Startup
[Weekly funding roundup Nov 16-22] Zepto effect boosts VC inflow to 2nd highest for 2024
The third week of November saw the Zepto effect when the quick commerce unicorn’s massive $350 million fundraise led the Indian startup ecosystem to achieve the second-highest weekly venture capital (VC) funding this year.
The total VC funding during the week totalled $575 million, cutting across 22 deals, and this was primarily due to the transactions in Zepto and HealthKart. The comparable previous week raised $174 million.
This is the fourth time in 2024 that VC funding on a weekly basis has crossed the half-a-billion-dollar mark. The other three times were in the months of May, June and September. The highest weekly capital inflow for the year is $872 million. Also, this is an important psychological benchmark for Indian startups as large deal transactions are a sign of confidence for the ecosystem.
This sharp increase in VC funding is also a reflection of how large deals can bring about a change in the capital inflow. In the case of Zepto, it raised $1.35 billion in 2024 alone, and the latest funding round only saw domestic capital infusion.
The expectation is the momentum will continue into next year, with a higher inflow of VC money into Indian startups.
On the other hand, there were not so encouraging developments for the Indian startups that have graduated into the field of publicly traded companies. Honasa Consumer continues to come under pressure and its share prices continue to fall due to weak financial results. Zinka Logistics, the parent company of Blackbuck, had a tepid listing on the stock markets.
Key transactions
Quick commerce player Zepto raised $350 million from Motilal Oswal AMC, Claypond Capital, Raamdeo Agarwal, along with other domestic family offices.
Consumer nutrition platform HealthKart raised $153 million from ChrysCapital, Motilal Oswal Alternates, Neo Group, and A91 Partners.
Insurtech startup Zopper raised $25 million from Elevation Capital, Dharana Capital, and Blume Ventures.
Logistics startup Blitz raised Rs 51 crore ($6 million approx.) from IvyCap Ventures, India Quotient, Alteria Capital, and angel investors.
Consumer tech startup Billion Hearts raised $4 million from Blume Ventures, General Catalyst, and Athera Venture Partners.
Startup
Zoho CEO Sridhar Vembu revives 70-hour work week debate, says no need to work to ‘demographic decline’
After Infosys co-founder NR Narayana Murthy,
CEO Sridhar Vembu has rekindled the ongoing debate on whether a 70-hour work week is necessary for rapid economic development.Pointing to East Asian economies such as Japan, South Korea, Taiwan, and China, Vembu, in a post on X, argued that these countries have developed through an extremely hardworking culture, which has ultimately contributed to their economic growth.
“The rationale behind the 70-hour work week is “it is necessary for economic development”. If you look at East Asia – Japan, South Korea, Taiwan, and China have all developed through extreme hard work, often imposing punitive levels of work on their own people,” Vembu noted, adding that these nations now face low birth rates, prompting governments to incentivise citizens to have more children.
Vembu then posed two questions: Is such hard work necessary for economic development, and is such development worth the price of a “lonely old age” for a large mass of people?
In addressing the first question, Vembu believes only a small percentage of the population, perhaps 2-5%, needs to work extremely long hours to drive overall economic progress.
“My response to the first question is that it is enough if only a small percentage of the population drive themselves hard,” he said.
“Please note the “drive themselves”—I am in that camp but I am not willing to prescribe this to anyone else. Some percentage of the population will drive themselves hard (may be 2-5%). I believe that is sufficient for broad-based economic development, and the rest of us can have a decent work-life balance. I believe such a balance is needed,” Vembu added.
As for whether a 70-hour work week is worth a potential demographic decline, Vembu is emphatic that it is not.
“On the second question, no it is not worth it. I don’t want India to replicate China’s economic success if the price is China’s steep demographic decline (which has already started). India is already at replacement level fertility (southern states well below that already) and further declines to East Asian levels won’t be good,” Vembu explained.
“I do believe we can develop without needing to work ourselves to demographic suicide,” he added.
Startup
How D2C brands can ensure efficient logistics with cost-effective deliveries
An essential player works round the clock behind the scenes of India’s burgeoning ecommerce market: the logistics provider. In an age of digital commerce, where customers are demanding a greater selection of products at low costs and speedy delivery, the phenomenal rise of direct-to-consumer (D2C) brands is driving logistics companies to expand their networks to serve smaller towns.
Logistics and technology ecosystems have emerged as critical enablers, ensuring seamless and reliable delivery experiences that form the backbone of this flourishing sector.
To highlight how logistics solutions are revolutionising the ecommerce industry, a panel discussion was held at the Jaipur edition of D2C Carwaan, an event aimed to onboard brands that capture the essence of India and help them establish a network with the right stakeholders, including investors, enablers, and mentors.
The panellists – Shrawan Daga, Founder, Krishna’s Herbal & Ayurveda; Nitin Jain, Founder and CEO, Indigifts; and Raju Kumar Sinha, Chief Business Officer, Fship – shared their views and insights on the topic ‘Logistics and beyond: Building seamless solutions for ecommerce success’.
