There were several important developments in the startup space during the day on Monday. Here’s a wrap of the top startup headlines.
PhonePe receives insurance broking license
Payments major PhonePe has received an insurance broking licence from Insurance Regulatory and Development Authority of India (IRDAI).
Last year PhonePe entered the insurtech sector with a limited insurance ‘corporate agent’ license, which restricted the company to partner with only three insurance companies per category.
Now, with this new ‘Direct Broking’ license, the fintech startup can distribute insurance products from all insurance companies in India.
The new broking license also allows PhonePe to start offering personalised product recommendations to its 300+ million users and offering a much more diverse portfolio of insurance products for Indian consumers, the company said.
“This licence is a big milestone in our insurance journey. PhonePe is India’s fastest growing insurtech and this move to broking will give us further momentum and accelerate our growth in this space,” said Gunjan Ghai, vice-President & head of insurance at PhonePe.
Edtech startup Scaler Academy acquires Coding Elements
Edtech startup Scaler Academy has acquired online learning platform Coding Elements.
The deal is reportedly worth about $1 million (close to ₹8 crore).
With this acquisition, Scaler aims to strengthen further and expand its offering in the professional upskilling space, the company said in a statement.
Coding Elements offers computer science courses to students such as data science, machine learning, and full-stack web and mobile app development. It offers coding courses for kids and claims to have about 4,000 students on its platform. Mudit Goel, Coding Elements’ founder will join Scaler as its strategy and product lead.
Launched in 2019, Scaler Academy claims to have around 7,500 learners that have joined its educational programmes. The edtech startup is backed by marquee investors like Sequoia Capital, Tiger Global and Rocket Internet among others.
Cars24 backers and co-founders offload shares worth $20 mn in secondary deals: Report
Online marketplace for used cars Cars24 is all set to secure a new round led by Falcon Edge, Entrackr reported.
Cars24’s early backers and co-founders have offloaded $20 million worth shares across two secondary deals since December. According to the reports, its early investors MPGI Holdings, Asia Venture Group and Siegfried Trust offloaded shares worth $8.5 million, $1.5 million and $180K to DST Asia in December.
Cars24’s brand ambassador and former captain of the Indian cricket team Mahendra Singh Dhoni was also allotted shares worth $463K for his services.
Co-founders Mehul Agrawal, Vikram Chopra, Ruchit Aggarwal, and Gajendra Kumar Jangid collectively received bonus shares summing up to $36 million from the company. Its early backers Sequoia, MPGI Holdings and Indian Continent Investment also received shares valued at an aggregate $11 million during the same month, the report adds.
Tiger Global’s partners Scott Schleifer and Griffin Schroeder had also invested in the company in December last year. Their collective stake worth $2 million was bought back by the company last month.
In November last year, Cars24 drove into the unicorn club after picking up $200 million at a valuation of over $1 billion.
Zomato modifies cutlery options on its app to cut plastic use
In a bid to curtail the use of plastic, newly-listed food delivery platform Zomato has decided to change its default mode, requiring customers to now explicitly “opt-in" for cutlery if they require it.
Introducing this, Zomato founder Deepinder Goyal wrote on Twitter: “On the zomato app, customers could always skip cutlery with their orders. We are now changing this from an ‘opt-out’ to an ‘opt-in’. Customers will now have to explicitly request for cutlery, tissues, and straws, if they need it."
Goyal added that stopping the default delivery of single-use plastic spoons can help the company save up to 5,000 kilos of plastic waste in a day.
Further, the company said in a blog post that the change will help their restaurant partners save ₹2-5 (~0.5-1% of order value) on every order going forward.
As per the company, the feature has already been rolled out for 50 percent of Zomato's customers. It will be launched for all customers in the next three to four weeks.
Grofers’ founder responds to backlash over 10-minute deliveries
After facing backlash over the newly-launched 10-minute grocery delivery service, Grofers founder Albinder Dhindsa said ‘it breaks my heart that instead of celebrating innovation coming from India, some of us stay cynical of people who are trying to break the status quo.’
The executive of the newly-minted unicorn e-grocery startup took to twitter to clear the air about the company’s 10-minute express delivery model amid mounting criticism around the pressure that on-demand deliveries put on gig workers.
Dhindsa said, “Some people think that we are pushing our riders to drive fast and break traffic rules to deliver groceries in 10 minutes, that we are an inhuman valuation seeking corporation which puts lives at risk to deliver groceries in 10 minutes.”
Addressing the criticism, Dhinsa said “Our partner stores are located within 2 kilometres of our customers. We have 60+ stores in Delhi, and 30+ stores in Gurgaon already. Our stores are so densely located that we can deliver 90% of the orders within 15 minutes even if our riders drove under 10kmph.”
“Our in-store planning and tech are now so good that we pack most orders in under 2.5 minutes. Our riders are not (dis)incentivised to deliver orders fast. They do it at their own pace and rhythm. We've had zero reported rider accidents in the last two months since we launched 10-minute grocery delivery,” the statement further read.
