As the Union government takes the first legislative step towards bringing back the merchant discount rate (MDR) on digital payments, companies like PhonePe, Paytm, Razorpay and Pine Labs could stand to gain anywhere between Rs 150 crore to Rs 1,000 crore in annual revenues, depending on their scale of merchant payments.

While the final contours are not out yet, industry sources told The Arc that the government could consider allowing a 0.25%–0.30% MDR on UPI payments above Rs 2,000, according to reports. This fee would be distributed among the issuing bank, acquiring bank and then payment apps like PhonePe or Google Pay would get their cut.

Only the first step: Industry executives, however, cautioned that the government's proposed amendment is only the first step.

While moving amendments to the Payment and Settlement Systems Act,2007 despite a politically turbulent Parliament session indicates that the Finance Ministry considers the issue a priority, the amendment by itself does not automatically bring back MDR.

"What I understand is that it will still take some time, but it is a good start," said the founder of one of India's largest payment companies.

A senior banker added that while RBI will eventually frame the operational rules, the final decision on MDR rests with the government, making it largely a policy call.

Also this comes at a time when the government is yet to release its incentive pay-out for digital payments processed last year. The Union government had set aside around Rs 2,100 crore to incentivise UPI and RuPay debit card payments processed by fintechs.

Even if MDR returns, its impact may be more limited than many expect.

UPI remains predominantly a small-ticket payment network. Regulatory discussions have centred around levying MDR only on transactions above Rs 2,000, meaning only a small share of overall UPI payments would attract charges.

The proposal is also expected to cover only large merchants with an annual turnover of Rs 40 lakh and more, who account for less than 10% of India's nearly 60 million merchant base, according to industry estimates.

NPCI data further illustrates this skew. The industry-wide average UPI ticket size is roughly Rs 1,300.&nbsp;The average P2M payment is only about Rs 600, compared with roughly Rs 2,450 for person-to-person transfers. That means that most of the merchant payments will fall below the Rs 2,000 limit.&nbsp;

Paytm and PhonePe: Among the UPI apps, Paytm and PhonePe the two largest merchant acquirers stand to benefit the most, with each looking at a topline boost of around Rs 300 to Rs 700 crore in per annum.&nbsp;

Interestingly, while PhonePe dominates the UPI market with 46-48% market share as compared to Paytm, which is a distant third with just 7-8% share. But in terms of merchant payments, the two companies have a comparable business because of the QR code network they have set up.&nbsp;

PhonePe settles around 9.6 billion merchant transactions annually. It earned Rs 1,206 crore in merchant payment revenue in the first half of FY26, implying an annualised run rate of more than Rs 2,500 crore, as per its draft documents filed with Sebi earlier this year. This revenue is a mix of MDR from non-UPI payment modes, platform charges and other lending and insurance distribution charges.&nbsp;

Paytm, meanwhile, reported merchant revenue of around Rs 600 crore in the first quarter of FY27, translating into an annual run rate of roughly Rs 2,500 crore. It is this revenue stream, which currently relies on fees from financial services and non-UPI digital payment modes, that stands to receive a significant boost if MDR makes a comeback.

According to estimates by Bernstein, MDR could eventually settle in the range of 15 to 30 basis points, with UPI third-party application providers (TPAPs) retaining around five basis points after sharing economics with banks.

Based on Paytm's merchant payment business, Bernstein estimates the company could see an incremental revenue of Rs 300 crore to Rs 700 crore. Considering PhonePe operates at a comparable scale in merchant payments, back-of-the-envelope calculations based on its FY26 disclosures suggest it could see a similar uplift.&nbsp;

Paytm founder Vijay Shekhar Sharma recently told analysts that any MDR revenue, whenever it is introduced, would flow almost entirely to the company's bottom line.

For IPO-bound PhonePe, such an incremental revenue stream could also provide relief at a time when investors continue to scrutinise its profitability. In FY26, PhonePe reported revenue growth of just 11% to Rs 7,920 crore, while its net loss widened 62% to Rs 2,791 crore.

The likes of Google Pay and BharatPe, could be next with comparatively lower MDR payouts, given their scale.

Pine Labs and Razorpay: The benefits may not stop with the UPI apps. Merchant payment processors and payment aggregators could also see a meaningful boost to their topline. Pine Labs, during its June quarter earnings, said nearly 70% of its payment volumes now come through UPI.&nbsp;

Bernstein estimates Pine Labs could gain between Rs 50 crore and Rs 150 crore in additional revenue, assuming around 70% of its UPI transactions are above Rs 2,000.

