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    Startup Digest: Former Twitter exec blows whistle on social media giant, Unicorn India Ventures to sell stakes in 6 startups to US fund

    Startup Digest: Former Twitter exec blows whistle on social media giant, Unicorn India Ventures to sell stakes in 6 startups to US fund

    Startup Digest: Former Twitter exec blows whistle on social media giant, Unicorn India Ventures to sell stakes in 6 startups to US fund
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    By Aishwarya Anand   IST (Published)

    Former top Twitter says social media platform riddled with spies, mismanagement & coverups: Report
    A former top executive at Twitter has made several explosive claims against the microblogging giant, accusing it of being a threat to user privacy, and even democracy.
    The claims by the whistleblower, Twitter's former head of security Peiter Zatko, came to the surface after CNN, The Washington Post, and Time gained access to an 83-page confidential disclosure sent to the US Congress and federal agencies last month.
    According to reports by these three publications, Twitter and its board were complicit in covering up "egregious deficiencies", too many employees had access to the central controls and sensitive information without adequate oversight, and incredibly enough, at least one employee is a foreign spy.
    Zatko, who used to report directly to former Twitter CEO Jack Dorsey and later, his successor Parag Agrawal, "paints a picture of a chaotic and reckless environment at a mismanaged company" in the complaint, as per the CNN report.
    Zatko was reportedly hired by Dorsey after a large-scale hack in 2020, in which the Twitter handles of several high-profile personalities — including Joe Biden, Barack Obama, and Elon Musk — were compromised.
    Zatko, according to CNN, joined a company that he described as incredibly mismanaged, with "extraordinarily poor security practices, including giving thousands of the company's employees — amounting to roughly half the company's workforce — access to some of the platform's critical controls".
    He even said he was concerned that some of Twitter's employees sympathised with those who took part in the January 6 insurrection at the US Capitol in Washington, when supporters of then-President Donald Trump allegedly tried to overthrow the US government in an attempted coup.
    In response, Twitter attacked Zatko's credibility. A Twitter spokesperson told CNN that Zatko was fired more than six months ago for "poor performance and ineffective leadership", and said his allegations were "riddled with inconsistencies and inaccuracies" and called the complaint an attempt by Zatko "to capture attention and inflict harm on Twitter".
    Unicorn India Ventures to sell stakes in six startups to US fund for Rs 50 crore
    Venture capital firm Unicorn India Ventures has inked a strategic agreement with the US-based Continuum Fund to transfer the stakes of its six portfolio startups to the American investor for Rs 50 crore, doubling returns for its limited partners (LPs).
    The six portfolio startups that the VC firm will divest into include Genrobotics, Sequretek, Clootrack, Inc42, Inntot, and NeuroEquilibrium. These were investments from the firm's first tranche of funds of Rs 100 crore, raised in 2016 and deployed across 17 early-stage startups.
    "We are proud to say we have been able to return close to 2x DPI to our investors and the TVPI is over 5x of the fund size. We have two outliers from our first Fund: OpenBank and SmartCoin. We studied the rest of the portfolio and came up with a curated list of 6 companies that we look at as Future Winners, but they need time to grow.
    Given that we have just finished the sixth year of the seven-year fund, we wanted to provide an exit to our LPs. We have structured this through a Delaware-based continuum Fund which would provide liquidity to our LPs," said Bhaskar Majumdar, managing partner, Unicorn India Ventures.
    Nandan Nilekani-backed ShopX shuts shop, files for bankruptcy
    Nandan Nilekani-backed e-commerce startup ShopX has decided to shut shop and filed for bankruptcy under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, the ministry of corporate (MCA) filing showed. Its board had passed a special resolution to file for bankruptcy last month.
    The firm in the filing claimed that it failed to generate enough cash flow and also found it difficult to raise fresh capital. The company said it took multiple loans from its investors including Nilekani and its Singapore-based backer Fung Investment, without sharing details about the figures.
