Here are the top headlines from the startup space this week.
Mamaearth set to apply for IPO in October: Sources
Beauty and personal care brand Mamaearth has appointed Kotak Mahindra Capital, JM Financial, and JP Morgan as banks for its initial public offer expected to be valued Rs 2,000-2,500 crore, people familiar with the matter told CNBC-TV18.
The company aims to use proceeds from the IPO to expand stores offline. The brand owned by Honasa Consumer will file the draft red herring prospectus (DRHP) with markets regulator Securities and Exchange Board of India (Sebi) in October.
The IPO may comprise a fresh issue and an offer for sale. The company plans to sell 10 percent stake to raise Rs 2,000-2,500 crore at a valuation of Rs 22,000-25,000 crore.
Byju’s $800M fundraise off the track as Sumeru Venture payment goes missing: Report
At a time when the macroeconomic headwinds have slowed the pace of deal-making in the startup ecosystem, edtech giant BYJU’s had announced a mega $800 million fundraise in March this year. While, founder Byju Raveendran had invested $400 million, the rest came from other investors, including Sumeru Ventures, Vitruvian Partners and BlackRock.
However, a Morning Context report published on Monday morning, has revealed that the money from Los Angeles-based Sumeru Ventures has not come in yet.
The company’s filings with the ministry of corporate affairs show that 16,031 Series F preference shares were allotted to Vitruvian Partners on 29 March for Rs 571 crore. There has been no such filing in the case of either Sumeru Ventures or BlackRock since the March announcement. This means Byju’s is looking at a Rs 2,500 crore sized hole in the funding, the report added.
CoinSwitch Kuber’s top 3 executives quit to launch own venture
Crypto exchange CoinSwitch Kuber’s Chief Financial Officer (CFO) Sarmad Nazki, Chief Business Officer (CBO) Sharan Nair and head of new initiatives Krishna Hegde have quit the company.
The news was confirmed to CNBC-TV18 by Ashish Singhal, co-founder and CEO CoinSwitch Kuber. It was first reported by Entrackr.
Singhal said, “After several years of building CoinSwitch, my colleagues and good friends Sharan Nair, Sarmad Nazki and Krishna Hegde have decided to start up in the Web 3 space.”
“I’m happy to see Sharan, Sarmad and Krishna spread out and continue to build toward this future, and we at CoinSwitch look forward to future collaborations. I’m also grateful to each one of them for their contributions in making CoinSwitch the largest crypto investing app in India. Their transition has been ongoing for weeks and we have a strong set of leaders to take over their functions,” Singhal told CNBC-TV18.
Meanwhile, the firm has appointed Myntra’s Sudheer Tumuluru as head of crypto engineering.
upGrad co-founder reveals big hiring plans ahead of funding round
Edtech firm upGrad is looking to hire more than 3,000 people across segments in 2022-2023 at a time when its peers are on a firing spree amid a ‘funding winter’ in the startup space.
“In this fiscal year, we will go up to 2,000-3,000 or more people. Every week I am sitting with an open position of about 250 plus… many of our new businesses, whether it is to study abroad, short skill certification, etc., will require the right sort of people coming in,” co-founder and managing director Mayank Kumar told CNBCTV18.com in an exclusive interview.
The unicorn has lined up the mega hiring plan ahead of a funding round it is expected to close soon.
Ola may lay off 400-500 employees: Report
Mobility giant Ola may lay off 400-500 employees, amid a delay in listing plans and a tough funding environment, sources told Moneycontrol.
“Key managers were asked to draw up a list of people from their respective teams last week who can be let go,” the source said. The report further added that Ola has also hit the brakes on investments in overseas markets where it is present, such as the UK, Australia, and New Zealand.
When CNBC-TV18 reached out to the company, Ola did not comment on these layoffs or the number of people who would be impacted, however it said, “Our core continues to be the broader mobility industry, be it ride hailing, auto retail, financial services or electric vehicles.”
Razorpay shared donor data with police, claims Alt News
Fact-checking website Alt News has alleged that payment gateway Razorpay had shared its donor data with the police without informing it.