For Razorpay, which has a dominant presence among online merchants and SMEs, the share of UPI transactions is likely to be similar, if not higher, suggesting that it too could emerge as a meaningful beneficiary if MDR is eventually implemented.

Could this help smaller UPI apps? One of the more interesting consequences of MDR could be its impact on smaller UPI apps.

Over the past two years, NPCI has encouraged newer players such as Navi, Super.money, Pop, Scapia, Jupiter and even BHIM to scale up and challenge the dominance of PhonePe and Google Pay.

These apps currently command just 1% to 2% market share each. But if MDR creates a sustainable revenue pool, smaller players may have greater room to invest in customer acquisition, rewards and merchant incentives, potentially making the UPI market more competitive.

Whether the additional revenue simply strengthens the incumbents or helps challengers narrow the gap could become one of the most closely watched outcomes of UPI's next phase.

Merchants may push back: While MDR would create a new revenue stream for fintech companies, it would also introduce a fresh cost for merchants that have become accustomed to accepting UPI payments for free.

"Organised merchants bargain for every penny. If UPI starts attracting MDR, they will simply factor digital payment costs into their overall economics. That will also affect how much payment companies can charge them for other services," said the founder of a Gurugram-based payment company.

Since payment companies like Paytm and PhonePe were not able to charge MDR, they would typically bundle soundbox charges, device servicing charges, processing fees for credit, insurance and many other prices on the merchant. Now with MDR coming into picture, a lot of these charges could get scrutinised, especially by large merchants.

Industry executives also pointed out that many organised retailers have actively encouraged UPI payments because they are both popular with customers and free to accept.

That could change if merchants have to start paying MDR. This could bring Visa and Mastercard back into the digital payments game.

"When RuPay credit cards on UPI were launched with charges attached, merchants such as Decathlon and Pizza Hut resisted. A similar reaction this time would not be surprising," the founder added.

Government's move to amend Payment Act, 2007 has got the payments industry excited about the revenue opportunity that comes with MDR.

Return of MDR: Why PhonePe, Paytm, Razorpay stand to gain the most

Gurgaon-based Fairdeal Market is building B2B quick commerce for small retailers, from kiranas and paan shops to tea stalls, delivering FMCG supplies within 60 minutes.

Traditional distribution in India is geared towards large wholesale orders and next-day delivery. Fairdeal wants to become the top-up channel for local retailers, using smaller, more frequent orders to replenish products as they run out.

Currently, Fairdeal supplies goods to more than 20,000 retailers in Delhi-NCR, logging an average order value of Rs 3,500. The company operates six dark stores in the region and plans to open four more in the coming month.&nbsp;

Founders Prateek Bansal and Yash Bansal, who are brothers, estimate that Fairdeal’s current scale represents less than 10% of the opportunity in Delhi-NCR. There is room to run a network of 60 dark stores in the market.

Fairdeal’s revenue rose from Rs 1.2 crore in FY24 to Rs 14.2 crore in FY25, Tracxn data shows. At the same time, net loss went up from Rs 4 crore to Rs 4.6 crore.

In May 2026, the four-year-old company raised $15 million in Series A funding, a round led by Bertelsmann India Investments and supported by WaterBridge Ventures and Incubate Asia Fund. The round took Fairdeal’s total funding to $20 million.

The Bansals started Fairdeal in 2022. Before that, Prateek built Health and Hygiene Pro Services, which supplied surgical consumables and medical devices to chemists. The business reached around Rs 15 crore in GMV before he sold it for Rs 5 crore in cash. Yash worked in brand and strategy at FMCG major Marico.

Fairdeal Market delivers FMCG supplies to kiranas, paan shops and tea stalls within 60 minutes

Can Fairdeal make small-order wholesale work for kiranas?

Quick-commerce app FirstClub has one of the highest average order values in Indian online grocery at nearly Rs 1,200. It has built this basket size by listing a more selective range of higher-quality, healthier products and designing a shopping experience that feels different from other platforms.

The two-year-old company currently serves 1.7 lakh households in Bengaluru. Around 60% of customers who order in a given month return to transact the following month.

While on-demand delivery is its main business, FirstClub also offers a subscription service for early-morning drops of dairy products, batters, bread and other essentials.

