IPO-tied FirstCry calls for a valuation of $4 billion; Clevertap in talks to raise $75 million

By Sydney Barrett Last updated Aug 9, 2022

SoftBank and other foreign investors are looking to reduce their stake in FirstCry through a secondary market sale that would value the company at up to $4 billion. The omnichannel retailer is seeking more domestic private equity funding ahead of its delayed IPO.

Also in this letter:
■ Clevertap in Discussions to Close $75M Financing, dual assessment
■ The IT industry is facing a perfect talent storm, says Wipro’s Rishad Premji
■ WazirX claims to comply with KYC rules

IPO-tied FirstCry could see its valuation rise to $4 billion in secondary funding

Japan’s SoftBank is one of many investors trying to sell shares of FirstCry in the secondary market, valuing the company at $3.5 billion to $4 billion as it prepares for a public listing, multiple sources tell us.

Details: The firm led by Masayoshi Son, FirstCry’s largest investor, NewQuest Capital Partners, and several other existing investors are in talks to divest some of their holdings, they said.

SoftBank, which owns a 29% stake in FirstCry, plans to reduce its stake to less than 25%, according to another person with knowledge of the matter.

The Pune-based retailer is looking to reduce its overseas holdings while raising domestic private equity funds as it prepares to file for an initial public offering (IPO) in the coming months.

FirstCry has held talks with Mumbai-based private equity firm Kedaara Capital, which has backed eyewear retailer Lenskart, according to two people familiar with the developments. They said FirstCry plans to submit its draft IPO papers “very soon.”

FirstCry is currently valued at around $2.7 billion. According to a person familiar with the matter, Premji Invest holds a 9-11% stake in the company, Mahindra Group around 12-13% and TPG 5-6%.

IPO Details: People familiar with its IPO plan said the company is aiming for an IPO with a valuation of $6 billion to $7 billion as it is a rare example of a profitable e-commerce company. In fiscal 2021, Firstcry recorded a net profit of Rs 2.16 crore against a loss of Rs 1.91 crore in the previous fiscal year.

SaaS company Clevertap in talks to close $75 million in funding, doubling its valuation

Customer retention and user engagement software provider Clevertap is set to raise about $75 million from Canada’s CDPQ and IIFL, sources tell us.

The funding round will value the Mumbai and California-based company at $750 million to $775 million, more than double the valuation in the previous round, they said.

The fundraiser comes at a time when software-as-a-service (SaaS) company valuations have plummeted from the highs they reached during the pandemic.

Indian SaaS flagship Freshworks, which went public in the US last year, has dropped its valuation to $4.3 billion.

miss unicorn: Clevertap aimed to close the new round at a $1 billion valuation but lowered its expectations due to the broader market slowdown, said another person familiar with its fundraising plan.

The company had raised $35 million in its Series C round led by Sequoia Capital and Tiger Global in October 2019 when it was valued at $385 million.

Clevertap competes with MoEngage, AppsFlyer and WebEngage, among others. His customers include Lenskart, PharmEasy and Dream11.

The IT industry is facing a perfect rush for talent, says Wipro’s Rishad Premji

India’s IT sector is facing a “perfect storm” in terms of talent-related challenges, said Wipro Ltd Chief Executive Rishad Premji, with almost 40% of its employees joining in the last two years and a similar number working from the level is II and Tier III cities.

Premji’s comments come at a time when the IT industry experienced a high level of turnover in the quarter ended June 30. Among the top four IT companies, Wipro was the lone exception with a 23.3% turnover rate in the April-June period, up 50 basis points from the previous quarter.

“Less than 15% of employees are coming into the offices in most companies…there’s a big challenge in terms of the culture of connectedness and the sense of giving people a sense of belonging to the organization despite the huge growth,” Premji said.

“People living in Bengaluru, Hyderabad, Mumbai or Pune have returned to their hometowns (to Tier II and III cities) with no active interest in necessarily returning to big cities,” he added.

WazirX says it is compliant with KYC rules

Nischal Shetty, CEO, Wazir X

Zanmai Labs, operator of Indian cryptocurrency exchange WazirX, said on Tuesday that it has a zero-tolerance policy towards illegal activities.

The statement comes just days after the Directorate of Enforcement (ED) claimed the company had breached know-your-customer (KYC) guidelines.

“Users are only signed into WazirX after they complete the KYC process, including submitting proof of address and proof of identity. Our KYC/AML (Anti-Money Laundering) terms and processes are publicly available on the platform. For each transaction, we are able to create each user’s KYC details,” a spokesman said in a statement.

Catch up fast: On Friday, ED said it had recently conducted searches on one of the directors of Zanmai Lab Pvt Ltd and issued an order to freeze his bank accounts with balances of Rs 64.67 crore. According to ED, WazirX “actively” helped 16 fintech companies – under investigation for money laundering – to divert suspected criminal proceeds using crypto.

The agency claimed that WazirX violated KYC norms and failed to conduct extended due diligence (EDD) or collect suspicious transaction reports (STRs).

Indian fintech firms set to manage $1 trillion in assets by 2030: report

Funding for Indian fintech startups totaled $7.8 billion in 2021, and the industry is expected to have $1 trillion in assets by 2030, according to a new report by venture capital firm Chiratae Ventures and EY India will manage.

Indian fintech companies are expected to reach $200 billion in revenue by 2030, the report added.

Currently, most of the funding is geared towards digital payment companies. Of the $7.8 billion total raised by the sector last year, $3.5 billion (about 44%) went to fintech payments companies, it said.

As India’s payments landscape evolves, technologies such as Near-Field Communication (NFC) payments, Soft Point of Sale (PoS) penetration and Central Bank Digital Currency (CBDC) use cases are expected to drive new innovations in this space, per the report .

Uber unlocked economic value of Rs 44,600 crore for India in 2021: report

Ride-hailing company Uber unlocked economic value of Rs.44,600 for India in 2021, according to a study by UK-based consultancy PublicFirst.

These include the impact of driver partner revenue and the indirect and induced multiplier effect created throughout the company’s supply chain.

With 600,000 drivers and 8.5 million passengers per month, India is one of the largest markets for the US-based company.

According to the report, Uber has produced Rs. 150,000 in consumer surplus for Indians and saved them 168 million hours a year.

The report is based on data from 2021, when operations were suspended for two months due to Covid-19 lockdowns.

IPO-tied FirstCry calls for a valuation of $4 billion; Clevertap in talks to raise $75 million

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IPO-tied FirstCry calls for a valuation of $4 billion; Clevertap in talks to raise $75 million

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