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EV startup Vidyut on Tuesday said it has raised $10 million in its Series A fundraise (a mix of equity and debt funding) led by 3one4 Capital, and will deploy new funds to scale its new offerings that include EV insurance, lifecycle management and EV resale. The round also witnessed participation from new and existing investors namely, Saison Capital, <keyword id="20657706" type="General" weightage="20" keywordseo="zephyr-peacock" source="keywords">Zephyr Peacock</keyword>, Force Ventures, a venture debt fund Alteria Capital and CEO of Udaan, <keyword id="20483955" type="General" weightage="20" keywordseo="sujeet-kumar" source="keywords">Sujeet Kumar</keyword>. Founded in 2021, the startup said it aims to expand its presence to 40 cities and will double its team size by the end of FY25 as it prepares to build a full stack EV ecosystem. "Our focus is not just on financing but on elevating the entire EV ownership journey for India's SMBs, who are the backbone of our economy," said <keyword id="20657704" type="General" weightage="20" keywordseo="gaurav-srivastava" source="keywords">Gaurav Srivastava</keyword>, co-founder of Vidyut. The company already offers ownership solutions for Mahindra, Piaggio, Altigreen, Murugappa Group's Montra Electric, Euler Motors and OSM vehicles. "Vidyut's model removes EV adoption barriers, especially in the large but price sensitive driver cum owner segment. At 3one4 Capital, we are excited to back the Vidyut team in their mission to simplify EV ownership," said <keyword id="20657703" type="General" weightage="20" keywordseo="sonal-saldanha" source="keywords">Sonal Saldanha</keyword>, Vice President, Investments, 3one4 Capital. "After hitting an inflection point, customised financing and lifecycle management solutions will play a central role in large scale EV adoption, requiring lenders to evaluate asset risk alongside borrower risk," added <keyword id="20657705" type="General" weightage="20" keywordseo="dhairen-tohliani" source="keywords">Dhairen Tohliani</keyword>, Vice President, Alteria capital. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8-pro-review/articleshow/107726935.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8-pro-review/articleshow/107726935.cms" target="_blank">Pixel 8 Pro review: ‘Okay Google’ – The flagship smartphone ticks almost all boxes</a><a href="https://www.businessinsider.in/tech/news/dell-xps-17-9730-review/articleshow/107330203.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/dell-xps-17-9730-review/articleshow/107330203.cms" target="_blank">Dell XPS 17 9730 review – Feature-packed laptop but at a premium</a><a href="https://www.businessinsider.in/tech/news/viewsonic-vx3219-2k-pro-review/articleshow/106729348.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/viewsonic-vx3219-2k-pro-review/articleshow/106729348.cms" target="_blank">ViewSonic VX3219 2K PRO gaming monitor – Reliable at an affordable price</a>

