There are several developments in the startup space during the week. Here are the top startup updates of the week:
1. ‘Will be profitable by 2021; in a fantastic position financially' says Sandeep Mathrani, CEO, WeWork
When WeWork withdrew its much-anticipated $47-billion IPO in September 2019, it saw valuations plummet to less than $8 billion on concerns over an erratic management and mounting losses.
The rating agency Fitch downgraded the co-working giant's rating regarding its ability to pay long-term debt to CCC - indicating 'substantial credit risk' where 'default is a real possibility'.
“The Fitch report is a reflection of industry and not WeWork. We ended Q2 with almost $4 billion in liquidity. We will demonstrate Q3 that we will end year with substantial improvement,” said Sandeep Mathrani, CEO, WeWork in an exclusive interview to CNBC-TV18. Mathrani added that the co-working space has no intention to use the original $2.2 billion liquidity from Softbank and how it is in a fantastic position financially.
Talking about the IPO failure and the impact of COVID19, Sandeep Mathrani said that, “Covid-19 has allowed me to streamline the company and the real estate portfolio. The company has managed to cut down a billion plus operational expenses and has divested all its non-core businesses.”
While India remains to be one of the top markets for WeWork, Karan Virwani, CEO of WeWork India, said that, “No speculative growth for next 12 months in India and the focus remains on creating an asset light model.”
The firms expects that COVID19 will accelerate the demand for flexible workspace and expects to be profitable by 2021.
2. CIC slams govt for saying 'no idea how Aarogya Setu was created'
The Central Information Commission of India (CIC) has issued a show-cause notice to the government for not sharing information on the contact tracing app Aarogya Setu.
All agencies involved in the creation of the app -- Ministry of Electronics and Information Technology (MEITY), National Informatics Centre (NIC), and National e-Governance Divison (NeGD) -- have been served show-cause notices for refusal of information on the app under the RTI Act.
The CIC observed that it is not possible that the agencies involved had no information on movement of files while creating the app.
Petitioner Saurav Das had moved to CIC after information on the creation of the Aarogya Setu app was refused to him under the RTI Act. He highlighted that it is quite surprising that NIC had not maintained any information on the app, despite being its developer.
3. SC dismisses CCI appeal for removal of stay on probe against Amazon, Flipkart
The Supreme Court has refused to entertain Competition Commission of India’s plea seeking to remove the stay imposed by Karnataka High Court on its probe against e-tailers Amazon and Flipkart.
The apex court has sent the issue back to the Karnataka High Court and directed it to decide on the issue within six weeks, as per CNBC-TV18. The SC in its statement questioned the delay in filing of the appeal by the CCI.
The Karnataka HC had on February 14 stayed CCI’s probe into Amazon and Flipkart over alleged anti-competitive practices – which the watchdog appealed in the SC via a Special Leave Petition on September 21.
The investigation was launched on January 13after CCI said there was “prima facie case” based on complaint by the Delhi Vyapar Mahasangh under Section 3 of the Competition Act.
4. Amazon says interim stay on Future-RIL deal by Singapore arbitrator; Future says order should be tested under Indian law
Amazon on Sunday said that it had been granted relief by an emergency arbitrator in Singapore to get an interim stay on Future Group's deal with Reliance Retail, in which Reliance has sought to purchase Future's retail assets.
Amazon had sought emergency arbitration to seek a stay on the deal until the arbitration process is complete, sources told CNBC-TV18.
In a statement, Amazon said: "We welcome the award of the Emergency Arbitrator. We are grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process."
Reliance Retail said that the company was informed of an interim order passed by the Emergency Arbitrator in the arbitration proceedings invoked by Amazon under a shareholders’ agreement with the promoters of Future Group.
5. Ankhi Das, Public Policy Director, India, South and Central Asia, Facebook quits
Facebook's Public Policy Director Ankhi Das has decided to step down from her role to pursue her interest in public service. In a press release Facebook India's Managing Director said, “Ankhi was one of our earliest employees in India and played an instrumental role in the growth of the company and its services over the last 9 years.
Meanwhile, Ankhi Das in a post announced her decision to step down and said, ‘After nine long years, I feel that my mission has largely been met.’ She added, ‘Thank you, mark for creating something beautiful for the world. I hope I have served you and the company well. I know we will be in touch on Facebook.”
