Payments firms in limbo; CG Power's Wolfspeed problem
Payments firms in limbo; CG Power's Wolfspeed problem
Also in the letter:
Digital payment firms in a no-win game as margins hit rock bottom
Driving the news:
There are 54 licensed PAs today, all vying for a slice of the booming online commerce market.
Venture-backed fintechs are undercutting aggressively to defend their turf.
Smaller players are struggling to keep up with the scale and pricing power of bigger firms.
Making sense:
Large fintechs get subsidised rates from banks through subvention deals.
Every major PA is chasing the same handful of large clients in travel, food delivery, and ecommerce.
With little room left for tech-led innovation in core payments, the business has become largely commoditised.
Also Read:
Way forward:
Easebuzz is going after the education sector.
DigiO is betting on recurring payments via UPI or net banking mandates.
PayGlocal and BriskPe are focused on cross-border transactions.
Also Read:
CG Power's chip plans rocked by turmoil at wafer company Wolfspeed
What's the news:
With Wolfspeed now teetering on the brink of default, Renesas faces not just financial strain but also the prospect of a disrupted supply chain.
That spells uncertainty for CG Power's Sanand project, which hinges heavily on demand from Renesas.
Industry voice:
Impact ahead:
Also Read:
Details:
Also Read:
Early-stage VC Inflexor eyes Q2 first close of $150-million Fund-III
In focus:
Alongside its core interest areas, such as artificial intelligence (AI), the new fund will also invest in companies developing healthcare devices and advanced materials, including those used in electric vehicle (EV) batteries.
Inflexor plans to invest in 25-27 startups through this fund.
Gunuturu said the average cheque size will be around $2.5-3 million, in exchange for a 15% stake.
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ETtech Done Deals
Wealthtech platform Syfe closes $80 million funding round:
Cleantech asset financier StrideGreen raises $3.5 million:
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Global Picks We Are Reading
Happy Friday! Payment aggregators are cutting prices to stay competitive, as a crowded market, shrinking margins and limited innovation squeeze the sector. This and more in today's ETtech Morning Dispatch.■ Inflexor's new fund■ ETtech Done Deals■ Uber adds board muscleOnline payment aggregators (PAs) are locked in a race to the bottom on pricing, each trying to outbid the others to win market share in an increasingly cutthroat sector.The online PA space has seen frenetic activity over the past year, including new licenses issued, major players re-entering growth mode, and a couple of large fundraises.A few structural forces are pushing pricing south.Smaller PAs are carving out niche use cases to build sustainable models.The potential bankruptcy of American Silicon Carbide (SiC) wafer maker Wolfspeed could have ripple effects on India's semiconductor ecosystem, particularly CG Power's upcoming chip facility in Sanand, backed by the Murugappa Group.CG Power's partner for its outsourced semiconductor assembly and test (OSAT) project, Renesas, had entered a long-term SiC wafer supply agreement with Wolfspeed, worth $2 billion.Danish Faruqui, CEO of US-based chip investment advisory Fab Economics, said Wolfspeed's bankruptcy will send shockwaves through supply chains in Japan and China as well. "If Wolfspeed undergoes bankruptcy proceedings, Renesas will face significant accounting losses to recognise impairment losses because it will likely struggle to recover the advance payment of $2 billion."Another expert stated that if Renesas faces a prolonged downturn, CG Power's Sanand OSAT plant will need a complete reassessment, both in terms of technology and demand outlook.CG Power, a part of the Murugappa Group, holds 92.3% stake in the Sanand-based OSAT joint venture, with Renesas Electronics Corporation owning 6.8%. The Rs 7,600-crore plant in Sanand is expected to commence mass production in 2027.Murali Krishna Gunturu, partner, Inflexor VenturesEarly-stage venture fund Inflexor Ventures expects to announce the first close of its $150 million (Rs 1,250 crore) Fund III by the end of the second quarter, partner Murali Krishna Gunturu told us.The fund, which has previously backed consumer durables maker Atomberg, spacetech startup Bellatrix Aerospace, CredFlow, and Bioprime Agrisolutions, has also closed its Rs 350-crore Opportunities Fund . It did so by acquiring the entire portfolio of its first fund (Parampara Capital), thereby providing liquidity to its early investors."The pressure on exits is only going up, not just in India, but globally as well. Limited partners invested in many startups between 2020 and 2022 with high expectations from VCs (venture capitalists), seeking returns within five or so years. But now there is a sense of disillusionment," Gunturu, one of the founding members of Inflexor, told us.Dhruv Arora, founder, SyfeThe Singapore-based wealth management platform Syfe has secured $53 million in a new funding round, led by two family offices from the UK. In August 2024, the company had raised $27 million as part of the same round, and this extension takes the total funds raised in the round to $80 million.StrideGreen, a climate tech-focused asset financing and management platform, has raised $3.5 million in a funding round led by the clean mobility-focused Micelio Technology Fund. The funds will be utilised to strengthen StrideGreen's product offerings and expand its team.Nikesh Arora, CEO, Palo AltoUber has appointed Nikesh Arora, the chief executive officer (CEO) of Palo Alto Networks, to its board of directors. The ride-hailing giant communicated this to the Securities and Exchange Commission (SEC) in a filing. Arora will serve on the Nominating and Governance Committee as well as the Compensation Committee.CEO Sundar Pichai | Google CEO Sundar Pichai was recently asked during an interview why people should trust Big Tech companies like Google, considering these companies store their users' 'deepest and darkest secrets.'The Indian cryptocurrency exchange WazirX faced a significant setback on Wednesday when the Singapore High Court dismissed a restructuring plan submitted by its parent company, Zettai Pte Ltd, in November 2024. The proposal emerged just months after the platform suffered a massive $235 million cyber theft last July.A senior White House official recently told The Wall Street Journal that US President Donald Trump was displeased with Elon Musk's open criticism of his 'one, big, beautiful bill.' The official emphasised how baffled the president was given how closely they had collaborated for four months. But what prompted all this? ■ Trumpworld is fighting over 'official' crypto wallet ( Wired ■ Inside the collapse of Microsoft-backed UK tech unicorn Builder AI ( FT ■ Tech giants in the Gulf are building super-apps to dominate digital life ( Rest of World
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