Ayyappan Rajagopal, who earlier led Cleartrip as CEO and was a senior vice president at Flipkart, started FirstClub in 2024. Arvind Charanyan, Rajagopal’s colleague from Flipkart, soon came on board as a co-founder. Charanyan has also worked at HUL, Myntra and Coupang.

FirstClub closed a $55-million Series B earlier this month, touching a valuation of $255 million. Overall, it has raised over $86 million in funding from investors like Accel, Peak XV Partners and RTP Global.

Slower quick commerce? FirstClub’s quality route to higher AOV

Merchant payments have partly helped Paytm return to growth after its regulatory troubles, and the listed fintech major is now trying to rebuild its consumer business.

Paytm’s monthly transacting users crossed 80 million during the April-June 2026 quarter, picking up from a low of 70 million in December 2024. Founder-CEO Vijay Shekhar Sharma sees that as a base from which to restart consumer acquisition with more confidence.

During the latest earnings call, Sharma told equity analysts that growing the consumer business was “a project of personal interest” for him. However, he clarified that Paytm would not chase scale through incentives the way it did in its earlier phase. The focus this time is on building a sizeable consumer base for higher-value financial services.

“We don’t want market share for the heck of it,” he said, adding that Paytm wanted users who could be monetised through personal credit, wealth management and other financial services.

The Noida-based company, owned by One97 Communications, had 96 million monthly transacting users at the start of 2024. The figure began to fall after the RBI restricted key areas of its operations over compliance issues in February that year.

The RBI ordered One97 affiliate Paytm Payments Bank Limited (PPBL) to stop offering basic banking services. PPBL underpinned Paytm’s transaction flow, and its suspension affected the company’s ability to process UPI payments for consumers as well as merchants.

Paytm could resume digital payments only after becoming a third-party UPI app. PPBL’s banking licence was cancelled in April 2026 and regulators this week appointed a former SBI executive to liquidate the entity.

Paytm’s monthly transacting users crossed 80 million during the April-June 2026 quarter

Why Paytm’s next consumer bet cannot look like its last one

Logistics platform Shiprocket’s core operations are profitable and currently absorb losses of its newer businesses. But that gap may close soon. Calculations made by a financial model suggest that the newer businesses may reach approximate breakeven in FY28.

The core operations comprise domestic shipping and a suite of shipping applications. The newer portfolio includes cargo and fulfilment, cross-border shipping, advertising and marketing solutions, hyperlocal deliveries and capital solutions.

Shiprocket’s group revenue stood at Rs 2,024 crore in FY26. According to the financial model reviewed by The Arc, group revenue could rise to Rs 3,528 crore in FY28 and to Rs 7,340 crore by FY31. Adjusted EBITDA, excluding employee stock-option expenses, is projected to increase from Rs 17.6 crore in FY26 to Rs 322 crore in FY28 and Rs 1,362 crore by FY31.

That would raise the adjusted EBITDA margin from 0.8% in FY26 to about 9% in FY28 and 19% by FY31, the model shows.&nbsp;

These are not projections confirmed by Shiprocket, which has filed its final IPO prospectus. In response to queries from The Arc, the company said that the projections were not part of its prospectus and declined to comment on the figures.

Domestic shipping and shipping applications are expected to remain Shiprocket’s main source of profit. This core segment has been profitable since FY22 and recorded annualised revenue growth of 17% between FY24 and FY26, although its growth slowed in the latest financial year.

The financial model sees the core segment’s revenue to increase by about 20% annually over the next five years. Its adjusted EBITDA margin is projected to move up from 12.5% in FY26 to around 18% by FY31.

None of the newer businesses has produced a segment-level profit in the three years disclosed in the IPO prospectus. The financial model estimates that revenue from this portfolio may rise 76% in FY27, before annual growth moderates to 34% by FY31.

Promising bets: Much of the turnaround assumed in the model depends on advertising and marketing solutions, which include payments product Fastrr Checkout and Shiprocket Ads. Revenue from the business stood at Rs 83.8 crore in FY26. The model projects it to reach Rs 1,578 crore by FY31. It is also the only business in the emerging portfolio to carry high margins, making its performance important to the wider profitability case.

Artificial intelligence is another part of the operating-leverage assumption. Shiprocket disclosed that AI generated about 70% of its code in FY26, while an AI chatbot automatically resolved 65% of customer support tickets. The company plans to begin selling AI agents to small businesses in FY27.

