Atomberg's funding plans; Neocloud firms eye India capacity

Happy Wednesday! Atomberg Technologies is in talks to raise funding for its engineering arm ahead of a public listing. This and more in today's ETtech Morning Dispatch.

Also in the letter:
■ Instamart gets new CEO
■ Pine Labs Q1 report
■ Unacademy-UpGrad merger nears close

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(L-R) Shibam Das and Manoj Meena, founders, Atomberg

Atomberg Technologies is in talks to raise funds for its business-to-business engineering arm even as it prepares a Rs 2,000-crore IPO. The company is weighing whether the relatively smaller business should be housed separately or taken public with the parent.

Funding and ownership:

• General Catalyst is leading a Rs 150-200 crore round, with Mirae Asset Management considering participation, sources told us. The deal values the arm at Rs 1,500-1,700 crore.
• Should the deal go through, Atomberg's existing investors will receive mirror holdings in the engineering business, preserving their relative ownership while allowing the unit to raise capital independently.
• Revenue for the B2B arm — which makes motors and components and counts appliance makers among its clients — stood at Rs 17 crore in FY25 and could overtake the consumer business within two to three years, a person in the know told us.

IPO and financials:

• Atomberg plans to file its draft IPO papers in the coming weeks. The Rs 2,000-crore issue will combine fresh shares with an offer for sale.
• Its FY25 operating revenue rose 20% to Rs 958.4 crore, while net loss narrowed 41% to Rs 117.4 crore.
• Atomberg has raised about $151 million to date, including an $86 million round led by Temasek and Steadview Capital in 2023.

Also Read: Atomberg backer Inflexor raises Rs 400 crore, sets Rs 1,250 crore target for third fund

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At least six Nvidia-backed neocloud companies are in talks with Indian operators to lease data centre capacity for artificial intelligence (AI), sources told us.

Driving the news: Companies such as CoreWeave, Together AI, Nebius, Lambda Labs, Crusoe and Nscale are at various stages of discussions with Indian players including Sify Technologies, Yotta Data Services, CapitaLand Investment, CtrlS Datacentres and Tata Communications.

Why India: Talks are centred on hotspots like Mumbai, Chennai, Hyderabad and Vizag. A 20-year tax holiday for foreign cloud providers, announced in this year's Union Budget, along with abundant engineering talent and low infrastructure costs, has made India the most attractive data centre destination in the region.

Double click: Neoclouds, or "babyscalers," differ from hyperscalers like AWS, Azure and Google Cloud by focussing solely on renting Nvidia GPU clusters for AI training and inference. Yotta is already hosting global AI firms and deploying over 85,000 GPUs, while CtrlS has multiple deals progressing through Letters of Intent.

What this means: For India's data centre industry, these companies could emerge as marquee anchor tenants at a time when developers are racing to add capacity.

Also Read: India data centre capacity to jump to 12 GW by 2030 as AI fuels demand: Wood Mackenzie

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Food and grocery delivery platform Swiggy has appointed former Myntra boss Nandita Sinha as the chief executive officer (CEO) of its quick commerce business, Instamart, the company said on Tuesday.

Driving the news: Sinha will take charge on August 3, replacing Amitesh Jha, who became Instamart CEO in August 2024. She stepped down from Flipkart-owned Myntra in April this year.

Jha's departure follows a series of senior exits at Instamart over the past year, including chief operating officer (COO) Ankit Jain and chief business officer (CBO) Hari Kumar.


Tell me more: Sinha joins as Instamart faces slowing momentum. The business reported an operating loss of Rs 858 crore in the January-March quarter and trails Eternal-owned Blinkit and IPO-bound Zepto in order volumes.

Under Sinha, Myntra became profitable. Industry executives said she now faces the challenge of turning around Instamart's fortunes in the intensely competitive quick commerce market.

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Amrish Rau, CEO, Pine Labs

Merchant payments firm Pine Labs' first-quarter consolidated net profit rose fourfold, driven by increased adoption of digital payments and the underlying infrastructure in ‌the ⁠country.

Financials:

• Net profit: Rs 19.6 crore compared with Rs 4.8 crore a year earlier.
• Revenue from operations: Up 20% to Rs 736.9 crore from Rs 615.9 crore.
• Esop costs: Fell to Rs 26 crore from Rs 66 crore a year earlier.
• Ebitda: Rose 5% to Rs 126 crore
• Margin: Narrowed to 17.1% from 19.6%.

Growth guidance intact: Pine Labs reaffirmed its FY27 revenue growth forecast of 21-23.5%. In its shareholder letter, the company said this quarter's investments should start driving higher sales productivity in the back half of FY27, supporting margin improvement by year-end.


Rai Rohit Prasad, MD, Easebuzz

Pune-based digital payments firm Easebuzz reported a 10% rise in revenues in FY26, a sharp drop from the previous year amid increased competition and regulatory changes.

Number-wise:

• Profit after tax fell 41% to Rs 11.15 crore from Rs 18.77 crore in FY25.
• Revenue at Rs 723 crore for the fiscal.
• Value of payments processed by the company rose about 67% to nearly $50 billion from around $30 billion.

Sudhir Singh, CEO, Coforge

IT solutions firm Coforge on Tuesday posted a significant jump in net profit and revenue.

• Net profit: Up 63.3% on year to Rs 518.6 crore.
• Revenue from operations: Rose 49.2% to Rs 5,527.7 crore, from Rs 3,704.4 crore a year ago.
• Fresh order intake of $691 million during the quarter, led by strong demand in the Americas.

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(L-R) UpGrad's Ronnie Screwvala and Unacademy's Gaurav Munjal

Unacademy investors to get UpGrad board seat: Unacademy's investors will receive one seat on UpGrad's board as part of the edtechs' merger, with the final transaction value fixed at Rs 1,955 crore, sources told us, adding that the deal is expected to close within three weeks. The final value is Rs 100 crore lower than the Rs 2,055 crore envisaged earlier.

Meta's global policy chief summoned: The Ministry of Electronics and Information Technology (MeitY) has summoned the global public policy executive for Meta after a video of Prime Minister Narendra Modi was temporarily taken down from Facebook in India on Tuesday morning, sources told us.

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