Fund of Funds 2.0: Bet on manufacturing; Matching startups with talent using AI

Hello,

Nykaa’s big beauty bet is paying dividends. 

Nykaa parent FSN E-commerce Ventures saw its operating revenue grow 27% year-on-year, driven by a boom in the beauty vertical. Over the past year, the Falguni Nayar-led company has also been looking to put down its roots in international markets, especially the GCC region.

Meanwhile, the company’s fashion vertical has been relatively subdued in its growth, and with Shein back in the ring as a challenger, the competition’s set to only get tougher. But the beauty and fashion platform does have a plan in the works: partnering with other international D2C brands and tapping into fashion private labels, for starters. 

In the world of fast fashion retailing, speed is key.

Meanwhile, over in the SaaS sector, VC firm Peak XV Partners is divesting from Freshworks, after selling about a 1% stake in the company for $51.5 million. It now holds a 3.9% stake in the SaaS giant.

This comes months after Peak XV cut the size of its largest fund by 16%, as growth-stage funding into the startup ecosystem has slowed down over the past two years. 

In other news, this past week has been a treat for fans of Ed Sheeran, as the singer-songwriter embarked on his six-city ‘+ - = ÷ x Mathematics Tour’ in India. Sheeran welcomed Bengaluru to the tour this weekend, charming the crowds with hits like Shiver, Perfect, and Photograph.

His impromptu busking stint on a busy city street did run into a SNAFU, as videos of a policeman unplugging Sheeran’s instruments in the middle of a performance went viral, drawing criticism from netizens.

Clearly, the long arm of the law spares no one, not even international pop stars. 

In today’s newsletter, we will talk about 

• Fund of Funds 2.0: Bet on manufacturing
• Matching startups with talent using AI
• The women at Zepto’s Pink Store

Here’s your trivia for today: What is considered the fastest-growing plant on Earth?

In-depth

Fund of Funds 2.0: Bet on manufacturing

It was in early 2016 that the Government of India unveiled the Fund of Funds for Startups (FFS), armed with a budget of Rs 10,000 crore. The idea was not to funnel this directly into startups but to channel them through SEBI-registered alternative investment funds (AIFs).

Recent data shows that AIFs supported by FFS have already invested more than Rs 20,000 crore in over 1,100 startups. It’s a good time to take stock of the FFS programme as FM Nirmala Sitharaman announced a new FFS with a fresh capital of Rs 10,000 crore.

Government push:

• The world over, the concept of government venture capital is seen in a positive light, especially when it is deliberately used to complement private venture capital in funding firms that might escape the radar of traditional VC firms.
• Companies that qualify under this programme may also require more funding upfront as well as for a longer term, such as in the manufacturing sector littered with MSMEs taking fundamental bets on transformational ventures in an emerging era of smart factories, and 3D printing, among others.
• The FFS idea is also perhaps a signal to the large conglomerates to follow suit. If Reliance or Tatas, say, can match these investments with something from their own pockets, that would help bridge the R&D gap.

Funding Alert

Startup: JQR

Amount: $25M

Round: Equity

Startup: BorderPlus

Amount: $7M

Round: Institutional investment

Startup: The Energy Company

Amount: $2M

Round: Pre-Series A

Startup

Matching startups with talent using AI

Deepak Subramanian, along with Shravan Kumar and Varun Gopalakrishnan started YourTribe in 2021 to help startups hire top talent by combining the power of AI with employer branding.

YourTribe is designed specifically for startups, going beyond traditional job portals by curating top talent and intelligently matching candidates based on skills, career aspirations, and cultural fit.

Recruitment using tech:

• Its recruitment-as-a-service model offers startups an on-demand solution without the hefty per-hire commissions. “Instead of paying 8.33%–12% of annual salaries per hire, startups can opt for a cost-effective flat-fee model that provides flexibility and better hiring outcomes,” explains Subramanian.
• So far, the startup has successfully facilitated over 400 hires for startups, spread across more than 75 different companies.
• Recently, YourTribe was featured on Startup Singam—the first startup reality show in Tamil Nadu's mainstream TV—where it secured Rs 4 crore in funding from all five investors on the panel.

Women Empowerment

Meet the women at Zepto’s Pink Store

Last month, Zepto’s Co-founder and CEO Aadit Palicha launched Zepto’s first all-women dark store in Chennai’s Madambakkam, run by a team of 25 women.

From overseeing daily operations to managing inventory and logistics, each team member brings their own unique strength to the table.

Women at work:

• The women at the Madambakkam store are led by D Vinitha, a year-long Zepto employee who comes with the experience of being a delivery agent, loading and unloading, and working night shifts—roles that are mostly led by men
• Rajeshwari B, a 26-year-old store shift in charge at the store says, being able to work night shifts has been a dream come true. “For me, this has been a boon because it gives me the flexibility of work hours,” she says.
• Kalaivani Kalaiselvan, 23, used to work as a beautician gig worker before she joined Zepto over a year ago. She says having an all-women team has meant dissolving hierarchies as they support each other as women, mothers and daughters first.      

News & updates

• Fast growth: McDonald’s global comparable sales posted a surprise rise in the fourth quarter on Monday, aided by demand for its affordable burgers and fries among diners in the Middle East, Japan, and China.
• Reevaluation: The European Union will conduct a review of its multi-billion euro external aid to more closely align the bloc’s funding allocation with its foreign policy interests in the midst of a challenging international environment.
• Homegrown: OpenAI is pushing ahead on its plan to reduce its reliance on Nvidia for its chip supply by developing its first generation of in-house AI silicon chip, which it plans to finalise in the next few months and send for fabrication at Taiwan Semiconductor Manufacturing Co. 

What is considered the fastest-growing plant on Earth?

Answer: Bamboo. It can grow up to 91 centimetres (35 inches) in a single day.

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