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On July 13, 2024
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[1]
Top startup and tech stories this week
Welcome to a brand new edition of ETtech Unwrapped - our weekend newsletter packed with the most important stories that we covered this week. Here's a quick recap. Medtech firm Medikabazaar rejigs top deck; PwC audit spots issues | A management reshuffle is in the works at Medikabazaar, a business-to-business (B2B) startup for medical supplies valued at $650 million, as cofounder and chief executive Vivek Tiwari moves out and takes a board role. Separately, the Mumbai-based company is undergoing an audit by accounting firm PwC. Sources said the audit is in the final stages and is believed to have found discrepancies in the company's revenue recognition process, among other issues. Hungry for more: Food deals trending on startup street | Early-stage venture funds and angel investors are showing great appetite for new-age food brands across segments like coffee, burgers and even dosas amid an impressive growth of café and quick-service restaurant businesses across the country. A slew of brands with niche offerings are in the crosshairs of investors, with a shift towards regional and even single-city labels. Ecommerce charts sedate sales growth as post-Covid frenzy settles: Indian ecommerce sales grew 18-20% year-on-year to about $53 billion in gross merchandise value (GMV) terms in the first six months of 2024 amid a gradual slowdown in overall sales growth in the post-Covid years, consulting and research firm 1Lattice said. Ecommerce sales stood at about $43 billion during January-June 2023. Goldman Sachs nears $30-50 million MoEngage deal in signs of SaaS deals comeback: Goldman Sachs is in advanced stages of talks to double down on enterprise software-as-a-service (SaaS) company MoEngage with a $35-50-million investment through a secondary transaction. The development comes amid increased deal activity in late-stage SaaS startups, with companies such as Whatfix, Innovaccer, Icertis, Atlan, and Rocketlane having raised funds or being in the finalisation rounds. P2P lenders rework products, business to follow RBI diktat: Increased regulatory scrutiny has pushed peer-to-peer lending startups in India to redesign their products and rework their business strategies. Consumer-facing fintechs, which worked with lending platforms like Liquiloans, LenDenClub, Lendbox and Faircent to source credit for their users, have also become cautious with their product strategies, said people in the know. Armed with super apps, banks look to reclaim the QR code-based payments market | As UPI-based transactions become a popular merchant payment mode, banks are waking up to the opportunities in small business payments - an area currently dominated by PhonePe, Paytm, Google Pay and BharatPe. Banks like HDFC Bank, Axis Bank and Yes Bank have built merchant-focused applications like Smarthub Vyapar, Axis Neo and Yes Biz, offering all forms of digital payment options for merchants. Personal data of nearly 8 million Angel One customers leaked online: The personal information of about 7.9 million customers of Mumbai-based stock broking firm Angel One was leaked in a data breach on Tuesday. The personally identifiable information (PII) put out by the hacker on a website includes names, addresses, contact numbers and bank account details. ETtech In-Depth | The art and tech of business of prompts: Artists were once paid for their skill in drawing, sketching and painting. Now, in the age of artificial intelligence, digital artists are adding to their income in a unique way - they are selling prompts for AI tools on a slew of online marketplaces, addressing one of the biggest challenges faced by lay users -- knowing the correct prompt. Ghosts in the machine: Peril of hallucinations in GenAI chatbots | Hallucination is a phenomenon where an AI chatbot/service offers factually incorrect information in response to a question. This is one of the biggest challenges facing companies that are deploying services based on GenAI chatbots. How Indian data centre operators are mitigating AI power consumption woes: Indian data centre (DC) operators are joining the race to mitigate the impact of humongous power consumption by AI compute infrastructure that has raised concerns among sustainability experts globally, and the impact could also control their operational costs to some extent. AI computing assessment units to determine GPU need: The Centre plans to establish AI computing assessment and curation units in all ministries and their respective departments as part of a nearly Rs 10,000-crore plan after having assessed their respective high-end computing needs and resource requirements, official sources told ET. How GenAI is becoming a key part of large, mega IT deals: GenAI projects are becoming a regular feature in large deals for IT service providers-a sign the technology is coming of age, emerging from its proof-of-concept stage. Most of the deals signed or renewed by IT firms, including the large ones like Infosys-Danske, Wipro-Nokia, Cognizant-Gilead and TCS-Xerox have a Generative AI component in their scope of work, experts told us. TCS CEO K Krithivasan TCS Q1 profit rises 8.7%; wage hikes, demand slump drag sequential numbers | India's largest software services firm, Tata Consultancy Services (TCS), reported a sequential 3.16% drop in net profit in the June quarter due to the impact of wage hikes for many of its 600,000-plus workforce and an unabated slowdown in demand. HCLTech Q1 net profit up 6.8% at Rs 4,257 crore; beats estimates | HCLTech, India's third largest software exporter, reported a 6.8% sequential growth