In a statement, Razorpay, without referring to the specific allegation of Alt News, said that it was mandated to comply with the written order from legal authorities under the provisions of the law.
Razorpay had deactivated the account of Alt News on its donation platform following a request from the police and re-enabled it later.
Twitter drags government to court, challenges content takedown orders
On the receiving end of the government’s ire for failing to act as per content takedown orders, Twitter has decided to respond by moving the judiciary.
Twitter filed a plea before the Karnataka High Court, challenging the Ministry of Electronics and Information Technology’s (MEITY) orders for suspending tweets and accounts.
In a strongly-worded notice to Twitter on June 27, MEITY had red flagged repeated cases of the company’s alleged lack of action on takedown orders.
As per the notice, the government had warned Twitter that failure to act on takedown orders by July 4, would put the social media company at risk of losing protection under Section 79 of the Information Technology Act.
Aggrieved by the government’s orders and notice, Twitter has argued in its plea that the government’s use of power to issue takedown orders is excessive and disproportionate.
Rajeev Misra steps back from SoftBank to launch new fund: Report
Rajeev Misra, CEO of SB Investment Advisers, which manages SoftBank Vision Fund, is stepping back from his role at the Japanese company to launch a new fund.
Misra will retain a senior position with the group’s first $100 billion Vision Fund, but relinquish other roles, sources told Bloomberg News.
SoftBank founder Masayoshi Son announced the plan in a memo, telling staff that Misra had agreed “to build and run a new external multi-asset investment fund” that would have a broader remit than SoftBank’s two Vision funds.
Swiggy completes acquisition of Dineout
Food and groceries delivery e-commerce major, Swiggy has completed the acquisition of Dineout, a dining out and restaurant tech platform.
Dineout founders Ankit Mehrotra, Nikhil Bakshi, Sahil Jain, and Vivek Kapoor have joined Swiggy as the acquisition is completed.
Taking to twitter, Swiggy Co-Founder Sriharsha Majety said, “Today marks another milestone with @Dineout_India and the entire team becoming a part of @Swiggy. We welcome the founders @Ankitatdineout @sahil685 and the entire team while we gear up to offer unmatched experiences to our consumers.”
M2P Fintech acquires cloud lending platform Finflux
M2P Fintech, an API infrastructure company has acquired Finflux, a cloud lending platform for an undisclosed sum.
This deal will enable M2P Fintech to accelerate the adoption of next-generation digitization, workflow automation and roll out of cutting-edge lending products that are secure, scalable and cloud ready, a statement said.
“Our key offerings around BNPL and neo credit products gets a major thrust with the FinFlux’s platform and we are embarking on a mission to digitise the lending ecosystem,” said Madhusudanan R, Co-Founder, M2P Fintech.
Clear acquires CimplyFive to strengthen its compliance suite for CFOs
Clear, a fintech SaaS company has acquired CimplyFive, a cloud hosted application that automates Company Law and SEBI Listing Obligations (LODR) compliance in an all cash deal.
This is Clear’s second company acquisition in 2022, after it acquired Xpedize, an invoice discounting platform in March. The company till date has made four acquisitions which includes YBANQ and Karvy’s GST busines.
With this acquisition, Clear’s enterprise customers will have access to comprehensive Compliance Risk Management Software that eliminates many procedural non-compliance under the Companies Act, 2013.
Hotels, restaurants barred from levying service charge
The Central Consumer Protection Authority (CCPA) has barred hotels and restaurants from levying service charge on customers and issued guidelines in this regard to prevent unfair trade practices and protect the interest of the consumers.
As per CCPA’s guidelines, no restaurant or hotel shall add service charge automatically or by default in the bill, service charge shall not be collected from consumers by any other name and no restaurant or hotel shall force a customer to pay service charge and it shall clearly inform the consumer that the same is voluntary, optional and at the consumer’s discretion.
The guidelines added that no restriction on entry or provision of services based on collection of service charge shall be imposed on consumers. Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount, CCPA said.