Official figures: Shiprocket’s revenue from operations climbed 24% to Rs 2,024 crore in FY26 from Rs 1,632 crore a year earlier, according to its final IPO prospectus. Its restated loss, however, went up from Rs 74.4 crore to Rs 79.2 crore.

The core business generated Rs 1,485 crore in revenue, while the loss-making new portfolio contributed Rs 539 crore, or 26.62%. The portfolio’s adjusted EBITDA loss widened to Rs 169 crore in FY26.

IPO details: Shiprocket, which is backed by investors including Blinkit owner Eternal and German conglomerate Bertelsmann, plans to open its public issue on August 12 and close it on August 14.&nbsp;

The IPO has a total offer size of up to Rs 1,617 crore. The company will raise up to Rs 885.5 crore by issuing fresh shares, while existing shareholders will offload shares worth up to Rs 732 crore through the offer for sale.

The total offer has been cut by over 30% from Shiprocket’s earlier plan. The company is seeking a valuation of around Rs 7,000 crore compared with the Rs 10,000-crore price tag at which it last raised private funding.

Of the fresh proceeds, Rs 365.6 crore is earmarked for expanding Shiprocket’s platforms, with most of the spending directed towards its newer businesses. This includes Rs 205.8 crore for marketing and Rs 159.8 crore for technology infrastructure.

Another Rs 210 crore will be used to clear nearly all of the company’s debt. The remaining capital will be used for unidentified acquisitions and general corporate purposes, together capped at 35% of the gross fresh issue.

Selling shareholders: Shiprocket does not have an identifiable promoter and is listing as a professionally managed company, as per the prospectus.

Managing director and CEO Saahil Goel and executive director and COO Gautam Kapoor are each selling shares worth up to Rs 61 crore in the OFS. Co-founder Vishesh Khurana will offload shares worth Rs 20 crore.

Lightrock will sell shares worth about Rs 272 crore, the largest amount among the selling shareholders, while Tribe Capital will part with shares worth Rs 120 crore.

At the IPO valuation, Lightrock, which owns a 4.4% stake, is expected to take a loss of 28% on its investment. Tribe Capital stands to make nearly eight times its investment.

The company is seeking a valuation of around Rs 7,000 crore.

IPO-bound Shiprocket’s new businesses may break even in FY28: Financial model

Capital was the one thing Zepto could always find, even during Covid-19 and the tech slowdown. The quick-commerce player’s valuation jumped from $570 million to $7 billion in four years. That streak hit its first serious test in recent weeks when Zepto’s IPO process forced a harder look at its business.

Bankers and institutional investors, including mutual fund houses, sought improved financials, clearer disclosures and like-for-like comparisons with Blinkit and Swiggy Instamart on average order value, margins and accounting treatment.

That pressure, along with the possibility of a huge valuation cut from $7 billion to $2.5 billion, made Zepto delay its stock listing by at least two quarters. The Aadit Palicha-led company will instead approach existing investors to seek $100 million, about 12% of its $837-million IPO target.

A private round may buy Zepto time, but it won’t provide the balance-sheet cushion the public issue was meant to create. Palicha will have to decide how much Zepto can keep spending on discounts, marketing and dark stores before the platform generates better economics, or before it needs another infusion.

Palicha discussed the investor concerns at a town-hall meeting with Zepto employees on July 31, 2026, a day after retreating from the IPO market. He said that the company would file an updated draft prospectus only after achieving specific targets on negative working capital, AOV and cash burn.&nbsp;

Zepto will file an updated draft prospectus after achieving targets on negative working capital, AOV and cash burn.

Zepto’s path of list resistance: What delayed IPO reveals about its economics

PhonePe, the largest UPI payments player and the most valuable fintech in India, is turning to the credit business to improve its non-payments revenue and build a clearer path to profitability. The move comes after the Walmart-owned company, last valued at $12 billion, paused its IPO plans earlier this year.

Currently, PhonePe is facilitating above Rs 2,000 crore of loan disbursals every month, split between consumer and merchant credit, said three people aware of the numbers. That would translate into an annualised disbursal run rate of about Rs 24,000 crore.

Merchant loans account for an annualised disbursal run rate of Rs 14,000 crore, while consumer loans make up the rest, the sources added. In FY25, PhonePe arranged Rs 4,500 crore of merchant loans, indicating a sharp year-on-year increase in this segment.

PhonePe does not lend from its own balance sheet. It acts as a loan-sourcing partner for 56 lenders, using its payments network to bring them consumer and merchant borrowers.

