Startup Digest brings you a quick wrap of all the news that matters in the startup space.
RBI rejects Sachin Bansal's banking licence application
The Reserve Bank has rejected the application of Chaitanya India Fin Credit Private Limited, a microfinance entity of Navi Technologies, for on-tap universal private bank licences and small finance bank (SFB).
RBI has rejected 6 applicants seeking a bank licence, including an application from Sachin Bansal-led Chaitanya India Fin Credit.
Incidentally, this comes on a day when Chaitanya’s parent Navi Finserv announced a plan to raise Rs 600 crore rupees through non-convertible debentures. Chaitanya India Fin Credit is an NBFC-MFI arm of Bansal's Navi Group.
"We are going to evaluate the written response and chart out our next course of action. A lot of options are there in front of us and there are many things to explore like reapplying. The news is just out and we will have to wait for RBI's written responses and then respond," Sachin Bansal told CNBC-TV18.
“We haven't received a written response from RBI yet to understand exactly what happened. Will chart the next course of action after we get clarity. It is not the end of the road for us; we can re-apply,” Bansal added.
Crucial meet on May 18 to discuss 28 percent GST on online gaming; EGF urges govt to keep tax rate at 18 percent
The Group of Ministers (GoM) on online gaming, casinos and race courses will meet tomorrow morning to finalise its stand on applicability of GST rate, valuation on which GST should be levied, sources told CNBC-TV18.
Meghalaya CM Conrad Sangma likely to chair the meeting. The meeting is likely to decide to levy 28 percent GST on online gaming, race courses and casinos. The final report will be submitted to the GST Secretariat and put before GST Council for a final nod, sources added.
The government had in May last year set up a panel of state ministers for better valuation of services of casinos, online gaming portals and race courses for levying GST. The GoM, headed by Sangma, met early this month and discussed the applicable GST rate on these three services.
Currently, a tax rate of 18 percent is levied on the commission (Gross Gaming Revenue or GGR) collected by the online gaming platforms for each game that does not involve betting or gambling.
E-Gaming Federation (EGF), an organisation representing top online skill gaming operators in India, has urged the government to consider GGR for levying GST and keeping the service at an 18 percent slab.
“A higher tax burden will make the industry unviable. The gaming platform operators will be unable to continue operations at any meaningful level. Growth, innovation, employment opportunities, government revenues and most important responsible and safe gaming will be impacted in a big way. We urge the GoM to consider the industry’s unique needs and recommend the continuance of the current practice of considering GST to be paid on GGR, with the rate remaining at 18 percent. As online gaming is different from gambling and the Supreme Court and several High Courts have reaffirmed the status of skill-based games as legitimate business activity, rational tax treatment of online skill gaming will help in creating mutually benefitting situations for all the stakeholders,” said Sameer Barde, CEO, EGF.
HDFC and HDFC Life buy stake in Xanadu Realty for an undisclosed sum
HDFC and its subsidiary HDFC life insurance company have acquired a stake in real estate business accelerator firm Xanadu Realty after making a strategic investment in the company for an undisclosed sum.
The investment will bolster Xanadu Realty’s plans of strategic expansion initiatives and creating proprietary tech platforms, the company said in a statement.
“This strategic partnership will go a long way in unlocking exponential potential for Xanadu Realty and Indian real estate sector at large,” said R Karthik and Anurag Singhvi, MDs and Co-Founders, Xanadu Realty.
The firm claims to have grown 10 times in sales delivery since its inception in 2016. It has over 600 employees across Mumbai, Pune, and Bengaluru. The company has done client sales worth Rs 2,000 crore in the 2022 financial year and is expected to double the figure this fiscal.
BYJU’s in talks to acquire US-based Chegg: Report
Edtech decacorn Byju's is in talks to acquire California-based online tutoring company Chegg, the Economic Times reported, citing sources.
According to the report, if BYJU’s buys Chegg, a publicly traded company in the US, it may also help the edtech firm go public.