    "The company has been unable to meet its various payment obligations and has ceased to be a going concern. The company has tried various options to meet its payment obligations, including raising of additional equity, sale of its assets, sale of the business, etc. but is not able to achieve any success,” the company’s filings said.
    The e-commerce enablement platform added in the regulatory filing that it has considerably reduced its employees' strength to ensure that there is no other recurring payment obligation of the company. Backed by investors like Nandan Nilekani, Fung Strategic Holdings, Rajesh Ranavat and Kewal Nohria, the startup had raised nearly $60 million by 2020.
    Rivigo held talks with Flipkart, FirstCry for a sale: Report
    Logistics unicorn Rivigo has held talks with e-commerce giant Flipkart and FirstCry, an omnichannel baby products retailer for a potential sale, as per a report by the Economic Times.
    Rivigo's sale talk is still in the preliminary stage that may or may not result in an acquisition deal, the report added. The company, reportedly, had said that it evaluated merging its operations with e-Kart, Flipkart's logistics arm and FirstCry's logistics unicorn Xpressbees.
    "The company is not in great health, it has tweaked its business model in the past from being an aggregator to being asset-heavy and owning trucks to now again being asset light… its fleet size reduced significantly from 3,000," ET reported citing sources.
    Top startups founders and stakeholders launch Artha School of Entrepreneurship for early-stage entrepreneurs
    Top founders and stakeholders in the Indian startup ecosystem have launched a non-profit Artha School of Entrepreneurship to help new-age entrepreneurs scale their ventures. The initiative will be spearheaded by TN Hari, former HR head at BigBasket and ex-Lenskart CHRO Suruchi Maitra.
    The other members of the founding team include Helion Ventures co-founder Ashish Gupta, entrepreneur and angel investor Pavan Vaish, ISB founding dean and Ashoka University founder Pramath Raj Sinha, Helion Ventures and the Fundamentum Partnership founder Sanjeev Aggarwal.
    The program has been designed for founders of early-stage startups that have achieved some level of product-market fit and are poised for scale. The objective is to make the art and science of scaling accessible to these founders, the statement added.
    As part of the program, the participants will have access to online content, in multiple formats, relating to all elements of scaling and get mentorship from a set of successful founders and startup executives.
    The non-profit will also partner with startup incubator T-Hub in Hyderabad and KSN Global in Kochi. As per the company, discussions are also underway to partner with ecosystem enablers in other states.
    India e-commerce firms ramp up hiring of delivery workers for shopping season: Report
    India's e-commerce companies are adding delivery personnel at a rapid pace, fearing a labour shortage might cause them to lose out in one of the biggest annual shopping seasons that begins in earnest next month, Reuters reported.
    The moves come amid a tightening job market - India's unemployment rate fell below 7% in July for the first time since January - and persistently high inflation, complicating the outlook for the industry which has long battled chronically high employee turnover.
    "Overall demand for the gig workforce has seen a sharp increase and that is not completely supported by the increase in pool size of delivery people... It is not a free-flowing pool," TK Balakumar, chief operating officer at online grocery seller BigBasket, told Reuters.
    The company, backed by the Tata group conglomerate, has ramped up the number of delivery partners in its instant delivery segment BB Now to 2,200 in the quarter ended June, from just 500 in the March quarter. It aims to further raise the number to about 6,000 by March 2023.
    Gig work employment, of which delivery workers and salespersons form a large chunk, is expected to reach 9.9 million in India in 2022-23, up about 45 percent from 2019-20, according to a report in June by think tank NITI Aayog.
    "There's a constant churn and movement that has existed for 4-5 years. It can cause a temporary crunch but we don't think it is a long-term thing because supply and demand will match," Kabeer Biswas, chief executive officer at Dunzo, told Reuters.
    FUNDING NEWS
    Mojocare bags $20.6 million in Series A round from B Capital and others
    Health and wellness startup Mojocare has raised $20.6 million in a Series A funding round led by Facebook Co-founder Eduardo Saverin's B Capital.
