Pepperfry’s Down Round, Bhavish Aggarwal’s Sorrows, and Razorpay Shortlists Bankers

Pepperfry’s latest fundraise, $18 million at an implied valuation of roughly $185 million, is not only a down round, but a verdict. A company that once commanded private marks north of $450-500 million, and raised over $300 million across a decade, has now been repriced by nearly half. This is not a funding hiccup. It is a structural reset for Indian vertical e-commerce.

The financial anatomy tells the story. Revenue has fallen from ₹272 crore in FY23 to ₹163 crore in FY25 - a ~40% compression in just two years. Losses have narrowed, yes - from ~₹188 crore to ₹85 crore, but almost entirely through cost cuts. Advertising was slashed. Headcount reduced. Marketplace breadth trimmed. The business looks healthier on paper, but the improvement is defensive, not generative. This is the classic efficiency trap: cutting to survive, without proving you can grow again.

Meanwhile, the market moved on.

Amazon and Flipkart have neutralised the old vertical moats. Large-item fulfilment centres, scheduled delivery, white-glove installation - these are now hygiene factors, not differentiators. When horizontals can subsidise furniture margins with profits from cloud, ads, fintech and grocery, a standalone vertical cannot win on logistics alone.

Then comes the conglomerate squeeze. Reliance folded Urban Ladder into its retail stack, absorbing a once-hyped competitor for a fraction of capital raised. IKEA runs India with a 20-year lens - big box stores, online integration, local sourcing, EV-led last mile - treating furniture as ecosystem infrastructure, not quarterly P&L. Venture-backed verticals operate on 3-5 year capital cycles. That asymmetry matters.

The sharper blow, however, comes from integrated D2C players like Wakefit and WoodenStreet. They own manufacturing, focus on high-velocity SKUs, scale offline deliberately, and operate near breakeven or profitability. Pepperfry, still largely a marketplace with partial private-label push, sits uncomfortably in between - neither capital-light enough to scale cheaply nor vertically integrated enough to extract full margin.

Layer on structural friction: furniture is high-ticket, low-frequency, logistics-heavy, and prone to returns. Replacement cycles stretch 5-10 years. CAC is rising. LTV is capped unless you build adjacent services - financing, design, warranties, B2B solutions. The global cautionary tales are clear: Casper’s collapse under high CAC and low frequency; Made.com’s bankruptcy under inventory stress; Wayfair’s painful pivot from growth to EBITDA discipline. Vertical furniture is unforgiving.

Against this backdrop, the TCC Concept share-swap deal, valuing Pepperfry at roughly ₹660-693 crore for majority control, feels less like optionality and more like inevitability. The down round is balance-sheet cleanup ahead of consolidation. Early investors are bridging, not betting. Governance has stabilised post-Ambareesh Murty under Ashish Shah, but the mandate has shifted - from IPO ambition to survival and integration.

Pepperfry still owns real assets: brand recall, 200+ studios, a nationwide logistics spine. Under the right strategic umbrella, it may yet become the experience layer in a larger home ecosystem. But as an independent, hyper-valued vertical e-commerce story, its chapter has closed.

And that is the real omen, for every Indian vertical that mistook GMV for inevitability.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Ab Kya Hoga Bachhu”: Consumer Commission Issues Arrest Warrant Against Ola Electric’s Bhavish Aggarwal

Trouble seems to be mounting for Bhavish Aggarwal after the District Consumer Disputes Redressal Commission of South Goa issued an arrest warrant when he failed to appear for a February 4 hearing in a case tied to Ola Electric.

The complaint, filed in 2024, alleges that a customer’s escooter went missing from a service center, and the latest order sharpens scrutiny around the company’s already criticized after-sales service track record.

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“Aapki Sahayta Chahiye”: Razorpay Shortlists Four Bankers To Helm $700 Mn IPO

Fintech major Razorpay has reportedly shortlisted Axis Capital, Kotak Mahindra Capital, JPMorgan Chase and Citigroup to steer its proposed $700 Mn IPO, signaling that the listing playbook is now firmly in motion.

The public issue is expected to include a mix of fresh shares and an offer for sale, as the company eyes a raise north of $700 Mn. This development follows its recent reverse flip back to India, a strategic reset aimed at paving the way for a debut on domestic stock exchanges.

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“I Don’t Wanna Play With You Anymore”: Artha Venture Moves To Oust Hornet CEO Over Alleged Governance Breaches

Artha Venture Fund has initiated steps to remove the CEO of Hornet, alleging misappropriation of funds and theft of sensitive data, claims made publicly by the fund’s managing director on X.

Hornet, known for its crypto and dark web forensics work with government agencies, now finds itself at the center of a governance storm.

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“Janmo Ke Saathi”: ixigo To Acquire Two European Travel Tech Startups For ₹130 Cr

Online travel aggregator ixigo is expanding into Europe with plans to acquire a 60% stake in Trenes for about ₹125 Cr and a 45.02% stake in Sqaas for roughly ₹4.8 Cr, taking the total deal value to around ₹130 Cr.

The move is aimed at exporting ixigo’s product stack and AI-led travel search capabilities to the European rail market. Notably, Trenes is Spain’s second-largest train OTA and clocked nearly €5.5 Mn in CY25 revenue, giving ixigo a ready foothold in the region.

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“Hum Saath Saath Hai”: HUL Completes Acquisition Of Remaining 49% Stake In OZiva For ₹824 Cr

FMCG heavyweight Hindustan Unilever Limited has completed the acquisition of the remaining 49% stake in OZiva for ₹824 Cr, making the D2C nutrition brand its wholly owned subsidiary.

HUL had first picked up a 51% stake in December 2022 for ₹264.28 Cr, valuing OZiva at around ₹518 Cr at the time. The consumer giant has tightened its grip on the fast-growing plant-based wellness segment.

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“Ho Raha Bharat Nirman”: Centre Approves Startup India FoF 2.0 With An Outlay Of ₹10,000 Cr

The Union Government has greenlit Startup India FoF 2.0 with a fresh ₹10,000 Cr outlay, with approval from Narendra Modi. The original Fund of Funds was launched in 2016 under the Startup India action plan with an initial ₹10,000 Cr corpus to catalyze domestic VC investments.

With Phase 2 now cleared, the Centre is doubling down on its institutional push to fuel early and growth-stage startups.

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1. Used-car marketplace Spinny has reportedly raised $170 Mn, led by Fidelity Investments and Accel Leaders Fund, at a valuation of about $1.5 Bn. That’s a notch below the $1.7 Bn tag it commanded after its 2025 round, suggesting a mild reset in pricing.

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2. Smart mobility startup Six Sense Mobility has raised ₹44 Cr, or about $4.8 Mn, in a Pre-Series A round led by Ashish Kacholia with participation from Piper Serica Angel Fund. The company is setting up a new electronics manufacturing unit in Noida with an initial capacity of one million units annually.

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3. IDfy has raised ₹476 Cr in a Series F round led by Neo Asset Management to fund its international expansion. Existing backers including Blume Ventures and IndiaMART also participated, continuing their support after its 2024 Series E.

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4. Battery tech startup e-TRNL Energy has raised ₹27.4 Cr in a round led by IAN Alpha Fund, with participation from Navam Capital and Anicut Capital among others. The company plans to use the capital to complete product development and showcase large-scale lithium-ion cell manufacturing in India.

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5. D2C beauty brand ClayCo Cosmetics has raised ₹30 Cr from London-based Twenty Nine Capital Partners in a fresh funding round. The board allotted 1,529 Series A CCPS at a steep premium, underscoring investor confidence in the brand’s growth trajectory.

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