STARTUP DIGEST: Tata Digital to acquire 1MG, BharatPe buys PAYBACK


There were several important developments in the startup space on Thursday. Here are the stories that made headlines in the startup universe today.

STARTUP DIGEST: Tata Digital to acquire 1MG, BharatPe buys PAYBACK
Tata Digital's shopping spree continues, will buy a majority stake in digital health startup 1MG. BharatPe has made its first acquisition by buying out loyalty platform PAYBACK. Walmart has said it is "open to an IPO" for Flipkart.
Here are the top stories from the startup universe today:
Tata Digital to acquire 1MG; company to be valued at $450 million
Tata Digital, the subsidiary of Tata Sons is set to acquire a majority stake of between 50-60 percent in digital health startup 1MG. The company will be valued at $450 million post-money, as per sources, with the deal also likely to mark exits for some early investors.
Prashant Tandon, the CEO of 1MG, told CNBC-TV18 in an exclusive interview that this is a significant milestone for the company in its journey. “1MG was started to make healthcare understandable, accessible, and affordable and in Tata Group we find a very unique alignment, a brand name that is trusted, a group that is known to do things the right way,” he said.
Started in 2015, 1MG is a leading player in the eHealth space and enables easy and affordable access to a wide range of products like medicines, health and wellness products, diagnostics services and tele-consultation to customers.
"The investment in 1MG strengthens Tata's ability to provide superior customer experience and high-quality healthcare products & services in the e-pharmacy and e-diagnostics space through a technology-led platform," Tata Digital CEO Pratik Pal said in a statement.
Tandon added that it perfectly suits 1MG to work with Tata as partners to take their startup to the next level and create India’s best healthcare company from here.
“Broadly, digital health space is seeing a massive change. It is an inflection point. Especially post the pandemic the need and appreciation of delivery of healthcare services where the consumer is at their doorstep has only grown manifold,” he said.
Open to IPO for Flipkart but no specific timeline: Walmart
Global retail giant Walmart has said it is "open to an IPO" for its Indian e-commerce arm Flipkart but there is "no specific timeline" for the share sale.
Both Flipkart and payment app PhonePe continue to do well, Walmart International President and CEO Judith McKenna said while speaking at the DB Access Global Consumer Conference on June 7.
"We always made it clear from the day we made the acquisition or the investment, that we would be open to an IPO," said McKenna. However, she noted that there is no specific timeline for the IPO.
"But if we build a strong business, and we continue to do the things that we need to do to ensure that long-term and sustainable growth, that is a possible route that we would consider in the future, but certainly no specific timeline on that (IPO)," she added.
Walmart Inc owns a majority stake in Flipkart. It had invested $16 billion in 2018 in the Bengaluru-based e-commerce platform to pick up 77 per cent stake. In July last year, it led a $1.2-billion round in Flipkart, valuing the e-commerce firm at $24.9 billion.
According to sources, SoftBank Group is in discussions with Flipkart to pump in about $500-600 million into the Walmart-owned e-tailer. The transaction -- which may also see participation from Singapore's sovereign wealth fund GIC and Canadian pension fund CPPIB -- could value Flipkart at $30-32 billion, they added.
BharatPe acquires loyalty platform PAYBACK, aims to expand merchant base to 20 million by 2023
Merchant payments provider BharatPe has made its first-ever acquisition by buying out loyalty platform PAYBACK from American Express and ICICI Investments Strategic Fund. The value of the deal remains undisclosed.
Post-acquisition, PAYBACK will become a wholly-owned subsidiary of BharatPe and will continue to offer its services to existing customers across India. PAYBACK allows users to earn and redeem points while shopping online or offline.
With this acquisition, BharatPe plans to help its 6 million small merchants and kirana store partners in attracting more customers through reward and loyalty programmes, the company said in a statement.
Additionally, BharatPe will seek to direct over 100 million existing PAYBACK users to its merchant partners. Thus, enabling the company to attract more merchants to its roster and the move fits into BharatPe's expansion strategy of growing its merchant base to over 20 million by 2023. acquires fitness startup Tread
Making a foray into the fitness hardware segment, health and wellness startup has acquired Tread, a Bengaluru-based connected fitness start-up. The company however has not disclosed the amount.
The acquisition of Tread will help launch its hardware-at-home vertical, the company said. It plans to launch smart bikes in the India market. These smart bikes would be sold on the platform and offline stores in the next two to three months.
Iora Health to be acquired by One Medical
US-based primary healthcare startup Iora Health has entered into an agreement to be acquired by healthcare company One Medical, reported The Economic Times.
Report adds all-stock transaction will value Iora Health at $2.1 billion and will give shareholders of the startup a 26.75% stake in One Medical.
