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STARTUP DIGEST: PhonePe's Rs 135-cr ESOP buyback, Flipkart to acquire majority stake in Sastasundar, Zomato a good investor in us: Grofers CEO & Alibaba slashes sales outlook

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There's been a lot of action in the start-up space. Startup Digest brings you a round-up

STARTUP DIGEST: PhonePe's Rs 135-cr ESOP buyback, Flipkart to acquire majority stake in Sastasundar, Zomato a good investor in us: Grofers CEO & Alibaba slashes sales outlook
Here are the top headlines from the start-up space this week.
Zomato a very good investor, will always keep dialogue open, says Grofers CEO Albinder Dhindsa on merger reports
E-commerce firm Grofers’ co-founder and CEO Albinder Dhindsa tells CNBC-TV18 that “Zomato is a very good investor in us and will always keep the dialogue open (on potential merger).”
Dhindsa’s comments come amid reports of food delivery giant Zomato investing approximately $500 million in the e-commerce firm.
The investment will likely value Grofers at around $1.5 billion, up from $1 billion when Zomato first invested in the start-up earlier this year with a $100-million cheque, ET reported.
PhonePe announces ESOP buyback worth Rs 135 cr for employees
Digital payments platform PhonePe has announced a buyback of employee stock options (ESOPs) worth Rs 135 crore.
The buyback offer follows a three-tier model, based on seniority, a statement said.
The company's founders will not be participating in the buyback, while the top leadership can sell up to 10 percent of their vested stock, it added.
All other current employees can sell up to 25 percent of their vested stock. PhonePe Head of HR Manmeet Sandhu said almost 75 percent of PhonePe's current workforce is eligible to participate in the current buyback offer, and “for most it’s the first time in their careers that they’ve either owned ESOPs or had a chance to liquidate them”.
Flipkart forays into healthcare, to acquire majority stake in Sastasundar
Walmart-controlled Flipkart has announced its entry into the healthcare segment and said it has signed an agreement to acquire a majority stake in Sastasundar Marketplace Ltd, an online pharmacy.
The e-commerce firm said it entered into the sector through the launch of Flipkart Health+ and as part of this development, it has signed a definitive agreement to acquire a majority share in Sastasundar Marketplace Ltd.
The development comes after the e-commerce major doubled its fulfilment capacity versus last year preparing for the festive season, with dozens of new fulfilment centres, more than 1,000 last mile delivery hubs and expanded relationship with kirana partners
Walmart International net sales were $23.6 billion, a decrease of $5.9 billion, or 20.1%, negatively affected by $9.4 billion related to divestitures, the company said during its Q3 earnings call on Tuesday. Changes in currency exchange rates positively affected net sales by approximately $1.3 billion.
Myntra CFO, CMO to exit amidst leadership churn
Myntra is seeing top-level churn in its leadership, with its chief financial officer and chief marketing officer putting in their papers. This comes as the fashion portal’s CEO Amar Nagaram is set to move on from the company by December.
Nagaram told employees in an internal mail that CFO Ramesh Bafna and CMO Harish Narayanan will be leaving the company, as per sources. They will continue in their roles till January 2022.
Myntra announced the appointment of Flipkart executive Nandita Sinha as the new CEO effective January 2022.
Nagaram will remain at the company till December and may continue with the company in an advisory role, a source said.
Nykaa net profit falls to Rs 1.2 cr in Q2
FSN E-Commerce Ventures, which operates e-commerce beauty company Nykaa said its net profit fell 97 percent to Rs 1.2 crore for Q3FY22 on year-on-year basis. Profits fell as the beauty and fashion products platform faced a steep 92 percent increase in expenses, largely attributed to marketing and advertising costs.
Its revenue from operations, on the other hand, grew 47 percent to Rs 885.3 crore compared to Rs 603.8 crore in the year-ago period.
On the business front in Q3, Nykaa's Beauty and Personal Care GMV (gross merchandise value) grew by 38 percent to Rs 1,185.9 crore (YoY). Fashion GMV went up by 215 percent to touch Rs 437 crore (YoY).
CRED in talks to acquire Dineout, Wint Wealth: Report
Kunal Shah-led fintech platform CRED is in talks to acquire two start-ups ― Dineout and Wint Wealth, as it seeks to offer more services to its over 7.5 million users, sources told Moneycontrol.
