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Indian B2B e-commerce startup Udaan raises $280 million

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Business-to-business marketplace Udaan has raised $280 million from new and existing investors as the Indian startup builds a war-chest to accelerate its growth and fend off rivals.

The new capital is not part of a new financing round but is an extension of Series D. The Bangalore-based startup, which secured $585 million prior to the new capital as part of its Series D round and $1.15 billion overall to date, is now valued at over $3.1 billion, a source familiar with the matter told TechCrunch.

Octahedron Capital and Moonstone Capital are financing the fresh capital, with participation from existing investors Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent.

Much of the business-to-business market in India remains unorganized. This means that merchants in the nation today have to travel to other cities — where all the major dealers operate — to stock up their inventory. But these merchants don’t have much negotiating leverage, so they struggle to find best-value for money and access to a wider selection of catalogues.

Udaan, co-founded by three former Flipkart executives, is solving this problem by connecting small retailers with wholesalers and traders. The startup today serves over 3 million retailers and small and medium-sized businesses and it has on boarded thousands of brands including Coca Cola, PepsiCo, Boat Lifestyle, Micromax, HP, LG, ITC, HUL, and P&G.

Amod Malviya, co-founder of Udaan, said in a statement that the coronavirus pandemic underscored the significance of small businesses and mom-and-pop shops (popularly known as kiranas) in the country.

“Udaan is at the forefront of this uniquely Indian e-commerce opportunity, emerging in the last 4 years as one of the largest e-commerce platforms in India, while taking an India-first mobile-first approach to e-commerce. This financing enables us to further our journey of taking e-commerce to the depth and breadth of the country, with Udaan’s unique low-cost model for core middle India,” he said.

Other than the inventory problem, Udaan also helps merchants secure working capital. Small businesses, especially mom-and-pop shops, rely on money they secure from selling their existing inventory to buy the next batch. Since Udaan is able to see the engagement of different merchants on the platform, it is able to provide working capital to them ahead on time.

These decades-old challenges also present a massive potential reward to firms. “The unaddressed SME credit demand in India is ~US$300-$350 billion, with more than 90% of current demand being met by banks. A typical digital SME lender focusses on Rs1-5 million ($13,575 to $67,875) ticket size with no collateral, average tenure ~12-18 months, and with some ecosystem anchor,” analysts at Bank of America wrote in a recent equity research report, obtained by TechCrunch.

“While growth potential in theory is high, despite much higher yields, we don’t find their economics to be much superior to banks even in a steady state. Overall, steady state ROE (return on equity) for an average digital SME lender is unlikely to be much more than 18% levels — not meaningfully higher than a big private bank,” they wrote.

Udaan said it will deploy the fresh capital in further creating the market, and expanding the selection of products and categories it currently offers. Additionally, the four-year-old startup said it will expand its financing capabilities for small businesses and its supply chain network.

The fresh fundraise “reflects the long-term truly transformative and fundamental value creation potential that Udaan platform offers for the lives and businesses of Indian MSMEs, who are major job creators and form the backbone of our economy and the society,” said Malviya. “Participation of existing and new investors in this financing highlights the increasing recognition of capital markets of this unique nature of the Indian market, and the opportunity it offers.

In the past two years, scores of startups and giants such as Reliance, and Amazon have started to explore the business-to-business market in India. Reliance Retail is the largest retail chain in India, where it serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country.

The retail chain entered the e-commerce space with JioMart in late 2019 through a joint venture with Jio Platforms. By mid last year, JioMart had established presence in over 200 Indian cities and towns. On top of this, Reliance Retail has a partnership with Facebook for WhatsApp integrationFacebook, which invested $5.7 billion in Jio Platforms earlier this year, has said that it will explore various ways to work with Reliance to digitize the nation’s mom and pop stores, as well as other small- and medium-sized businesses.

For JioMart, Reliance Retail is working with retail shops, giving them a digital point-of-sale machine to make it easier for them to accept money electronically. It is also allowing these shops to buy their inventory from Reliance Retail, and then using their physical presence as delivery points. It’s currently largely focused on grocery delivery, however.  In a recent report to clients, Goldman Sachs analysts estimated that Reliance could become the largest player in online grocery within three years.

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MIT develops method for lab-grown plants that eventually lead to alternatives to forestry and farming

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Researchers at MIT have developed a new method for growing plant tissues in a lab – sort of like how companies and researchers are approaching lab-grown meat. The process would be able to produce wood and fibre in a lab environment, and researchers have already demonstrated how it works in concept by growing simple structures using cells harvested from zinnia leaves.

