STARTUP DIGEST: IPO-bound Paytm to create firm for payments business; Xiaomi completes business registration of EV unit

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Here’s a wrap of the top startup headlines on September 1

STARTUP DIGEST: IPO-bound Paytm to create firm for payments business; Xiaomi completes business registration of EV unit
There were several important developments in the startup space on Wednesday. Here’s a wrap of the top startup headlines. 
IPO-bound Paytm to form payments unit
IPO-bound payments company Paytm is looking to turn its payment aggregator business into a new subsidiary called Paytm Payments Services Limited as the deadline to adhere with the Reserve Bank of India’s payment aggregator rules inches closer.
The company will seek approval for the same from its stakeholders through the extraordinary general meeting scheduled for September 23. In the letter to shareholders, Paytm said the transfer of its payments business will be made on a slump sale basis for a lump sum of ₹275-350 crore, which it will receive in five equated annual instalments.
In March 2020, the Reserve Bank of India (RBI) issued new guidelines for payment aggregators and payment gateways, in a bid to further regulate the sector. The guidelines stated that non-banking entities offering payment aggregator services need to apply for fresh authorization.
The guidelines also stated that the non-banking entities will have to separate their payment aggregator and gateway businesses from their marketplace business.
T Rowe Price MFs markup Paytm valuation by 16% ahead of IPO: Report
Mutual funds managed by US-based investment management firm T Rowe Price have marked up fintech unicorn Paytm's shares by over 16% from the original acquired price, according to the Economic Times.
At least two mutual funds priced Paytm shares at $295 apiece at the end of the June-quarter compared to the original $254. The increase is nearly 57% if one compares it with the valuation in the year-ago quarter, when shares were marked down to $188, the report added.
T Rowe Price, which has invested in major publicly listed technology firms like Zoom and Coupang, first invested in Paytm in 2019 as part of a $1 billion funding round. Paytm has filed for a $2.2 billion IPO, which is expected in October end.
Trifecta Capital launches third venture debt fund
Venture debt firm Trifecta Capital has launched its third venture debt fund, targeting a corpus of Rs1,500 crores for its latest fund.
The fund, with a target corpus of Rs1,000 crores ($133 million) and a greenshoe option of Rs500 crore ($ 67 million), will be the largest in the series of venture debt funds managed by the firm, it said in a statement. It aims to serve the rapidly growing financing opportunities for Indian startups.
Earlier this year, the firm announced the final close of its Venture Debt Fund – II at $140 million, which it started raising in 2019.
The firm has made 140 investments over the last six years. Trifecta Capital’s Venture Debt Funds have invested approximately Rs2,200 crores ($293 million) in over 85 startups.
The Trifecta Venture Debt Fund’s portfolio now has 11 Unicorns and more than 15 Soonicorns, with businesses including Big Basket, Pharmeasy, Cars24, Vedantu, Infra.Market, ShareChat, Dailyhunt, UrbanCompany, CarDekho, Blackbuck, Ninjacart, NoBroker, Kreditbee, Dehaat, Turtlemint, Servify, Livspace and BharatPe amongst several others. The portfolio is cumulatively valued at $33 billion.
The firm aims to deploy its funds from third capital in emerging sectors such as SaaS, D2C, B2B commerce, Fintech, E-commerce Sellers, among others.
“With this third venture debt fund, we will strengthen our existing investor relationships and selectively add new investors who can add value to our portfolio companies. We aim to further enhance our track record of delivering consistent returns every quarter as well as best-in-class venture debt fund returns to our investors, as we help them participate in some of the most exciting new businesses in India," said Rahul Khanna, Managing Partner, Trifecta Capital. Trifecta Capital aims to complete the first close in calendar year 2021.
Google delays return to office to January as COVID worries linger
Google has postponed return to the office for workers for the third time.
Google is extending its voluntary return-to-office policy through January next year, CEO Sundar Pichai said on Tuesday, citing uncertainty caused by the COVID-19 pandemic in many parts of the world.
"Beyond January 10, we will enable countries and locations to make determinations on when to end voluntary work-from-home based on local conditions," Pichai said in a blog post.
As the highly contagious delta variant of the Covid-19 virus spreads several other tech companies, including Amazon, Facebook and Apple, are also reassessing their return-to-office plans.
UPI logs robust growth in August
Digital payments continued to grow at a robust pace and touched a new record in August, indicating an increased adoption of digital payments by consumers during pandemic.
The Unified Payments Interface (UPI) logged more than 3 billion transactions for the second consecutive month in a row in August, as per data released by the NPCI.
In August, UPI logged 3.55 billion transactions, which is an all-time high in terms of the volume of transactions the payments platform has recorded since its launch. In value terms, UPI saw transactions worth Rs 6.39 trillion in August, which is again a record high. On a month-on-basis, UPI’s volume of transactions was up 9.5 per cent in August, and the value of transactions was up 5.4 per cent.