With the acquisition, One Medical will expand its presence into primary care at every stage of life, the report added. PremjiInvest had led a $126 million funding round in February last year.
Wellbeing Nutrition raises undisclosed capital from Klub
Wellbeing Nutrition, an organic plant-based nutrition startup, has raised an undisclosed amount in growth financing through Revenue Based Financing platform, Klub.
With the additional fund raise, the company will be focusing on ramping up operations, including marketing and working capital.
In a statement, the company said it has grown at about 45 percent monthly CAGR over the last 12 months.
Top US antitrust lawmaker targets Big Tech with new bills
Lawmakers in the U.S. House of Representatives are working on drafts of five antitrust bills, Reuters report. 4 of these antitrust bills are aimed directly at reining in Big Tech, and may introduce them within days, Reuters rrported quoting sources.
The process may be changed before they are introduced. They may be introduced this week but that may be delayed, as per the report.
Among the five bills being considered, two address the problems of platforms, like Amazon creating a space for businesses to sell products and then competing against those products.
One of the two would make it illegal in most cases for a platform to advantage its own products on its platform with potentially a fine of 30 percent of the US revenues of the affected business if they violate the measure. A second requires platforms to sell any business if owning it creates an incentive for the platform to advantage its own products or lines of business.
A third bill would require a platform to refrain from any merger unless it can show the acquired company does not compete with any product or service the platform is in.
A fourth would require platforms to set up a way for users to transfer data if they desire, including to a competing business. A fifth is similar to a Senate measure that would raise what the Justice Department and Federal Trade Commission (FTC) charge to assess the biggest companies to ensure their mergers are legal and increase the budget of the agencies.
The House Judiciary Committee's antitrust panel wrote a report that was issued in October 2020 that spelled out abuses by four big technology companies, Alphabet Inc's , Google, Apple Inc , and Facebook . The report -- which was scathing -- suggested expansive changes to antitrust law.
Google, Facebook pledged millions to local news outlets globally
Facing regulatory and political pressure, Facebook and Google in recent years committed a combined $600 million to support news outlets globally - many of them local or regional enterprises foundering in a digital age.
Reuters reported that thousands of media outlets received financial and other support for fact checking and reporting to training.
While some publishers express gratitude for contributions, several media analysts and news business executives told Reuters that the funding does not nearly compensate for the tens of billions of dollars publishers lost. This as the tech companies gobbled up the digital advertising market.
Google and Facebook accounted for 54 percent of US digital advertising revenue in 2020, according to eMarketer, a market research company.
Some critics also dismissed the projects, including contributions of $300 million from each company. Both tech companies face battles over compensation for news content worldwide, as well as antitrust lawsuits from regulators and publishers.
However, the tech giants told Reuters that they are genuinely committed to helping local and regional outlets, and both will continue to offer support after the $600 million initiatives expire in coming months.
GameStop taps Amazon Australia chief as CEO, may sell shares
GameStop has named the head of Amazon's Australian business as its CEO and said the struggling video game retailer may sell new shares, sending its volatile stock down 7 percent in extended trade and disappointing some of its ardent fan base of individual investors.
Matt Furlong, a nine-year Amazon veteran, will succeed George Sherman as chief executive officer. GameStop said Mike Recupero, who spent over 17 years at Amazon, will succeed Jim Bell as chief financial officer.
Furlong will join on June 21, while Recupero, who was chief financial officer of Amazon's North American consumer business, will come on board on July 12, the company said.
GameStop's shares have almost doubled in the past month, approaching their January high. That was when a massive surge driven by investors on Reddit's wallstreetbets trading forum made the stock the most traded on the U.S. market for several days.
Tesla to launch high-end Model S ‘Plaid’ to fend off Mercedes, Porsche
Tesla will deliver a high-performance version of its Model S, aiming to reignite interest in the nearly decade-old sedan and fend off rivals such as Porsche, Mercedes-Benz and Lucid Motors in the luxury electric vehicle market.
Tesla redefined electric cars in 2012 when it launched its high-end Model S with a sleek design and long driving range, but is facing a raft of new challengers.
The latest price for the Model S Plaid is $10,000 more than what was displayed a few days ago on Tesla's website.

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