Raveendran had told ET, the next twelve months will be the best time to acquire companies. "We have made large, multi-hundred-million-dollar, acquisitions. Globally, we would have made four out of the top ten edtech acquisitions," he said. “We are looking at large multi-billion dollar acquisitions … that’s why we are accessing all kinds of capital. We are exploring acquisitions in the US.”
Of 1,023 requests, 952 from Indian law enforcement agencies: WazirX Transparency Report
WazirX received 1,023 requests from law enforcement agencies during October 2021 to March 2022, of which 952 came from Indian agencies, while 71 were from foreign agencies.
Crypto exchange WazirX received 1,023 requests from law enforcement agencies from October 2021 to March 2022, of which 952 came from Indian law enforcement agencies, while 71 were from foreign agencies, it revealed in its bi-annual Transparency Report.
All the requests were related to criminal activities and the exchange complied with all of them with a turnaround time of 22 minutes. Under the IT Act, companies are required to comply with information requests from law enforcement within 72 hours.
While 40 percent of the frauds reported were ponzi schemes and social engineering scams, 25 percent were related to impersonation and a further 25 percent were phising/airdrop scams, the report added.
WazirX also acted on requests from consumers and its legal team to lock 17,218 accounts. Of the total, 73 percent were based on consumer requests while the rest were locked at the behest of the legal team over disputes related to payments. The number of accounts locked during the six-month period rose 19 percent sequentially, WazirX stated.
MG Motor India announces winners of its Developer Program and Grant Seaosn 3
MG Motor India has announced 11 winners of its innovation programme — MG Developer & Grant Season 3. Supported by Startup India and Invest India, the programme encourages tech startups to build new, technologically advanced applications and experiences to strengthen India’s mobility space.
The 11 winners selected are Hyperreality Technology, SaleAssist Innov8, MSB Digital, Imaginate, Cymbeline Innovation, Sahayak Technologies, Voice of Things, XR labs, Papli Labs, Zekardo Automotive Solutions, and DocketRun Tech.
The winners have received grants and are engaged by MG and the consortium partners to meet business objectives.
D2C consumer brand iGRiD records 100 percent yearly growth
iGRiD, a D2C everyday consumer startup brand said it has clocked 100 percent year-on-year growth and is looking to double it by next year.
The firm will also expand its operations in North India, starting with Delhi. iGRiD sells top quality products at a pocket-friendly cost. It currently has 75 SKUs across 3 verticals: Home Essentials, Beauty and Healthcare.
“We have doubled our revenues year-on-year for the past two years now. We intend to expand our product range from the current 75 SKUs to 300. We are looking to add more SKUs in the verticals in which we are present. Also, we are aiming at increasing our revenues by more than 200 percent this financial year,” said Madhav Kota, Founder and Director, iGRiD.
LinkedIn introduces first class of Creator Accelerator Program in India
Professional networking website LinkedIn has introduced its first class of "Creator Accelerator Program" in India, which it launched this February.
A group of selected 200 Indian creators on LinkedIn will get access to a 10-week incubator programme that offers guidance and coaching, networking opportunities and a financial grant from the California-headquartered company, the firm said in a statement.
The India edition is a part of LinkedIn’s global Creator Accelerator Program, and follows its initial launch in the US in September 2021. With 88 million users, India is the fastest-growing market for the Microsoft-owned company, the firm added.
Automovill announces new franchise business model
Automovill, a full-stack mobility startup, has announced the launch of a new franchise model under its umbrella. The brand already runs two models — Spokes and Hubs.
As per the new model, the initial stage is Spoke and the second stage is the Hub, and finally, the Hubs will be eligible to become Automovill’s franchise.
The new franchise model will follow basic SOPs and criteria including a minimum of nine trained and dedicated manpower with two lifts, a washing area, a paint booth, a parking area for 30 cars, and more. The area of workshops could be somewhere in the range of 6,000-7,500 sqft. In some cases, it will be more, based on the city and number of vehicles.