In July, UPI crossed the 3 billion volume mark for the first time since its inception in 2016 as it clocked 3.24 or 324 crore transactions amounting to Rs 6,06,281 crore during the month. In the UPI ecosystem, the apps that lead the transactions are PhonePe, Google Pay and Paytm Payments Bank.
EarlySalary partners HDB Financial Services for digital loans
Consumer lending platform EarlySalary has tied up with non-bank financier HDB Financial Services to fuel growth in digital lending.
The partnership aims to build momentum in impact categories of skill upgradation, education loans and healthcare finance, the company said. It added that the association will also facilitate building a large consumer lending book with EarlySalary. HDB Financial Services is a subsidiary of India’s largest private lender HDFC Bank.
G Ramesh, managing director and chief executive of HDB Financial Services, said “The partnership will help reach millions of customers across India by providing them with easy finance with digital on-boarding and customer support, thus providing them with a seamless borrowing experience.”
“This partnership also illustrates our ambition to speed-up the collaboration with Fintechs to create the services of tomorrow," added Ramesh.
Akshay Mehrotra, co-founder and chief executive of EarlySalary, said it has disbursed 2 million loans since inception and will further disburse 1 million loans this financial year.
Consumers spent $40Bn on App Store in H1 2021
Consumers globally spent $41.5 billion on the App Store in the first half of 2021, which is almost double that of the Google Play Store, according to data sourced by Finbold (finance news website). The spending represents a growth of 22.05% from a similar period in 2020.
App Store's H1 2021 spending is almost double compared to $23.4 billion spent by Android consumers, the report adds. The Google Play spending represents a growth of 30% on a year-over-year basis. Cumulatively, spending on the two platforms recorded a growth of 24.8% YoY, hitting a total of $64.9 billion. The growth rate by Google Play spending might reflect the tussle between Apple and app developers. The company was hit by antitrust accusations alongside the controversial 30% commission fee for developers.
However, Apple appears to be countering any possible dominance by introducing the App Store Small Business Programme, which reduces the App Store commission from 30% to 15% for developers grossing less than $1 million a year.
As per the findings, short video sharing platform TikTok extended its dominance into 2021, emerging as the most grossing app for the first half at $920 million, followed by YouTube at $564.7 million. Dating app Tinder ranks third at $520.3 million. Data on mobile app spending and grossing is provided by SensorTower. 9
91% of Indians plan to shop for the upcoming festive season: Trade Desk and YouGov
After a tough year with the pandemic, consumers in India are gearing up to celebrate the festive season and making new purchases during the upcoming shopping sales for Diwali, Dussehra and Christmas.
A survey conducted by global advertising leader, The Trade Desk and YouGov revealed that 91 percent of Indian consumers are planning a purchase during the upcoming festive season and six in 10 are interested in learning about new brands during festive season sales. The survey also revealed that 82 percent of respondents shopped online at least once a month in the past six months, and nearly one in four made online purchases several times a week or more often. The findings also highlighted the growing importance of OTT and music streaming in aiding consumers’ discovery of new deals and promotions. More and more frequent online shoppers are learning about new deals and promotions from either advertisement on OTT or from ads on music streaming services.
NTT expands its data center footprint by 20%
Global technology and business solutions provider NTT’s Global Data Centers division has expanded its global data center footprint by 20% to build a connected future that will benefit enterprise and hyperscale clients around the world.
NTT operates data centers across Europe, North America, Africa, and Asia, including a major presence in India. As per the company, it delivers and operates global interconnected data centers with cross regional data center networks through key markets such as London, Singapore, Tokyo, and Virginia in North America. Its expansions in data center services provide increased data center capacity and network connectivity across all geographies.
With Mumbai 8 going live soon, the Chandivali campus, India’s first operational hyperscale data center park, will reach 85MW of IT load.
Over the next 18 months, four new hyperscale data center parks will also become operational: two in Navi Mumbai and one each in Chennai and Delhi, adding approximately 133MW of IT load and 50,000m2 of floorspace, the company added. NTT claims that interconnections for 10 data centers across India will also be rolled out in 2021 and submarine cable landing stations are planned in Mumbai and Chennai.
GLOBAL TECHNOLOGY & STARTUP NEWS
Google to invest $1.2 Bn in Germany cloud computing programme
Google is investing 1 billion euros ($1.2 billion) by 2030 to expand its cloud computing infrastructure in Germany and to increase the use of renewable energy, the Associated Press reported.
The internet giant plans to add new cloud computing centres in the Berlin region and in the town of Hanau, close to the DE-CIX data exchange in Frankfurt. Google said it would purchase more than 140 megawatts of electricity from the German subsidiary of French utility company Engie over the coming years to operate the data centres.
The company said Engie will guarantee that 80% of the electricity comes from carbon-free sources, including a new solar park and 22 existing wind parks in Germany. Google said it aims to use 100% renewable energy by 2030.
Germany's economy minister, Peter Altmaier, called the announcement a "strong signal" for green energy and digital infrastructure.