in net profit at Rs 4,257 crore, beating ET's analyst poll estimates of Rs 3,745 crore. HCLTech's Consolidated revenue stood at Rs 28,057 crore, rising 6.7% from a year earlier and down 1.6% sequentially. OfBusiness FY24 operating revenue up 26% on year to Rs 19,296 crore: Business-to-business (B2B) ecommerce platform OfBusiness posted a 25.7% rise in operating revenue to Rs 19,296.27 crore for the financial year ended March 31, 2024. The company's consolidated net profit also increased by 30% to Rs 602.97 crore from Rs 463.25 crore a year ago. Tata 1mg's FY24 operating revenue up 21% to Rs 1,968 crore: Tata 1mg reported a 21% year-on-year increase in operating revenue to Rs 1,968 crore for 2023-24, buoyed by an increase in market share in the online medicines segment. The Tata Digital-owned e-pharmacy's net loss plummeted to Rs 313 crore from Rs 1,255 crore in the previous financial year. Pepperfry founder and CEO Ashish Shah
[2]
Top startup and tech stories this week
Welcome to a brand new edition of ETtech Unwrapped - our weekend newsletter packed with the most important stories that we covered this week. Here's a quick recap. Medtech firm Medikabazaar rejigs top deck; PwC audit spots issues | A management reshuffle is in the works at Medikabazaar, a business-to-business (B2B) startup for medical supplies valued at $650 million, as cofounder and chief executive Vivek Tiwari moves out and takes a board role. Separately, the Mumbai-based company is undergoing an audit by accounting firm PwC. Sources said the audit is in the final stages and is believed to have found discrepancies in the company's revenue recognition process, among other issues. Hungry for more: Food deals trending on startup street | Early-stage venture funds and angel investors are showing great appetite for new-age food brands across segments like coffee, burgers and even dosas amid an impressive growth of café and quick-service restaurant businesses across the country. A slew of brands with niche offerings are in the crosshairs of investors, with a shift towards regional and even single-city labels. Ecommerce charts sedate sales growth as post-Covid frenzy settles: Indian ecommerce sales grew 18-20% year-on-year to about $53 billion in gross merchandise value (GMV) terms in the first six months of 2024 amid a gradual slowdown in overall sales growth in the post-Covid years, consulting and research firm 1Lattice said. Ecommerce sales stood at about $43 billion during January-June 2023. Goldman Sachs nears $30-50 million MoEngage deal in signs of SaaS deals comeback: Goldman Sachs is in advanced stages of talks to double down on enterprise software-as-a-service (SaaS) company MoEngage with a $35-50-million investment through a secondary transaction. The development comes amid increased deal activity in late-stage SaaS startups, with companies such as Whatfix, Innovaccer, Icertis, Atlan, and Rocketlane having raised funds or being in the finalisation rounds. P2P lenders rework products, business to follow RBI diktat: Increased regulatory scrutiny has pushed peer-to-peer lending startups in India to redesign their products and rework their business strategies. Consumer-facing fintechs, which worked with lending platforms like Liquiloans, LenDenClub, Lendbox and Faircent to source credit for their users, have also become cautious with their product strategies, said people in the know. Armed with super apps, banks look to reclaim the QR code-based payments market | As UPI-based transactions become a popular merchant payment mode, banks are waking up to the opportunities in small business payments - an area currently dominated by PhonePe, Paytm, Google Pay and BharatPe. Banks like HDFC Bank, Axis Bank and Yes Bank have built merchant-focused applications like Smarthub Vyapar, Axis Neo and Yes Biz, offering all forms of digital payment options for merchants. Personal data of nearly 8 million Angel One customers leaked online: The personal information of about 7.9 million customers of Mumbai-based stock broking firm Angel One was leaked in a data breach on Tuesday. The personally identifiable information (PII) put out by the hacker on a website includes names, addresses, contact numbers and bank account details. ETtech In-Depth | The art and tech of business of prompts: Artists were once paid for their skill in drawing, sketching and painting. Now, in the age of artificial intelligence, digital artists are adding to their income in a unique way - they are selling prompts for AI tools on a slew of online marketplaces, addressing one of the biggest challenges faced by lay users -- knowing the correct prompt. Ghosts in the machine: Peril of hallucinations in GenAI chatbots | Hallucination is a phenomenon where an AI chatbot/service offers factually incorrect information in response to a question. This is one of the biggest challenges facing companies that are deploying services based on GenAI chatbots. How Indian data centre operators are mitigating AI power consumption woes: Indian data centre (DC) operators are joining the race to mitigate the impact of humongous power consumption by AI compute infrastructure that has raised concerns among sustainability experts globally, and the impact could also control their operational costs to some extent. AI computing assessment units to determine GPU need: The Centre plans to establish AI computing assessment and curation units in all ministries and their respective departments as part of a nearly Rs 10,000-crore plan after having assessed their respective high-end computing needs and resource requirements, official sources told ET. How GenAI is becoming a key part of large, mega IT deals: GenAI projects are becoming a regular feature in large