6. Funding of the week:
Online brand in fresh fish and meat e-commerce FreshToHome has raised $121 million in Series C funding led by Investment Corporation of Dubai, Investcorp, Ascent Capital, U.S. Government’s development finance institution - DFC, the Allana Group and other investors. Iron Pillar, the lead investor from Series B participated in this round with a significant investment of $19M. Barclays was an advisor for the transaction.The funding is the largest ever Series C funding in India Consumer Tech.
After Katrina Kaif, Bollywood actor Alia Bhatt has made a personal investment in the omnichannel lifestyle retailer, Nykaa via a secondary transaction for an undisclosed amount.
Nutrition Healthcare Startup ‘Wellversed’ raises an undisclosed amount in Pre Series A funding round led by Cricketer Yuvraj Singh.With this round of funding. This association will help Wellversed to scale expansion in newer markets, upgrade technology, and strengthen the company’s supply chain and R&D.
Mumbai-based digital lending startup Flexiloans has raised Rs 150 crore through a mix of equity and debt. The equity infusion was done by Falguni and Sanjay Nayyar Family Office.With this current round, the total amount of money raised by Flexiloans since its inception in 2016 has reached Rs 500 crore, in a mix of equity and debt.
Teachmint, an online teaching platform, has raised $3.5 million in a seed stage led by Lightspeed India. Existing investors Better Capital and Titan Capital also participated in this round. This is the second round of funding for Teachmint since raising its first round in August this year.
Online blue-collar workforce management platform Betterplace has raised $10 million in a Series B round led by Jungle Ventures and a total of $16 million since its inception. Existing investors, Unitus Ventures, 3One4 Capital, and Venture Highway also participated in the round.
Agritech supply chain and trade finance firm Origo has raised Rs 35 crore debt from Northern Arc Capital and other investors. Origo group firms Origo Commodities and Origo Finance, will use the fund for securitizing the agricultural markets and streamlining the supply chain mechanism for agri produce in India.
Hubilo, a global virtual events platform, has raised $4.5 million (about INR 33.2 crore) in funding, led by venture capital firm Lightspeed. Marquee tech angels, including Girish Mathrubootham (CEO Freshworks), Nishant Rao (ex-CEO LinkedIn India), Jonathan Boutelle (Co-founder, Slideshare), and Abinash Tripathy (CEO Helpshift) also participated in the seed funding round. With this funding, Hubilo plans to build an Intelligent Hub for Virtual Events.
InVideo, a video creation platform that allows users to create high quality videos for any form of digital media, has raised a $15M Series A led by Sequoia Capital India. The round also includes participation from Tiger Global, Hummingbird, RTP Global and Base. The team plans to use this fresh capital injection to continue build on their technology solution and expand at scale.
Treebo Hotels has raised Rs 10 crore from a group of angel investors including Vijay Shekhar Sharma, founder & CEO of Paytm, Jaydeep Barman, co-founder & CEO of Rebel Foods (Faasos), Deepak Parayanken, Managing Director of Mozambique Holdings.
Jumbotail, a B2B marketplace for food and grocery products, on Monday said it has closed $ 11 million (about Rs 81.2 crore) funding round led by Heron Rock. The series B2 round also saw participation from Jumbofund, Nexus Venture Partners, Siddhi Capital, Reaction Fund, Pimpernel Holdings and a group of HNIs as well as industry leaders.
WL & RAC protection startup Railofy, has raised an additional Rs 4 crore (INR 40 Million) in a seed round from Roots Ventures, Astarc Ventures, Better Capital, and other angel investors. Recently, the travel protection startup had raised Rs 7 crore from Chiratae Ventures for the same round. The round also saw Anand Srinivasan, ex-Revenue Head GoAir, and Sunil Kumar, ex-Joint GM (Portals) IRCTC, join the company as mentors.
7. Cure.fit cofounder Ankit Nagori swaps equity for larger ownership in Eat.fit
Cure.fit cofounder Ankit Nagori has increased his ownership in the company’s health food business Eat.fit through an equity swap of his stake in the former.
This comes weeks after Eat.fit, registered under CureFoods Pvt Ltd, was hived off as an independent entity. The company said Nagori is not exiting cure.fit and will continue to be on the board of CureFit and will also have stake in CureFit. CureFit will also have significant ownership in the spun off Eatfit entity.
