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UPI MDR rollout delayed; Rs 7,131 crore RDI deployment
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NPCI has pushed back the UPI MDR rollout until after the festive season. This and more in today's ETtech Top 5.
Also in the letter:
■ Urban Company to consider fundraise
■ F2A raises funds for AI, deeptech
■ Freshworks to acquire Torii
Implementation of the merchant discount rate (MDR) on select UPI (Unified Payments Interface) transactions has been pushed beyond Diwali, and a final date will be communicated soon to stakeholders, the National Payments Corporation of India (NPCI) said in a statement on Tuesday.
The plan: The UPI MDR framework, announced on September 15 by NPCI, was scheduled to take effect on October 15. It prescribed a 0.4% fee on UPI merchant payments above Rs 2,000, capped at Rs 300 per transaction.
Merchant pushback: The postponement follows representations from merchant associations seeking relief during the ongoing festive sales season. Besides deferment, they also sought a higher exemption threshold for small merchants, and exemption for merchant-to-merchant transactions.
Exemptions: Per the September framework, merchant payments of up to Rs 2,000 and person-to-person transfers remain free. Qualifying small merchants are also exempt, and merchants cannot pass on the fee to customers.
Why MDR matters: NPCI has said MDR income would support merchant expansion, payment infrastructure, and fraud prevention. The delay would push back this revenue for banks and payment companies.
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The government has committed Rs 7,131 crore to 19 fund managers under the Rs 1 lakh crore Research, Development and Innovation (RDI) scheme to support deeptech startups and private sector R&D.
First cohort: The group includes five focussed research organisations (FROs) and 14 alternative investment funds (AIFs) such as Chiratae Ventures, Blume Ventures, Kalaari Capital, Speciale Invest, YourNest Capital, IvyCap Ventures, Ideaspring Capital, and TVS Capital Funds.
Research hubs (FROs):
Funding process: "Disbursals will follow due process and depend on the fund managers' ability to mobilise capital and deploy it into eligible companies," a person familiar with the process told ET.
Second cohort: The government plans to announce the second cohort shortly and is open to expanding commitments depending on the quality and number of proposals received.
Also Read: RDI fund: Call for proposals to reopen after review, to boost Viksit Bharat 2047, says TDB Secretary
Abhiraj Singh Bhal, cofounder and CEO, Urban Company
The board of home services platform Urban Company will meet on October 16 to consider a fresh fundraise, according to an exchange filing. Among the fundraising routes it will consider is a qualified institutional placement (QIP), the filing said.
IPO proceeds: The company raised Rs 472 crore through its initial public offering (IPO) in September 2025. As of June 30, the company had Rs 2,019 crore in cash on its books, even as its InstaHelp business continued to weigh on its bottomline.
Competition: Urban Company is competing with Snabbit and Pronto in the instant househelp segment. Snabbit has raised a total of $112 million, including a $56-million round closed in April 2026. Pronto, meanwhile, has raised more than $50 million.
Cash burn: During the April-June quarter, UC’s InstaHelp business generated Rs 11 crore in revenues and reported adjusted operating losses of Rs 132 crore. The company said at the time that losses in the segment were expected to remain high.
Infosys cofounder Nandan Nilekani
Fundamentum Frontier Advisors (F2A), the AI and deeptech investment platform anchored by Infosys cofounder Nandan Nilekani, has raised Rs 3,000 crore for its growth-stage fund. The fund has secured approval from limited partners (LPs) to exercise the green shoe option of Rs 500 crore.
Investment plan: F2A plans to make 12-15 investments over the next two to three years, with initial cheques of Rs 100-150 crore that can go up to Rs 200 crore. It is evaluating around 75 companies and expects to close three investments in the next quarter.
Focus areas: The fund is looking at automation, robotics, advanced materials, defence technology, and AI applications. It will also back cooling and connectivity solutions for data centres, but not data centre operators.
AI-generated exam papers: Nilekani on Tuesday also called for a big shift in India's framework for conducting examinations, and proposed the use of AI to create question papers on the day of the test in a bid to remove the risk around fraud and leaks. This after prime minister Narendra Modi had turned to Nilekani to fix issues with India's examination system following the infamous leak of the NEET-UG question paper.
Dennis Woodside, CEO and president of Freshworks
Software-as-a-service company Freshworks said it will acquire New York-based SaaS management platform Torii to add software management and AI spend governance capabilities to its Freshservice offering.
AI spends: "Torii tracks AI consumption to the token, attributes it to the people and teams driving it, and forecasts where it’s heading, so IT can charge it back, set limits, and catch a spike while it's still small," the company said in a statement.
Cost control: Freshworks added that the integration would bring technology inventory, usage, and spending information onto a single platform, enabling IT and finance teams to identify unused software licences, track expenditure, and manage access more efficiently.
Also Read: Freshworks turns profitable in Q2, revenue up 16%
Also in the letter:
■ Urban Company to consider fundraise
■ F2A raises funds for AI, deeptech
■ Freshworks to acquire Torii
UPI MDR rollout deferred beyond Diwali
Implementation of the merchant discount rate (MDR) on select UPI (Unified Payments Interface) transactions has been pushed beyond Diwali, and a final date will be communicated soon to stakeholders, the National Payments Corporation of India (NPCI) said in a statement on Tuesday.
