SoftBank's $265M Paytm exit; early-stage startups face capital crunch

Hello,

The world's two richest men–Jeff Bezos and Elon Musk–are pouring tens of billions of dollars into their space ambitions, with completely different endgames in mind.

With Blue Origin, Bezos hopes the planet will get rid of polluting industries off Earth while Musk’s SpaceX is drawing up plans for what life could look like on Mars. 

Although these plans have been in news cycles for quite a while now, the upcoming end of the International Space Station has kicked commercial space missions into high gear. 

The question is: Who will emerge as a winner in the new space race?

ICYMI: Last week, the European Space Agency launched Proba-3, a Sun-observing mission, aboard the Indian Space Research Organisation's flagship rocket. The mission builds on ISRO's recent accomplishments, including the Chandrayaan-3 lunar landing and its sun-studying Aditya-L1 solar observatory.

Lastly, it’s been 11 years since the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) came into force. However, PoSH training remains a mere compliance formality rather than a tool to protect women in the workplace. 

In today’s newsletter, we will talk about 

 -SoftBank's $265M Paytm exit

 -Early-stage startups’ money struggles

Here’s your trivia for today: Which is the only capital city located on the Equator?

Investor

SoftBank's $265M Paytm exit

SoftBank Group has officially completed its exit from Indian fintech firm Paytm by selling its Singapore subsidiary's stake in Japan-based PayPay Corporation to a SoftBank Vision Fund 2 entity.

The transaction, valued at $279.2 million, severs both direct and indirect investment ties between SoftBank Group and Paytm. In the January-March quarter of 2024, SoftBank had already sold its direct stake in Paytm, taking a $544 million loss. 

Key takeaways:

• Paytm announced the transaction on Saturday, confirming that its wholly-owned subsidiary, One97 Communications Singapore Private Limited (Paytm Singapore), sold 3.95% of PayPay Corporation. 
• SoftBank held about 18.5% of Paytm before its IPO in 2021, with a 17.3% stake through SVF India Holdings (Cayman) Ltd and an additional 1.2% via SVF Panther (Cayman) Ltd. 
• During the IPO, SVF Panther divested its entire stake, raising Rs 1,689 crore (around $225 million).

Funding

Early-stage startups’ money struggles

India’s startup ecosystem is attracting capital, but not in early-stage ventures. In a marked shift from recent years, money is flowing into established ventures with proven business models, making the path harder for early-stage innovators.

Early-stage funding–seed, angel and Series A–has almost halved from its peak activity in 2021-2022. While funding activity, which includes the total number of deals and funding amount, has seen an uptick in growth- and late-stage investments this year.

Fresh capital:

• The numbers tell the complete story: early-stage funding has softened to $3 billion across 1,533 deals through November 2024, down from $4 billion spread across 2,137 deals in the same period last year, according to YourStory's analysis of Tracxn data. 
• Recent deals highlight a shift toward later-stage investments: quick commerce platform Zepto secured $665 million in Series F funding in June while ride-hailing platform Rapido raised $200 million in its Series E round in September.  
• Investors are now increasingly moving away from being sector-focused when it comes to funding, leaving new startups coming up in maturing sectors hunting for capital. 

News & updates

• Sale: The Scott Trust has announced it has decided to press ahead with its sale of the Observer to Tortoise Media. The deal, currently agreed in principle, will also result in £25m of investment in the Observer by Tortoise, whose investors will now include the Scott Trust, it has been revealed. 
• Iconic: A pair of iconic ruby slippers that were worn by Judy Garland in The Wizard of Oz and stolen from a museum nearly two decades ago sold for a winning bid of $28 million at auction Saturday. Heritage Auctions had estimated that they would fetch $3 million or more, but the fast-paced bidding far outpaced that amount within seconds. 

What you should watch out for

• IPO Watch: It is a busy week for the IPO market, with 11 companies including Vishal Mega Mart, TPG Capital-backed Sai Life Sciences and fintech firm One Mobikwik Systems gearing up to launch their initial share sales, collectively aiming to raise nearly Rs 18,500 crore.
• Key data: Apart from CPI inflation,  the industrial and manufacturing production numbers for October are expected to be out on December 12. 

Which is the only capital city located on the Equator?

Answer: Quito, Ecuador. 

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