EV startup Vidyut raises $10 mn to build full-stack ecosystem

The pandemic may have wreaked havoc on existing businesses, but it created a bubble bigger than the dotcom one in the startup ecosystem as cheap money was chasing just about any idea. With the go-go days of funding behind us, private equity players say that founders are no longer behaving like overgrown teenagers. In a freewheeling chat with Business Insider, Mukul Gulati, President and Chief Investment Officer of Zephyr Management, says that founders now see the writing on the wall and don’t have to be lectured on profitability. Edited Excerpts: As a private equity player, what do you like about India and how has your journey in the country been Mukul Gulati: Zephyr’s been in business for 30 years globally. We are headquartered in New York. Our founder is Tom Barry, who is a legend in the world of emerging markets. He’s an American, but in his heart, he’s a globalist. He came up with the idea many years ago before anyone invested in the emerging world to invest in Africa. When apartheid was removed in South Africa and Nelson Mandela got elected, at that time, we helped start one of the first funds in South Africa. And the idea was to bring private capital, support the private sector, and bring modern management practices to the emerging world. And since then, Zephyr has become much more established in the African continent and has sponsored private equity funds in other markets in Mexico and in Korea. We’ve been in India for about 17 odd years. I joined the New York office and came to India, to Bangalore to help start our business. And we started off doing sort of growth capital, not tradition, not classic venture. What we do today is actually a little bit of venture and a little bit of growth capital. How is India different from other markets you are present in? Mukul: In India, we realised that we needed a local approach. And one aspect of that approach is that you cannot take management teams for granted. In America, generally, it’s the business model that matters and you can find good management. In India, and it’s true in other parts of the emerging world, execution matters the most. And execution generally is driven by the founding team or the management team. And that’s sort of been a big lesson for us and sounds pretty obvious, but you can’t overemphasise that aspect. Over time, we learned what our role as investors is. Because obviously the execution needs to be done by the management team. We thought over time, the role that we could play is not that of a spectator but a true value-add partner. over the last 10 years, that’s the approach that we’ve taken. And we’ve become multistage investors. If the idea is right, and it sort of matches what our view of the sector is, then we can go early. With the easy money era coming to an end, how are investors or LPs looking at investing in India? Mukul Gulati: The sophisticated LPs understand there were excesses in the system and the excesses are gradually working their way through. And as the bubble is winding down, there may be some good investments available. So for many of our existing investors and some new ones that we are talking to, that is the main point of view. It’s not everyone because not everyone is that sophisticated, but I would say majority of the people see this way because they saw this play out in their US portfolios. What kind of excesses did India’s ecosystem see compared to North America? Mukul Gulati: The so-called ZIRP (Zero Interest Rate Phenomena) resulted in a lot of fundraising post-COVID. It was true for US fintechs and other startups, series A valuations at $50 million plus. There were a lot of excesses and the root cause was easy money. These excesses were even more prevalent in India. There were more egregious instances of hollow businesses getting insane valuations. What I saw most, noticed more in the US, was that while the businesses were okay, they shouldn’t have been valued at such prices. In India, it was a little bit of both. Some businesses were just never going to make it, leave aside valuation as the business is just not working. Many of these businesses have folded since. And then there are some where perhaps decent businesses, but got overvalued and will take many, many years to grow into those valuations. The bursting of the bubble is actually healthy for the Indian venture capital ecosystem. What about founder behaviour? Has it improved? Mukul Gulati: Now we see that the founders are better behaved. We don’t have to give them a speech about on how they should not focus on valuation, but on cash flows and profitability. We sounded like preachy aunts and uncles to these young founders that we are from a prior generation and we don’t have good advice to give them. And now they take us seriously, partially because they understand this is how the market works. For most of our businesses, survival wasn’t an issue because we were not dependent on filling cash flow gaps through external funding. You’ve had a few exits. How easy or hard is it to exit aid from the Indian market? Mukul Gulati: Exits are never easy. Exits are particularly challenging in emerging markets. The exit environment in India is improving, but by no means it is like what it is in the Western markets. They’re improving in the sense that public markets are maturing. They’re more liquid. However, public markets have also become more selective over the last few years in terms of what kind of issues they’ll absorb. The Indian IPO market will want a certain size. So the bar has risen, which is good because you don’t want small illiquid companies. Another thing that’s happened is that with the recent ups and downs of sort of tech-based companies in the stock market, I think that people want some emphasis on cash flows and profitability. And so from that perspective, the IPO market is a little bit more selective too. In fact, I would argue that the IPO market for emerging businesses is better in India, than many other places, including America. And the second way the exit environment that has improved in India is sales to financial sponsors. Because we have so many private equity funds that operate in this $400-500 million plus fund size range, a $50 million, $100 million transaction is quite attractive. And this is mostly a five-year phenomenon that wasn't the case 10 years ago, but it started five years ago when many more funds either have dedicated sort of funds for India or they have pan-Asia funds and all are sort of US-based players. The large global funds are all active in India and they all want to write big checks and they don’t have enough deal flow at that size. And the third point is that, you know, strategic sales, frankly, are still fewer in India than you would otherwise imagine for an economy of India’s size. You know, and foreign investors remain somewhat cautious. ALSO READ: <a href="https://www.businessinsider.in/business/startups/news/zephyr-peacock-india-looks-to-raise-200-mn-in-the-midst-of-funding-winter/articleshow/105353270.cms" data-type="tilCustomLink" target="_blank">Zephyr Peacock India looks to raise $200 mn in the midst of funding winter</a>

With the onset of funding winter, founders are now better behaved, says Mukul Gulati of Zephyr Peacock