It entered the merchant loan segment in March 2023 and consumer loans in February 2024. As of September 2025, it had facilitated about Rs 14,270 crore in cumulative loan disbursals.

Back-of-the-envelope estimates suggest it has more than doubled its loan disbursal pace in less than two years.

PhonePe applied for a licence to operate its own non-banking financial company (NBFC) in November 2025 and is awaiting regulatory approval. It had earlier sought this status in 2021 and 2023, but both requests were rejected because Flipkart, then part of the same group, already held an NBFC licence.

Update on July 25: PhonePe's latest financials <a href="https://www.thearcweb.com/article/phonepe-sameer-nigam-marketing-employee-costs-fy26-imOOewwtOBkYAUee">were released one day after the publication of this article.</a> Here are the details -&nbsp;PhonePe's consolidated financials show operating revenue crossing Rs 7,920 crore ($910 mn) in FY26, growing 11.3% YoY.

More importantly, consolidated net loss spiked by 62% to Rs 2,792 crore ($321 mn), according to MCA filings sourced through Tofler.&nbsp;Employee expenses, which includes ESOP costs, rose 7.1% to Rs 4,386 crore ($504 million).

For PhonePe, there is a sharp slowdown in revenue growth to just 11% in FY26 from 41% growth in FY25 and&nbsp;74% in FY24.

But the silver lining is the lending business - the topline of PhonePe Lending unit is up 151% to Rs 945 crore in FY26. Also, it swung to a Rs 74 crore profit in FY26 from Rs 162 crore loss in FY25.

PhonePe is aggressively ramping up credit business to improve its non-payments revenue.

PhonePe’s IPO case now rests on lending and Paytm benchmark

Venture-backed fintech lenders are hitting the IPO market, looking to become listed businesses in a category dominated by NBFCs like Bajaj Finance. Kissht floated its shares in May, Fibe just filed its draft prospectus in June and Moneyview received Sebi approval in July.

Together, the three startups have built assets under management of more than Rs 35,000 crore, based on their latest disclosed numbers. Moneyview has AUM of nearly Rs 20,000 crore, whereas Kissht and Fibe have AUM of Rs 8,000 crore to Rs 9,000 crore each.

Around 70% of Moneyview’s asset base results from off-book partnerships with traditional financiers. Fibe and Kissht carry a larger share of loans on their own books, with Fibe’s on-book share at 60% and Kissht’s at 55%.&nbsp;

Moneyview is more dependent on partner lenders, while Fibe and Kissht have somewhat more direct balance-sheet exposure. These structures have an effect on capital intensity, risk-sharing and reported margins.

The digital lending sector has seen some consolidation in recent years. MyShubhLoans and Axio were acquired by UGro and Amazon, respectively, while some startups struggled to raise fresh funding. Currently, the four major players in the space are Kissht, Fibe, Moneyview and KreditBee.

Kissht, Fibe and Moneyview have built AUM of more than Rs 35,000 crore

Kissht, Fibe and Moneyview take different lending models to IPO market

Quick food-delivery app Swish is eyeing an operating margin of 15-20% on orders averaging about Rs 250. That target is higher than the food-delivery margins of Zomato and Swiggy, although Swish is building a very different model and is far smaller by orders and markets served.

Zomato (Eternal) and Swiggy, both now publicly traded companies, deliver orders from thousands of restaurants, food joints and small eateries under a marketplace model. Swish, founded two years ago, procures raw materials, cooks food in its own neighbourhood kitchens and delivers orders through an in-house fleet in 10 minutes or so.&nbsp;

Owning these layers helps Swish retain food gross margins of 60-70%, instead of splitting economics with restaurants as Zomato and Swiggy do.

Currently, Swish handles 25,000 to 30,000 orders a day in two markets, Bengaluru and Delhi-NCR. Zomato and Swiggy operate across India, each moving 2 million to 2.25 million food orders daily.

Swish competes directly with companies that own some combination of kitchens, food brands and delivery, including Eternal’s Bistro, Zepto Cafe, Rebel Foods, Curefoods and Rapido’s Ownly.

Bistro, the closest rival, has its own cloud kitchens and a separate consumer app. As of January 2026, it had 45 kitchens across Delhi-NCR and Bengaluru. It has been adding about 10 kitchens every quarter and is estimated to be managing 60-70 outlets currently.

Aniket Shah, Ujjwal Sukheja and Saran Sureshkumar, who earlier worked together at crypto platform Pillow, launched Swish in August 2024. Over the past 18 months, the company has raised $54 million across three funding rounds and reached a valuation of $139 million.

