Here are the top headlines from the startup space.
Swiggy rolls out $35-40 million ESOP liquidity programme
Foodtech startup Swiggy on Wednesday announced that it will allow employees to liquidate their stock options worth $35-40 million over the next two years -- in July 2022 and 2023. The programme is based on its current valuation of $5.5 billion and comes as it looks to help its staff create wealth. All employees with stock options will be eligible to participate.
The value of the stock options will increase in tandem with the company’s valuation. "This is an industry-first initiative whereby we are democratizing wealth creation by enabling all our ESOP holding employees to participate in our committed liquidity events in 2022 and 2023," said Girish Menon, head of human resources, Swiggy.
Swiggy had previously announced employee share buybacks in June 2018 and November 2020. The buyback was estimated at $7 million to $9 million, with 40 percent of the company's stock option holders eligible for the exercise then. The latest buyback decision follows the company raising $1.25 billion from Softbank and Prosus in July. Swiggy is in talks with existing and new investors to raise close to $1 billion, for a valuation of above $10 billion, sources had told CNBC-TV18.
Investcorp eyes capital boost for online retailer FreshToHome
Bahrain-based Investcorp aims to more than double its private equity investments in India over the next few years and is currently looking to raise new capital for online retailer FreshToHome, in which it invested last year, an executive told Reuters. Investcorp is currently managing around $300 million of private equity investments in India, a large majority of which was made over the past 18 months, said Gaurav Sharma, head of private equity at Investcorp India.
The firm, which focuses on private equity, real estate, credit management and absolute return investments, plans to more than double that amount as it seeks to capitalise on India's digitalisation drive, accelerated by the COVID-19 pandemic. "I would say in the next three to four years we would want to more than double assets under management and invest close to $400-500 million at least in India," Sharma told Reuters.
Sharma said Investcorp was working with a global investment bank to raise primary capital for FreshToHome, a direct-to-consumer meat and seafood retailer, which is aiming to expand in other markets such as the United Arab Emirates and Saudi Arabia. Investcorp invested in the firm in November last year as part of a $121 million funding round alongside other investors.
The new funding could exceed $200 million, he said, adding that an IPO - while not currently on the cards - could be considered in about two years.
The Good Glamm Group acquires The Moms Co.
Content-to-commerce group, the Good Glamm Group has acquired Mom and Baby DTC brand, The Moms Co. to further strengthen its growth across South Asia. With this acquisition, The Moms Co. aims to grow to a Rs 500 crore revenue run rate in the next two years. While the company has not stated the size of the acquisition, it claims, this acquisition marks India’s largest DTC transaction in the beauty and personal care segment. Sources tell CNBC-TV18 that the size of the deal was close to Rs 500 crore.
The Moms Co. will continue to work as an independent entity. Over the last four years, the brand has catered to over two million customers across 20,000 pin codes in India. The founders Malika Sadani and Mohit Sadaani will work closely with Naiyya Saggi and Priyanka Gill, co-founders, Good Glamm Group to accelerate The Moms Co.'s presence not just in India, but across the world.
Under the group, the brand will be able to leverage a large digital audience of over 100 million users across POPxo and BabyChakra, over 220,000 Plixxo influencers and BabyChakra’s 10,000 doctors network. The brand will ramp up its retail presence from its 1,500 retail touchpoints today to over 20,000 from the group to drive adoption of its personal care and baby care ranges.
Being a mom-led brand, The Moms Co. will also have access to data-driven insights from the group’s content platforms into what millennial women and moms are looking for. These will be integrated into The Moms Co's product development engine to accelerate the creation, launch and marketing of products across skin, hair, bath and body, and mother and baby personal care.
BharatPe forays into Buy Now Pay Later segment with launch of 'postpe'
Fintech company BharatPe has announced its foray into the 'Buy Now Pay Later' (BNPL) segment, with the launch of ‘postpe’. Customers using the postpe platform can download the app from Play Store and avail interest-free credit limit of up to Rs 10 lakh. The company said that postpe is not only limited to big-ticket purchases but can also be used for micro-purchases, making it the first of its kind.