The Dineout deal is pegged at a valuation of $25-50 million, while Wint Wealth could be acquired for about $50 million, the report added.
CRED's talks to acquire these start-ups comes weeks after it raised $251 million, doubling its valuation to $4 billion in barely six months.
Thrasio-style G.O.A.T Brand Labs acquires kids clothing brand Frangipani
Tiger Global and Flipkart Ventures-backed G.O.A.T Brand Labs has acquired Mumbai-based kids clothing brand Frangipani. The company has also acquired a women's lifestyle brand and an inner wear or loungewear brand but did not disclose the names of the targets, according to MoneyControl.
Rishi Vasudev, Co-founder and CEO of G.O.A.T Brand Labs, which stands for Greatest Of All Time, said, “Each of our acquisitions is special and strengthens G.O.A.T Brand Labs as a D2C accelerator platform.”
He also added that GOAT will be looking to scale at least 25 D2C brands to Rs 100 crore in the next 3-4 years. Further, the company aims to grow Frangipani at least 5x in the next 2 years.
Thrasio-styled Powerhouse91 acquires sports & fitness brand Slovic
Thrasio-styled, e-commerce roll-up start-up Powerhouse91 has announced the acquisition of sports and fitness brand, Slovic. This follows the company’s recently concluded acquisition of women-focussed wellness brand Azah.
Besides providing growth capital, Powerhouse91 aims to grow Slovic by 15-20x over the next few years by driving efforts across marketing, supply chain and operations. Slovic makes fitness strength training equipment, footwear, accessories and more.
Credlix acquires NuPhi, EXIM fintech start-up, grows supply chain financing business to $100 mn
Moglix’s digital supply chain financing platform Credlix has acquired NuPhi, a Singapore-based fintech start-up offering invoice factoring solutions to MSME exporters in India and South East Asia.
Founded in 2019 by Pramit Joshi and Mayur Totla, NuPhi offers cross-border financing and SaaS applications to digitalise and automate EXIM workflows.
The acquisition comes at a time when Moglix, which is a B2B marketplace for industrial products, has been expanding globally while focusing on strengthening supply chain financing solutions to ensure manufacturers get easy access to cash for growth.
Google steps up product focus to drive digital inclusion in India
Google on Thursday announced a slew of new product features and partnerships as part of its efforts to drive digital inclusion in the country.
The tech giant announced the first-ever Google Assistant-enabled, end-to-end vaccine booking flow in India which will guide users through the process of booking a vaccination appointment on the Co-Win website with voice guidance in English and eight Indian languages at each step. This feature will be available in Chrome on Android and will begin rolling out in early 2022.
In order to help local language speakers find high-quality information by translating the best results from across the web, Google launched a new feature in ‘Search’ that will give users an option to access web pages from other languages and view it in their preferred local language.
It also announced the launch of 100,000 Google Career Certificate scholarships and joins hands with leading companies to drive the hiring of Google-certified professionals.
Accenture, Microsoft expand Project Amplify to support 10 start-ups, social enterprises in India
Accenture and Microsoft will support 10 start-ups in India that focuses on social impact and sustainability, by helping them to scale their emerging solutions and business models. The joint initiative ‘Project Amplify’ is Asia Pacific-wide and accelerates the growth of 33 start-ups from across the region.
The initiative extends activities launched in South Asia in 2020 welcoming business ventures from Singapore, Australia, Japan, Sri Lanka, and other countries.
The initiative has a long-term goal of accelerating Asia’s potential and improving millions of lives in the region and globally, by addressing diverse societal challenges, the companies said in a statement.
Yulu launches ‘Yulu Max Network’ to accelerate electric 2W adoption
E-mobility service provider Yulu has launched a network of battery-charging and swapping stations named ‘Yulu Max Network’.
The Max Network will help users swap their batteries with zero downtime and enhance the range of two-wheeler EVs.
The first batch of 10 Yulu Max stations was launched in Bengaluru and will be swiftly expanded to 100 stations in the next three months, the company statement said.
Yulu plans to create a network of 500 Max Stations in Bengaluru, Mumbai and Delhi NCR by mid-2022 to facilitate the adoption of electric 2-wheelers in India.
