consortium could be led by SBI. Other big bankers could also join, given that the feasibility of the project is established, and the applicants are big names,” said another source.
ISMC, backed by Mumbai-based venture capital fund Next Orbit and Israeli technology company Tower Semiconductor, has proposed building the fab in an electronics cluster near Mysuru.
We reported on Nov. 8 that Reliance Industries and HCL were individually eyeing a 30% stake in ISMC.
More top stories from our reporters
LTIMindtree will focus on real estate, cost and revenue synergies: LTIMindtree, the entity formed by the merger of Larsen & Toubro Infotech (LTI) and Mindtree, will focus on long-term real estate, cost and income synergies, its chief executive said. The company, which has become India’s fifth-largest IT service provider by market capitalization, may seek to rationalize real estate if there is duplication within the same cities. But in bigger cities like Bengaluru, it will focus on setting up more satellite offices in the long term, chief executive Debashis Chatterjee told us.
India Push for Airbnb: Airbnb saw overall nightly bookings from Indians grow nearly 50% in the third quarter, while domestic nightly bookings increased nearly 80% over the same period pre-Covid. “India has been one of our most important and fastest growing major geographies,” co-founder and chief strategy officer Nathan Blecharczyk told us in an exclusive interview.
Global choices we are reading
■ Do you want to archive Twitter? Good luck with that (wired)
■ Elon Musk testifies in court over his multi-billion dollar contract with Tesla (WSJ)
■ Supervisory board tells Meta to reinstate post comparing Russians to Nazis (The Washington Post)