OTHER STARTUP NEWS
iD Fresh Food offers stock options worth Rs 46 Cr to 27 employees
Homegrown fresh food brand iD Fresh Food has announced its seventh round of Employee Stock Option Plan (ESOP) tranche worth Rs 46 crores for 27 staff members. Since 2016, the D2C startup has granted around Rs 300-crore worth of ESOPs to employees across functions.
“Our latest ESOP grant is a small effort to thank them for their valuable contributions. In the coming months, we are excited to augment our 2,000+ workforce as we explore new markets and continue to create new opportunities for a diverse set of professionals, while actively creating a more inclusive workplace,” said PC Musthafa, co-founder and CEO, iD Fresh Food.
GoMechanic launches Rs 30 Cr partner stock option scheme
After market automotive service and maintenance platform GoMechanic said it plans to issue shares worth Rs 30 crore to its service partners under an incentive plan.
”The company has proposed to issue stocks worth Rs 30 crore as a reward for its vast network of service partners. The stock options will have a 4-year vesting duration with yearly vesting at 25 percent and a cliff period of one year,” GoMechanic said in a statement.
Announcing the launch of a ‘partners incentive plan’ for its services partners, workshops, retailers, distributors and consultants across India, GoMechanic said it also aims to train over 5,000 mechanics in more than 1,500 workshops across the country in partnership with National Skill Development Corporation (NSDC).
Good Glamm Group restructures business; eyes global expansion
Content-to-commerce unicorn The Good Glamm Group has reorganized its business by creating three divisions—Good Brands Co., Good Media Co., and Good Creator Co., to focus on structural efficiencies. The firm has also announced the launch of its international division.
A few brands across content and creator space that The Good Glamm Group acquired last year include ScoopWhoop, Miss Malini, The Moms Co, among others.
This will help maximize revenue potential for all beauty and personal care brands in the group, the company added.
Nykaa expands into men’s innerwear and athleisure category
Cosmetics-to-fashion retailer Nykaa has expanded into men’s innerwear and athleisure category with GLOOT. While announcing its entry into the men’s innerwear category, Nykaa Fashion said that the new multi-brand e-commerce fashion offering was “inspired by the needs of health-conscious individuals”.
The company noted that most men’s underwear options cause discomfort in a number of ways, including odour, and lack of active underwear options. In addition, the firm found a lack of understanding of the difference between trunks, boxer briefs, briefs, etc., which Nykaa’s new product GLOOT hopes to solve. GLOOT will offer a wide range of underwear across all categories.
Pine Labs-owned Setu gets RBI’s in-principal approval to operate as an account aggregator
Fintech infrastructure startup Setu’s subsidiary Agya Technologies has received an in-principle licence from the Reserve Bank of India (RBI) to operate as an account aggregator.
Taking to Twitter, Nikhil Kumar, Co-founder, Setu, said “In the last ten years India’s financial services landscape has been shaped by the public digital Infrastructure; Aadhaar – brought down the cost of onboarding, UPI – brought down the cost of transactions and now account aggregator will usher a new wave of innovation.”
The approval will allow the company to launch its own AA platform. Earlier the company had built the interface for Onemoney which is a licensed AA and was one of the first to release an app.
BharatPe clocks $18.5Bn TPV in Q1 FY23, facilitated Rs 3,600 Cr loans
Fintech company BharatPe has hit $18.5 billion in annualised Total payment volume (TPV) in the first quarter of this fiscal. This is a growth of over 50 percent compared to the last quarter of FY22, the company said.
The firm has also announced that it closed one of the highest growth quarters as it facilitated over Rs 3,600 crore in loans, recording a growth of 112 percent over the last quarter. BharatPe has facilitated disbursals to over 1.2 lakh merchants in the first quarter of FY23, up from 66,000 merchants in the last quarter of FY22.
The fintech giant further added that it is on track to achieve the target of $2 billion in loans facilitated through its NBFC/ bank partners across both consumer and merchant business by the end of FY23 as well as scaling TPV to $30 billion by March 2023.
