ZoomCar SPAC, V-Mart acquires Limeroad and More!

A lot happened this week in Indian startup ecosystem

October 21, 2022

Top of the Morning folks! Catch up on top news in under 5 min

1. Zoomcar to Go Public Via SPAC

Why it is in the news: Zoomcar Inc, an India-based car-sharing platform, has reached an agreement to go public via a merger with blank-check firm Innovative International Acquisition Corp., according to people familiar with the matter.

  • Combined company is valued in transaction at $456 million

  • Innovative International SPAC raised $235 million in US IPO

Last year: Last November, Zoomcar got $92 million in a Series E round led by SternAegis Ventures, bringing the total it has raised to $332 million, according to data provider PitchBook.

Sequoia Capital India is an investor and board member.

Backdrop: Zoomcar operates a marketplace for private vehicles, with owners making their cars available on the platform and users able to rent them by the hour, day, week, or month.

  • Zoomcar was founded in 2013 by Greg Moran, who is now chief executive officer, and David Back, who is no longer with the company.

  • The platform has more than 3 million active users, with over 25,000 vehicles registered by their owners.

  • The company, which doesn’t own any of the vehicles rented through its platform, takes 40% of each transaction.

What next: Shares of the merged company, to be called Zoomcar Holdings Inc., are expected to trade on the Nasdaq.

2. V-Mart To Acquires LimeRoad

Why it matters: Aiming to not only acquire digital-first millennials but build omnichannel expertise, Lalit Agarwal, managing director of V-Mart Retail stated that V-Mart will operate LimeRoad as an independent business unit, retaining its tech startup culture.

Backdrop: Founded in 2012, LimeRoad claims to sell its fashion products to 17 Mn buyers. The startup claims to deliver gross merchandise value (GMV) of more than INR 700 Cr at consistently strong contribution margins after marketing costs.

  • V-Mart plans to make a total investment of INR 150 Cr to help the startup scale further and achieve sustained profitability, the fashion retailer said in a release.

Also: The completion of the transaction is subject to necessary approvals and closing conditions. Both companies aim to leverage each other’s synergies and deliver emerging fashion trends to their customers through the acquisition.

  • This is V-Mart’s second acquisition after the Unlimited store brand, which is bought from Arvind Fashions.

  • As part of the deal, V-Mart would acquire the fashion marketplace’s assets worth about INR 14.61 Cr and assume its current liabilities of INR 36.26 Cr.

3. Amul merges with five other cooperative societies

Why it matters: Amit Shah emphasized the need to double milk production in the country over the next five years, not just to meet the demand in the domestic market, but also those of neighboring countries like Nepal, Bhutan, etc.

  • India has the biggest milk industry in the world, producing more than 180 million tons of milk every year. This is 23% of the world’s annual production, according to the UN Food and Agriculture Organization

What was said: "Modi Govt is giving priority to natural agriculture and digital agriculture and for certification of natural products, the process to form a multi-state cooperative society by merging Amul and five other cooperative societies have been started," the Union Home and Cooperation minister said.

The big picture: While the EU, as well as the U.S., exports a lot of their products, India is not a major exporter of milk, showing a high domestic consumption.

  • Indian dairy market is worth more than 9 trillion Rupees ($128 billion) and is growing at 5.5% every year according to IBEF.

  • This will also help Modi Govt to make India a $5 trillion economy by 2024-25.

What will happen: MSCS will ensure the export of the products after its certification so that profit can go directly into the bank accounts of the farmers.

  • Adoption of technology solutions will help in increasing production efficiency and reducing wastage in the supply chain.

  • About 60% surplus milk is handled by the unorganized sector (milkmen), while the remaining 40% is procured by the organized sector. This move is expected to improve these numbers.

Others in news

  • Licious enters plant-based meat business (Read)

  • Fabindia goes for an IPO later this year (Read)

  • CCI Approves Sony-Zee Merger Deal (Read)

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