8. Ant Group's IPO sees record $3 trillion in retail demand
Retail investors placed bids for a record $3 trillion of shares in Ant Group HK initial public offering, set to be the world's biggest Ant's dual listing is set to raise about $34.4 billion, split fairly evenly between Shanghai's STAR Market and Hong Kong, topping Saudi Aramco's $29.4 billion listing last December. Investors, both retail and institutional, are rushing to buy into Ant, which operates China’s biggest payments platform and other financial services, despite risks of greater scrutiny at home and abroad.
9. Big tech earnings out this week
Global technology giants Amazon, Apple, Google and Facebook reported a mixed bag of earnings.
Facebook’s stock was down more than 2% after the company reported a decrease in users in the U.S. and Canada but moderate revenue growth in its third-quarter earnings.
Amazon saw international business report a profit for a second quarter in a row at $407 MN in the September quarter versus loss of $386 MN in the same quarter in 2019.
Apple posted a record September quarter revenue of $64.7 billion. International sales accounted for 59 percent of the quarter’s revenue.
Google brought in total advertising revenue of $37.10 billion, compared to $33.80 billion a year ago. YouTube ad growth was particularly strong, up 32% from a year ago
10. Big Tech CEO Senate hearing ends with little discussion on how to fix companies’ liability shield
The CEOs of Facebook, Google and Twitter testified before the Senate Commerce Committee on Wednesday to defend their legal liability shield.
Bipartisan members of the committee are eager to reform Section 230, which protects tech platforms from liability from their users’ posts and also allows them to moderate and remove posts they find objectionable. The shield has come under attack from Republicans who accuse platforms of using it to shield them from claims of bias and Democrats who accuse them of failing to effectively remove harmful content.
Republicans focused their comments on allegations that the Facebook, Google and Twitter censor conservatives on their platforms by creating and applying policies in a biased way. All three CEOs denied that they engage in censorship.
11. US appeals court rejects immediate WeChat ban
US appeals court has rejected a Justice Department request that it allow the government to immediately ban Apple and Alphabet’s Google from offering Tencent’s WeChat for download in U.S. app stores. The three-judge panel for the Ninth Circuit Court of Appeals said in a brief order the government had not demonstrated it would “suffer an imminent, irreparable injury during the pendency of this appeal, which is being expedited.”
12. Zoom end-to-end encryption is finally here, but you'll sacrifice many features for it
Zoom, which shot to popularity at the onset of the Covid-19 lockdown as the messiah of work from home protocols, is finally rolling out end-to-end encryption across all its apps on various platforms.
The feature comes after months of privacy and security debacles surrounding Zoom, which has seen the service grow from a bit-part enterprise communication service to one of the most-used apps in the world. Zoom’s end-to-end encryption is rolling out effective immediately, and while that is great, enabling it will mean that users will have to sacrifice a number of convenient features, such as live streaming, cloud recording of meetings, live transcription and more.
13. Google: In Headlines
Google steps up campaign against EU push for tough new tech rules
Alphabet unit Google has launched a 60-day strategy to counter the European Union's push for tough new tech rules by getting U.S. allies to push back against the EU's digital chief and spelling out the costs of new regulations, according to a Google internal document.
The European Commission will publish rules called the Digital Services Act (DSA) on December 2, after which they will need to be reconciled with proposals from EU countries and the European Parliament before they become legislation.
The proposal has triggered intense lobbying from U.S. tech giants and even some European tech peers worried about the impact on their business models.
Italy's antitrust probes Google for possible abuse of dominant position
Italy's antitrust regulator said it was probing Google for a possible abuse of dominant position in the Italian market of display advertising. The regulator said that thanks to its position in the online advertising market, the company “uses in a discriminatory way enormous amounts of data, collected through its own applications, impeding other competitor operators to compete in an effective way”.
14. Netflix raises monthly charges for US customers
Streaming video service Netflix has raised monthly charges in the United States for its standard and premium subscription plans, a move that sent the company's shares climbing nearly 5%. Netflix increased the cost of its standard subscription by $1 a month to $14, and the price for the premium tier rose by $2 per month to $18. The standard plan, the company’s most popular, enables two streams at the same time, while the premium plan allows for four simultaneous streams.The price increase was the first for U.S. customers since January 2019.
15. Prosus to buy up to $5 billion in its own, Naspers shares
Dutch technology investor Prosus will buy back up to $5 billion in its own and South African parent Naspers, as part of efforts to narrow a discount between the companies' share prices and underlying assets. Prosus said it would buy-back up to $1.37 billion of its own stock and up to $3.63 billion of Naspers’ shares on the open market in a proposed transaction it expected to launch following the release of its interim results on November 23.