PrepInsta announces menstrual leaves for its female employees
Edtech platform for engineering students PrepInsta has announced menstrual leaves for its female employees.
Under the initiative, female employees at the startup will now be able to avail two days of additional paid leave every month. About 50 percent of the overall workforce at the startup are women, the firm said.
“We know there is a clear under-representation of women at the workplace, we want to make sure that workplace participation becomes 50-50. There’s a large difference between gender blindness and gender equality/equity. Gender blindness does not bring gender equality. We need to take additional actions/ benefits,” said Atulya Kaushik, Co-Founder and CEO, PrepInsta.
Google India to guide 10K startups in tier 2 and 3 cities via Startups school initiative
Google India has announced the launch of Startup School to guide 10,000 startups in tier II and III cities in the country.
Startup School is a series of guided online trainings designed to equip early-stage startup founders with the tools, products, and knowledge that growing companies need.
The curriculum will feature instructional modules on subjects such as shaping an effective product strategy, deep dives on product user value, roadmapping and product requirements document development, building apps for next billion users in markets like India, driving user acquisition and many more.
Karnataka and Gujarat developed best startup ecosystems for budding entrepreneurs
Gujarat and Karnataka were ranked the best among big states for developing a startup ecosystem for budding entrepreneurs, as per the Department for Promotion of Industry and Internal Trade’s (DPIIT) ranking of states and Union Territories released on Monday.
Among smaller states, those with a population of less than one crore, Meghalaya was the top performer. The DPIIT’s states’ startup ranking 2021 was released by Commerce and Industry Minister Piyush Goyal.
A total of 24 states and seven Union Territories (UTs) participated in the exercise and ranked the states and UTs under five categories — best performers, top performers, leaders, aspiring leaders and emerging startup ecosystems.
Indian startup funding drops by 33% in April-June quarter: Tracxn Report
The total funding raised by Indian startups has declined by 33 percent from $10.3 billion during the January-March quarter to $6.9 billion in the second quarter, according to a report by SaaS-based market intelligence platform Tracxn.
The report has highlighted that fundraising during the last three months also witnessed a decline in comparison to the same quarter last year (Q2 2021), where the total funds raised were $10.1 billion.
Top startups which raised funds during the quarter include Dailyhunt parent VerSe Innovation ($805 million – Series J), Delhivery ($304 million – Series J), and Udaan ($275 million – Series D). They were followed closely by ShareChat ($255 million – Series G) and upGrad ($225 million – Series F).
Over 22,000 techies lose job in US, 12,000 employees fired by Indian startups: Chrunchbase Report
As the tech and startup sector gets hammered by economic meltdown, more than 22,000 workers in the sector have lost jobs in 2022, along with more than 12,000 in the Indian startup ecosystem.
Startups, especially the ones who benefited from a pandemic boom, are feeling the pressure as valuations, particularly at the late stage, have started to dip, according to Crunchbase. Startups now say it is much more difficult to raise new funding in this gloomy environment.
As startups in India keep firing their staff to navigate through the ‘funding winter’, the country may see more than 60,000 job losses in 2022 alone, led by edtech and e-commerce platforms.
Hiring activity in India grows 22% Y-O-Y in June: Naukri JobSpeak
India’s hiring activity has shown an upward growth trajectory, with the latest Naukri JobSpeak Index observing a 22 percent year-on-year growth in June’22 v/s June’21.
The demand in metros and non-metros especially showed an optimistic upward trend. Amongst metros, Mumbai continued to lead the race in three consecutive months at 43 percent y-o-y growth. Other metros such as Kolkata (29 percent), Delhi (29 percent), Chennai (21 percent), Bengaluru (17 percent), Pune (15 percent), and Hyderabad (11 percent) continue to show positive growth in June 2022 as against last year.
The demand for entry-level talent continued to record the highest yearly growth (30 percent) in June 2022. Additionally, growing hiring sentiment was observed for other experience brackets such as 4–7 years (19 percent), 8–12 years (17 percent), 13–16 years (21 percent), and over 16 years (17 percent) in June’22 v/s June’21.