    Its existing investors Chiratae Ventures, Sequoia India's Surge and Better Capital, also participated in the round.
    Angel investors including Kunal Shah, founder of CRED, Ankit Nagori, founder of Curefoods, Adrian Auon, founder and CEO of Forward, Sajid Rahman, founder and CEO, and others, also pitched in.
    The Bengaluru-based company intends to use the fresh capital to expand its product, content, and care delivery teams. It will also strengthen and diversify its product portfolio and adopt a distribution-first omnichannel approach.
    The firm claims to have registered a 45x growth in its paid subscriber base and delivered care to users across 50 percent of India's pin codes with a Net Promoter Score (NPS) of 60, in 12 months. The company also said it recorded a 60x growth since its launch.
    "In India, 400 million users are battling issues related to dermatological, mental health, fertility, and women's and sexual wellness. Consumers have a serious lack of trust in them, and access is severely limited due to a nearly nonexistent care layer.
    The prevalence of unskilled and dishonest health professionals is alarming, and the likelihood of counterfeit products sold offline is considerable," said Rajat Gupta, co-founder, Mojocare.
    Winuall raises Rs 17 crore from Dream Incubator, IPV and others
    Winuall, a social commerce platform that allows educators to share a wide range of curated courses to their students has raised Rs 17 crore from Dream Incubator, Inflection Point Ventures, existing investors Prime Venture Partners, BEENEXT and other strategic investors.
    The startup will use the fresh capital to enhance product and tech capabilities, hire across leadership roles and scale up marketplace business by onboarding more creators, content-suppliers and educators, a statement said.
    The company has reported a 100 percent MOM growth in the adoption of its social commerce platform in the last six months and educators have seen 50 percent growth in their income.
    "We are already break-even and are on track to make our marketplace business profitable in the next 3 months. At Winuall, we are building a content marketplace with a strong supply, understanding user patterns and recommending the best suitable content for the student.
    By our social commerce model, we have better margins to share with our educators and provide affordable content to students," said Ashwini Purohit, CEO, Winuall.
    IAN & Manipal group invest Rs 4.5 crore in Indium Finance
    Indium Finance, an NBFC platform for distributors, wholesalers and retailers has raised Rs 4.5 crore in a fresh funding round led by Indian Angel Network’s lead Investors Sanjay Rishi, Raman Roy, and Manipal Group.
    The firm will use the fresh capital to accelerate the acquisition of new customers, build product platform to provide customized solutions, and expand the sales and technology teams.
    Indium Finance is currently working with multiple corporate and B2B e-commerce partners, giving it access to 25000+ distributors, dealers, and retailers. This investment will also be used to collaborate with new corporate and e-commerce partners in the next six months.
    "We will enable SMEs that face difficulties accessing timely financing due to a lack of collateral or required documentation. The investment from IAN will act as a catalyst to further our goals. Not only will it help us accelerate our business growth, but also build new product capabilities,” said Shalabh Mohan and Vivek Kumar, co-founders, Indium Finance.
    Growfitter raises additional $500,000 in an extended Pre-Series A round
    Incentivised wellness platform Growfitter has raised an additional $500,000 in an extended Pre-Series A funding round led by Venture Catalysts and Singapore-based Baksh Capital.
    The funds will be utilised in building technology infrastructure and expanding business operations, focusing the efforts on hiring and branding of the platform, the firm said.
    The company has partnered with premium brands such as Amazon Pay, Defy, Byju’s, Puma, Jockey, Myntra, Lakme, ixigo, and Tata 1mg, Ease My Trip, PharmEasy, MediBuddy, MyGlamm, Clovia, WrapCart, among others for its reward program.
    It claims to have close to 1 million app downloads across 200 cities and rewards worth more than $1 million has already been redeemed. The startup has also launched its Health Insurance segment.