“To ensure that the right people run these models for us, we have kept a three stage graduation process — spokes, hubs and then franchisee. We aim at launching 30 franchisee in the current fiscal, and expanding to at least 15 cities through this,” said Ramana Sambu, Co-Founder and Chief Business Officer, Automovill.
HempStreet inks strategic partnership with Israeli femtech firm Gynica
Cannabis startup HempStreet has partnered with Israel-based femtech company Gynica to strengthen research and development (R&D) capabilities and to co-develop clinically-proven phytopharmaceutical products to improve menstrual health and other ailments related to women.
Both Gynica and HempStreet have a strong focus on phytopharmaceutical products and together, the companies will co-develop medical products for the Indian market to tackle ailments specifically related to women's health, the firm said in a statement.
“This partnership is also representative of the focus of biotech innovation in India and Israel, that both share the same passion for phytopharmaceutical medicines and to solve problems for the world. We are confident this partnership will usher in a new era of women's healthcare not just for India but the world,” said Abhishek Mohan, Founder and CEO, HempStreet.
76.78 percent organisations ready to give employees their preferred work model: TeamLease Report
Over 300 organisations in the technology, manufacturing, BFSI, FMCG, retail, health and automobile sectors, are willing to adopt hybrid or virtual work model in a post-pandemic era. Atleast 76.78 percent are ready to give their employees the preference to choose their work model, according to a recent report by TeamLease, a people supply chain company.
The findings from the report also showed that 58.04 percent of surveyed organisations think 2022 is the year offices will become completely in-office. Although 43.46 percent of HR leaders conceded that their employees want to return to work.
While the future remote workforce is expected to grow, many will still want a place to connect with others in person. Co-working and community spaces are uniquely positioned to fill the void.
As per the report, 36.61 percent of respondents claimed they had office space on lease pre-pandemic but moved to co-working spaces afterward with an almost equal number of organisations (36.92 percent) saying they had office space on lease pre-pandemic but moved to fully-remote work settings without an operational office. While 21.42 percent of organisations didn’t see any change in their workspace status quo, 5.05 percent said they intend to stay a virtual-only organisation for the foreseeable future.
New Age consumers growing appetite for Korean Beauty: Pilgrim survey
Young consumers, especially women, have a growing affinity towards the latest K-beauty ingredient — 24K Gold. In the latest survey conducted by D2C beauty and personal care brand Pilgrim, 40 percent women expressed their desire to try products with 24K Gold as the key ingredient.
The data also showed that while rice water holds the top place (47.5 percent) amongst the skincare trends that consumers would want to try, 24K gold is quickly catching up with a 38.6 percnt share in consumer preference.
In the past 12 months, Pilgrim claims to have witnessed a 388 percent growth in month run rate. Out of this, 75 percent of revenue was driven by its K-beauty range, 25 percnet by the French beauty range before its new launch, and their newly launched Spanish beauty range also contributed to 18 percent of the revenue in the first quarter.
GLOBAL TECHNOLOGY & STARTUP NEWS
Musk links deal progress on proof of spam bot share on Twitter
Elon Musk said his $44-billion offer would not move forward until Twitter shows proof that spam bots account for less than 5 percent of its total users, hours after suggesting he could seek a lower price for the company.
"My offer was based on Twitter's SEC filings being accurate. Yesterday, Twitter's CEO publicly refused to show proof of <5% (spam accounts). This deal cannot move forward until he does," Musk said in a tweet.
Hours later, Twitter said it was committed to completing the deal at the agreed price and terms "as promptly as practicable".
After putting his offer on hold last week pending information on spam accounts, Musk said he suspected they account for at least 20 percent of users compared with Twitter's official estimate of 5 percent.