India’s D2C market estimated to touch $60Bn in size by FY27: Shiprocket, CCI & Praxis Global Report
D2C brands are estimated to be $60 billion industry by FY27, registering a CAGR of about 40 percent, according to a report by logistics startup Shiprocket, The Confederation of Indian Industries (CII) and Praxis Global Alliance.
The report said that D2C is a $12 billion market today and several D2C brands in India have crossed Rs 100 crore revenue in 3-5 years after the launch.
Consumer spending is in fact estimated to reach $4 trillion by 2030. Spending on categories like food, apparel, transport and communication and personal care is expected to double by 2030, the report added.
GLOBAL TECHNOLOGY & STARTUP NEWS
Twitter lays off 30% of employees: Report
Social media giant Twitter said laid off 30 percent of its talent acquisition staff, according to a Wall Street Journal report.
Less than 100 employees are anticipated to be affected by the layoffs, which are only affecting the talent acquisition team, the report added. In light of the hiring pause, Twitter is reprioritising the talent acquisition team, which includes recruiters, to ensure that it operates efficiently and responsibly, a company spokesperson was quoted in the report.
Except for the most important positions, Twitter is at the moment halting the majority of hiring and backfilling. The company spokesman announced that employees will receive severance compensation, however, details of the severance were not provided.
GameStop fires its CFO and announces layoffs
GameStop has fired its Chief Financial Officer, Mike Recupero, and is making staff cuts across departments as part of an aggressive turnaround plan.
Recupero, who joined the company about a year ago, was “fired because he was not the right culture fit” and was “too hands off,” a person familiar with the matter told CNBC. He was pushed out by GameStop chairman Ryan Cohen, the person said.
Diana Jajeh, the company’s chief accounting officer, will become CFO. She will have a starting annual salary of $200,000, according to a filing with the US Securities and Exchange Commission, and will be eligible for a “transformation bonus” in an aggregate amount of $1,965,000.
It’s making staff cuts across departments as part of an effort to turn around the videogame retailer. CEO Matt Furlong explained the changes in the memo to employees and said the company has to take bold steps as it invests in its digital future.
Amazon teams up with Just Eat on US food delivery with Grubhub investment
Amazon has agreed to take a 2 percent stake in Just Eat Takeaway.com’s struggling US meal delivery business Grubhub and will offer its Prime members access to the service for one year.
According to Reuters, the deal is a major relief for Just Eat Takeaway, Europe’s largest meals company, whose stock had fallen 70 percent this year.
Shareholdershave demanded it sell or find a partner for Grubhub, which it bought just last year for $5.8 billion in shares.
Just Eat Takeway specified in a statement it continues to “explore the partial or full sale of Grubhub” though there is no certaintainty any deal will be reached.
WeChat shuts Bloomberg’s financial news account
Chinese social media platform WeChat has shut down a Bloomberg social media account, accusing it of violating country’s regulations on online public accounts.
Tencent-owned WeChat said it had received “complaints” about Bloomberg’s “Daybreak” account, which posts global market updates, reports South China Morning Post.
The account, active since January 2021, has breached Chinese regulations, the Chinese platform said.
Chinese tech giants Tencent and Ant Group pledge to ban NFTs, crypto marketplaces
Chinese internet and tech giants have signed an initiative to ban cryptocurrency and digital collectibles (NFTs), along with a promise not to establish secondary marketplaces.
According to the South China Morning Post, Tencent and Ant Group joined a self-driven industry initiative to ban cryptocurrency and fight speculation.
Platforms that sell digital collectibles “shall require real-name authentication of those who issue, sell and buy” the assets and “only support legal tender as the denomination and settlement currency”, according to the document signed by China’s biggest tech firms.
Hacker claims to have stolen 1Bn records of Chinese citizens from police
A hacker has claimed to have procured a trove of personal information from the Shanghai police on one billion Chinese citizens, which tech experts say, if true, would be one of the biggest data breaches in history.