Race to boost delivery speeds
Daga said one of the biggest hurdles in logistics for D2C brands is fast delivery. Over the past year, ecommerce marketplaces have made significant strides in enhancing delivery speed, introducing same-day and next-day services to cater to customer demands.
“The sooner you deliver your products, the lesser will be your Return to Origin (RTO) rates—the rate at which goods are returned to the seller—and higher your profits,” he said, adding that his company dispatches orders from 11 states. Managing customer returns is an essential component of ecommerce logistics for D2C firms.
Each D2C brand has its own set of challenges. “Prepaid orders don’t start coming in unless you have a loyal customer base. One of the key reasons for brands with higher RTOs is cash on delivery (COD), which involves a lot of impulse buying,” Sinha said. Suggesting solutions like prepaid shipping and AI-driven address verification, he said it’s best to replicate inventories at multiple warehouses or nearest to customers to ensure speedy delivery and ensure a smooth logistics management process.
With a focus on personalised solutions, Jain said Indigifts does not work as per customers’ needs as they are never loyal. “We have categorically decided at what price point we want to work and therefore we don’t do COD to maintain profit margins. If you don’t have the right logistics partner, you’ll never be able to build your distribution,” he noted.
On avoiding COD, Jain shared his three-pronged business funnel – customer, consumer, advocate – a design methodology he applies on his website. “The fight is to convert customers to consumers, and to achieve this it is important to create a selection of the product from where you want to sell what,” he said.
How free shipping shapes online shopping
The era of lightning-fast, free shipping has transformed expectations and affected retailers and brands of all sizes. All panellists agreed that free shipping, which is now part of customer behaviour, has become a mindset. They also addressed the impact of free shipping on profits, suggesting strategies like surface shipping and zone-specific logistics.
But how can brands improve their profit margin and reduce logistics costs while offering free shipping to customers? “With India now boasting the second-largest road network globally, a COD-driven business where speed matters must opt for surface shipping, which is almost 35-40% cheaper than air shipping,” said Sinha, adding that brands must also be careful in selecting the right courier partner.
Though many brands offer free shipping or free shipping with an order minimum, to meet current consumer expectations, at the end of the day, these brands still need to pay for these shipping costs and factor them into their business models.
Advising entrepreneurs on how to deal with logistics challenges that they face, the speakers spoke about focusing on regional shipments to reduce shipping costs and RTOs. Firms must work with reliable third-party logistics partners who have experienced staff in ecommerce and wide network coverage, or specialised ecommerce courier aggregators who offer services of all leading couriers on one single platform.
Startup
When innovation backfires: What 2024’s marketing fails teach us about sensitivity and strategy
With firms considering squeezing their marketing budgets, digital channels have become the main mode of advertising and the number one go-to choice for small firms with a low marketing budget.
Social media, search engines, and emails allow firms to reach specific audiences without overspending, offering scalable solutions that fit diverse marketing needs.
This trend underscores a broader shift in advertising priorities, favouring affordability and efficiency over intricate high-budget campaigns.
This year saw innovative viral campaigns that combined humour, technology, and personalised messaging to captivate audiences. These campaigns not only resonated with viewers but also demonstrated the innovative potential of digital marketing strategies.
“More than 50% of startups operate on a low budget so they need to ensure their marketing techniques are targeted and serve a clear purpose. Poorly handled campaigns fail when they don’t understand their audience, misjudge cultural values, or make claims that are hard to believe. For example, using sensitive topics in a campaign without care or connection can seem insensitive and lead to criticism,” says Prady Kumaar, CEO and Co-founder, NP Digital India.
However, not all campaigns hit the mark, with many backfiring due to poorly conceived messaging or a lack of cultural sensitivity.
Such missteps led to negative sentiment on social media, with floods of criticism highlighting tone-deaf or offensive content.
The backlash often forced brands to issue public apologies and address reputational damage, illustrating the thin line between innovation and insensitivity in modern marketing.
The allure of viral campaigns
Digital marketing has revolutionised how brands interact with their audiences. Successful campaigns can catapult brands into the spotlight through a variety of factors, including creating engaging and relatable content that resonates with audiences, deploying a multi-channel approach, and crafting campaigns that reach out to them on a personal level.
Brands like Zomato, YesMadam, and Bombay Shaving Company have all attempted to create impactful campaigns. While some succeeded, others faced severe backlash, illustrating the risks of navigating this space.
When marketing misses the mark
Marketing missteps often stem from poorly thought-out messaging or a lack of cultural sensitivity. Below are key examples of recent campaigns that sparked controversy:
YesMadam’s workplace stress controversy
The home salon services company faced public outrage for a LinkedIn post claiming it fired 100 employees for being stressed. The post, intended as a campaign to highlight workplace mental health, was criticized for its insensitivity. Following the backlash, YesMadam issued a statement clarifying its intent and apologised for the miscommunication.
Mayank Arya, Co-founder and CEO of YesMadam, issued an apology, acknowledging the misaddressed campaign and its unintended impact.
“Our intentions were rooted in addressing workplace stress and fostering a healthier work culture. However, we understand that the approach taken was inappropriate and led to unfavourable feedback. I deeply regret any confusion or discomfort caused by this initiative. There was no panic within the office, as everyone was informed about the campaign in advance. It was never our intention to harm or mislead anyone, and I extend my heartfelt apologies for any miscommunication,” he added.
