Startup Street: This Ratan Tata-Backed Startup Predicts Floods In India, Days In Advance
Here’s what went on this week on Startup Street.
This week on Startup Street, we have a Boston-based startup that has been predicting floods in India, days in advance. India’s market regulator is working on a new set of norms to allow startups to shift from the Innovators Growth Platform to the main stock exchange after a year of trading. A Swedish payments firm Klarna has become the most valuable fintech startup in Europe after a new funding round. And India’s Ministry of Finance has simplified angel tax assessment for startups.
ClimaCell Has Been Predicting Floods In India
Boston-based weather forecasting startup ClimaCell has been predicting floods in India, days before they hit with a devastating force.
Amir Givati, director of flood modeling at ClimaCell, told BloombergQuint that the startup’s Global Urban Flooding Forecast predicted the floods in Assam, Uttar Pradesh, Rajasthan, Maharashtra and Gujarat, two to three days in advance. “The ClimaCell model predicted the Kerala and Tamil Nadu heavy floods last week.”
More than 1,200 villages are affected by floods in Bihar, with at least 130 dead and 1.25 lakh displaced, according to reports by the Press Trust of India. Parts of Maharashtra, Kerala and Karnataka are also under water with Home Minister Amit Shah set to do an aerial survey today. Swelling rivers in Assam also led to floods last month, displacing more than 42,000 people across 33 districts and killing at least 98. A recent flooding near Mumbai trapped over 1,000 people for 15 hours on a train due to rapidly rising flood waters.
The startup said it has had “positive interactions” with public and private stakeholders across India, who are seeking innovative solutions to tackle the social challenges arising from climate change. Globally, according to data ClimaCell cited, the number of floods and other hydrological events have quadrupled since 1980 and have doubled since 2004, highlighting the need of adaptation to climate change.
“With increasing temperatures of 1.5°C (Celsius) and as much as 4°C by the end of the century, flooding will continue to destroy lives,” the startup said.
According to ClimaCell, there are still multiple parts in the governmental weather forecasting and alerting system—in India and elsewhere—that are sub-optimal at the moment. “Starting from insufficient sensing networks, to modeling capabilities and most importantly to how data is being shared and disseminated in a timely and effective fashion.”
ClimaCell said it does not see its future as a replacement for governmental weather forecasting and alerting systems, but as a partner that is using traditional meteorological ways and adding thousands of Internet of Things data points to predict more accurately. “This is data from the connected world, from wireless signals to airplanes, drones and IoT devices. We then analyse the data at unprecedented resolutions, providing hyper-accurate, specific and customisable forecasts,” Chief Strategy Officer and Co-Founder Rei Goffer said.
The startup primarily works with private companies in aviation, logistics, agriculture and other such industries which are affected by changes in weather. Their clients include Delta, JetBlue, Via, USTA-US Open, New England Patriots, White Castle Roofing. The startup is backed by backed by Tata Group’s Chairman Emeritus Ratan Tata and Japan’s SoftBank Group Corp., among other investors.
SEBI Mulls Shifting Startups To Main Stock Exchange
The Securities and Exchange Board of India is working on a new set of norms to allow startups to shift from the Innovators Growth Platform to the main stock exchange after a year of trading.
SEBI officials told PTI that the regulator has finalised a draft set of norms after discussing with merchant bankers, industry bodies, the two leading stock exchanges and its own Primary Market Advisory Committee. This is said to be presented for the board’s approval at their meeting later this month.
The regulator had set up the IGP to kickstart listing of startups. It is commonplace in the Silicon Valley for new age ventures to aim for listing. However, startup listing has remained tepid in India with many citing difficulties in meeting compliance requirements.
A startup would need to be listed on the IGP for at least one year and have at least 200 shareholders at the time of migration, according to the draft proposal. They will also need to have net tangible assets of at least Rs 3 crore in the preceding three years, of which up to 50 percent can be held in cash.
The company will also need to have an average consolidated operating profit of Rs 15 crore during the previous three years.
The regulator, however, is of the view that the eligiblity criteria for migration to the main board should be stringent since that also entails trading by retail investors. Rules are much more relaxed on the IGP as trading activity there is relatively restricted.
Snoop Dogg-Backed Firm Is Now Europe’s Most Valuable Fintech Startup
Swedish payments firm Klarna has become the most valuable fintech startup as a new funding round took its valuation to $5.5 billion.
The startup raised $460 million in equity funding to “continue its rapid rise in U.S.”, it said in a media statement on its website. The funding round was led by Dragoneer Investment Group, the statement said.
With its new funding, Klarna has leapfrogged TransferWise and N26, which have recently been valued at $3.5 billion each.
Popular rapper Snoop Dogg had invested in Klarna back in January.
Angel Tax Relief
The finance ministry has simplified angel tax assessment for startups.
The Central Board of Direct Taxes said in a circular that no verification will be done by an assessing officer if a startup has been recognised by the Department for Promotion of Industry and Internal Trade and the case is selected under limited scrutiny.
In cases where scrutiny assessments of startup entities are pending, the CBDT has decided that the contention of the assessee will be summarily accepted whose cases are under ‘limited scrutiny’ for those entities recognised by DPIIT.
If a startup is not recognised by the DPIIT, then too the inquiry would be carried out after the approval of a supervisory officer.
But this may not offer much relief to startups already facing angel tax demands as reported here.