STARTUP DIGEST: Paytm slide show continues post-listing; Uber Eats to deliver cannabis in Canada

Paytm's parent company One97 Communications' shares continued to tumble on November 22 following a weak listing last week.

The stock is now 38 percent lower than the issue price in two trading sessions and more than $5 billion in market capitalisation has been erased since the listing.

On November 18, Paytm shares made a weak debut in the secondary market, with One97 stock ending 27 percent lower for the day compared to the issue price. The Paytm IPO, though oversubscribed, was booked 1.9 times. Paytm became one of the worst Dalal Street debutants of recent times.

Meanwhile, Paytm saw a 107 percent year-on-year increase in the gross merchandise value on its platform in the September quarter, and also saw loan disbursals reach 2.8 million in the quarter, double form the June quarter.

The GMV, which entails the payments made to merchants via Paytm's payment instruments, touched Rs 83,200 crore in October, which is a 131 percent year on year jump, the company said. The growth was aided by a strong festive season and festive spends, the company said. For the September quarter, the GMV stood at Rs 1.95 lakh crore, up 107 percent year on year.

The company has also seen a good growth in its monthly transacting users, which reached 57 million in the September quarter, and grew further to 63 million in the month of October, a 35 percent year on year jump.

The GMV per monthly transacting user has also increased to Rs 13,217 in the month of October, up from Rs 11,369 in the September quarter.

The Paytm slide post listing on Dalal Street is not good news for the category as a whole, according to Ashneer Grover, Co-Founder and MD of BharatPe.

Speaking in an interview with CNBC-TV18, the BharatPe MD said it was sad to see the recent developments with the Paytm IPO as the steep fall has a wider implication on the sector and is "category killing."

“I think the company simply seems to have not looked at where the market is, and had just gone ahead and priced itself where it wanted to. So it is a cumulative failure of the management, and the bankers. You know, 40 percent, down on a $20 billion stock, which is supposed to be the poster child of the Indian startup -- it is category killing,” said Grover.

Grover argued that the largest UPI player in the market is PhonePe and it is currently valued at $9 billion approximately. However, the Vijay Shekhar Sharma-led Paytm hit the market seeking a valuation of $20 billion.

"The largest UPI player PhonePe is valued at $9 billion. If Phonepe is valued at $9 billion, how can Paytm demand a $20 billion valuation?" he questioned. The BharatPe MD further said Paytm is seeing brand erosion and not just price erosion with this fall.

Another implication of the Paytm listing, according to Grover, will be that companies looking to list over the next 2-3 months will see a 'Paytm discount.'

"I expect IPO valuations to come down post-Paytm listing. I don't expect the public market to honour the kind of premium seen in private markets," he explained.

Online food delivery platform Swiggy has announced the launch of Swiggy One membership on November 22. The upgraded plan offers comprehensive coverage of all Swiggy services like Swiggy Genie, Swiggy Meat, Swiggy Instamart and food delivery.

Swiggy One is a single-tier membership that will provide free deliveries to consumers from 70,000 popular restaurants, and on all Instamart deliveries on all orders above Rs 99. Members will also receive up to 30 percent extra discount on restaurants, with other services like pick-up and drop service, which will be soon extended to Swiggy Genie and Meat too.

The membership has been priced at an introductory price of Rs 299 for the first three months and at Rs 899 for 12 months, with the plan being live in Lucknow, Pune, Trivandrum and Vijayawada, and expanding to over 500 cities in the next two weeks.

The company saw its valuation touch $10 billion in a recent funding round, where it was trying to raise $1 billion.

Edtech decacorn Byju’s is all set to acquire another startup in the language learning space, Hello English, according to Entrackr.

Hello English is in late-stage talks to get acquired by Byju’s in a deal worth $25 million. Besides India, Byju’s also plans to expand Hello English to overseas markets, including the Southeast Asia region (SEA), the report added.

Following the transaction, the Hello English team, along with the founders will join Byju’s. If the deal goes through, this will be the 10th acquisition for Byju’s in 2021.