<ul><li>The opportunity for India’s private market is large since China has disengaged from the world.</li><li>Zephyr Peacock was looking to raise an India-dedicated fund of $120-130 million earlier this year but has increased the target.</li><li>Startup founders have learned to behave and realise that they have to focus on cash flows and profitability.</li></ul> The <keyword id="6412154" type="General" weightage="30" keywordseo="funding-winter" source="Orion">funding winter</keyword> may not be anywhere near over, but global investors are still interested in India’s private markets. Zephyr Peacock, the India investment wing of New York-based global investment manager Zephyr Management, is looking to raise $200 mn from global and domestic investors over the next few months to provide growth capital to Indian enterprises. A majority of this money will come from North America. While it is never easy to raise a “blind pool” of capital, Mukul Gulati, President and Chief Investment Officer at Zephyr Management, says India is on everyone’s radar and pension funds and large endowment funds are sitting on a large pool of money. Explains Gulati, who has been selling India to global investors for nearly two decades now: “Despite all the news we’ve been reading about India, the reality was that India was not big enough. And India didn’t have a record or a reputation of delivering returns for investors on a consistent basis, especially on the private side. But that piece is easier now, just because India has become more important to the world.” The opportunity for India’s private market is large since China has disengaged from the world. However, investors are no longer going to support excesses of the Covid era. Foreign direct investments into China have fallen to 25 year lows and the Asian giant’s weightage on the MSCI All Country Index too has fallen sharply by 7 percentage points to 19%. In contrast, India’s weightage has risen by 4 percentage points, which is the highest compared to other countries in the basket. Global funds are sitting on dry powder that can easily run into tens of billions of dollars. Given the global slowdown coupled with China’s partial exit from the world stage, the world is looking at alternate destinations like India for growth and capital deployment. Explains Gulati, “So if you look at private equity investments and venture investments and FDI investments in China, all of that are at 10-20 year lows. And so for Western investors, just the diminishing of China has made India more important. And all this news about digitisation and 6-7% GDP growth is catching attention. And now we have some examples of good exits too. We understand India better and so we can articulate what we are doing in our strategy. For all these reasons, I feel optimistic that we’ll be successful.” Zephyr Peacock was looking to raise an India-dedicated fund of $120-130 million earlier this year but has increased the target to $200 mn as it is more confident of its strategy and opportunity set available to it in India. “From our own increasing confidence with our strategy, appetite and capital gains of our portfolio companies and the opportunity set available to us, we felt that this is a better fund size given the size of investments that we need to make,” adds Gulati. While there’s no shortage of dry powder, investors and LPs (limited partners) are not still rushing to write big cheques simply because the world has changed and money is no longer cheap. So now whether you have other options and relatively safe options, and given the entire churn in the startup ecosystem in India with funding winter setting in, what is it that investors are looking for? The so-called ZIRP (Zero Interest Rate Phenomena) is well and truly history. The pandemic saw some egregious instances of hollow businesses getting insane valuations. In the US, some really bad business ideas got funded. While valuations were a big worry in the USA, in India, it was a little bit of both – bad ideas and crazy valuations. Some businesses were just never gonna make it, leave aside valuation, explains Gulati. Zephyr was among the venture funds that had to sit by the side during the pandemic as valuations hit irrational levels. The firm did one deal in 2021 for that reason, because the market was so hot that bad businesses were getting funded and good businesses were getting funded at insane valuations. Now founders are better behaved as they can read the tea leaves. Says Gulati, “Now we see that the founders are better behaved. We don’t have to give them a speech on cash flows and profitability.” Now sophisticated LPs, the best ones already know this because a version of this game was played out in the United States, which is half of the world’s venture capital market. The LPs understand that there have been some excesses in the system but the ecosystem is working through it to establish equilibrium. And as the bubble is winding down, there may be some good investments available. “So for many of our existing investors and some new ones that we are talking to, that is the main point of view,” concludes Gulati.

Zephyr Peacock India looks to raise $200 mn in the midst of funding winter

New Delhi, Nov 23 () Loanzen, a start-up that provides financial solutions to logistics industry, on Sunday said it has raised funding from Zephyr Peacock India Growth Fund.
 However, it didn't disclose the funding amount.
 Existing investor Kae Capital also participated in the round, a statement said.
 "Loanzen will invest the funds raised in development of technology, build data analytics teams, scale operations in existing locations across Karnataka and expand to new markets," it added.
 While Loanzen declined to comment on the amount of funding or valuation, sources suggest the company has raised about USD 4-5 million (about Rs 28-35 crore) in this round.
 Zephyr Peacock India Growth Fund is a private equity fund investing in small and medium enterprises in India.
 Loanzen provides loans to purchasers of used commercial vehicles, including operators of small CV fleets and first-time buyers. These purchasers have limited financing options due to inadequate credit history and lack of documented income. 
 It uses proprietary underwriting processes based on alternate data sources to meet the needs of its customer segment.
 "Given the rapid growth in the logistics segment with increasing penetration of technology, we are looking to scale up over the coming year...We are planning to target a Rs 75-80 crore loan book addressing a base of over 2,000 customers in the coming year," Loanzen co-founder Madhu Sudhan said.
 Headquartered in Bengaluru, the company is currently serving customers in Karnataka and plans to expand to other states in south India in the coming months.
 Abhijeet Kudva, Managing Director at Zephyr Peacock, said Loanzen's loans have helped over 500 drivers and vehicle operators already.
 "We expect Loanzen to become a leader in logistics financing, supporting over 15,000 customers in the next three to five years," he added. SR RVK

