According to Scott Russell, member of the Executive Board of Customer Success at SAP, India is well positioned to become the strategic driver of cloud demand and cloud-based services in the world. The Walldorf-headquartered company is increasing its reliance on its India-based innovation labs to drive the next stage of growth as “the momentum in the Indian market remains strong.”
Also in this letter:
■ IPO of Cult.fit Eyes in 12-18 months
■ India well positioned to become a fast growing Web3 market: Nasscom
■ Ather Energy raises $50 million and other closed deals
India’s key growth driver amid cloud demand: SAP’s Scott Russell
India is an “innovation engine” for the world and a key growth driver for SAP, said a top executive at the German tech giant, whose business is expanding rapidly due to strong demand for cloud-based services.
Looking at India as “one of the fastest growing markets (for SAP) in the enterprise and mid-market segment,” Scott Russell, Executive Board Member, Customer Success, told us in an exclusive interview that “(Indian companies) are trying , to expand their business in other parts of the world and we can benefit from that.
The enterprise software maker posted triple-digit growth in India for three out of four quarters in 2021.
Growth story India: The company is increasing its reliance on its innovation labs in India to drive the next phase of growth. This work draws heavily on the relationships with local startups and the digital native community fostered by SAP Labs in India.
Last year, SAP announced it would invest up to $500 million to grow its India business, bolstered by the companies’ “global reach” as “momentum in the Indian market remains strong.”
“As big companies like Asian Paints and Tata Motors move to the cloud, we can demonstrate the use of technology and drive a strong narrative,” Russell said.
Large talent pool: The availability of talent, a highly skilled workforce and the culture of innovation and risk-taking put Indian companies in a strong position, the executive noted.
Russell said some of the new demand for automation is due to changing business models as companies increasingly seek to simplify structures and free up talent to handle operational tasks.
SAP is also seeing increasing demand for environmental, social and governance (ESG) products, and India is also seeing increasing demand for sustainable solutions, partly because it is part of globally connected value chains.
Tata-backed Cult.fit plans IPO in 12-18 months
Cult.fit is targeting an IPO in 12 to 18 months as its core gym business has turned an operating profit, its CEO Naresh Krishnaswamy told us.
He added that Cultfit’s revenue was up more than 50% from pre-Covid levels.
Focus on the core: Krishnaswamy added that the company, which counts Tata Digital and Zomato among its investors, is doubling down on its core fitness and fitness products business for now.
“Other companies like Mind.fit and some of our wellness categories like diagnostics have been put on hold,” he added.
The company also spun off its Care.fit business into Sugar.fit, which it says is doing “extremely well” in the area of diabetic care.
How is the business going? Cult.fit’s operating income was around Rs.161 crore in FY21.
CFO Bishnu Hazari told us that FY22 revenue would be of a similar magnitude due to the pandemic. However, the company is forecasting higher revenue for this fiscal year, with business growing 50% to pre-pandemic levels.
It was valued at $1.5 billion following a $145 million funding round led by Zomato in December 2021.
Cult.fit, formerly known as Cure.fit, has made 14 acquisitions over the past few years, including home fitness equipment companies like RPM Fitness and Fitkit.
India Well Positioned To Become A Fast Growing Web3 Market: Nasscom
According to a report by IT industry association Nasscom, India’s rapid adoption of new technologies, its burgeoning startup ecosystem and the potential of its vast pool of digitally skilled talent are the right building blocks to become a major player on the Web3.
Web3 uses blockchain technology to decentralize the web and provide the use cases that were centrally controlled in Web2 – with opaque execution.
Although Web3 is still in its infancy, India is well positioned to become a high-growth Web3 market due to its economic, demographic and technology adoption factors, the report states.
Using the numbers: According to the report titled The India Web3 Startup Landscape: An Emerging Technology Leadership Frontier, there were over 450 Web3 startups in India in the first half of the calendar year, with over $1.3 billion invested in Web3 since 2020.
“A third of these startups have emerged in the past year alone,” said Achyuta Ghosh, senior director and head insights, Nasscom.
Not just crypto: Indian Web3 startups are working on developing diverse solutions for important application areas such as finance, decentralized communities, entertainment and infrastructure and not only for cryptocurrencies. Most people associate Web3 with crypto alone, and that needs to be addressed, Ghosh said.
ET Ecommerce Index
We launched three indices – ET E-Commerce, ET E-Commerce Profitable and ET E-Commerce Non-Profitable – to track the performance of recently listed technology companies. That’s what has happened to them so far.
ETtech closed deals
Electric scooter maker Ather Energy has raised $50 million in a round led by existing backer Caladium Investment, regulatory filings sourced from Tofler showed. Herald Square Ventures also participated in the latest round, which sources say valued the company at $700-$800 million.
Enterprise financial modeling software provider Drivetrain AI has raised $15 million in a new round of funding led by Elevation Capital, Jungle Ventures and Venture Highway. Over 25 startup founders, advisors and investors attended the round, including Notion’s Akshay Kothari; Whatfix’s Khadim Batti and Amit Sharma; and Krish Subramanian and Karthik Srinivasan from Chargebee.
Blockchain startup Shardeum has raised $18.2 million in seed funding from around 50 investors including Jane Street, Struck Crypto, The Spartan Group, Big Brain Holdings, DFG, Ghaf Capital Partners and Foresight venture.
TWEET OF THE DAY
L&T Tech Q2 Profit Up 22.8%; Company updates annual forecast
L&T Technology Services’ net income rose 22.8% year-on-year to Rs.282 billion in the second quarter, on the back of an increase in previously closed deals and a strong performance across all sectors. The software service provider raised its revenue growth forecast in dollars for the current fiscal year on the back of largely robust demand.
Company performance: Revenue rose 24.1% to Rs.1,995 crore as all sectors posted double-digit growth rates. Sequentially, net income increased 3% while revenue increased 6.5%.
Operating margins were 18.3%, down 10 basis points (bps) sequentially and 20 bps year-on-year due to employee compensation increases.
The company raised its revenue growth forecast in dollar terms for this fiscal year to 15.5-16.5% from 13.5-15.5%.
PhonePe FY22 results: Meanwhile, Walmart-owned fintech PhonePe announced on Tuesday that its revenue from operations rose 138% to Rs 1,646 billion in FY22. Losses, excluding the cost of the Employee Share Scheme (Esop), narrowed slightly to Rs 827 crore over the same period.
More top stories from our reporters
Microsoft plans hyperscale data center in Pune: Microsoft is planning to develop a large hyperscale data center in Pune as part of its multi-city data center strategy for India, two people with direct knowledge of the development told us.
Microsoft lays off 1,000 workers: According to a report by Axios, Microsoft has laid off about 1,000 employees in a new round of layoffs. This is the third round of layoffs at the big tech firm since July. Microsoft laid off nearly 1% of its 180,000 employees in offices and product divisions this month as part of a “realignment.” Another 200 employees were laid off in August.
Global tips we read
■ The Bruce Willis deepfake is everyone’s problem (Wired)
■ The currently hottest app? One Where Teens Have To Say Nice Things About Each Other (WSJ)
■ The mysterious reappearance of China’s missing mega-influencer (rest of the world)