BharatPe stated that it aims to facilitate a loan book of $300 million on postpe in the first 12 months for its lending partners. The fintech company added that customers can shop across offline as well as online and repay easily through EMIs. All a customer has to do is scan the QR code through the postpe app and pay using credit. Users can also pay through a postpe card that will be accepted across millions of offline as well as e-commerce platforms. Cashbacks and rewards are also on offer.
Ashneer Grover, co-founder and managing director at BharatPe said their aim is to make credit available for everyone. Prior to this, BharatPe announced the launch of 12 percent club, where users have an option to invest and earn up to 12 percent annual interest or borrow at a competitive interest rate of 12 percent.
Voice AI startup Mihup launches Virtual Interaction Analyst (VIA) 2.0
Vernacular voice interface platform Mihup Communication has launched the second generation of its Virtual Interaction Analyst (VIA) platform in India.
According to the company, with Mihup VIA 2.0, companies get an advanced AI-powered interaction analytics platform that can analyse 100 percent of conversations across voice, chat or email channels thereby enabling better Audit and Compliance as well as automation of Quality Analysis. The advanced and multi-lingual platform can automatically evaluate interactions on various parameters including empathy, product information and accuracy of response provided by the agents, the firm added.
Gaming industry to move court against Karnataka online gaming ban
24 hours after the Karnataka government notified the ban on money based online gaming, the industry is looking at legal recourse to wiggle out of the ban. The gaming industry will move Karnataka High Court and seek legal recourse against the online gaming ban in the state. All India Gaming Federation, The Online Rummy Federation are evaluating legal challenges.
Gaming associations while speaking to CNBC-TV18 cited favourable verdicts in Madras HC, Kerala HC that overturned a similar ban on gaming apps.
Real-money gaming startups have started blocking access to residents in Karnataka after the state government notified the online gambling law with immediate effect on October 5.
Gaming platform Mobile Premier League (MPL) was among the first few gaming startups that began blocking access to users in Karnataka on Wednesday following a ban on online gaming. The newly-minted startup unicorn also shows an error message stating that users cannot play cash-based games since "the law in your state does not allow you to play the game with cash". The app however allows users to play free battles at the time of writing this article.
Fantasy sports major Dream11 was still operational, but Paytm First Games was not. The law, which came into effect late on Tuesday, bans online games involving betting and wagering, and "any act or risking money, or otherwise on the unknown result of an event including on a game of skill". The law imposes hefty fines and prison terms on violators and has been implemented amid growing concerns that online gaming platforms, like gambling, are addictive and can cause financial harm.
Credilio hits $1 million annual run rate within 6 months of launch
Fintech startup Credilio has announced that they have hit the $ 1 million mark in ARR just six months into its operations. The company said its products have seen instant adoption and rapid growth in the first 6 months. It is on track to reach over 1 million consumer applications from 25 locations assisted by 10,000 Advisors by March 2022, it added.
Credilio aims to solve this by creating India’s first advisor-led technology platform for the distribution of personal finance products. The company helps advisors educate customers and recommend products that are best suited to meet their unique requirements, enabling them to purchase credit cards & loans seamlessly.
Major boost to small players in e-retail market due to pandemic: Unicommerce Report
India’s online retail market, dominated by electronics and apparel products until the coronavirus outbreak, has seen blazing growth in other smaller and emerging categories since then, a new report said.
According to Unicommerce, e-commerce focused supply chain SaaS technology platform, fast-moving consumer goods, beauty and personal care products, health and pharmaceutical items, home decor and sports equipment are among the categories finding new buyers online.