    "The fund from this round marks our entry into the Web 3 & Blockchain space where we are building one of its kind move to earn lifestyle & wellness rewards app. Our aim is to reach 10 million users in the next 2 years & build an ecosystem powered by AI & Machine learning which will help people to get fit and adopt a healthy lifestyle," said Harshit Sethy, co-founder and CTO, Growfitter.
    OTHER STARTUP NEWS
    T-Hub and Hyderabad Angels partner to drive investment opportunities for startups
    Ecosystem enabler T-Hub has partnered with Hyderabad Angels to drive innovation and venture investment opportunities for technology startups in the country.
    As per a statement, Hyderabad Angels will provide access to investment opportunities to the startups from India, the USA, the UK, Singapore, Dubai, and UAE, among others. It will also have a presence at the new facility of T-Hub.
    In addition, this will also enable T-Hub to introduce Hyderabad Angels to its tech innovation ecosystem and facilitate exclusive meetings with startups and other stakeholders.
    "Joining forces with Hyderabad Angels elevates our value proposition, and we look forward to creating an impact together for our startup community. This will play a key role in providing the startups with access to cutting-edge technology, mentorship, funding avenues and tools they require to accelerate their innovation agendas,” said Mahankali Srinivas Rao, CEO, T-Hub.
    Apple plans to cut iPhone 14 production lag between China, India: Report
    Apple plans to start making the iPhone 14 in India about two months after its release in China, in a move that will narrow the gap from the typical six to nine months for previous launches, Bloomberg News reported.
    The company has been working with suppliers to ramp up manufacturing in India and the first iPhone 14s from the country are likely to be finished in late October or November, following the initial September release, Bloomberg reported, citing people familiar with the matter.
    Apple's Taiwan-based supplier Foxconn has studied the process of shipping items from China and assembling the iPhone 14 at its plant outside the southern Indian city of Chennai, it reported. The US tech giant is looking at options after Beijing's clashes with Washington and lockdowns across the country disrupted production, according to the report.
    coto launches City Ambassador Program to build hyper-local communities for women
    coto, a Web3-based social community platform, has launched a 'City Ambassador Program’ to help women build their own communities on the platform.
    Launched in 30 Indian regions, the phase-wise program will include city, state, zonal, and area-wise local ambassadors, a statement said. Each City Ambassador will work towards onboarding women to build their own communities on the platform. These representatives will promote local-level chapters on coto, the firm added.
    "We want to connect with women of all ages at the grassroots level. With an action-oriented approach, the program will enable women to support each other, and at the same time, inspire, instill confidence to build an identity of their own," said Aparna Acharekar, co-founder, coto.
    Simpl partners with Blue Tokai Coffee Roasters to offer checkout solutions
    Fintech startup Simpl has partnered with Blue Tokai Coffee Roasters, to offer seamless checkout solutions to the D2C brand. Simpl’s Pay-in-3 option with its interest-free payment period is available to Blue Tokai customers on the coffee brand’s online store, the firm said. Payments are split into 3 tranches at no extra charges, zero friction and a transparent payments experience, it added.
    "Our platform helps merchants boost order volumes while attracting new customers. The superlative checkout experience that Simpl enables helps our merchant partners build deeper relationships with their customers and attract new customers," said Nitya Sharma, CEO and co-founder of Simpl.
    GLOBAL TECHNOLOGY & STARTUP NEWS
    Apple employees launch petition over company's return-to-office stance
    Apple employees have hit back at the tech giant's return-to-office orders and launched a petition saying the firm risked stifling diversity and staff wellbeing by restricting their ability to work remotely, media reports say.
    The petition is in response to an all-employee memo from the CEO Tim Cook, who last week said workers would have to come into the office for at least three days a week from September, citing the Financial Times, The New York Post reported.
    The plan is looser than previous proposals that would have forced staff to return every Monday, Tuesday and Thursday, with Cook saying it would "enhance" the company's ability to work flexibly "while preserving the in-person collaboration that is so essential to our culture."
