SoftBank slashes Oyo’s valuation to $2.7B; Zetwork’s revenue up six-fold in FY22

SoftBank slashes Oyo’s valuation to $2.7B; Zetwork’s revenue up six-fold in FY22


SoftBank, Oyo’s largest shareholder with an IPO, has cut the hotel booking company’s valuation by 20% from $3.4 billion to $2.7 billion, after comparing it to peers with similar operations. Three years ago, Oyo was valued at $10 billion.

giphy

Credit: Giphy

Also in this letter:
■ Zetwerk reports six-fold jump in FY22 revenue to Rs 4,961 crore
■ WhatsApp Pay India head Manesh Mahatme resigns
■ ETtech opinion: The need for edtech


SoftBank cuts IPO valuation of Oyo to $2.7 billion

Ritesh Agarwal

Ritesh Agarwal, Founder and CEO, Oyo

SoftBank Group Corp. has slashed Oyo Hotels’ book valuation by more than 20% as the high-flying Indian startup prepares for an initial public offering (IPO).

Details: The Japanese investor, which is the largest shareholder in the hotel booking company, cut its estimate of Oyo’s value to $2.7 billion in the June quarter from $3.4 billion previously after comparing with peers with similar operations. Oyo had reached a valuation of $10 billion in a 2019 funding round.

IPO plans: We reported on Monday that Oyo filed a new round of financial documents with India’s market regulator and planned an IPO in 2023 after cost cuts and a recovery in travel helped it pare losses.

The startup was targeting a valuation of around $9 billion in its IPO after preliminary talks with potential investors. In its preliminary filing last September, the company had said it planned to raise 843 million rupees (about $1 billion) in the IPO.

Oyo’s response: The company said it was confident its valuation should not have been cut due to the recovery in business performance, adding that it had not decided on the timing for an IPO.

Finances: Oyo said in an addendum to its IPO filing on Monday that its losses narrowed and sales recovered in the year ending March 2022 (FY22) and the following three months (Q1FY23). .

It reported income from operations of Rs 1,459.3 crore in 1Q23. Its restated quarterly loss from continuing operations was Rs 414 crore. The company claimed this was its first Ebitda-positive quarter.


Zetwerk reports six-fold jump in FY22 revenue to Rs 4,961 crore

Zetwork

Amrit Acharya, Co-Founder and CEO of Zetwerk

Manufacturing services unicorn Zetwerk on Thursday reported revenue of Rs 4,961 crore in its audited FY22 results, a six-fold increase over the previous year.

The company reported revenue of Rs 835 crore in FY21 and Rs 321.7 crore in FY20.

Overall losses were virtually unchanged at Rs 42 crore, after factoring in non-cash employee share ownership plan (Esop) expenses. Zetwerk had reported a total loss of Rs 41.2 crore in FY21.

financial composition

What drives growth? Co-founder and CEO Amrit Acharya told us that the jump in revenue was due to growth in revenue from its consumer manufacturing business and international customers.

Zetwerk’s revenue from consumer manufacturing accounts for 30% of its total revenue, while international operations contribute 16%. The US market contributes to nearly 70% of the company’s international revenue.

On an operational level, the unicorn said it posted an Ebitda profit of Rs 57 crore from operations. Its total gross merchandise value (GMV) also grew sixfold to Rs 5,718 crore in FY22 from Rs 951 crore in the previous fiscal.

Increase in PLI: In 2021, the Indian government launched a Production Linked Incentive (PLI) scheme to boost domestic manufacturing, with a disbursement of Rs 2 lakh crore for 14 sectors, including automobiles and auto components, the special steel and white products.

The idea was to reduce import bills and improve the cost competitiveness of domestically manufactured products.

Cement, metals and renewable energy remain Zetwerk’s main manufacturing categories.


WhatsApp Pay India head Manesh Mahatme resigns

manesh mahatme

Manesh Mahatme, director and head of WhatsApp Pay in India, left the company earlier this month after nearly 18 months with the Meta-owned messaging app.

Return to Amazon? Mahatme, who was previously director and board member of Amazon Pay India, was hired by WhatsApp to lead its payments vertical in April 2021. As director of WhatsApp Pay, he focused on improving the experience of user payment and to scale the service.

He is expected to rejoin his former employer Amazon India in a strategic role, said a person familiar with the discussions, who did not want to be named.

WhatsApp UPI Struggles: In November 2020, the National Payments Corporation of India (NPCI), which operates the Unified Payments Interface (UPI), gave WhatsApp approval to go live on the platform in a phased manner, with a maximum 20 million customers to start. It doubled that cap to 40 million by the end of 2021, then to 100 million in April 2022.

Despite the increase, WhatsApp Pay’s share in the total number of UPI transactions remains abysmal. It had less than 1% share of the global UPI market in August, with just 6.72 million transactions, despite launching successive cashback campaigns in April and June, which led to a small increase in numbers.

Also read | NPCI consults government, other stakeholders on UPI market cap amid extension requests


ETtech Opinion: The need for edtech

edtech

During the pandemic, our domestic help was very worried about her children.

While the world had opened up, schools remained closed. Their children, who went to school to study and socialize, stayed locked up at home. In the absence of a school, the only method of teaching was to learn online.

Thanks to some enterprising teachers, the children received videos from the Internet to learn. Without educational technology, it would have been impossible for them to educate themselves.

The pandemic reversed decades of learning progress, especially in developing countries like India, but more than 600 million children worldwide were affected. Learning about poverty is real and could have far-reaching consequences for the future of the world.

Thirty-five million children in India have never been to school. More than 50 million children live in tier 2 and 3 cities, and many more in villages. Few have access to education like the privileged few in top cities.

Educational technology, or edtech, bridges this gap.

Click here to read the full column by Aviral Bhatnagar, Founder of A Junior VC.


Ettech Done Offers

Deep roots

Deep Rooted co-founders (from left) Santhosh Narasipura, Avinash BR, Gururaj Rao and Arvind Murali

■ Deep Rooted, a farm-to-consumer (F2C) fruit and vegetable brand, announced that it has raised $12.5 million in a funding round led by IvyCap Ventures, with participation from existing investors including Accel, Omnivore and Mayfield. Over the next 12 months, the startup plans to expand its operations to cover major cities in South India, strengthen its technology stack and proactively hire in marketing, technology and business roles.

■ Web3 wallet tracking and cryptocurrency taxation startup Binocs said it has raised $4 million in funding led by Beenext, along with Arkam Ventures, Accel, Saison Capital, Premji Invest, Blume Ventures and Better Capital . It said it would use the funds to expand its product, engineering, growth and marketing teams.

■ Web3 chess startup and marketplace Immortal Game said it has raised $12 million in funding led by TCG crypto. Other tech and entertainment VC specialists such as Cassius, Greenfield One, Sparkle Ventures, Kevin Durant and Rich Kleiman’s 35V, Blockwall, Kraken Ventures and Spice Capital also participated in the round.

■ FS Life, formerly known as FableStreet, said it has raised Rs 50 crore in a funding round led by Fireside Ventures. Other startup founders such as Ghazal Alagh of MamaEarth; Cars24’s Mehul Agarwal and Vikram Chopra; Malika Sadani from The Moms Co also took part in the round.

Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in New Delhi. Graphics and illustrations by Rahul Awasthi.



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