STARTUP DIGEST: Top Stories Of The Day

There were several important startup updates during the day on Monday. Here's a wrap of all the stories from the startup universe.

Razorpay raises $160 million led by Sequoia Capital and GIC; valuation triples to $3 billion

Payments and business banking platform Razorpay has announced its Series E fundraise of $160 million, which has tripled the company's valuation to $3 billion in less than six months. The company had become a unicorn in October 2020.

This new round was co-led by Sequoia Capital and GIC, Singapore’s sovereign wealth fund, along with participation from Ribbit Capital and Matrix Partners.

Razorpay plans to infuse the freshly raised capital to scale up its business banking suite, invest in new acquisitions and launch in International markets such as South-East Asian countries. The fintech Unicorn said it is hiring more than 600 employees to fuel its growth plans.

The new funding gives Razorpay a total of $366.5 million in investments since its inception in 2014, which includes its recent raise, a $100 million in Series D in 2020.

The company’s neo-banking platform RazorpayX saw 400 percent growth in transaction volume in the last 12 months of COVID. A portion of the funds raised will be invested in RazorpayX to roll out new tailored products, the company said in a release.

The company has been disbursing credit upwards of Rs 700 crore a month, helping entrepreneurs get access to working capital, and now plans to scale this up to Rs 1,000 crore a month by the end of 2021.

Razorpay is also looking at global expansion. The company has been working on market research, understanding the payment needs of Southeast Asia businesses and plans to hire on-ground teams in building a payment acceptance layer and work with multiple stakeholders on product customisation.

In 2021, Razorpay also plans to double down investment in acquiring B2B SaaS companies.

In 2019, Razorpay acquired two companies - Opfin, a payroll and HR management software company, and Thirdwatch, an Artificial Intelligence (AI) driven company specialising in big data and machine learning for real-time fraud prevention.

In the past six months, Razorpay said it has witnessed a 40-45 percent growth, month-on-month. Currently, the company has achieved $40 billion TPV (Total Payment Volume), and powers payments for over 5 million businesses including the likes of Facebook, Airtel, Ola, Zomato, Swiggy, Cred, ICICI Prudential among others. Razorpay is aiming to reach 200 million customers by 2021.

Druva secures $147 million investment

Cloud data protection and management company Druva has raised $147 million as its Series H funding round. This round doubles Druva’s valuation to over $2 billion, the venture had raised $130 million as part of its Series G funding round in June 2019 when it entered the unicorn club.

The fundraise was led by Caisse de dépôt et placement du Québec (CDPQ), a global investment group, with a significant investment by Neuberger Berman, each of which manage more than $300 billion in net assets.

The round also included participation from existing investors Viking Global Investors and Atreides Management.

As organisations quickly move workloads to cloud environments, adopt SaaS solutions, and combat rising cyber threats, the company says this new investment will fuel scale, continued innovation and expansion of Druva Cloud Platform to meet today’s unprecedented needs.

Over the last 12 months, enterprises have moved swiftly to adopt cloud solutions to strengthen business resilience, maintain critical business operations, and support hybrid work models. Based on this demand, Gartner, Inc. forecasts cloud adoption will reach a five-year compound annual growth rate (CAGR) of 20.7 percent. Only solutions built natively in the cloud will be able to successfully deliver and, 40 percent of organizations will supplement or completely replace traditional backup applications with cloud-based solutions by 2022, according to Gartner.

Helping businesses manage, protect, and govern critical data during their digital transformation efforts, Druva Cloud Platform’s customer base has expanded substantially during 2020, while the adoption of multiple Druva Cloud Platform products has increased by 50 percent in the same time period.

In the last year, the company’s data under management has grown by more than 40 percent as Druva supports industry leaders, disruptors, and pioneers including GameStop, Marriott, NASA, National Cancer Institute, Pfizer, and Regeneron Pharmaceuticals.

Paytm expands its ESOP pool to $600 mn; VSS owns $2.2 bn worth stake: Entrackr

Paytm has altered its ESOP scheme and added 242,904 options to the existing pool. With this, its current ESOP pool consists of 2,409,428 equity options, according to regulatory findings accessed by Entrackr.