Microsoft CEO Satya Nadella tells employees that pay increases are on the way
Microsoft CEO Satya Nadella told staffers that the company is raising compensation as the labour market tightens and employees contend with increasing inflation.
A spokesperson for the company confirmed the pay increase, which was reported earlier by GeekWire.
“People come to and stay at Microsoft because of our mission and culture, the meaning they find in the work they do, the people they work with, and how they are rewarded,” the spokesperson told CNBC in an email. “This increased investment in our worldwide compensation reflects the ongoing commitment we have to providing a highly competitive experience for our employees.”
Nadella told employees that the company is “nearly doubling the global merit budget” and allocating more money to people early and in the middle of their careers and those in specific geographic areas. He said the company is raising annual stock ranges by at least 25 percent for employees at level 67 and under. That includes several tiers in the company’s hierarchy of software-engineering roles.
Google opens new ‘Bay View’ campus: Report
Google this week is opening its newest campus in Mountain View, California, and executives say they aim to make it a place where employees in the company’s advertising division feel more comfortable returning to the office for decades to come.
The campus dubbed “Bay View” is located on 42 acres adjacent to NASA’s Ames Research Center in Mountain View and will house 4,000 employees working on its ads products led by Google’s VP of Ads, Jerry Discshler. It includes two office buildings, a 1,000-person event centre and 240 temporary hotel units for employees in town short-term.
It’s also the company’s first ground-up developed campus. Google’s other campuses are pre-existing buildings that had been modified by the company, a spokesperson told CNBC.
JD.com beats revenue estimates as lockdowns boost e-commerce demand
Chinese e-commerce group JD.com beat Wall Street estimates for quarterly revenue on Tuesday, as more people shopped on its platform following lockdowns in mainland China to fight a fresh COVID-19 outbreak.
The company reported revenue of 239.66 billion yuan ($35.57 billion) for the quarter ended March 31, compared to analysts' estimates of 236.66 billion yuan, according to IBES data from Refinitiv.
Excluding items, JD.com posted a profit of 2.53 yuan per American depository share (ADS), compared with analysts' expectations of 1.62 yuan.
The net loss attributable to ordinary shareholders stood at 2.99 billion yuan, compared with a profit of 3.62 billion yuan a year earlier.
Tencent Music's first-quarter revenue downbeat
China's Tencent Music Entertainment posted a 15 percent slump in first-quarter revenue, matching expectations, but saw its shares join a sector-wide surge on Tuesday as hopes grew for a loosening of regulatory curbs on China's tech giants.
Tencent Music said revenue dropped to 6.64 billion yuan ($979 million) in the first quarter ended March 31, partly due to lower ad sales after a fresh bout of COVID-19 cases in China. Net income attributable to equity holders of the company fell by a third to 609 million yuan.
The firm, 49 percent owned by tech giant Tencent, reported its biggest revenue driver, social entertainment services, saw a 21 percent fall in quarterly sales. Paying users in the segment fell to 8.3 million from 9 million in the previous quarter.
Uber launches robot food delivery in California
Uber has launched pilot food delivery services with autonomous vehicles in two California cities, and said it was adding electric vehicle charging stations into its global driver app, Reuters reported
The announcements are part of Uber's annual product event where the ride-hail and food delivery company showcases the latest updates to its app.
Uber announced one food delivery service using autonomous cars, and a separate pilot using sidewalk robots. Both services are available to Uber Eats users in Santa Monica and West Hollywood in California, and consumers will have the ability to opt out of the programmes.
Investors withdraw over $7 billion from tether
Investors have withdrawn more than $7 billion from tether since it briefly dropped from its dollar peg, raising fresh questions about the reserves underpinning the world’s largest stablecoin.
Tether’s circulating supply has slipped from about $83 billion a week ago to less than $76 billion on Tuesday, according to data from CoinGecko.
The so-called stablecoin is meant to always be worth $1. But on Thursday, its price slipped as low as 95 cents amid panic over the collapse of a rival token called terraUSD.
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