Earlier this week, Grofers had launched a 10-minute grocery delivery service in 10 cities including Delhi, Mumbai, Bengaluru, and Jaipur.
Indian food services market to hit $13 bn in GMV by 2025
Although massively under-penetrated when compared to the US and China, online penetration of food services market in India is set to grow two times by 2025 with the right tailwinds -- likely to clock a gross merchandise value (GMV) of $13 billion, according to a RedSeer report.
Even as the market was hit by the pandemic, it has also accelerated the pace of online adoption, the report added.
"While foodtech services like Zomato are doing IPOs and raising big bucks, the domestic market still lags behind in the food services market when compared to global counterparts, which means there is a lot of scope," the report noted.
However, the market is continuously growing with a number of drivers.
As per the findings, India is expected to be the third-largest consumer market by 2030 which will be a major boost for overall consumer economy. Although the market largely remains unorganised, there is a shift towards the organised side and the growth of it is expected to be 14 percent by 2025.
While on the other hand, the unorganised segment will see a mere growth of 5 percent, said the RedSeer report.
IIT Madras Incubation Cell and Sona Incubation Foundation sign MoU
IIT Madras Incubation Cell (IITMIC) and Sona Incubation Foundation have signed a MOU to foster entrepreneurial ideas in a supportive environment to professional, students, and local community.
According to a statement, through this MoU, IITMIC will extend holistic support to strengthen the incubation ecosystem at SIF and provide co-incubation support to select SIF incubatees to scale and make national impact.
IITMIC will also provide training, mentoring, enable networking and amplify the reach of the startups to investors, industry and potential market, the company said.
As per the statement, IITMIC has incubated 241 deep-technology startups so far, valued at Rs 11,000 crore, and have generated over 5200 jobs
Shopee tests India e-commerce market dominated by Amazon, Flipkart
Singapore-headquartered Shopee has launched a recruitment campaign for sellers to sell on "Shopee India" and is ramping up hiring in the country, according to Reuters.
India’s e-commerce market, estimated at $50 billion in 2018 and expected to be worth $200 million by 2027, is dominated by Amazon India and Walmart’s Flipkart. Two of the biggest conglomerates—Reliance Industries and Tata Group—are also making a play in the sector with their JioMart and Tata Digital enterprises.
"Shopee is coming to India!" announces a video posted earlier in August that promises free shipping and no commission fees for sellers and buyers. However, the company did not reveal as to whether they would launch in India.
India Covid Crypto Relief Fund to donate $15 mn to UNICEF
India Covid Crypto Relief Fund will donate $15 million (approx Rs 110 crore) to United Nations Children’s Fund (UNICEF) India to procure 160 million RUP syringes, Polygon cofounder Sandeep Nailwal announced on Twitter.
The relief fund has also partnered with the Ministry of Health to speed up the deployment of vaccines in the country.
“While talking to officers at Ministry of Health and Family Welfare, Crypto Relief volunteers understood that while Government of India is taking steps for securing the required vaccines, syringes are equally important for successful vaccination drive, and they’re in shortage,” Nailwal wrote on microblogging platform Twitter on Friday.
India Covid Crypto Relief Fund was launched in April amid the second wave of the pandemic by Nailwal, Etherum cofounder Vitalik Buterin, and former Coinbase technology chief Balaji Srinivasan has also contributed to the fund.
GLOBAL TECHNOLOGY & STARTUP NEWS
Australia considering new laws for Apple, Google, WeChat digital wallets
The Australian government is considering new laws that would tighten the regulation of digital payment services by tech giants such as Apple and Google, according to Reuters.
Treasurer Josh Frydenberg said he would “carefully consider” that and other recommendations from a government-commissioned report into whether the payments system had kept pace with advances in technology and changes in consumer demand.
Services such as Apple Pay, Google Pay and China’s WeChat Pay, which have grown rapidly in recent years, are not currently designated as payment systems, putting them outside the regulatory system.
“Ultimately, if we do nothing to reform the current framework, it will be Silicon Valley alone that determines the future of our payments system, a critical piece of our economic infrastructure,” Frydenberg said in an opinion piece published in the Australian Financial Review newspaper.
The Bank for International Settlements (BIS) earlier this month called for global financial watchdogs to urgently get to grips with the growing influence of ‘Big Tech’, and the huge amounts of data controlled by groups such as Google, Facebook, Amazon and Alibaba.
The Australian report recommended the government be given the power to designate tech companies as payment providers, clarifying the regulatory status of digital wallets.
It also recommended the government and industry together establish a strategic plan for the wider payments ecosystem and that a single, integrated licensing framework for payment systems be developed.
Affirm shares soar on news of Amazon partnership for 'buy now, pay later'
Amazon is diving into the 'buy now, pay later' space. The e-commerce giant is teaming up with Affirm for its first partnership with an installment payment player on the popular e-commerce site, CNBC reported.