As per Entrackr, Paytm is the most valued startup in India with a $16 billion valuation and this reflects in its employee stock option or ESOP scheme and the personal fortune of the company’s founder and CEO Vijay Shekhar Sharma.

The company has added Rs 456 crore worth of options in this exercise and the updated Paytm ESOP pool valued at about Rs 4,520 crore or $604 million, making it one of the largest ESOP pools among Indian startups.

Filings show that Paytm’s boss Vijay Shekhar Sharma holds 90.51 lakh equity shares in the company, currently valued at $2.2 billion.

Lo! Foods raises $1 million in pre-series A funding

FMCG startup Lo! Foods has raised $1 million in pre-series A funding led by the Chona Family Office (former promoters of Havmor Ice Cream). The round also saw participation from Ecosystem Ventures, Raveen Sastry of Multiply Ventures, KRS Jamwal, Pratyush Prasanna of Gojek. The funds will be used towards accelerating growth, strengthening existing distribution networks and ramping up marketing, as per the company.

Founded in 2019, the company sells a range of healthy low carbohydrates and keto friendly packaged products. The product portfolio ranges from staples to snacks and desserts, the company said. Lo! Foods has also ramped up to 20 cloud kitchens across Bangalore, Delhi, Gurgaon and Hyderabad that offer fresh Low-Carb food like Parathas, Rolls, Sandwiches on demand through food delivery apps.

Bitcoin slumps 14% after big gains 

Bitcoin, the world’s biggest cryptocurrency, fell as much as 14% to $51,541 on Sunday, reversing most of the big gains it made over the past week.

Bitcoin was last trading down 10% at $53,991 as of 1320 GMT, a whopping $12,000 below record highs set on Wednesday. Smaller rival Ether , the coin linked to the ethereum blockchain network, dropped 10% to $2,101, Reuters reported.

Data website CoinMarketCap cited a blackout in China’s Xinjiang region, which reportedly powers a lot of bitcoin mining, for the selloff.

Luke Sully, CEO at digital asset treasury specialist Ledgermatic, said in an email that people "may have sold on the news of the power outage in China and not the impact it actually had on the network".

"The power outage does expose a fundamental weakness; that although the Bitcoin network is decentralized the mining of it is not," Sully added.

Some widely-followed block chain analysts on Twitter pointed to a sharp drop in "hash rate" due to the outage.

Hash rate refers to the volatility index that measures the processing capacity of the entire Bitcoin network, and it determines the power required by miners to produce new Bitcoins.

"Typically shocks to hash rate do not cause price drops. A hash rate reduction slows transactions, which ironically makes it harder to move coins to exchanges for sale. The recent price drop is well within the bounds of typical volatility, it is noise not signal," said Edan Yago, co-founder at Bitcoin-based decentralised finance protocol Sovryn.

The retreat in Bitcoin also comes after Turkey’s central bank banned the use of cryptocurrencies for purchases on Friday.

Edward Moya, senior market analyst at OANDA, said cryptocurrencies had been ripe for a pullback.

"The market has become overly aggressive and bullish on everything," said Edward Moya. "It could have been any bearish headline that could have triggered this reaction."

Many cryptocurrency markets operate 24/7, setting the stage for price swings at unpredictable hours. Historically, retail and day traders have driven the moves.

Despite the sudden selloff, bitcoin is still up 89% so far in 2021, driven by its mainstream acceptance as an investment and a means of payment, accompanied by the rush of retail cash into stocks, exchange-traded funds and other risky assets.

Clubhouse closes new round of funding, valuation reaches $4 billion: Report

Audio-chat app Clubhouse closed a new Series C round of financing, the company said during its weekly town hall on Sunday, without disclosing the amount raised, Reuters reported.

A source familiar with the matter confirmed to Reuters that the new financing would value the company at $4 billion.

The social media app said the new round of financing was led by Andrew Chen of venture capital firm Andreessen Horowitz with major investors like DST Global, Tiger Global and Elad Gil.

Clubhouse and Andreessen Horowitz did not respond to requests for how much the funding round raised.

The San Francisco-based company, whose app allows people to discuss varied topics in audio chatrooms, has seen its popularity surge after appearances by billionaires Elon Musk and Mark Zuckerberg.

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