This work is still in its very early stages, but the potential applications of lab-grown plant material are significant, and include possibilities in both agriculture and in ruction materials. While traditional agricultural is much less ecologically damaging when compared to animal farming, it can still have a significant impact and cost, and it takes a lot of resources to maintain. Not to mention that even small environmental changes can have a significant effect on crop yield.

Forestry, meanwhile, has much more obvious negative environmental impacts. If the work of these researchers can eventually be used to create a way to produce lab-grown wood for use in construction and fabrication, in a way that’s scalable and efficient, then there’s tremendous potential in terms of reducing the impact of forestry globally. Eventually, the team even theorizes you could coax the growth of plant-based materials into specific target shapes, so you could also do some of the manufacturing in the lab, by growing a wood table directly for instance.

There’s still a long way to go from what the researchers have achieved. They’ve only grown materials on a very small scale, and will look to figure out ways to grow plant-based materials with different final properties as one challenge. They’ll also need to overcome significant barriers when it comes to scaling efficiencies, but they are working on solutions that could address some of these difficulties.

Lab-grown meat is still in its infancy, and lab-grown plant material is even more nascent. But it has tremendous potential, even if it takes a long time to get there.

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Cannabis marketing startup Fyllo acquires DataOwl

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Fyllo has acquired DataOwl, a company offering marketing and loyalty tools for cannabis retailers.

Fyllo said it already works with 320 cannabis retailers across 25 states (plus Puerto Rico and Jamaica). According to Chief Marketing Officer Conrad Lisco, this acquisition allows the company to offer the industry’s “first end-to-end marketing solution,” combining consumer data, digital advertising, regulatory compliance (thanks to Fyllo’s acquisition of CannaRegs last year) and, through DataOwl, CRM and loyalty tied into a business’ point-of-sale system.

As an example, founder and CEO Chad Bronstein (previously the chief revenue officer at digital marketing company Amobee) said that retailers will be able to use the Fyllo platform to send promotional texts to regular customers while, crucially, ensuring that those campaigns are fully in compliance with state and local regulations. He added that eventually, the platform could be used beyond cannabis, in other regulated industries.

“Beauty, gambling, etc. — the same things need to happen in every regulated industry, they would all benefit from loyalty and compliance automation,” Bronstein said.

In addition, he argued that mainstream brands are increasingly interested in using data around cannabis and CBD consumers, as borne out in a Forrester study commissioned by Fyllo.

Lisco said this acquisition comes at a crucial time for the cannabis industry, with dispensaries classified as essential businesses in many states, as well as continuing momentum behind marijuana legalization.

“In 2020, cannabis came of age,” he said. “We would say it went form illicit to essential in 10 months … 2021 is really about watching endemic [marijuana] brands try to scale, so that they can capitalize on the explosive growth. They’ve historically been excluded from the kinds of integrated marketing capabilities that other non-endemic [mainstream] brands get to use when go to market.”

Bronstein said Fyllo aims to bring those capabilities to marijuana brands, first by bringing the its compliance capabilities into the DataOwl product. The company also aims to create a national cannabis loyalty platform, allowing a marijuana retailer in one state to easily expand its marketing capabilities into other states in a compliant fashion.

The financial terms of the acquisition were not disclosed. DataOwl co-founders Dan Hirsch and Vartan Arabyan are joining Fyllo, as is the rest of their team, bringing the company’s total headcount to 110.

“By integrating with Fyllo, DataOwl’s solutions will reach the widest possible audience via the industry’s most innovative marketing platform,” Hirsch said in a statement.

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SpaceX delivers 60 more Starlink satellites in first launch of 2021, and sets new Falcon 9 rocket reusability record

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SpaceX has launched its 17th batch of Starlink satellites during its first mission of 2021, using a Falcon 9 rocket that was flying for the eighth time, and that landed again, recording a record for its reusability program. This puts the total Starlink constellation size at almost 1,000, as the company has expanded its beta access program for the service to the UK and Canada, with a first deployment in the latter company serving a rural First Nations community in a remote part of the province of Ontario.

The launch took off from Florida at 8:02 AM EST (5:02 AM PST), with delivery of the satellites following as planned at around an hour after lift-off. The booster on this launch flew seven times previously, as mentioned – including just in December when it was used to delivery a SiriusXM satellite to orbit to support that company’s satellite radio network.

Today’s launch was also notable because it included a landing attempt in so-called “envelope expansion” conditions, which means that the winds in the landing zone where SpaceX’s drone recovery ship was stationed at sea actually exceeded the company’s previously-defined safety window for making a landing attempt.

As a result of today’s success, SpaceX will likely now have higher tolerances for wind speeds in order to attempt recovery, which should translate to fewer cancellations of launches based on weather conditions in the landing zone.

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