What Reliance, SBI’s latest startup bets mean

What Reliance, SBI’s latest startup bets mean

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Aditi Shrivastava

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Madhav Chanchani

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Aditi Shrivastava

154 reads
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Madhav Chanchani

121 reads

India’s largest conglomerates and public-sector banks are paying the top dollar to get a slice of new-economy businesses. There are interesting shareholding dynamics in the latest investments in Dunzo and Pine Labs. Also in this newsletter: Ola co-founder Ankit Bhati’s new venture

January 07, 2022

5 MINS READ

This week, Reliance Retail made a $200-million bet on delivery firm Dunzo for just under 26% stake and SBI invested $20 million in fintech Pine Labs. The deals provide further confirmation that India’s largest conglomerates and public-sector banks are ready to plunk down serious cash to back technology startups at a higher valuation.

Last year, Tata Group had acquired e-grocer BigBasket and online pharmacy 1mg, spending a total of about $1.2 billion.

The latest deals have some interesting nuances.

The stakes for SBI: Pine Labs, a merchant payments platform, was last valued at $3-3.5 billion, and it is currently raising money from Falcon Edge at a valuation of over $5 billion, according to reports. Even if SBI invested at a valuation of $3 billion, it would get a stake of less than 1%. That India’s largest public-sector bank is spending $20 million for a small pre-IPO stake in a fintech is not something we saw coming.

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