Google appeals France's 'disproportionate' $591M fine in copyright row
Google said on Wednesday it was appealing against a 500 million euro ($591 million) fine imposed by France's antitrust watchdog in July over a dispute with local media about paying for news content. The fine came amid increasing international pressure on online platforms such as Google, and Facebook to share more of the revenue they make from using media outlets' news.
"We disagree with a number of legal elements, and believe that the fine is disproportionate to our efforts to reach an agreement and comply with the new law," said Sebastien Missoffe, head of Google France told Reuters.
"We continue to work hard to resolve this case and put deals in place. This includes expanding offers to 1,200 publishers, clarifying aspects of our contracts, and sharing more data as requested by the French Competition Authority,” Missoffe added.
The French antitrust body imposed the sanction on Google for failing to comply with its orders on how to conduct the talks with publishers. It said on Wednesday that Google's appeal, which will be ruled on by Paris' court of appeal, would not hold up the fine, which the US tech giant must still pay. It could not say how long the appeal process would take.
The case focused on whether Google breached temporary orders issued by the authority, which said such talks should take place, within three months, with any news publishers that asked for them. The watchdog said in its July 13 decision that the U.S. tech group must come up with proposals within the next two months on how it would compensate news agencies and other publishers for the use of their content. If it does not do that, the company would face additional fines of up to 900,000 euros per day.
Chinese state firms to take big stake in Ant's credit-scoring JV
Chinese-backed firms are set to take a sizeable stake in a key Ant Group asset for the first time, sources told Reuters. This move will loosen the Chinese fintech giant's grip on a data treasure trove of over 1 billion users but help revive its IPO.
The partners plan to establish a personal credit-scoring firm, said the people, adding that such a firm and ownership structure was one aspect of restructuring ordered by regulators who put a sudden stop to Ant's blockbuster IPO in November. The listing highlighted the outsized role of Ant and e-commerce affiliate Alibaba (9988.HK) in China, triggering a regulatory clampdown on the business empire of billionaire founder Jack Ma. The result was a restructuring order for Ant, a record $2.75 billion fine for Alibaba for antitrust violation, and a near-three month disappearance of Ma from public view. Under the plan, Ant and Zhejiang Tourism Investment Group will each own 35% of the venture, while other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold slightly more than 5%. The only non-state investor will be Transfar Group, parent of logistics and financial services firm Transfar Zhilian. Transfar's stake will total 7%, sources added.
China's Xioami
Chinese smartphone giant Xiaomi has completed the official business registration of its electric vehicle unit, marking the latest milestone in its push into the automotive sector, Reuters reported.
The new unit, to be called Xiaomi EV, opened with registered capital of 10 billion yuan ($1.55 billion) and Xiaomi CEO Lei Jun as its legal representative, Xiaomi said in a statement. Some 300 staff have so far been employed to join the EV unit and it continues to recruit talent, it said.
According to Reuters, the smartphone maker confirmed its foray into electric cars in March, pledging to invest $10 billion over the next 10 years.
Xiaomi said on Wednesday it has since conducted more than 2,000 interview surveys and visited over 10 industry peers and partners. However, it has revealed few details of its strategy for the automotive sector or vehicle types it intends to launch.
Last week, the company said it purchased autonomous driving technology startup Deepmotion for over $77 million, in an effort to boost research and development.
Walmart to hire 20,000 supply chain workers ahead of holiday season 
Walmart has planned to hire 20,000 workers at its supply chain division and raise wages ahead of the busy holiday season anticipating higher demand.
As per Reuters, the roles, which will be a mix of part time and full time jobs, would be hired at across more than 250 Walmart and Sam's Club distribution centers, fulfillment centers and transportation offices, the retailer said in a statement.
The world's biggest retailer also hired around 20,000 seasonal workers last year in its e-commerce fulfillment centers to meet the holiday demand.
The average wage for supply chain workers would be $20.37 per hour, the statement added, which compares with the company's announcement of $15.25 an hour average wage pay in February. Walmart, however, did not disclose its costs for the new hiring.
The move by Walmart comes as retailers across the US were worried that they will not have enough workers in stores and warehouses during the holiday shopping season because of the nationwide labor shortage due to the pandemic, prompting them to raise wages this year.
Walt Disney to move Hotstar content to Hulu, ESPN+ in US
Walt Disney said on Tuesday that content from its streaming service Hotstar — home to India's IPL cricket tournament and original shows like Aarya — will migrate to its ESPN+ and Hulu streaming platforms in the United States.
Disney, which has 174 million paying customers across its four streaming services, is looking to slowly consolidate its content into a Disney Bundle, which includes ESPN+, Hulu, Disney+, and more than 100,000 movies, TV episodes as well as sports events, Reuters reported.
Sports content from Hotstar will move to ESPN+, and Hotstar movies as well as TV shows will migrate to Hulu, which is home to series like The Handmaid's Tale.