    However, a group of workers, who operate under the name Apple Together, has circulated a petition pushing back against Cook's orders, saying greater flexibility would promote diversity within the company.
    Musk seeks documents from Jack Dorsey in fight over Twitter deal
    Billionaire entrepreneur Elon Musk is seeking documents from Twitter co-founder Jack Dorsey as the CEO of Tesla and SpaceX pursues his legal fight to walk away from his $44 billion deal for the social media company, according to a court filing seen by Reuters.
    Dorsey, who resigned as Twitter's chief executive in November and left the board in May, was asked for documents and communications about Musk's April agreement to buy the company and about spam accounts on the platform, according to a copy of the subpoena.
    The subpoena sought documents and communications about Twitter's use of mDAU, a measure of active users on its platform. Musk has alleged the company defrauded him by hiding the number of fake accounts in its regulatory filings, which Musk said he used to value the company. Twitter has denied Musk's spam allegations.
    Musk also wanted documents and communications regarding alternative measures of active users that the company has considered and information about the use of mDAU in executive pay and annual targets.
    US lawmakers unveil bill to help news media negotiate with Google, Facebook
    A bipartisan group of US lawmakers have released a revised version of a bill aimed at making it easier for news organizations to negotiate collectively with platforms like Google and Facebook, Reuters reported.
    The Journalism Competition and Preservation Act "removes legal obstacles to news organizations' ability to negotiate collectively and secure fair terms from gatekeeper platforms that regularly access news content without paying for its value," according to a news release from the lawmakers.
    The updated bill would cover news publishers with fewer than 1,500 full-time employees and non-network news broadcasters. It would allow them to work together to win better deals from Facebook, Google and other large platforms.
    Netflix ramps up hirings for its Cloud gaming plan
    Streaming giant Netflix has ramped up its dream to make it big in Cloud gaming as the company hunts for professionals to take on Cloud gaming services like Sony PlayStation Now, Google Stadia, Apple Arcade and Amazon Luna.
    According to Protocol, the streaming service is looking for a security product manager with experience handling "cloud gaming challenges", a rendering engineer who can support Netflix's "cloud gaming service", and other related positions.
    Netflix recently launched mobile games like "Into the Breach" and "Before Your Eyes", among others. However, less than 1 percent of its subscribers are playing mobile games. Netflix plans to launch at least 50 gaming titles by the end of the year.
    China's JD.com beats quarterly revenue estimates
    JD.com beat Wall Street estimates for quarterly revenue as lockdowns in China to control the spread of the coronavirus boosted online shopping and the company's "618" shopping event.
    The company reported second-quarter revenue of 267.6 billion yuan ($39.07 billion), topping analysts' average estimate of 262.31 billion yuan, according to IBES data from Refinitiv.
    Sales in its product segment, which includes online retail sales, rose 2.9% in the quarter, while those from services such as logistics and marketing jumped 21.9 percent.
    JD.com said net income attributable to ordinary shareholders rose to 4.38 billion yuan, or 1.37 yuan per American Depository Share (ADS) for the three months ended June 30, from 794 million yuan, or 0.25 yuan per ADS, a year earlier.
    Zoom cuts annual forecast as revenue growth hits record low
    Zoom Video Communications has cut its annual profit and revenue forecasts as demand for the video-conferencing platform cool off from pandemic highs amid stiff competition from Microsoft Teams and Cisco WebEx, Reuters reported.
    Shares of the pandemic darling fell 7 percent in extended trade after it reported its slowest quarterly revenue growth on record at 8 percent, as people switched to in-person meetings from virtual conversations.
    Finance chief Kelly Steckelberg told analysts the firm's online business was likely to decline by 7 to 8 percent in fiscal 2023. The company forecast annual revenue between $4.39 billion and $4.40 billion, compared with its earlier outlook of $4.53 billion to $4.55 billion. It now expects annual adjusted profit per share between $3.66 and $3.69, compared with the $3.70 to $3.77 forecast earlier.
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