Festive lift for etailers; Elevation’s late-stage push

Happy Friday! Online sales this festive season are expected to reverse three years of slowdown. This and more in today's ETtech Morning Dispatch.

Also in the letter:
■ PE bets on Indian SaaS
■ Groww cleared for IPO
■ Gaming law taken to court

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Online marketplaces are likely to ring in the festive season this year on a strong note after three years of slowdown, per industry watchers' projections.

Tell me more:

• According to market research firm Datum Intelligence, ecommerce sales during the festive period are expected to reach Rs 1.2 lakh crore this year.
• It represents a sharp 27% jump from Rs 94,800 crore in 2023.
• Quick commerce alone is expected to contribute Rs 14,010 crore in net order value, indicating how deeply it has become embedded in festive shopping behaviour.

Also Read: Ecommerce companies go big on gig hiring for festive play

Gathering speed: Online sales have gained momentum throughout the year, with a steady buildup ahead of the festive season. “Ecommerce had a slow start in January, but things picked up from March due to salary bonuses and all,” said Satish Meena, an advisor at Datum Intelligence.

Between April and June, pre-festive shopping remained solid before dipping in August, as consumers delayed purchases in anticipation of big festive discounts starting September.

Spending boost: Meena noted that a revision in GST rates could further lift demand during the festive period. However, if reforms are delayed, buyers may hold off on high-value purchases.

ET reported last week that Flipkart and Amazon have begun discussions with top brands on managing potential GST cuts. A decision by the GST Council is scheduled for early September, following a meeting.

Also Read: D2C brands lining up to list on quick commerce platforms in festive season

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Elevation Capital co-managing partners Mridul Arora (left) and Mukul Arora

Venture capital firm Elevation Capital, known for early bets on Paytm, Swiggy, Meesho, and Urban Company, is entering new territory. The firm has launched a $400 million fund focused on late-stage tech companies preparing for IPOs.

Tell me more:

• The vehicle, called Elevation Holding, will cut cheques between $20 million and $50 million across 10–15 companies, Elevation Capital co-managing partner Mukul Arora told ET.
• This new fund will primarily back companies in the consumer and financial services segments with a technology focus, Arora added.
• The fund will run in parallel with its Fund VIII, a $670 million early-stage vehicle that invests $2–5 million in startups.
• “Our horizons for investments are much longer, and we will hold long enough to be considered permanent holders of the stock,” said Mridul Arora, partner, Elevation Capital.

Zoom out: The launch reflects a broader shift in the venture capital industry. With traditional growth capital drying up, investors are setting up specialist funds to stay in the game as startups edge closer to profitability and public listing.

Rivals Accel and Peak XV (formerly Sequoia Capital India) already run similar growth-stage arms.

Also Read: Startup IPOs by default, not design

Traffic on IPO street: IPO activity is picking up pace. Ather Energy and BlueStone have gone public this year. Companies like Lenskart, PhysicsWallah, Groww, Pine Labs, Curefoods and Boat are expected to follow. From Elevation’s own stable, Meesho, Urban Company, Wakefit and Aye Finance are preparing to hit the markets.

Also Read: Indian venture capitalists need to pivot to a new model of investing

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Lalit Keshre, cofounder, Groww

Online investment platform Groww has been cleared by stock market regulator Securities and Exchange Board of India (Sebi) to launch its initial public offering (IPO), sources familiar with the development told us.

Tell me more:

• The IPO size is estimated to range between $800 million and $1 billion.
• Once the IPO is completed, Groww will be among the first fintechs to list in India following a ‘reverse flip’.

Also Read: Reverse flipping by Indian startups gathers steam: Here’s all you need to know

Groww: A snapshot:

• Founded in 2016, Groww is backed by prominent investors including Tiger Global, Peak XV (formerly Sequoia Capital India), Ribbit Capital, and Y Combinator.
• While stockbroking is its mainstay, Groww is also engaged in digital lending, payments, and wealth management.
• Groww reported an operating revenue of Rs 3,145 crore for FY24 but also incurred a net loss of Rs 805 crore, mainly due to a one-off tax payment resulting from its reverse flip from the United States to India.

Also Read: Groww to acquire Fisdom in a $150 million all-cash deal

Peer comparison:

• Groww’s only listed rival will be Angel One, the third-largest stockbroker in terms of active clients on the NSE.
• Bootstrapped Zerodha has no plans to list publicly in the near future.

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Private equity firms are doubling down on Indian software-as-a-service (SaaS). Investments reached $1.38 billion between January and July 2025, already 66% higher than the $833 million deployed throughout 2024, according to data from Venture Intelligence.

Driving the news: India’s enterprise SaaS sector, which is profitable with annual recurring revenue (ARR) in millions, is turning into fertile ground for PE funds, investors told ET. Healthcare and enterprise software firms have led the charge, with Impetus Technologies, Innovaccer, WhatFix, and Capillary Technologies drawing big cheques.

The numbers: The average PE investment in top SaaS firms shot up to $239 million from $96 million in 2024, per Venture Intelligence.

Zoom out: The Indian SaaS sector is projected to touch $62.93 billion in revenue by 2032, growing at a CAGR of 27.3%. AI, meanwhile, is rapidly reshaping the space, bringing both disruption and opportunity.

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Online money gaming ban faces first legal challenge: Head Digital Works, the parent company of the online gaming platform A23, has petitioned the Karnataka High Court to challenge the outright ban on real money online gaming. The court will examine the case on August 30.

Semiconductors are the ‘new steel’, says Murugappa chair: Group company CG Power & Industrial Solutions’ entry into the semiconductor business is a response to India’s urgent national need to build domestic manufacturing capabilities in this core technology, said the Murugappa group company’s chairman, Vellayan Subbiah.

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■ China is building a brain-computer interface industry (Wired)

■ Nvidia has a China problem (Axios)

■ Chinese EV makers are cashing in on Western luxury knockoffs (Rest of World)