Affirm’s buy now, pay later checkout option will be available to certain Amazon customers in the US starting Friday with a broader rollout in the coming months, the companies said in a statement. The partnership will let Amazon customers split purchases of $50 or more into smaller, monthly installments.
Affirm’s stock spiked as much as 48 percent on Friday, adding more than $8 billion to its market capitalization, later settling up nearly 33 percent.
Affirm is one of the best-known installment payment options. It works with more than 12,000 merchants, including Peloton and Walmart.
Affirm told CNBC that some of the Amazon customer loans will bear interest, but some will come with 0 percent APR. Other installment-type options are available on Amazon through credit cards.
Marketed as an alternative to credit cards, BNPL services have soared in popularity during the pandemic as consumers seek options that make purchases easier on their wallets.
Jack Dorsey's Square this month agreed to buy Australian BNPL pioneer Afterpay for $29 billion and a report said in July that Apple and Goldman Sachs were readying a version of the service.
Google Play app store revenue hit $11.2 bn in 2019, lawsuit says
Google has generated $11.2 billion in revenue from its mobile app store in 2019, Reuters reported.
Attorneys general for Utah and 36 other US states or districts suing Google over alleged antitrust violations with the app store also said in the newly unredacted filing that the business in 2019 had $8.5 billion in gross profit and $7 billion in operating income, for an operating margin of over 62 percent.
The figures include sales of apps, in-app purchase and app store ads. Google told Reuters the data "are being used to mischaracterize our business in a meritless lawsuit."
The company and its accusers said, in a separate filing on Saturday, a trial in late 2022 is possible over whether Google abuses its alleged monopoly in app sales for Android devices.
In its quarterly financial disclosures, Google groups Play app revenue with that of other services and accounts for the store's ad revenue as part of another broader category.
Attorneys general, as well as mobile app developer Epic Games and others separately suing Google, have contended that it generates huge profits through the Play Store by taking 30% of the fee for every digital good sold inside an app. The plaintiffs say Google's cut is arbitrarily high, siphoning app developers' profits.
Google argues that alternatives exist to Google's store and payment systems, though critics say those routes are unfeasible and were sometimes blocked.
Plaintiffs allege that Google through anticompetitive deals extended benefits to and imposed restrictions on major developers such as "League of Legends" maker Riot Games to keep them from leaving the Play Store.
A filing by Epic Games unsealed this month said Google, according to internal documents, feared losing $1.1 billion in annual app store profit if the Play Store was successfully bypassed.
Chinese social media platforms to "rectify" financial self-media accounts
China's top social media platforms, Wechat, Douyin, Sina Weibo and Kuaishou, said on Saturday they would begin to rectify irregular practices of "self-media" accounts that publish financial information, reported state media Global Times.
This follows an announcement by China's cyberspace regulator, the Cyberspace Administration of China (CAC), that it would look into accounts that have repeatedly released financial news illegally, distorted economic policy interpretation, badmouthed financial markets, spread rumours and disrupted network communications.
The term "self-media" is mostly used on Chinese social media to describe independently operated accounts that produce original content but are not officially registered with the authorities.
Wechat said in a statement on Saturday that from now until Oct. 26, it would investigate and shut down financial self-media accounts that "badmouth the financial market" and "blackmail and spread rumors."
Sina Weibo, Douyin and Kuaishou also released similar statements on Saturday, reported the Global Times, with Sina Weibo and Kuaishou adding that they would severely crack down on accounts that violate the rules.
The announcements come amid a recent crackdown by Beijing on the tech sector. China is also framing rules to ban internet companies whose data poses potential security risks from listing outside the country, including in the United States.
Clubhouse launches spatial audio feature to help virtual chats feel life-like
Clubhouse, an audio-only chat app will launch a spatial audio feature to make voices sound as if they're coming from different directions, helping conversations and virtual performances feel more life-like, according to Reuters.
The app, which is backed by venture capital firm Andreessen Horowitz, jumpstarted the social audio trend last year and became known for chatrooms of thousands that included chief executives and celebrities. However, it faces increasing competition from larger tech giants like Facebook, Twitter, and Spotify, which have all introduced their own social audio chat features.
The new surround-sound-like feature will help Clubhouse lean into performances and entertainment rooms that have proliferated on the app.
Depending on how many speakers are in a Clubhouse room and a variety of other factors, the app's technology will assign users a spatial positioning, so that the listener will hear the voices surround them in their headphones, said Justin Uberti, Clubhouse's head of streaming technology.
The spatial technology also makes it easier to detect when different users are speaking, whereas people previously might have to pay attention to the speakers' cadence and vocal timbre, he added.
Clubhouse, which started as an invite-only app and recently was opened to all users, said more than 700,000 rooms are now created each day, up from 300,000 in May.
Spatial audio will roll out first to iOS users and then Android users soon after, as per Reuters.
First Published: IST