Reliance Retail’s acquisition of Urban Ladder, a deal worth INR 182 Cr for a seven-year-old startup, a distress sale was a sign of the larger trend with M&As this year
With the funding for the Indian startup economy projected to witness at least an 11% year-on-year (YoY) decline in 2020, distress sales haven’t been uncommon this year.
Having acquired five startups this year, Unacademy has emerged as the biggest acquirer in 2020
Year End Review 2020
When the world shut down, they survived; when cash flow dried, they raised billions; when deals were few, they got acquired. From exciting launches & mammoth funding to biggest shutdowns, a look back at 2020 through startups’ lens.
Reliance Retail’s acquisition of Urban Ladder, a deal worth INR 182 Cr for a seven-year-old company, was a sign of the larger trend of distress sales in India’s startup mergers and acquisitions (M&As) landscape this year.
Urban Ladder, a late-stage startup which had raised over INR 700 Cr from marquee investors Sequoia India, Steadview Capital, ELEVATION Capital (earlier called SAIF Partners), and Kalaari Capital, was struggling to raise funds after its Series E round in 2017 and was running into losses. The revenue crunch was only exacerbated by the Covid-19 pandemic, thus prompting the sell-off.
With the funding for the Indian startup economy projected to witness at least an 11% year-on-year (YoY) decline in 2020, such distress sales have become a common sight this year.
Recommended For You:
BrandLabs is the brand marketing arm of Inc42 Media. With a team of journalists & analysts, and 4 years of extensive regional editorial expertise, we cover the country’s startups like no other.
The bigger startups in various sectors are on a consolidation drive, while the smaller ones in their growth stages are being absorbed by the behemoths in the business. Although, some are getting a better deal than others.
One of them is WhiteHat Jr, a 2018-founded startup, which, after just about 18 months of operations, got acquired by Indian edtech decacorn BYJU’S for $300 Mn, the biggest acquisition deal in the Indian edtech sector to date.
In 2020, BYJU’S also acquired Unitus-backed edtech startup LabinApp for an undisclosed amount, taking its all-time acquisition count to six.
Last year, the edtech giant had acquired Palo Alto-based Osmo for $120 Mn. Its other acquisitions so far include — Math Adventures, Tutorvista and Vidyartha.
Another Indian edtech player, Unacademy, which entered the unicorn club this year, also assimilated younger startups with niche offerings in what many see as its build-up to becoming an edtech super app.
In July, Unacademy acquired PrepLadder, a postgraduate medical entrance exam preparation platform for $50 Mn. The acquisition is expected to strengthen Unacademy’s presence in the medical entrance examinations categories such as the National Eligibility cum Entrance Test (NEET) for medical postgraduate courses. In the same month, Unacademy acquired a majority stake in K12 learning platform Mastree for $5 Mn. Mastree is building a one-stop subscription product for STEAM (science, technology, engineering, arts and mathematics) courses, for classes 5–8.
This year, Unacademy also acquired edtech startup Kreatryx to strengthen its presence in the GATE and ESE segments in the test prep market, Mumbai-based competitive programming platform CodeChef, and Union Public Service Commission (UPSC) test preparation platform Coursavy, taking its acquisition count for the year to five.
Thus, Unacademy was the biggest M&A player in India in 2020, in terms of the number of startups acquired.
Meanwhile, the largest M&A deal for the year was Indian foodtech unicorn Zomato acquiring UberEats’ India business for $350 Mn.
Overall, there have been 76 M&As to date this year.
While M&As grew 79% in the third quarter of 2020, the overall count for the year is expected to remain significantly lower than the previous year’s count of 113 M&A deals.
Here are the most significant M&As in the Indian startup ecosystem for Series A and above startups in 2020.
BYJU’S -WhiteHat Jr Deal Underscores Edtech’s Year
In a bid to expand its offerings, edtech unicorn BYJU’s acquired Mumbai-based WhiteHat Jr for $300 Mn in August this year.
Founded in 2018 by ex-Discovery Networks CEO, Karan Bajaj, WhiteHat Jr is a live online one-to-one coding platform that teaches the principles of coding—sequence, structure, logic, commands and algorithmic thinking – to young kids, who don’t get this training in the formal education system.
Before its acquisition, WhiteHat Jr had claimed to have a revenue run rate of $150 Mn and had raised $11 Mn from investors like Nexus Venture Partners, Omidyar Network India and Owl Ventures. Owl Ventures is also an investor in BYJU’s.
Reliance Steps Into Furniture Game With Urban Ladder
Reliance Retail, in November, bought 96% holding in the equity share capital of Urban Ladder for INR 182 Cr ($24.6 Mn) and has a further option of acquiring the remaining stake, taking its shareholding to 100%.
Urban Ladder operates a digital platform for home furniture and decor products. It also has a chain of retail stores in several cities across India. The online furniture retailer was valued at around INR 1,200 Cr in 2018, which dropped to around INR 750 Cr in 2019.
Reliance Eyes Epharmacy Domination With Netmeds Buyout
Reliance Retail entered the online medicine delivery space in August by acquiring 60% equity stake in epharmacy startup Netmeds, formally known as Vitalic Health Private Limited, for INR 620 Cr ($83 Mn).