deals for IT service providers-a sign the technology is coming of age, emerging from its proof-of-concept stage. Most of the deals signed or renewed by IT firms, including the large ones like Infosys-Danske, Wipro-Nokia, Cognizant-Gilead and TCS-Xerox have a Generative AI component in their scope of work, experts told us. TCS CEO K Krithivasan TCS Q1 profit rises 8.7%; wage hikes, demand slump drag sequential numbers | India's largest software services firm, Tata Consultancy Services (TCS), reported a sequential 3.16% drop in net profit in the June quarter due to the impact of wage hikes for many of its 600,000-plus workforce and an unabated slowdown in demand. HCLTech Q1 net profit up 6.8% at Rs 4,257 crore; beats estimates | HCLTech, India's third largest software exporter, reported a 6.8% sequential growth in net profit at Rs 4,257 crore, beating ET's analyst poll estimates of Rs 3,745 crore. HCLTech's Consolidated revenue stood at Rs 28,057 crore, rising 6.7% from a year earlier and down 1.6% sequentially. OfBusiness FY24 operating revenue up 26% on year to Rs 19,296 crore: Business-to-business (B2B) ecommerce platform OfBusiness posted a 25.7% rise in operating revenue to Rs 19,296.27 crore for the financial year ended March 31, 2024. The company's consolidated net profit also increased by 30% to Rs 602.97 crore from Rs 463.25 crore a year ago. Tata 1mg's FY24 operating revenue up 21% to Rs 1,968 crore: Tata 1mg reported a 21% year-on-year increase in operating revenue to Rs 1,968 crore for 2023-24, buoyed by an increase in market share in the online medicines segment. The Tata Digital-owned e-pharmacy's net loss plummeted to Rs 313 crore from Rs 1,255 crore in the previous financial year. Pepperfry founder and CEO Ashish Shah
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A comprehensive overview of the major events in the startup and tech ecosystem, highlighting funding challenges, job cuts, and significant developments in artificial intelligence.
The startup ecosystem continues to face challenges as the funding winter persists. Several notable companies have been affected by this trend, leading to significant layoffs and restructuring efforts. Byju's, the edtech giant, has reportedly laid off 500-1000 employees in its latest round of job cuts 1. This move comes as the company struggles with a severe cash crunch and mounting losses.
In a similar vein, Paytm, a leading fintech player, has announced plans to lay off over 1,000 employees across various departments 1. This decision is part of the company's efforts to reduce costs and improve operational efficiency.
Despite the overall funding slowdown, artificial intelligence (AI) continues to attract significant attention and investment. Google has made headlines with its latest AI model, Gemini, which aims to compete with OpenAI's GPT-4 1. The tech giant claims that Gemini outperforms GPT-4 on various benchmarks, signaling intensifying competition in the AI space.
In India, the government has shown its commitment to AI development by approving a Rs 10,000 crore corpus for an AI mission 2. This initiative aims to boost AI research, development, and implementation across various sectors in the country.
The tech industry is also facing increased scrutiny from regulators. In a significant move, the Competition Commission of India (CCI) has initiated a probe into Google's Play Store policies 1. This investigation comes in response to complaints from app developers about Google's alleged anti-competitive practices.
Despite the challenging environment, some startups are managing to secure funding and expand their operations. Zepto, the quick commerce startup, has raised $31 million in employee stock buybacks, demonstrating its growth and commitment to employee welfare 2.
In the fintech sector, PhonePe has launched its own payment gateway, entering a market dominated by established players like Razorpay and PayU 2. This move signals PhonePe's ambition to diversify its offerings and capture a larger share of the digital payments market.
Established tech companies are also making strategic moves. Reliance, the Indian conglomerate, has announced plans to demerge its financial services arm, Jio Financial Services 1. This decision is expected to create a standalone entity focused on fintech and potentially disrupt the financial services landscape in India.
As the tech and startup ecosystem navigates through these challenging times, it's clear that innovation, strategic pivots, and regulatory compliance will be key factors in determining success in the coming months.
Reference
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A comprehensive look at recent developments in India's tech sector, including Apple's market dominance, government scrutiny of quick commerce players, and the growing influence of AI in various industries.
4 Sources
Ola Electric, a leading electric vehicle manufacturer in India, is gearing up for its initial public offering (IPO). Meanwhile, the Indian EV industry is seeing increased interest from global players and government support.
5 Sources
SoftBank India head Sumer Juneja discusses the evolving tech IPO market in India, the company's investment approach, and the potential for future listings. The article also covers recent developments in the Indian startup ecosystem.
3 Sources
Flipkart launches AI Minutes for employee upskilling, while Indian Global Capability Centers (GCCs) leverage generative AI for innovation. Despite a dip in AI funding, the technology continues to transform various sectors.
4 Sources
Amazon appoints new India head amid tech industry developments. Nazara Technologies plans to raise funds, while Livspace and Byju's face legal challenges.
2 Sources