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In today’s newsletter: 

• What made Urban Company’s IPO a hit
• Groww founders’ Rs 614 cr payday ahead of IPO
• Sentient AI takes aim at OpenAI with open source AGI

P.S.: The AI Edge drops Saturday: one smart read to make sense of AI every week.

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Through its IPO, Urban Company didn’t just sell shares; it sold a story of trust, governance, and restraint. 

• The result? Investors stampeded, pushing subscriptions past the 100x mark

UC ticked all the right boxes during its IPO. The big ones? 

Transparency: Constant guidance and regular business updates helped build conviction around the UC team, drawing investors and ensuring predictability.

• The team even pushed out profitability targets by a few quarters, now expecting PAT-level profitability in FY28 as it provisioned Rs 150-200 crore for its quick services business – even that was very clearly and well communicated, we were told 

Also read: Urban Company shares settle 64% higher on listing day; m-cap jumps to Rs 24,267 crore

SBI’s MF arm, one of the country’s largest, spent over 3.5 hours with the UC team, which proved to be extremely positive. 

“Once SBI MF is in, the IPO then just builds itself,” a source told us.

On the face of it, UC turned profitable in the last financial year, ahead of its IPO. But that was largely due to deferred tax credits.

“For retail investors, who do not research too much before investing, an impressive net profit number is enough. They don’t know or care how the company got there,” a second source told us. 

UC also trimmed its IPO size and lowered valuation expectations, deliberately leaving money on the table for new investors, a move that further boosted sentiment.

• Each of the three co-founders holds an equal 6.7% stake, ensuring both diversification and equal skin in the game

And finally, UC’s status as a household consumer brand with millions of users ensured strong brand recall, helping propel demand for its shares during the IPO.

Dig deeper

From stock picks to fat cheques — Groww’s top brass just bagged incentives bigger than the company’s latest quarterly profit.

The incentive pool turned into a jackpot, with payouts that dwarfed even the firm’s quarterly profits.

• CEO Lalit Keshre led the pack with Rs 188.6 crore, almost all from incentives

• CTO Neeraj Singh pocketed Rs 151.3 crore, not far behind

Together, the four founders – including COO Harsh Jain, and CFO Ishan Bansal –  earned Rs 614 crore, eclipsing Groww’s Rs 378 cr Q1 profit.

Groww has a history of splurging on big-ticket bonuses that have weighed on its books.

• In FY24, it shelled out Rs 778.6 crore in one-time incentives for management

• Another Rs 106 crore was booked under its long-term incentive plan

Those payouts swelled employee costs and helped drive an Rs 804 crore annual loss.

With profits restored and user growth surging, Groww is teeing up for a market debut.

• FY25 delivered a turnaround with Rs 1,824 cr profit as costs normalised

The platform added scale, grabbing 26% of new demat accounts and 45% of net new NSE active users.

• Its IPO plan includes a Rs 1,060 crore fresh issue, plus an OFS and potential pre-IPO placement

Dig deeper

Peter Thiel-backed unicorn Sentient AI is taking on Silicon Valley’s biggest AI giants– and it has just launched its first open-source platform.

Sentient’s Artificial General Intelligence (AGI) platform is open source, allows multiple developers to contribute their AI models, and integrates numerous agents and data sources.

• Developers get to keep full ownership of their models and earn token-based rewards
  
  
• Users, meanwhile, can execute complex workflows by enabling multiple AI agents to collaborate in real time and share context

The platform is accessible through Sentient Chat, which opened today to its 2 million waitlisted users.

Sentient Chat features a ChatGPT-like interface and, at launch, offers over 40 specialised agents, 50 data sources, and more than 10 AI models

“Sentient brings together the largest open collection of AI agents, models, and data sources, and the economic rails to make them work at scale," Himanshu Tyagi, Co-founder, Sentient AI, said.

The startup says its goal is to break the pattern of AI centralisation among a handful of companies.

Founded in 2024 by IISc professor Himanshu Tyagi, Polygon Co-founder Sandeep Nailwal, and Princeton professor Pramod Viswanath, Sentient AI has raised $85 million in seed funding and is already valued at $1.2 billion.

• Key investors include Peter Thiel’s Founders Fund, Pantera Capital and Framework Ventures

Go deeper

• Infosys cofounder Nandan Nilekani has encouraged business leaders to move beyond the buzz around current AI tools and focus instead on creating resilient systems designed to stand the test of time.
  
  
• OpenAI is introducing new ChatGPT safeguards that prioritise teen well-being over privacy or absolute freedom, reflecting the complex role AI plays in the lives of young people.

Who knew a banana could topple ChatGPT?

• Google’s Gemini app is blowing up worldwide thanks to its Nano Banana image editor, now topping iOS charts in 108 countries

September’s already packed 12.6 million downloads and nearly $800K in revenue halfway through.

• Since launch, Gemini has clocked 185 million installs and 23 million new users

Find out more

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