Published: 6/8/2021
Good morning, it's Tuesday and we're back to our normal reporting schedule. As India is coming out of the second wave, the startup news seems to be rebounding and we have a couple of large news stories today- Tata investing in Curefit and the State Bank of India investing in Cashfree.
➡️ Tata seems to be on their investing/acquisition spree after acquiring both BigBasket and also being in talks to acquire 1mg. They have now officially committed to invest $75M into fitness startup CureFit (though it is uncertain if they are acquiring the company just yet).
➡️ As per the deal, CureFit's CEO Mukesh Bansal will join Tata Digital as its president while also remaining in his role at CureFit. Mukesh Bansal was previously the founder of fashion e-tailer Myntra, which was acquired by Flipkart in 2014. He then spent a couple of years at the eCommerce giant before starting Cult.fit in 2016.
➡️ CureFit has previously raised over $400M and was last valued at $815M, though it is unknown at what valuation or terms Tata invested at. The news of the investment is interesting because a recent news story about CureFit (and their acquisition of Tread) said that CureFit was sitting on a bunch of capital, though I do see how the acquisition makes sense from Tata's perspective.
➡️ Though late to the digital game, Tata has an aggressive goal of trying to build a super app in the country and their acquisitions of BigBasket and (reported) 1mg shows that they mean business. And who better to lead the digital strategy than someone who built who started and scaled an eCommerce business and spent a couple of years at India's largest eCommerce company.
➡️ I think it will still take Tata a while to acquire and build more pieces around its digital strategy, but I am very keen on seeing what direction Mukesh Bansal takes them in.
2. https://bit.ly/3xiGEKL: State Bank of India invests in Cashfree
➡️ In other startup news, Cashfree announced that the State Bank of India has invested an undisclosed amount into the company. The, usually unheard of, company counts the likes of Apis Partners, Smilegate and Y Combinator as its investors and was last valued at $200M in November.
➡️ I have not seen SBI invest in a startup before so this news was quite interesting and according to Cashfree's CEO the strategic investment helps with the company growth strategy.
➡️ Cashfree builds financial products for companies to collect payments from customers online and competes with the likes of Razorpay, PayU but also has products around payouts (disbursing money) as well as settling transactions on online marketplaces.
➡️ SBI is one of the largest banks in the company so this investment holds some significance just in those terms (the last investment by a bank in a startup in India was HDFC investing in Smallcase) and will probably help Cashfree with customers or core payments infrastructure down the road.
➡️ The company also seems to be in the market to raise more capital and I don't think they will have a terribly hard time raising with all things payments and infrastructure being super hot right now, so don't be surprised if we're covering Cashfree in the near future with some updated numbers.