Private equity venture Prosus Ventures (Naspers) has posted an 8 percent rise in first-half trading profit to $2.9 billion as revenue rose rapidly in its overall portfolio.

Swiggy delivered a “strong recovery” through the first half of the current financial year --April to September -- as its revenue from food delivery grew by 56 percent over this period, up 91 percent from pre-COVID levels, its investor Prosus said in a regulatory filing.

Prosus said that revenues at its e-commerce portfolio had risen by 53 percent to $4.2 billion, while that segment's trading loss increased to $372 million from a loss of $214 million in the same period a year ago.

In its separate earnings report, Naspers, South Africa's largest company by market capitalisation, posted a half-year revenue of $17.2 billion, up 29 percent from a year ago.

Prosus has backed some of the largest consumer internet companies globally. Its bets in India include PayU (which acquired BillDesk earlier this year), Meesho and Flipkart. Its stake in Swiggy rose to 36.3 percent after it infused an additional $274 million in the company this year.

Short video app Lomotif has announced its foray into India. The platform had a soft launch in India in early 2021 with the app being made available on Google Play Store and App Store.

Founded by Singapore-based Paul Yang, Lomotif was acquired by ZASH earlier this year. Its patent technology allows users to immerse themselves in a super-engaging reel format of content.

“We are grateful for the huge support that India has extended to Lomotif. Our user interest here is immense. We are happy to be present in this thriving space filled with talent and creativity. Lomo is synonymous with having a good time, and I hope our new Lomotif India channel will encourage people to create more interesting content,” said Ted Farnsworth, Chairman and Co-Founder of ZASH Global Media.

The platform will compete with players such as Moj, MX TakaTak and Josh.

After two years of deliberations, the joint parliamentary panel on the Data Protection Bill has adopted its report.

The committee was formed in December 2019 and was allowed five extensions. Several members of the committee filed dissent notes. With the adoption of this report, India could soon have a personal data privacy law as Parliament is likely to take this up in the upcoming winter session, which starts next week.

Members of the Congress, the BJD and the TMC on November 22 gave dissent notes to the JPC on the Personal Data Protection Bill after the panel adopted its report at its meeting here.

Congress leader Jairam Ramesh said he was compelled to submit a detailed dissent note on the bill as his suggestions have not been accepted and he was unable to convince members of the panel. From the TMC, MPs Derek O' Brien and Mahua Moitra submitted a dissent note, alleging the bill lacks adequate safeguards to protect the right to privacy of data principles.

Other Congress MPs who have submitted dissent notes are Manish Tewari, Gaurav Gogoi and Vivek Tankha. BJD's Amar Patnaik also submitted a dissent note on the bill. The Personal Data Protection Bill, 2019, was referred to the JPC for scrutiny before it is taken up by Parliament for consideration and passage. The report on the bill was delayed by the panel as its former chairperson Meenakshi Lekhi was elevated to the position of a minister and a new chairperson of the committee was appointed.

A Reserve Bank of India (RBI) Working Group (WG) on digital lending, including lending through online platforms and mobile apps, has noted that more than 600 illegal loan apps are operating in India.

The RBI panel found that between January and February 2021, 1,100 loan apps were available for Indian Android users in 80 app stores. Of these, 600 lending apps were illegal.

There have been several complaints of harassment by digital lending apps as well. Most of these apps were found to be unauthorised and operated by offshore entities. Reports have emerged on borrowers committing suicide following harassment by lending companies, The Times of India reported. Reports also said digital lenders repatriated profits unlawfully outside the country.

Although Digital Lenders Association of India (DLAI), formed by the stakeholders of the industry, had laid down a code of conduct for self-regulation, fraudulent activities continued in the absence of clear guidelines from the RBI.

“The thrust of the report has been on enhancing customer protection and making the digital lending ecosystem safe and sound while encouraging innovation,” the RBI said in a release.

According to the working group, some baseline standards of technology and compliance must be met as a precondition for offering digital lending solutions. It said loans should be directly disbursed to the bank accounts of borrowers and serviced through bank accounts of the digital lenders.

The group has sought comments from stakeholders and members of the public on the report on the RBI website by December 31.

