ED lens on Jaggi brothers; Flipkart begins India shift

Happy Tuesday! After a Sebi probe, Gensol Engineering is now on the Enforcement Directorate’s radar. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ Yulu’s fresh raise
■ Voice AI gains traction
■ Zetwerk IPO-bound

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Following Sebi’s probe, the Enforcement Directorate (ED) is now investigating investments in Gensol Engineering and plans to question directors Anmol and Puneet Singh Jaggi in connection with the Rs 5,000-crore Mahadev betting scam.

Driving the news:

• The ED suspects that the Jaggi brothers used illegal betting proceeds to manipulate stock prices and has seized five lakh shares.
• Authorities have confiscated securities worth Rs 573 crore, including assets linked to Gensol.

Context setting:

• The Mahadev scam revolves around the Mahadev Book app, which illegally offered sports betting and gambling services in India.
• The operation used fake accounts to launder funds.
• The network gained traction through high-profile Bollywood endorsements and opulent events funded by illicit gains.

Eversource Capital has made a non-binding offer of Rs 1,200 crore for the struggling ride-hailing service BluSmart, according to sources. However, the deal may stall due to ongoing regulatory investigations into Gensol Engineering, BluSmart's key EV fleet supplier.

Also Read: Anmol Jaggi pitched strategic changes at BluSmart ahead of Sebi crackdown on Gensol

Deal details:

• Eversource Capital is also exploring alternative acquisition routes, including direct talks with Gensol’s lenders — Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (IREDA) — who hold a lien on BluSmart’s EV fleet, people aware of the matter told us.
• A slump sale, which would shield Eversource from BluSmart’s existing liabilities, is also under consideration. The current offer remains subject to due diligence.

Read ETtech’s in-depth coverage of the Gensol-BluSmart crisis:

• BluSmart crisis: Green mobility’s red flag is giving HNIs bond blues
• How the Jaggi brothers misled investors and lenders while being cleantech poster boys
• BluSmart cab services stay suspended in Delhi-NCR, Bengaluru, Mumbai as cofounder under Sebi lens
• Gensol promoters quit board; BluSmart begins shutting ops
• Anmol Jaggi and Ashneer Grover fund trails see overlap
• Scoop: Uber in early discussions with EV ride-hailing startup BluSmart for a possible acquisition
• BluSmart's ride into the sunset: Timeline of events at the cab-hailing EV firm

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Kalyan Krishnamurthy, CEO, Flipkart group

The board of Flipkart has approved shifting the company’s domicile from Singapore to India, according to sources. The move comes as the Walmart-owned ecommerce giant prepares for a public listing on Indian stock exchanges by 2026.

Driving the news:

• “Flipkart’s board has approved the plan to flip back when they met last week in Singapore…the process will now kick off,” said a person familiar with the matter.
• Flipkart's much-anticipated IPO is expected to be a landmark moment for India’s startup ecosystem, which was significantly shaped by the Bengaluru-based company.
• Flipkart Internet Pvt Ltd has recently initiated a capital restructuring, as per filings with the Registrar of Companies. A Flipkart spokesperson confirmed the relocation.

Recent flip-backs:

• With this move, Flipkart joins a growing list of firms redomiciling to India. Dream11 shifted its base from the US to India earlier this year via the fast-track route.
• Other firms that have returned to India from the US or Singapore include Zepto, Pine Labs, Groww and Kreditbee. Meanwhile, Meesho, Razorpay, Eruditus, Udaan and Khatabook are in various stages of the flip-back process.

Also Read: Google invests $350 million in Flipkart as part of nearly $1 billion funding round

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(L-R) Naveen Dachuri, Amit Gupta & RK Misra, founders, Yulu

Bengaluru-based mobility startup Yulu is in talks to raise $75-80 million (around Rs 650-700 crore) to tap into the growing quick commerce market. The company is in discussions with global impact funds and private equity investors, according to sources.

Driving the news:

• Existing investors Bajaj Auto and Magna International are expected to participate.
• Cofounder and CEO Amit Gupta confirmed a mix of equity and debt for the raise.
• The $75-80 million capital will be raised as primary investment, with secondary deals possible if some investors fall short of shareholding thresholds.

Financials:

• Yulu hit a $30 million annual revenue run rate last year.
• Its valuation is expected to rise 20-25% from its last round in February 2024, when it raised $19 million at a $210 million valuation.
• To date, Yulu has raised $124 million from investors including Blume Ventures, 3one4 Capital, and Northern Arc Capital, according to Tracxn.

Future outlook: Gupta told ET that Yulu plans to expand its fleet from 45,000 to 75,000-80,000 scooters by end-2025.

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Indian voice AI startups are drawing growing business interest as demand for conversational AI rises in customer service and call centres.

What’s happening:

• Experimental pilots are now evolving into full-time deployments as model accuracy and reliability improve, according to experts.
• Investor interest in voice technology is rising sharply. Venture capital funding surged to $202 million in 2024 across 12 deals, up from $7 million in 2023, per Venture Intelligence.
• The Indian conversational AI market is currently valued at $516.8 million and is projected to reach $4.9 billion by 2033, growing at a compound annual growth rate (CAGR) of 26.4%, according to market research firm IMARC Group. Automation is a key growth driver.

Use cases: Voice AI adoption is accelerating in ecommerce, contact centres, and financial services. Experts told us that India stands apart as a voice-first market, unlike many others globally.

Challenges:

• A major hurdle is achieving natural-sounding speech, as users expect human-like interactions.
• Voice AI continues to struggle with regional languages, particularly in capturing nuances like tone, emotion, and empathy.
• Concerns persist over AI replacing call centre jobs, though the current focus is on handling high call volume during peak periods, not eliminating roles.

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Zetwerk gears up for IPO in 12-24 months: Manufacturing unicorn Zetwerk is planning to go public within the next 12 to 24 months, founder and CEO Amrit Acharya told employees in an internal note. The company will begin preparations for its listing during the current financial year.

Unacademy now ‘default alive’, to cut cash burn to Rs 200 crore in 2025: CEO Gaurav Munjal | SoftBank-backed edtech startup Unacademy aims to reduce its cash burn to under Rs 200 crore in calendar year 2025, down from over Rs 1,000 crore three years ago, cofounder and chief executive officer Gaurav Munjal said in a post on X.

A third of Druva’s code will be written by AI by 2025-end, says data security unicorn’s CEO: Jaspreet Singh, founder and chief executive of data security startup Druva, said artificial intelligence represents a significant opportunity, especially in engineering.

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