Swish is reportedly discussing a fresh raise of $20 million to $50 million from Bertelsmann India Investments.&nbsp;

Among its key investors, Accel owns a 26.2% stake, Hara Global 20.4% and Bain Capital Ventures 7.1%. The three founders hold 12.72% each.&nbsp;

The opportunity Swish is chasing sits within the Indian cloud-kitchen sector, which crossed Rs 10,000 crore ($1.1 billion) in 2024 and is expected to grow at 30% annually through 2030, as per Redseer’s June 2025 estimates.

Swish retains food gross margins of 60-70% instead of splitting economics with restaurants.

Can Swish get better margins from small orders than Swiggy, Zomato?

Silicon Valley has produced hundreds of AI unicorns over the past four years. The Indian startup ecosystem largely sat outside that boom.

That has started to change. In the past month, India has minted two AI unicorns: foundation-model startup Sarvam and vibe-coding company Emergent, both valued at $1.5 billion.

The two companies have one investor in common: Lightspeed Venture Partners. Hemant Mohapatra led Lightspeed’s early bets on Sarvam and Emergent, backing them at the seed or Series A stage. Lightspeed is the largest shareholder in Sarvam with a 14-15% stake after its founders and management, who own nearly 60%, as per Tracxn data.&nbsp;

In an in-depth interview with The Arc, Mohapatra says the AI moment represents a major shift. Indian startups, he argues, need to move beyond business-model innovation, where margins can always be squeezed, and build around deeper technology-led differentiation in the AI era.

Lightspeed is already seeing a new crop of entrepreneurs coming up. “We have made more investments in AI in the past 12 months than in the previous two combined,” he tells The Arc.

Mohapatra also discusses how a new generation of AI-led services companies may evolve, what the change means for SaaS startups and how the profile of Indian tech founders is changing.

Mohapatra began his venture capital career in India in 2018 after more than a decade in Silicon Valley, where he worked across product management, business development and strategy at Google and chipmaker AMD. Before returning to India, he spent a year at venture capital firm Andreessen Horowitz.

Besides Sarvam and Emergent, his AI investments include Supabase, the open-source Firebase alternative; Composio, which connects AI agents and applications; and Rephrase, a video creation platform acquired by Adobe. He has also backed deeptech startups Airbound, a drone logistics company, and Pixxel, which builds hyperspectral Earth-imaging satellites.

Globally, Lightspeed has been a major backer of frontier AI labs, including Anthropic in the US and Mistral in France. It is an investor in AI application companies Glean, valued at $7 billion, Suno ($5.4 billion) and Granola ($1.5 billion).

Interview with Lightspeed's Hemant Mohapatra, early backer of Sarvam and Emergent.

‘Era of business-model innovation in India is over’

As Amazon India scales its new quick-commerce service, Amazon Now, it is trying to win back daily grocery purchases from its high-value customers who moved that spending to Blinkit, Swiggy Instamart and Zepto.

The company sees fresh produce as the main product category for building trust. Fruits and vegetables are a category that customers closely judge for quality, reliability and value. If Amazon Now can get this right, it has a better chance of upgrading customers from trial orders to larger, more regular grocery baskets.

Amazon has certain structural advantages in the race: Prime users who shop frequently on its ecommerce marketplace, years of data on consumption patterns, direct relationships with big brands and a delivery network that can be adapted for instant grocery. It is using all these pieces to build Amazon Now while also spending heavily to acquire customers.

The company has put two of its most seasoned India executives in charge of areas central to quick commerce. Nishant Sardana, who has worked across Amazon and ITC in consumer electronics, now leads Amazon Now operations. Harsh Goyal, a 13-year company veteran and former chief of staff to ex-India head Amit Agarwal, oversees grocery and everyday essentials.

Currently, Amazon Now, launched in June 2025, handles 4 -4.5 lakh orders a day across parts of Bengaluru, Mumbai, Delhi-NCR, Chennai and Pune. It is already at 13-15% of Blinkit’s daily order volume, despite being present in fewer cities and running fewer dark stores.

For the incumbents, the issue is not Amazon Now’s current size. It is the speed at which it is moving, backed by management’s willingness to take risks and spend for the long term.

Amazon is trying to win back daily grocery purchases from its high-value customers.