Cryptocurrency should not end up in wrong hands, can spoil youth: PM Modi
Prime Minister Narendra Modi said that democratic nations need to work together to ensure that cryptocurrency does not go in the wrong hands. The remarks came during his keynote address at The Sydney Dialogue on the theme of India's technology evolution and revolution.
"It is important that all democratic nations work together and ensure it does not end up in wrong hands, which can spoil our youth," PM Modi said on cryptocurrency or bitcoin.
The Crypto Debate: Parliamentary Committee yet to form an opinion: Chair Jayant Sinha to CNBC-TV18
A parliamentary panel, chaired by BJP leader Jayant Sinha discussed the pros and cons of crypto finance with various stakeholders, and several members were in favour of regulating crypto currency exchanges rather than imposing an outright ban on crypto currencies.
Sinha told CNBC-TV18 that the standing committee wanted to understand the challenges and opportunities and is yet to form a view on the matter. It is important to balance regulation and innovation, he said.
The meeting took place against the backdrop of rising concerns in various quarters about crypto currencies and the possible risks emanating from trading in them, especially since there is a growing interest in such assets worldwide. Currently, there are neither specific regulations nor an outright ban on use of crypto currencies in the country.
 
GLOBAL TECHNOLOGY & START-UP NEWS
Alibaba slashes sales outlook as competition bites, demand slows
Chinese e-commerce giant Alibaba Group has slashed its forecast for annual revenue growth on increased competition and a regulatory crackdown, sending its stock tumbling 11%.
As per Reuters, Alibaba now expects revenue for the year ending in March to rise between 20% and 23%, the slowest pace since its 2014 stock market debut and down from a May forecast of 29.5% growth. The company also undershot expectations for earnings per share in the second quarter.
For the quarter ended September 30, Alibaba earned 11.20 yuan per share on an adjusted basis, missing an average estimate of 12.36 yuan. Alibaba's stock has lost a huge 38% so far this year, valuing the company at about $390 billion.
Apple’s electric car could debut as soon as 2025: Report
Apple is pushing to launch its electric car as early as 2025 and refocus the project around full self-driving capabilities, Bloomberg News reported.
The iPhone maker’s shares rose nearly 3% to hit a new record following the report.
Apple’s ideal car would have no steering wheel and pedals, with interiors designed around hands-off driving, the report stated.
Reuters had reported in December that Apple was targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology.
Meanwhile, The Information, citing a memo, reported that Apple was preparing to bring back employees to offices starting February 1 and will let staff work for up to four weeks remotely each year.
US state attorneys general probe Instagram’s effect on kids
A bipartisan coalition of US state attorneys general said that it has opened a probe into Facebook, now known as Meta Platforms, for promoting its subsidiary Instagram to children despite potential harm, Reuters reported.
The investigation, involving at least nine states, comes at a time when Facebook is under scrutiny over its approach to children and young adults.
The attorneys general are investigating whether the company violated consumer protection laws and put young people at risk, they said in emailed statements.
US states file amended complaint against Google’s antitrust laws
A group of US states led by Texas have filed an amended complaint against Alphabet Inc's Google accusing the tech giant of using coercive tactics and breaking antitrust laws in its efforts to boost its already dominant advertising business, according to a Reuters report.
The updated allegations are the latest in an onslaught of regulatory scrutiny of Google over its practices. The tech company faces several lawsuits, including one by the Justice Department for monopolistic practices.
Google commits $740 mn to Australia months after threatening pull-out
Google will spend $736 million in Australia over five years, the tech giant said, just months after it threatened to pull its services from the country in response to tougher government regulation, according to a Reuters report.
The main operating unit of Alphabet said it planned to expand cloud infrastructure, set up a research hub staffed by Australian researchers and engineers and partner with science agency the Commonwealth Scientific and Industrial Research Organisation (CSIRO).
Google Australia Managing Director Mel Silva, who earlier this year threatened to block Google’s search engine in the country, said the spending plan would bring significant technology resources and investment.
Starbucks links with Amazon Go for first cashier-less cafe
Starbucks’ newest cafe lacks one element most customers are used to seeing: cashiers.