Unicommerce analysed online purchases from January to August 2021 and last year with a sample size of over 40 million orders for its emerging E-commerce Segments 2021 report, which highlighted segments that had a limited online presence pre-pandemic but have grown in the last 18 months.
However, the market shares for such categories changed significantly in 2021, with tier 1 cities accounting for over 160 percent growth for such emerging segments with a market share contribution of 52 percent. Data from Unicommerce showed that volumes of fast-moving consumer goods (FMCG) products grew 74 percent from the year-earlier during January-August 2021, while beauty and personal care products clocked 143 percent, the highest among all emerging segments.
GLOBAL TECHNOLOGY & STARTUP NEWS
Zuckerberg denies claims Facebook putting profit over safety
Facebook CEO Mark Zuckerberg has hit back at claims the social media giant fuels division, harms children and needs to be regulated, saying the claim the company puts profits over safety is "just not true". "The argument that we deliberately push content that makes people angry for profit is deeply illogical," Zuckerberg wrote in a note to Facebook employees that he then posted on his account, hours after whistleblower Frances Haugen testified before US lawmakers.
"I don't know any tech company that sets out to build products that make people angry or depressed. The moral, business and product incentives all point in the opposite direction," Zuckerberg added. Zuckerberg’s statement comes after the company faced a more than six-hour-long blackout across platforms due to a “faulty configuration change”. Services on Facebook, Instagram and WhatsApp were affected in one of the longest outages the company ever faced.
Telegram founder says over 70 million new users joined during WhatsApp outage
Telegram, an instant messaging app, gained more than 70 million new users during Monday's Facebook outage, its founder Pavel Durov said, as people worldwide were left without key messaging services for nearly six hours.
"The daily growth rate of Telegram exceeded the norm by an order of magnitude, and we welcomed over 70 million refugees from other platforms in one day," Durov wrote on his Telegram channel.
Durov said some users in the Americas may have experienced slower speeds as millions rushed to sign up at the same time, but that the service worked as usual for the majority. EU antitrust chief Margrethe Vestager said the outage demonstrated the repercussions of relying on just a few big players and underscored the need for more rivals, Reuters reported. Russia said the incident showed Moscow was right to develop its own sovereign internet platforms and social networks.
EU lawmaker says US tech giants should be regulated where they are based
US tech giants such as Apple, Google, Facebook and Amazon should be regulated by the EU country where they are based under proposed EU rules, a top lawmaker told Reuters. The country of origin principle is set out in EU antitrust chief Margrethe Vestager’s draft rules known as the Digital Services Act which requires US tech giants to do more to police the internet for illegal and harmful content.
The principle means Ireland is responsible for regulating Apple, Alphabet unit Google and Facebook because they have their European headquarters there while Amazon is subject to Luxembourg’s supervision. France and a few other countries are seeking to broaden the scope, worried that enforcement concentrated in just two countries may weaken the rules and also slow down decision-making.
Lawmaker Christel Schaldemose, who is steering the DSA through the European Parliament and has the power to amend or add other provisions to it, supports the act’s core proposal." It makes sense to keep the country of origin principle,” she told Reuters in an interview. Schaldemose however wants to go one step further than Vestager by including a ban on some targeted advertising in the DSA."
Targeted advertisements that are based on your behaviour on Facebook, for instance, should not be allowed. Advertisements based on the fact that you have visited websites for buying shoes and things like that, classic commercial advertisements should probably be allowed,” Schaldemose said. Schaldemoe said she hopes to finalise her draft with other lawmakers in the next two months so she can thrash out a deal with EU countries next year before the proposed rules can be implemented.
Amazon CEO Andy Jassy says the company could do more to treat workers better
Amazon CEO Andy Jassy said the company could do more to treat employees better and acknowledged one of its approaches to worker safety during the coronavirus pandemic fell short. "I think if you have a large group of people like we do — we have 1.2 million employees — it’s almost like a small country,” Jassy said on stage at the GeekWire Summit in Seattle. “There are lots of things you could do better."