Amazon Now’s early scale gives Blinkit reason to watch

Small apparel shops in tier-2 and tier-3 towns are unable to keep up with fashion trends their customers now discover online. This is because many of them source stock from traditional wholesalers, who take weeks or months to adjust to changing demand.

The risk for shop owners is not just slower sourcing, but poor purchasing decisions that can lock up capital in unsold inventory. A new set of startups is trying to solve this problem at different points in the retail supply chain. 

Navo, a B2B wholesale fashion marketplace, is using live commerce and video-led interactions to help local retailers buy popular designs remotely. The company, founded by Anshul Singhal and Suparn Goel in 2022, also shares insights into demand patterns with manufacturers, shortening the time it takes for new apparel styles to land on store shelves.

Another player, Bijnis, is focused on faster factory-to-store replenishment. Initially, it operated as a marketplace connecting factories and retailers across fashion and lifestyle categories. Retention issues and high cash burn pushed it to pivot to a quick commerce-like model for retailers, with 60-minute deliveries.

A parallel layer is emerging around sellers and creators. Zoop, started by Sanchi Virmani, Abhishek Nevatia and Raghav Dalela, is building tools that allow social sellers to stream across platforms while managing orders and inventory in one place.

Together, these companies point to a new phase of B2B fashion commerce after inventory access.

Meesho has already shown that value fashion can scale among consumers in smaller towns.&nbsp;

B2B fashion-commerce startups help retailers understand what is likely to sell, trust the product before buying it remotely and restock faster.

After Meesho, startups target fashion supply gap in small towns

VC firm 3one4 Capital is putting together a new $225-million fund for seed and Series A bets on Indian tech companies, regulatory filings show. International Finance Corporation (IFC), part of the World Bank, plans to commit up to $20 million to this vehicle, known as Fund V, along with a co-invest envelope of an equal amount.

Fund V will target opportunities in artificial intelligence, advanced manufacturing, fintech, deeptech and consumer internet.

3one4, formed by brothers Pranav Pai and Siddharth Pai in 2016, had closed its fourth early-stage fund at $200 million in 2023. That vehicle was the Bengaluru-based firm’s sixth overall. 3one4 manages committed capital of Rs 3,710 crore and has over Rs 6,000 crore in assets under management.

The firm’s notable investments include Licious, Darwinbox, Vidyut, WintWealth, Seekho, Jupiter, and Tracxn. It was an early backer of Licious, participating in multiple rounds from 2018 onward, including the $30-million Series E in December 2019 at a valuation of $285 million and the $192-million Series F in July 2021 at roughly $800 million.

In recent years, 3one4 has begun realising returns. In early 2026, it exited Raise, the parent of fintech platform Dhan, following the company’s $120-million Series B. In 2025, it sold its stake in audio OTT platform Kuku FM after the company’s $85-million Series C (3one4 had first invested in 2019).&nbsp;

The partial exit from Kuku FM delivered a realised internal rate of return of about 90%, the firm said, calling it “a strong step forward” in its distribution journey and a validation of its early-stage consumer internet thesis.

In 2025, the firm also fully exited fintech ToneTag. It had led ToneTag’s pre-Series A in 2017 and sold during the company’s $78-million Series B2 round. ToneTag enables contactless and offline payments using sound waves.

3one4’s team includes Anurag Ramdasan and Nruthya Madappa as partners. Ramdasan has been involved in investing in and managing over 30 portfolio companies, including Koo, personal finance app WeRize and social content platform Lokal. Madappa previously founded and ran The CoWrks Foundry, an early-stage accelerator, and worked on revenue and growth at math tutoring platform Cuemath.

Fund V will target opportunities in AI, advanced manufacturing, fintech, deeptech and consumer internet.

3one4 targets new $225-mn fund; IFC to commit $20 mn

Snabbit, an app for instant house-help services, has closed a $56-million Series D, its fifth funding round in two years. The transaction values the company at $360 million and brings total capital raised to $112 million. The Arc had written about the potential round in March.

The Series D was co-led by Mirae Asset Venture Investment’s unicorn growth fund, Susquehanna Venture Capital and Bertelsmann India. Existing backers Lightspeed and Nexus also participated, along with new investor FJ Labs Inc.

Snabbit, founded by former Zepto executive Aayush Agarwal, operates in select neighbourhoods of Mumbai, Delhi-NCR and Bengaluru. The platform crossed 1 million jobs in March 2026. These are household tasks performed by domestic and gig workers registered with the company.