“At YesMadam, we have always prioritised the well-being of our employees. The campaign was conceptualized with the genuine objective of raising awareness about mental health challenges in corporate and startup environments,” Mayank said.
Zomato’s chief of staff job posting
Zomato’s CEO, Deepinder Goyal, faced criticism for a job posting requiring candidates to pay a Rs 20 lakh fee in their first year. While the fee was intended to be donated to charity, it sparked debates about elitist and exploitative hiring practices. Critics argued that the unconventional approach alienated potential candidates, despite the company’s defence of the initiative as a filter for highly committed applicants.
Bombay Shaving Company’s misstep
In an ad meant to support Uttar Pradesh Class 10 topper Prachi Nigam, who faced online bullying for her facial hair, Bombay Shaving Company included the tagline: “We hope you never get bullied into using our razor.” The ad was criticized for being tone-deaf and exploitative. Despite the company’s defence, it was widely seen as lacking in empathy.
Poonam Pandey’s cervical cancer campaign
A death hoax campaign involving Poonam Pandey to raise awareness about cervical cancer also drew significant backlash. The digital marketing agency responsible later issued an apology, acknowledging the distress caused by their campaign.
Insights from experts
Marketing experts and influencers emphasise the importance of thoughtful and audience-centric campaigns.
Harish Bijoor, Founder of Bengaluru-based boutique consulting firm Harish Bijoor Consults Inc., warns against letting advertising overshadow brand strategy.
“My big complaint with startups is the way they handle their marketing strategies today. Startups tend to mistake advertising to be strategy. It is important for the startup to appreciate that if there is a dog, the body of the dog is brand strategy and the tail is advertising. The tail must not wag the dog. The dog must wag the tail. Therefore marketing strategy comes first and advertising comes next. Unfortunately, a fair number of startups get excited by the sexy creative and get excited by moment marketing buzz and in the bargain, make the mistake of letting the tail wag the dog,” Bijoor explains.
In the age of social media, influencers hold a lot of sway over public perceptions, which in turn belies a responsibility that they have to be more discerning about the tone and goal of the marketing campaigns they choose to promote, believes content creator Dr Geetika Rawat, a dentist and content creator.
“As an influencer, I am trusted by many followers and at the same time I hold the ability to create meaningful conversations. If a brand’s campaign feels off, I can suggest changes or refuse to promote it. We should advocate for campaigns that are thoughtful and inclusive. Participating in ads that trivialise sensitive issues like mental health can feel like a betrayal to the audience. It’s better to step back than risk losing trust.” says Rawat.
“Transparency is the cornerstone of my work—I only endorse products I genuinely trust and always disclose partnerships or sponsorship. In addition, I prioritize inclusivity, authenticity, and respect in my content, avoiding stereotypes or exploitative messaging,” agrees Sunaina Rekhi, a yoga teacher and lifestyle influencer with half a million Instagram followers.
Vivek Goel, Founder and CEO of marketing firm Orange Owl, advises startups to focus on clear, data-driven go-to-market strategies that align with their target audience’s needs. Misaligned or misdirected messaging that doesn’t resonate with the audience can only lead to wasted budgets and missed opportunities, he cautions.
“Startup marketing is about precision: 64% of successful startups target their audience strategically, while 86% of consumers prefer authentic brands. Choosing the right channels boosts engagement by 80%, and treating marketing as a conversation—not a monologue—enhances adaptability and trust, driving growth,” says Runki Goswami, Global Marketing Head at Newgen Software.
Where to draw the line
Brands must tread carefully to avoid missteps that can harm their reputation. Some key principles to follow include:
Respecting sensitivities: Avoid exploiting personal or emotional topics for shock value or attention.
Transparency and authenticity: Ensure messaging aligns with the brand’s values and resonates genuinely with the audience.
Ethical data use: Avoid overly aggressive targeting or using customer data in invasive ways.
Testing campaigns thoroughly: Pre-test messaging with diverse audiences to identify potential areas of concern.
“Brands should avoid crossing the line into over-promising or being too aggressive in their campaigns. Authenticity is key—while pushing for conversions is important, campaigns should never mislead customers or use manipulative tactics. It’s important to ensure campaigns are consistent with the brand’s values and messaging, while also being respectful of the audience’s time and attention,” adds Goel.
Striking the right balance
Marketing in the digital age offers immense opportunities but comes with significant risks.
Brands must prioritise empathy, authenticity, and respect in their campaigns. By balancing creativity with responsibility, they can foster trust and build lasting relationships with their audiences.
“Brands should know when to draw the line between a campaign that might be insensitive, misleading, or too intrusive. Campaigns should not take advantage of sensitive topics, make fantastical promises or cross the line in terms of personally invasive tactics, such as being too aggressive with targeting or using customer data in an unethical manner. A campaign’s approach should always be guided by transparency, respect and authenticity,” explains Kumaar.
“Ultimately, the line is drawn when a campaign risks damaging trust, harming the brand’s reputation, or alienating its audience,” he adds.
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