With this acquisition, the Mukesh Ambani-led company got the 100% equity ownership of Netmeds subsidiaries — Tresara Health Pvt Ltd, Netmeds Marketplace Ltd and Dadha Pharma Distribution Private Limited.
MyGlamm Acquires POPxo For Its Content Power
Looking to carve a niche for itself in the beauty and personal care segment through content and community, Mumbai-based direct-to-consumer (D2C) brand MyGlamm acquired Delhi-based women-focused digital media and ecommerce platform POPxo for an undisclosed amount in August this year.
Darpan Sanghvi of MyGlamm told Inc42 that this was a 100% acquisition, but POPxo will remain an independent entity and continue to operate as it is. With this acquisition, POPxo CEO and founder Priyanka Gill joined MyGlamm as a cofounder.
Flipkart Bolsters Super App Ambition With Mech Mocha
Walmart-owned ecommerce giant Flipkart entered the gaming segment this year with its acquisition of Bengaluru-headquartered Mech Mocha for an undisclosed amount.
Founded by Arpita Kapoor and Mohit Rangaraju in 2014, Mech Mocha is a mobile gaming startup that aims to disrupt mobile entertainment for Indians. It is backed by investors including Accel Partners, Blume Ventures and Shunwei Capital.
Medlife Joins Forces With PharmEasy
In September, Bengaluru-headquartered Medlife merged with PharmEasy, the first major consolidation in the sector since the entry of big players like Reliance Industries and Amazon.
The deal saw API Holdings, the parent entity of PharmEasy, acquire 100% equity shares of Medlife. Medlife’s promoters in return got a 19.95% stake in the combined entity.
Voonik Finds New Home At Bangladesh’s ShopUp
Bengaluru-based fashion retailer Voonik merged with Bangladesh-based social commerce platform ShopUp in February. Media reports had claimed that it was a distress sale, as Voonik couldn’t find buyers in India.
Founded in 2013 by Sujayath Ali and Navaneetha Krishnan, Voonik began as a personal shopping app for women, which allowed them to buy apparel from multiple stores, according to their body type, lifestyle and budget.
Over the last few years, the company had pivoted about five times. In May 2019, it was reported that Voonik was moving to a fully private label business.
Ola Electric Acquires Etergo To Push EV Dreams
Bengaluru-based cab aggregator Ola’s electric mobility unit Ola Electric acquired Amsterdam-based Etergo BV for an undisclosed amount in May this year. Post-acquisition, Etergo’s team will continue to be based out of Amsterdam as they join Ola Electric.
Founded in 2014 by Bart Jacobsz Rosier and Marijn Flipse, Etergo has developed an all-electric state-of-the-art AppScooter. First revealed in 2018, the AppScooter uses swappable high energy density batteries to deliver a range up to 240km and class-leading acceleration.
BigBasket Snaps Up DailyNinja To Bulk Up Subscription Play
To take a leap in the subscription delivery space, grocery delivery platform BigBasket has acquired online milk delivery service DailyNinja in March. While the deal amount was undisclosed, media reports around the time speculated that DailyNinja had been acquired for around INR 100 Cr.
DailyNinja, founded by Sagar Yarnalkar and Anurag Gupta in 2015, had last raised an undisclosed amount from Mumbai-based venture capital firm Matrix Partners India, back in September 2018. Prior to that, the company had raised $3 Mn from Saama Capital and Sequoia Capital.
Other Notable Acquisitions
Paytm Eyes Insurance Market With Raheja QBE Acquisition
Paytm, in July, acquired a 100% stake in Mumbai-based private sector general insurer Raheja QBE for INR 568 Cr ($77.16 Mn). Raheja QBE is owned 51% by Prism Johnson and 49% by QBE Australia.
The acquisition will allow Paytm to innovate insurance products and services and accelerate its reach and adoption. Meanwhile, this move will help Raheja QBE insurance business scale new heights, as it can now utilise Paytm’s large customer base.
Sachin Bansal’s Navi Snaps Up DHFL General Insurance
Flipkart cofounder and former CEO Sachin Bansal, in January, acquired Mumbai-based insurance company DHFL General Insurance from Kapil Wadhawan-led financial services group Wadhawan Group Capital (WGC) for INR 100 Cr ($14 Mn). The deal was seen as a distress sale for WGC, which used to operate the bankrupt DHFL business.
The insurance company is now a subsidiary of Navi Technologies, Bansal’s latest venture, a fintech company which is looking to become a digital BFSI player.
Founded in 1984, DHFL was a 100% fully owned entity of WGC. The company has been known for over three decades for offering affordable housing finance to the middle and lower-income category. The parent company WGC also owns financial services companies such as Aadhar Housing Finance, Avanse Financial Services, DHFL Pramerica Asset Managers, DHFL Pramerica Life Insurance and DHFL General Insurance.
Zomato Acquires Uber Eats’ India Business
Indian foodtech unicorn Zomato, in January, acquired Uber Eats’ food delivery business in India for $350 Mn.
According to the terms of the deal, Uber Eats’ would continue to remain an Uber brand globally. However, in India its customers will be automatically redirected to Zomato, giving the Indian food aggregator access to almost 50-55% of the market.
Under the all-stock deal, Uber also got a 9.99% stake in Zomato.
As we move into the next year, more surprises await. The Indian startup ecosystem offers limitless opportunities.