The 1-million milestone places Snabbit in a fast-scaling but crowded category. Urban Company’s dedicated service, Insta Help, also crossed 1 million bookings in March 2026, while Pronto reported 500,000 bookings in the same month.

Compared with other players, Snabbit is building its service on a deliberately narrow geographic bet. It is not racing to cover entire cities. Instead, it concentrates supply and demand inside tightly defined “nano-markets” — small clusters where jobs sit close together and workers spend more time earning than commuting.

The company says this approach is designed to lift utilisation, cut response times and make the economics work. Read The Arc’s <a href="https://www.thearcweb.com/article/snabbit-founder-weve-the-most-capitalefficient-model-in-consumer-internet-Qo0IGByOR0nsmdXk">detailed interview</a> with Agarwal to better understand the model.

“We are not selective — we are slow. We know we have to launch everywhere eventually, but we don’t want to open everything up at the same time,” Agarwal told The Arc. “If you operate across 10 hyperlocal areas and get 100 jobs, the P&amp;L won’t work. You need those 100 jobs to become 1,000 jobs within a micro-market for the economics to make sense.”

Abhilash Karri from Susquehanna wrote on LinkedIn that the winning platform in the space would need “dense local supply, operational excellence, safety, transparency and a great customer experience, while also creating dignified earning opportunities” for workers.

Snabbit is preparing to add more household service categories, starting with home cooks. “Childcare and elderly care are two other large categories we are keen to expand into, and drivers as well,” Agarwal told The Arc.

Urban Company is the dominant player in the broader space of at-home services, which include personal grooming and repairs. In its first post-IPO earnings call, co-founder Abhiraj Bhal said that Insta Help had scaled to 4.7 lakh orders within months of launch. The segment still posted an adjusted EBITDA loss of Rs 44 crore, which Bhal attributed to upfront investment. The core business stayed profitable at the adjusted EBITDA level.

In March 2026, Pronto raised $25 million in a Series B round led by Epiq Capital, with participation from existing investors Glade Brook Capital, General Catalyst and Bain Capital Ventures. The round took Pronto’s total funding to $40 million and valued it at about $100 million.

The round values the company at $360 million and brings total capital raised to $112 million. 

Snabbit lands $56-mn Series D as instant home services take off

Freshworks will remove about 500 employees, or 11% of its workforce, as the Nasdaq-listed software company adjusts to heavier use of AI in product development. The layoffs were announced alongside the company’s first-quarter results (Q1 CY26).

This is Freshworks’ second major workforce reduction in less than two years. In November 2024, it had cut 660 jobs.

CFO Tyler Sloat said that the company expected to record a one-time, layoffs-linked restructuring charge of $8 million, most of which would fall in CY26 Q2. “About over half of our code is originated in AI today. Like many other software companies, that is definitely changing how we build products, how fast and the amount of people we need,” CEO Dennis Woodside said on the earnings call.&nbsp;

The other trigger for restructuring is the revised sales focus. Freshworks is putting more resources behind its employee experience (EX) business, which includes IT service management and HR software under the Freshservice brand. That segment is expanding at 27% year on year and is expected to account for 60% of total revenue by the end of the year.&nbsp;

Freshworks’ original customer experience business, Freshdesk, is now growing at 6% and is projected to remain in low single digits.

Results:&nbsp;For the quarter ended March 2026, Freshworks posted revenue of $228.6 million, up 16% from $196.3 million a year earlier. The company beat its own guidance, which had projected Q1 revenue of $222 million to $225 million.

The operating loss decreased to $8.1 million from $10.4 million in the year-ago quarter. Adjusted free cash flow was mostly flat at $55.8 million compared with $55.4 million earlier.

Adjusted free cash flow, a metric that the company says remained flat at $55.8 million for the quarter, compared to $55.4 million in the first quarter of 2025.

Freshworks’ EX business crossed $540 million in annual recurring revenue and continues to grow 27% YoY, CFO Sloat said. “We anticipate EX ARR to grow in the mid-20s and EX ARR to be over 60% of total ARR by year-end,” he added.

The company is eyeing revenues of $232 million to $235 million in CY26 Q2. For the full year, it has guided for revenue of $958 million to $964 million. It forecast non-GAAP operating income of $41 million to $43 million for the second quarter and $207 million to $215 million for the full year.

Management had earlier said that it was targeting $1.3 billion in annual recurring revenue by 2028. It expects AI-led products to contribute around $100 million in ARR by then.

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