The confidence injected by the COVID jab in the Indian consumer has led to greater spending on travel and movies this festive season, according to a report released by online payments company, PayU.

During the festive period this year, PayU registered a record high of eight million transactions on a single day. The overall transactions handled by the digital payments services provider increased by 17 percent while average spends went up by 52 percent compared to 2020.

On the e-commerce front, owing to week-long and month-long sales with deep discounts, the total number of transactions increased by 40 percent while the total spends went up by 50 percent.

Following the relaxation in travel norms and mass vaccination, the travel and hospitality sector saw an increase of 105 percent in transacting users this festive season compared to last year. Holiday packages received a boost with a record 200 percent growth in spends processed per day, according to the PayU Insights Report.

On the entertainment side, the gradual re-opening of public theatres and auditoriums post second wave of COVID-19 pandemic led to a recovery in digital payments for movies and events, with 264 percent growth in total number of transactions and 450 percent growth in total spends processed.

Australian small publishers will get a leg-up in their fight to secure licensing deals with Google and Facebook after the country's richest person said his philanthropic organisation would seek a collective bargaining arrangement for them.

According to Reuters, the Minderoo Foundation, owned by Andrew Forrest, Chairman of iron ore miner Fortescue Metals Group, plans to help 18 small publishers by applying to the Australian Competition and Consumer Commission (ACCC) on their behalf so they can negotiate together without breaching competition laws.

The move was welcomed by publishers, including the Star Observer, Australia's oldest LGBTQ title, which like some other small publishers did not get a deal with Facebook despite having secured a deal with Google.

The 18 small publishers being helped include online publications that attract multicultural audiences and focus on issues at a local or regional level, Emma McDonald, Director of Frontier Technology, a Minderoo Foundation initiative, said in a statement.

Google reiterated that "talks are continuing with publishers of all sizes." Facebook said it "has long supported smaller independent publishers."

The foundation's move comes after ACCC late last month allowed a body representing 261 radio stations to negotiate a content deal.

El Salvador plans to build the world's first ‘Bitcoin City,’ funded initially by Bitcoin-backed bonds, President Nayib Bukele said, doubling down on his bet to harness the cryptocurrency to fuel investment in the Central American country.

As per Reuters, speaking at an event closing a week-long promotion of Bitcoin in El Salvador, Bukele said the city planned in the eastern region of La Union would get geothermal power from a volcano and not levy any taxes except for value added tax (VAT).

Half of the VAT levied would be used to fund the bonds issued to build the city, and the other half would pay for services such as garbage collection, Bukele said, estimating the public infrastructure would cost around 300,000 Bitcoins.

El Salvador in September became the first country in the world to adopt Bitcoin as legal tender.

Ericsson has agreed to buy cloud communications firm Vonage in a $6.2 billion all-cash deal, as the telecom gear maker moves to broaden its 5G portfolio, Reuters reported.

The deal, one of the largest in Ericsson's history, follows its $1.1-billion purchase of Cradlepoint last year, which gave it access to tools that can connect devices using the so-called Internet of Things over a 4G or 5G network.

US-based Vonage makes Application Programming Interface (API), which helps different software communicate with each other.

Ericsson will pay $21 for each outstanding Vonage share, a 28 percent premium to November 19’s closing price and a 34 percent premium to the average of the last three months, a price analysts said was high.

Uber Technologies will allow users in Ontario, Canada, to place orders for cannabis on its Uber Eats app, marking the ride-hailing giant's foray into the booming business, Reuters reported.

Uber Eats will list cannabis retailer Tokyo Smoke on its marketplace on November 22, following which customers can place orders from the Uber Eats app and then pick it up at their nearest Tokyo Smoke store, the spokesperson said.

Uber, which already delivers liquor through its Eats unit, has had its sights set on the burgeoning cannabis market for some time now. Its CEO Dara Khosrowshahi told media in April the company will consider delivering cannabis when the legal coast is clear in the United States.

The partnership will help Canadian adults purchase safe, legal cannabis, helping combat the underground illegal market which still accounts for over 40 percent of all non-medical cannabis sales nationally, Uber said on November 22.