When asked what Amazon could do better, Jassy pointed to the company’s processes around pandemic leave in its warehouses. Amazon told workers it would provide up to two weeks of paid sick leave for employees who showed symptoms, had the virus, or were in quarantine. But that process did not work perfectly. Amazon employees told CNBC last April they experienced issues getting paid while they were out on leave.
Additionally, the company’s highly automated human resources systems became so overloaded with workers requesting COVID-19 leave that some employees were mistakenly denied sick leave or threatened with termination, Bloomberg reported.
"During the pandemic in our fulfilment centres, we had a system and a process around people being able to request short and long term leave and the process just didn’t scale," Jassy said. "We never anticipated having a pandemic or having demand like that. It didn’t work the way we wanted it to work," he added.
Amazon and other e-commerce companies benefited from the coronavirus-fueled surge in online orders. But the pandemic also generated unprecedented strain on Amazon’s fulfilment and logistics operations and tested the company’s relationship with its front-line workers, who couldn’t work remotely. Amazon disclosed last October that nearly 20,000 front-line workers contracted Covid-19 between March 1, 2020, and Sept. 19, 2020.
Google to invest $1 billion in Africa over five years
Google plans to invest $1 billion in Africa over the next five years to ensure access to fast and cheaper internet and will back startups to support the continent's digital transformation, Reuters reported. The unit of US tech company Alphabet made the announcement at a virtual event where it launched an Africa Investment Fund, through which it will invest $50 million in startups, providing them with access to its employees, network and technologies.
In collaboration with not-for-profit organisation Kiva, Google will also provide $10 million in low-interest loans to help small businesses and entrepreneurs in Ghana, Kenya, Nigeria and South Africa get through the economic hardship created by COVID-19. "Today I'm excited to reaffirm our commitment to the continent through an investment of $1 billion over five years to support Africa's digital transformation to cover a range of initiatives from improved connectivity to investment in startups," said Sundar Pichai, CEO of Google and Alphabet.
Google said a programme pioneered last year in Kenya in partnership with Safaricom that allows customers to pay for 4G-enabled phones in instalments would be expanded across the continent with mobile operators such as MTN, Orange and Vodacom. The company has been building an undersea cable to link Africa and Europe, which it says will bring faster internet and lower connectivity costs.
France's Thales partners with Google on secure cloud services
Defence company Thales and Google are partnering to offer state-vetted cloud computing services for the storage of some of France's most sensitive data, Reuters reported. The alliance between Thales, Europe's largest defence electronics supplier, and the Alphabet unit fulfils a May government plan under which France acknowledged US technological superiority in the field.
The French government said then that cloud computing services developed by Google and Microsoft could be used to store France's most sensitive state and corporate data provided the services were licensed to French companies. Thales and Google Cloud said they will create a France-based company and Thales will be the majority shareholder. That company will provide the whole range of Google Cloud's services but its network and servers would be separate from those used for regular Google clients. The Thales-Google partnership will need the blessing of France's cybersecurity agency ANSSI to get a "trusted cloud" label.
Pinterest launches new ad features to drive shopping
Pinterest will roll out new features for brands to promote products and ideas to users, the digital pinboard as part of an effort to grow online shopping on its site. The features come as social media rivals including Facebook, TikTok and Snap compete for the lucrative e-commerce market with in-app shopping or virtual clothing try-ons.
Brands can now upload their product catalogues and Pinterest will automatically pull items into a slideshow advertisement that will be tailored to users based on their interests, as per Reuters. The feature will make it easier for advertisers to have video ads, which can be time-consuming to produce, said Julie Towns, global head of ads product marketing at Pinterest.
Pinterest will also introduce an ad format to facilitate companies and content creators working together on paid partnerships. For example, a creator can make a video post about a dessert recipe, and a baking brand can pay to promote that ad to more users.
(Edited by : Jomy Jos Pullokaran)