The anonymous internet user, identified as “ChinaDan”, posted on hacker forum Breach Forums last week offering to sell the more than 23 terabytes (TB) of data for 10 bitcoins, equivalent to about $200,000, Reuters reported.
Singapore-based crypto lender Vauld suspends withdrawals
Singapore-based crypto lending and trading platform Vauld said on Monday it would suspend withdrawals and trading and seek new investors, the latest sign of stress in the embattled crypto industry.
Vauld CEO Darshan Bathija said in a blog post that it was facing “financial challenges” due to: “the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate which has led to a significant amount of customer withdrawals in excess of a $197.7 million since June 12.”
Crypto lender Voyager Digital files for bankruptcy
US crypto lender Voyager Digital has filed for bankruptcy, becoming another casualty of a dramatic fall in prices that has shaken the cryptocurrency sector, Reuters reported.
In its Chapter 11 bankruptcy filing on Tuesday, Voyager — based in New Jersey but listed in Toronto — estimated that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in assets, and liabilities worth the same value.
Crypto lenders such as Voyager boomed in the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. However the recent slump in crypto markets – sparked by the downfall of two major tokens in May – has hurt lenders.
EU eyes $47Bn in private capital to fund deep-tech startups
The European Commission is planning measures to attract 45 billion euros ($47 billion) in private funding for “deep-tech” startups, those based on significant scientific or engineering advances, an EU policy document seen by Reuters showed.
A new Listings Act planned for later this year will also cut the cost of stock market flotations for the firms, the document, A New European Innovation Agenda, added.
The proposals aim to help the 27-country bloc catch up with the United States, Japan and South Korea in cutting-edge technology, venture capital funding and innovative patents.
Facebook asks US court for old FTC merger documents in antitrust fight
Meta’s Facebook has asked a US court for eight documents created by the US Federal Trade Commission as part of their review of the company’s purchases of Instagram and WhatsApp, which the agency allowed to go forward.
As per Reuters, the request was made late on Tuesday and comes in a lawsuit filed by the FTC that has asked the court to order both of those deals undone. Facebook bought Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014.
The FTC sued Meta’s Facebook in 2020, during the Trump administration, alleging that the company acted illegally to maintain its social network monopoly. Facebook is fighting the lawsuit, and wants the materials as part of that fight.
UK watchdog probes Microsoft’s $68.7Bn Activision buyout deal
Britain’s antitrust watchdog has started an investigation into Microsoft’s $68.7 billion deal to buy “Call of Duty” maker Activision Blizzard.
The Competition and Markets Authority (CMA) said it had until September 1 to make its phase 1 decision on whether the deal between the US technology company and video-game maker Activision would reduce competition in the UK, according to a Reuters report.
The phase 1 investigation by the CMA will either lead to the deal being cleared or will move to a more in-depth phase 2 probe.
Apple to release new ‘Lockdown Mode’ as it battles spyware firms
Apple has said it plans to release a new feature called “Lockdown Mode” this fall that aims to add a new layer of protection for human rights advocates, political dissidents and other targets of sophisticated hacking attacks.
As per a Reuters report, the move comes after at least two Israeli firms have exploited flaws in Apple’s software to remotely break into iPhones without the target needing to click or tap anything. NSO Group, the maker of the “Pegasus” software that can carry out such attacks, has been sued by Apple and placed on a trade blacklist by US officials.
Airbnb obliged to provide information to tax authorities: EU Advisor
Short-term accommodation services company Airbnb is obliged to provide information in rental contracts to tax authorities, an adviser to Europe’s top court said, in another potential legal setback in Europe for the company.
Airbnb has in recent years found itself at loggerheads with authorities in several European Union countries, arguing that taxation and other requirements contravene the EU principle of the freedom to provide services across the 27-country bloc.
The latest case involves a 2017 Italian law requiring Airbnb and other short-term rental sites to forward information from their rental contracts and withhold 21 percent from the rental income and pay it to tax authorities, Reuters reported.