Loanzen gets funding from Zephyr Peacock India

<ul><li>The <keyword id="6412154" type="General" weightage="20" keywordseo="funding-winter" source="Orion">funding winter</keyword> is far from over and the recovery will be slow, say industry experts.</li><li>But late stage deals have picked up in the last quarter due to valuation catchup.</li><li>VCs too are facing pressure from LPs who have not received their Distributed to Paid-In Capital.</li><li>Foreign LPs have turned wary while authorizing drawdowns for investments in India </li></ul>Three startups — Zepto, Zyber 365 and Incred — turned unicorns in the last few months. They were the first such to officially hit the $1 billion valuation mark in 2023. While this indicates that late-stage deals are back in the market, there’s no thaw in the funding winter that’s set in mid-2022, say experts. “The funding winter is far from over. We are not even halfway there,” Anas Rahman Junaid, chief researcher at Hurun India told Business Insider India. Concurs Fazal Ahad, managing director at Merisis Advisors, “We expect the funding winter to start reducing and regular activity to start in a couple of quarters.” In the quarter ending September, the startup ecosystem raised $1.9 billion, hitting a five-year low, as per KPMG’s Venture Pulse report. In spite of large deals, venture financing halved even on a quarter-on-quarter basis from $3.3 billion raised in July quarter. Even at the height of funding winter, the early stage deals have been happening till Series B. Thanks to the valuation catch-up, funding has just now picked up in late-stage deals as well. “There seems to have been more activity in the funding space but the metric for funding has evolved, which will mean valuations will remain under pressure especially at the late stage, though we feel the process will be slow and we may not see the 2020/21 phase for a long time,” said Manoj Agarwal, Co-founder &amp; Managing Partner, SeaFund. It’s a founders’ winter Venture Capital firms had become tightfisted after the interest rate tightening cycle set in the summer of 2022. Since then, a lot of changes have set into the Indian startup ecosystem saw acquisitions, layoffs and more. But mostly, startups charted a path to profitability by tightening belts and rationalizing growth plans. “The driver for companies during the funding days of 2021 was raising the next round. That was the driver for founders and most early VCs. Because of the slowdown, the focus shifted to profitability, where it should always have been,” said Bhaskar Majumdar, managing partner at Unicorn India Ventures. Most VCs now are letting startups clean up shop before betting on them – extending the phase of funding winter. “The duration of the current funding winter in the startup ecosystem is closely tied to the adaptability of founders. This phase will likely persist for those founders who resist aligning their valuations, expectations, and business models with the current market realities,” says Anirudh A Damani, managing partner at Artha Venture Fund. India vs foreign LPs differ on drawdowns While startups are struggling to match growth with profitability, VCs too are facing a tough road with higher-for-longer interest cycles, making capital tighter. They are under pressures of their own. “VCs are also facing tailwinds from limited partners who haven’t got their Distributed to Paid-In Capital or DPIs. VCs are now starting to focus on DPIs,” says Majumdar. DPIs is a measure of the total capital that a fund has returned thus far to its investors. Theoretically, there is a lot of dry powder amounting to as much as $40 billion sitting with VCs that are keen to invest in India. But these funds seem to be stuck in a strange limbo. “The dry powder scenario in India's VC market presents a unique dichotomy. On the one hand, significant dry powder is available, but on the other, many foreign funds are experiencing reluctance from their LPs to authorize drawdowns for investments in India or VC asset classes, given the global uncertainties affecting this sector,” says Damani. At the same time, Indian LPs have been aggressively backing funds as well as investments. Damani adds that Indian funds flush with domestic capital are facing intense drawdown pressures, and looking for investment opportunities to meet LP expectations. “In 2023 itself, funds worth $5 billion have been launched to invest in Indian startups. Add to them the pool of capital available with the existing funds, and we have plenty of dry powder available for investing in India,” insists Agarwal. The startup funding environment is currently under many forces and pressures. Yet, experts insist that good business models will always find investments — meaning that the fit will always survive. SEE ALSO <a href="https://www.businessinsider.in/business/startups/news/a-billion-little-pieces-unicorns-lose-bragging-rights-as-funding-winter-deepens/articleshow/104356885.cms">A billion little pieces: Unicorns lose bragging rights as funding winter deepens</a> <a href="https://www.businessinsider.in/business/startups/news/zephyr-peacock-india-looks-to-raise-200-mn-in-the-midst-of-funding-winter/articleshow/105353270.cms">Zephyr Peacock India looks to raise $200 mn in the midst of funding winter</a>

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EV startup Vidyut raises $10 mn to build full-stack ecosystem

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With the onset of funding winter, founders are now better behaved, says Mukul Gulati of Zephyr Peacock

Malini Bhupta

Zephyr Peacock India looks to raise $200 mn in the midst of funding winter

Malini Bhupta

Loanzen gets funding from Zephyr Peacock India

PTI

Late-stage deals are back but funding winter is far from over say VCs

Katya Naidu

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