It was an eventful week for Bengaluru, with the Silicon Valley of India keeping its momentum in the startup space intact with fund raising and big ticket hiring. It also grabbed a lot of attention nationally as the newly-appointed Congress-Janata Dal (Secular) coalition state government presented its first Budget during the week.
Let’s first start with the state Budget, as it impacts not just the residents but businesses as well. Karnataka chief minister H.D. Kumaraswamy’s Budget 2018-19 focussed heavily on farmers and the rural economy as he announced a Rs 34,000 crore farm loan waiver. It was capped at Rs 2 lakh for every family, and will include defaulters (farmers) up to December 31, 2017, in the first stage. To ramp up revenue to fund his populist Budget, the chief minister has proposed to increase state sales tax on fuel (petrol and diesel), which would lead to a hike in petrol prices by Rs 1.14 a litre and diesel by Rs 1.12 a litre. According to reports, the Karnataka government collects revenue of approximately Rs 11,000 crore a year from fuel taxes.
For Bengaluru, the Budget proposed a certain sum for sustainable measures such as setting up of 100 charging units (at a cost of Rs 4 crore) across the city to encourage more electric vehicles on road and restoring the Bellandur lake, the largest body of water in the southeast part of the city. (Last year, the highly-polluted lake had caught fire, caused by severe pollution). Rs 50 crore has been allotted for the ‘rejuvenation’ of the lake.
The Budget also proposed a Rs 100 crore direct subsidy to loss-making Bangalore Metropolitan Transport Corporation (BMTC), which is struggling with piling losses hit by slowing revenue and lack of passengers riding buses. For Bengaluru city, the government proposed to form an Integrated Road Transport Authority to provide an easy transport system at affordable prices.
Besides the Budget, which kept everyone occupied, Bengaluru’s startup momentum was on track too.
In the food tech startup space, HungerBox, raised $4.5 million in its Series A funding round led by South Korean investment firm Neoplux and India-focused private equity fund Sabre Partners. Existing investors Lionrock Capital (Singapore) and Infosys co-founder Kris Gopalakrishnan also participated in the round.
HungerBox, a B2B food and beverage digitisation platform for corporates started in 2016, clocks more than 6 million orders a month in over 160 digital cafeterias. (Using the app, employees can view the menu provided by all enlisted food vendors at their workplace cafeterias, place orders, and track delivery. They can also provide ratings and feedback.) Its client includes Microsoft, Accenture, CapGemini, Genpact, ABB, and McKinsey.
The funding came about two weeks after Bengaluru-based food delivery startup Swiggy raised $210 million in its latest round of funding from global investors.The intensity of funding has heightened in the food tech space, which went through a rough phase during 2015-16. Over the last few months, deep pocketed players—such as Swiggy and Zomato—have managed to woo global investors to pump in money into their ventures.
Business is clearly booming in the co-working real estate space. Co-working startups continue to be attractive for investors in Bengaluru. ClayWork Spaces Technologies, for example, raised $250,000 from Nisus Finance. The company plans to utilise the capital to open new shared office spaces in Bengaluru. All this is for a reason. According to data from commercial real estate services provider CBRE, 75% of co-working space areas are located in the top three tier I cities led by Bengaluru, Delhi-Gurugram, and Mumbai.
Among the big-ticket hirings, Bengaluru-headquartered Ola, India’s largest cab-hailing company, appointed Simon Smith as managing director for its Australia operations to boost its presence in the country. Prior to Ola, Smith was the CEO of eBay Australia. In January, Ola launched its services in Australia, operating in Melbourne, Perth, Sydney, Brisbane, Canberra, and the Gold Coast.
Another Bengaluru-based unicorn, Swiggy, named Vivek Sunder as its first chief operating officer. Sunder will be responsible for developing and executing the online food delivery startup’s strategic initiatives. Prior to Swiggy, Sunder was the managing director for Procter & Gamble’s East Africa business.
Watch this space to know more next week.