The global coffee chain on Thursday opened its first ever location in partnership with Amazon Go, the e-commerce giant's brick-and-mortar convenience store, where customers can sit at a table with a latte or grab a sandwich from a shelf and walk out, Reuters reported.
Starbucks and Amazon plan to open at least three more US locations together in 2022, said Kathryn Young, Starbucks' senior vice president of global growth and development.
Tesla CEO Elon Musk exercises more options, sells $973 mn for taxes
Tesla boss Elon Musk sold another $973 million in stock to pay taxes after exercising options on Tuesday, Reuters reported.
Musk acquired 2.1 million shares worth $2.2 billion at the Tuesday closing price and sold 934,091 for $973 million to pay taxes, the SEC filings showed.
In a sector surge spearheaded by Rivian Automotive Inc and Lucid Group Inc, Tesla Inc rose 4.1% to close at $1,054.73, leaving its market capitalisation down about $187 billion since before Musk began selling shares last week.
Over the past week, Musk has sold about 8.2 million Tesla shares for around $8.8 billion. Those sales fulfil almost half of his pledge on Twitter to sell 10% of his stake in Tesla.
Game over for Fortnite in China as Epic Games pulls the plug
Epic Games pulled the plug on its Chinese version of Fortnite, with its three-year effort to penetrate the world’s biggest gaming market derailed by Communist Party crackdowns against online addiction and the broader tech sector, as per an AFP report.
Epic Games had announced two weeks ago that it would shut down the Chinese version of the game on November 15, noting that “Fortnite China’s Beta test has reached an end” and that servers would be closed.
Chinese players said they could no longer access the game on Monday, posting goodbyes on social media platform Weibo. A discussion board on the game had been viewed 470 million times, as per AFP.
China’s WeRide to launch robotaxis on GAC’s Ontime ride-hailing app
China-based autonomous driving start-up WeRide plans to make its robotaxis available for booking by the public on Guangzhou Automobile Group’s Ontime ride-hailing app by next year, as per Reuters.
Backed by Nissan Motor, WeRide said in a statement it plans to offer test rides for the public at the Guangzhou Auto Show, which begins in the southern Chinese city on Friday. It added that its robotaxi has been integrated into the Ontime platform and they were conducting testing.
Automakers and technology firms are investing billions of dollars in autonomous driving, aiming to take an early lead in what many consider the future of mobility.
Bitcoin heads for worst week in months as Mt Gox payouts loom
Bitcoin fell to a one-month low on Friday and was headed for its worst week in six months as traders have booked profits from a long rally and been spooked by an expectation that creditors of collapsed crypto exchange Mt Gox might liquidate their payments.
The largest cryptocurrency by market value, bitcoin was down 1.6% at $55,980 by mid-session in Asia, its lowest since mid-October and 20% below last week’s record high, as per Reuters.
For the week, bitcoin has fallen 14% and through its 50-day moving average. It has gained more than 90% this year. Ether, the second largest cryptocurrency by market value, was steady near a three-week low at $4,014 on Friday but set for a 14% weekly loss.
Binance US may raise ‘couple hundred million’ in funding, CEO says
Binance’s US unit may raise a “couple hundred million” dollars in a funding round set to close in a month or two and the global cryptocurrency exchange has also decided on a new headquarters, its chief executive Changpeng Zhao said.
Speaking at the Bloomberg New Economy Forum in Singapore, Zhao said the firm’s US affiliate has the option to go for an initial public offering (IPO) using rival Coinbase as an example, and that he was not ruling out listing the parent company in future.
Binance, one of the world’s biggest cryptocurrency exchanges by trading volumes, has come under scrutiny from regulators, with some banning the platform and others warning it was unlicensed to operate.
Its US affiliate is also reportedly under investigation, according to Reuters.
China’s Weibo cleared for Hong Kong secondary listing
Chinese social media company Weibo has been approved by the Hong Kong Stock Exchange’s listing committee to sell shares in the city, according to Reuters, giving it a secondary listing alongside New York.
Weibo did not specify how much China’s largest microblogging platform is looking to raise in the secondary listing, nor specify a timetable for the sale.
The filings were part of a post-committee hearing information pack published on the Hong Kong Stock Exchange’s website, indicating Weibo had been given approval to press on with the listing.
Sources have previously told Reuters the deal would be worth about $700 million.
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