Valuation With an Asterisk, BluSmart Founders Booked, and Zomato Experiments

Zepto’s last private round valued it at about $7 billion. Less than a year later, domestic institutions discussing its IPO were reportedly closer to $2.3-3 billion. The gap matters because a private funding valuation does not always tell you what ordinary shares are really worth.

This is where the “shadow down-round” starts.

When a startup raised money at a very high valuation in 2021 or 2022, cutting that valuation later creates problems. Existing investors have to mark down their holdings, employee ESOPs lose value, founders face dilution and a company preparing for an IPO has to explain why its price has fallen.

So some companies delay that reset.

Udaan raised more than $350 million through convertibles and debt after being valued at around $3.2 billion. Because convertibles do not always require an immediate equity valuation, the company could raise money without fixing a lower price straight away. When the reset eventually came, reporting put Udaan at around $1.8 billion. ShareChat followed a similar route. Its $49 million convertible round had no announced valuation, although reporting suggested conversion below $2 billion against its earlier $4.9 billion valuation.

Other deals protect investors through stronger rights instead of a lower headline price.

Suppose an investor puts ₹500 crore into a company at a ₹2,500 crore valuation for 20%. With a 2x participating liquidation preference, a ₹1,500 crore sale could return ₹1,100 crore to that investor. Despite owning only 20%, it would receive about 73% of the sale proceeds. Ordinary shareholders divide the rest.

These aggressive terms are not standard across Indian startups. The more common structure remains around 1x non-participating preference with weighted-average anti-dilution. Harsher protections usually appear when companies are under pressure.

The damage becomes visible at an exit or IPO. Snapdeal’s proposed 2017 sale showed how an ESOP pool once notionally worth about $260 million could end up with almost nothing after preference investors were paid. PharmEasy later showed how anti-dilution rights can protect some shareholders while others absorb more of the reset.

That is why a clean down-round can sometimes be healthier. Everyone sees the new price, ESOPs can be reset and the cap table becomes easier to understand.

The better question is no longer what valuation a startup last announced. It is what rights investors received at that valuation, and what founders and employees will actually own when those rights finally convert.

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.

“Ye Tune Kya Kiya”: CBI Books BluSmart Founders In IREDA Case

The CBI has booked BluSmart and Gensol founders Anmol and Puneet Jaggi over alleged financial irregularities in the ₹672.74 Cr IREDA case.

The probe flags suspected diversion of ₹290.76 Cr, along with irregular EV purchases, solar projects and fund transfers.

Read more here

“Kuch Naya Ho Jaaye”: Zomato Experiments Rapid Food Delivery

Zomato is testing food vending machines in several Gurugram offices in partnership with popular restaurant brands.

Instead of relying on regular doorstep delivery, this setup allows employees to grab meals directly inside their workplace.

Read more here

“Dekh Tere Sansar Ki Halat”: Meesho Faces FIR Over Alleged Sale Of Toxic ‘Sulfas’

Meesho and a Surat-based seller face an FIR after a 17-year-old allegedly bought a restricted pesticide through the platform and later died after consuming it.

The case could put ecommerce safeguards around the sale of toxic substances under greater scrutiny.

Read more here

“Hum Bhi Hain Josh Mein”: Mygate Launches AI Assistant MIRA

Mygate has launched MIRA, an AI-powered assistant for resident welfare associations and housing societies.

It automates invoice extraction, payment reconciliation, transaction analysis, collections monitoring and overdue-account tracking.

Read more here

“IPO Ka Fan Full Speed”: Atomberg Files DRHP For ₹450 Cr Fresh Issue

Atomberg Technologies has filed its DRHP with SEBI for an IPO comprising a fresh issue of up to ₹450 Cr and an OFS of up to 7.65 Cr shares.

The company plans to use proceeds for debt repayment, brand awareness, performance marketing, R&D and general corporate purposes.

Read more here

“Purana Saal Naya Maal”: Deepinder Goyal’s Temple Wearable Gets ‘Smaller’ Ahead of its Launch

Deepinder Goyal has revealed a smaller design for Temple’s wearable, calling it the “smallest” and “most powerful” on the market.

Pre-orders for the limited launch edition are expected soon, with shipments slated for year-end.

Read more here

“Modi Hai Toh Mumkin Hai”: ISRO Mulls Exiting Launch Vehicle Manufacturing

ISRO is reportedly looking to gradually stop manufacturing launch vehicles, with mature rocket technologies being transferred to private companies and PSUs.

The shift would let ISRO focus on R&D, advanced missions and specialised infrastructure while industry handles commercial manufacturing and operations.

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“Mubarakan Ji Mubarakan”: Centre Notifies ₹62,500 Cr Mobile Manufacturing Scheme

MeitY has notified the ₹62,500 Cr Mobile Phone Manufacturing Scheme to deepen domestic production, local value addition and Indian-owned mobile brands.

The five-year scheme will run from FY27 to FY31, offering incentives of 2.25% to 5%, with additional benefits for Indian design, R&D and local component sourcing.

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“Ye Kya Ho Raha Hai Bhaiya”: A91 invests Rs 143 Cr in Atomberg

A91 Partners has invested around ₹143 Cr in Atomberg through primary and secondary transactions.

Ahead of Atomberg’s proposed IPO, it has already sold shares worth around ₹445 Cr while retaining a 21% stake.

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1. Raana Semiconductors is in advanced talks to raise ₹100 Cr in Series A funding to build a 12-inch crystal-growth system, with an Indian VC expected to lead.

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2. D2C beauty startup Be Clinical has raised ₹21 Cr in a seed extension led by Sauce, with backing from V3 Ventures and angels.

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3. Omega Seiki Mobility has raised another ₹50 Cr in fresh funding led by Unistone Capital’s Abhishek Misra, its second fundraise in a month.

   Read more here

4. Pune-based green energy startup Greenjoules has raised around ₹62 Cr in its ongoing Series B round, led by Amazon.

   Read more here

5. Chennai-based agritech startup Fragaria is in talks to raise ₹40 Cr in a fresh round led by Blume Ventures.

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6. EV battery-swapping startup Battery Smart has raised $19.5 Mn in Series C funding, led by existing investor Rising Tide Ventures.

   Read more here