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Hurdles are increasing for Flipkart and Snapdeal merger.

23rd, June 2017

The announcement came saying Flipkart and Snapdeal will merger and become one company rather compete and kill each others in the market. This announcement came almost one and half month back, but there is no further process happened. 


As per the source, Softbank wants to go slow on the related transaction between Snapdeal’s digital payment arm Freecharge and Paytm. The other rumour in the market witnessing is Flipkart wanting to just pay $400 Mn for Snapdeal’s marketplace.


The process has hit by another hurdle. PremjiInvest, the investment arm of Wipro Chairman Azim Premji, has reportedly sought further clarity on the how the rights of minority shareholders will be upheld and protected. 


To date, PremjiInvest has participated in two funding rounds, including $500 Mn private equity round in August 2015 and $100 Mn Series E round in May 2014, along with a consortium of other investors. 


Premjiinvest is trying to build consensus among other minority investors. This includes the likes of Singapore’s sovereign wealth fund Temasek, and asset manager BlackRock etc. The aim is to oppose special payouts to certain shareholders, as per a source aware of the development. 


Apart from PremjiInvest, Ratan Tata, Foxconn, Alibaba Group, Ontario Teachers’ Pension Plan, eBay, and Hong Kong-based hedge funds, among others own about 40% of the company. However, they do not have a board representation


Freecharge which is part of Snapdeal is suppose to merger with Patym in a deal to be estimated to be $40 -$50 Mn. Last month, Jasper Infotech, which owns and runs Freecharge had made a fresh investment of $3.38 Mn (INR 22 Cr) in Freecharge. The sources suggested that Softbank does not want to take the risk of prolonging the Flipkart-Snapdeal merger by allowing Snapdeal to sell Freecharge first and get a few months more of operating capital.


However, the proposed deal value of $45 Mn to $90 Mn will be a steep downfall in FreeCharge’s valuation of $450 Mn in 2015, at the time of sale to Snapdeal.

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Startup can raise fund now with much ease.

19th, June 2017

Ministry of Corporate affairs (MCA) notified a change in operational and compliance relaxation. Some of the key points are - ability to raise deposits from members, with exemption from procedural compliance for an extended period of five years. 


In June 2015, MCA had permited all private companies including startups to rasie funds from their shareholders to the extent of 100 % of their paid up capital and free reserve. Such companies were exempt from procedural requirements such as issue of an offer circular or creation of a deposit repayment reserve.


Other compliance relaxations, announced by the MCA in its notification dated June 13, include exemption from preparing and including cash flow statements with annual accounts. In the absence of a company secretary, a director of a startup is permitted to sign annual returns filed with the registrar of companies. Instead of holding a board meeting every quarter, startups are deemed as compliant with the Companies Act, if they hold a meeting once in six months. The only caveat is that the gap between two board meetings shall be at least 90 days. 

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Startup, according to MCA 's notification, denotes an entity recognised as such by the DIPP's notification. It can be a private company, firm or LLP , which has not completed seven years from incorporation (10 for biotech sector), is innovative or has a scaleable business model. Further, its turnover for any of the financial years since incorporation should not be more than Rs 25 crore.


Source: ET

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News

Quick process of insolvency for start-ups and small business.

17th, June 2017

When it comes to insolvency process of business, it used to be cumbersome process. Getting insolvency certificate used to take long time rather than raising fund for business. Keeping all these problems in mind government has proposed changed the process. 


As per the new process, Start-ups and small business can get insolvency process completed by 135 days, with the IBBI notifying new norms in this regard. 


The norms for fast tracking the process have been notified under the Insolvency and Bankruptcy Code


Small companies are those defined under the Companies Act, 2013 while the definition of startups was described through a notification by the commerce and industry ministry last month. 


As per the new regulation‘ insolvency process shall be completed within a period of 90 days, as against 180 days in other cases. However, the adjudicating authority may, if satisfied, extend the period of 90 days by a further period up to 45 days for completion of the process .


(The development first reported by ET)

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News

GrowthEx, counselling platform acquires Edtech Startup Leapwired.

16th, June 2017

GrwothEx an online counselling platform announced its acquisition of technology platform of Edtech start up Leapwired for an undisclosed amount. 


Leapwired, technology platform founded by Akshay Bhaskar & Pranav Jang Bahadur in 2016. LeapWired is a telephonic consultation platform for students to get connected to experts from their dream colleges. The firm is based in gurugram. 


GrowthEx which has more than 10000 users, 5000+ counsellers and 1000+ programmers. They operate in India, Singapore, Quatar, Brazil etc.. GrowthEx was founded in 2014 by Varun Saxena & Ayesha Raval. It is an online platform enabling personal            and professional life counselling. It is facilitated by an online and offline community of learners sharing common growth goals. 


The company also provides courses for K-12, entrance exams, certifications and up skills for working professionals. 


GrowthEx raised an undisclosed amount of funding in 2017 from a clutch of investors. At the time of funding, the startup said that the funds would be used to scale up the number of experts and programmes on the platform. The investment will also be used enhance technology and multifold increase the community engagement initiatives.


The competitors for Edtech startup – Leapwired such as BYJUs, Edupritine, Uncademy etc has raised funds during Q1 2017.

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