The plan: The UPI MDR framework, announced on September 15 by NPCI, was scheduled to take effect on October 15. It prescribed a 0.4% fee on UPI merchant payments above Rs 2,000, capped at Rs 300 per transaction.
Merchant pushback: The postponement follows representations from merchant associations seeking relief during the ongoing festive sales season. Besides deferment, they also sought a higher exemption threshold for small merchants, and exemption for merchant-to-merchant transactions.
Exemptions: Per the September framework, merchant payments of up to Rs 2,000 and person-to-person transfers remain free. Qualifying small merchants are also exempt, and merchants cannot pass on the fee to customers.
Why MDR matters: NPCI has said MDR income would support merchant expansion, payment infrastructure, and fraud prevention. The delay would push back this revenue for banks and payment companies.
Blume, Kalaari, Chiratae among 19 VCs in RDI fund's Rs 7,131 crore first cohort
The government has committed Rs 7,131 crore to 19 fund managers under the Rs 1 lakh crore Research, Development and Innovation (RDI) scheme to support deeptech startups and private sector R&D.
First cohort: The group includes five focussed research organisations (FROs) and 14 alternative investment funds (AIFs) such as Chiratae Ventures, Blume Ventures, Kalaari Capital, Speciale Invest, YourNest Capital, IvyCap Ventures, Ideaspring Capital, and TVS Capital Funds.
Research hubs (FROs):
- AI & Robotics Technology Park (ARTPARK) at IISc Bengaluru
- Centre for Cellular and Molecular Platforms (C-CAMP) in Bengaluru
- IIT Madras Research Park
- Pilani Innovation & Entrepreneurship Development Society (PIEDS) at BITS Pilani
- Society for Innovation & Entrepreneurship (SINE) at IIT Bombay
Funding process: "Disbursals will follow due process and depend on the fund managers' ability to mobilise capital and deploy it into eligible companies," a person familiar with the process told ET.
Second cohort: The government plans to announce the second cohort shortly and is open to expanding commitments depending on the quality and number of proposals received.
Also Read: RDI fund: Call for proposals to reopen after review, to boost Viksit Bharat 2047, says TDB Secretary
Urban Company board to meet on October 16 to consider fundraise
The board of home services platform Urban Company will meet on October 16 to consider a fresh fundraise, according to an exchange filing. Among the fundraising routes it will consider is a qualified institutional placement (QIP), the filing said.
IPO proceeds: The company raised Rs 472 crore through its initial public offering (IPO) in September 2025. As of June 30, the company had Rs 2,019 crore in cash on its books, even as its InstaHelp business continued to weigh on its bottomline.
Competition: Urban Company is competing with Snabbit and Pronto in the instant househelp segment. Snabbit has raised a total of $112 million, including a $56-million round closed in April 2026. Pronto, meanwhile, has raised more than $50 million.
Cash burn: During the April-June quarter, UC’s InstaHelp business generated Rs 11 crore in revenues and reported adjusted operating losses of Rs 132 crore. The company said at the time that losses in the segment were expected to remain high.
Nilekani-backed Fundamentum's F2A raises Rs 3,000 crore for AI, deeptech fund
Fundamentum Frontier Advisors (F2A), the AI and deeptech investment platform anchored by Infosys cofounder Nandan Nilekani, has raised Rs 3,000 crore for its growth-stage fund. The fund has secured approval from limited partners (LPs) to exercise the green shoe option of Rs 500 crore.
Investment plan: F2A plans to make 12-15 investments over the next two to three years, with initial cheques of Rs 100-150 crore that can go up to Rs 200 crore. It is evaluating around 75 companies and expects to close three investments in the next quarter.
Focus areas: The fund is looking at automation, robotics, advanced materials, defence technology, and AI applications. It will also back cooling and connectivity solutions for data centres, but not data centre operators.
AI-generated exam papers: Nilekani on Tuesday also called for a big shift in India's framework for conducting examinations, and proposed the use of AI to create question papers on the day of the test in a bid to remove the risk around fraud and leaks. This after prime minister Narendra Modi had turned to Nilekani to fix issues with India's examination system following the infamous leak of the NEET-UG question paper.
Freshworks to acquire Torii to expand into AI spend management
Software-as-a-service company Freshworks said it will acquire New York-based SaaS management platform Torii to add software management and AI spend governance capabilities to its Freshservice offering.
AI spends: "Torii tracks AI consumption to the token, attributes it to the people and teams driving it, and forecasts where it’s heading, so IT can charge it back, set limits, and catch a spike while it's still small," the company said in a statement.
Cost control: Freshworks added that the integration would bring technology inventory, usage, and spending information onto a single platform, enabling IT and finance teams to identify unused software licences, track expenditure, and manage access more efficiently.
Also Read: Freshworks turns profitable in Q2, revenue up 16%
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