STARTUP DIGEST: Top stories of the day
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Here’s all that made news in the startup world today.
Paytm has invited shareholders to dilute their shares for sale ahead of Diwali IPO. Food tech platform Swiggy has sought CCI approval for investment by Softbank. Apple shows off a slew of updates for its major products at its conference for software makers, privacy features take the centre stage, with services like ‘private relay’ that hides user IP addresses, ‘hide my email’ for temporary and anonymous email addresses. Thousands of government, news, and social media websites across the globe are hit by an hour-long outage linked to US-based cloud company Fastly Inc.
Here’s all that made news in the startup world today.
IPO-bound Paytm invites shareholders to dilute stake
Digital payment app Paytm has invited shareholders to tender their equity shares for sale in the initial public listing proposed to be held later this year. In a letter to its shareholders, Paytm’s parent company One97 Communications Ltd said that the company had received in-principle approval from the Board of Directors for the public listing. CNBC-TV18 had reported on May 31 that the board of One97 Communications had given the in-principle approval for the listing. Paytm said the proposed IPO is contemplated to include a fresh issue of equity shares by the company and an offer for the sale of equity shares by existing shareholders. “You may, in your sole discretion, participate in the Offer by offering either all or a part of the Equity Shares held by you (which are eligible to be offered in the Offer) in the Offer for Sale. We wish to inform you that the Offer for Sale component has to be finalised before filing the DRHP with SEBI. However, the price band for the IPO will be determined at a later stage, either at the time of filing the RHP (in which case it will be included in the RHP)or prior to the IPO opening for a subscription (in which case there will be an advertisement at least two working days prior to issue opening),” the letter said. It further added that the equity shares that are not sold in the offer for sale shall be locked in for a period of one year from the date of allotment of equity shares in the IPO unless they are exempted shares. However, the company also warned that offering shares would not guarantee that they will be sold through the offer, as it will depend on the investor’s response to the offer. The initial offering would be the largest ever seen in India, as it tries to raise $3 billion. Paytm is expected to file its prospectus by July.
Swiggy seeks CCI approval for SoftBank investment
Food delivery platform Swiggy has sought approval from the Competition Commission of India for a proposed investment by Softbank. The Japanese tech giant is investing about $450-500 million in Swiggy via its SoftBank Vision Fund II, CNBC-TV18 learns from sources. The investment from SoftBank will come on top of the $800 million series J round that Swiggy recently closed, with Falcon Edge, Amansa, Think Investments, Carmignac and Goldman Sachs at a valuation of $5 Billion.
Whatfix raises $90 million in funding backed By SoftBank Vision Fund 2
SaaS startup Whatfix has raised a $90 million Series D round backed by SoftBank Vision Fund 2. The startup has now trebled its valuation since 2020. Eight Roads Ventures, Sequoia Capital India, Dragoneer Investment Group, F-Prime Capital, and Cisco Investments also participated in the round. “This latest round of funding strengthens our position as market leaders as we plan to expand our offerings globally and continue to provide excellent customer service to businesses who look to us to guide them through their digital transformation initiatives,” said Khadim Batti, CEO and co-founder, Whatfix.
The company plans to use the funding to continue growing its stronghold in the US market while accelerating global expansion into new markets such as the Asia Pacific and Europe. In addition, Whatfix will invest the funds in product innovation focusing on artificial intelligence, enterprise solutions, and providing personalized experiences. To date, Whatfix has raised $139.8 million to date and the company’s valuation has increased three times in the past 15 months.
TPG to lead $80 million funding in Zenoti: Report
US private equity major TPG is set to lead funding of $80 million in SaaS startup Zenoti, reported ET. The startup is likely to be valued anywhere between $1.5 billion posts this funding. This as Zenoti continues to see increased adoption of digitisation from the beauty and salon industry in the US. As per the report, some of its existing investors are also going to participate in the funding round and it may see a minor secondary share sale as well. When contacted by the Economic Times, Zenoti said this is an extension of its series D round and its valuation has jumped to almost $1.5 billion.
Truemeds raises $5 million in the latest funding round
Telehealth platform Truemeds has raised $5 million in a Series A funding round led by InfoEdge Ventures, Asha Impact, and Indian Angel Network Fund. The funding will be used to expand its footprint to three additional cities, build product and technology and invest in improving the supply chain of generic medicines, Truemeds said in a statement. “With this investment, we will be able to not only make the Truemeds experience even more seamless but also bring access to affordable medicines to more people in different parts of India,” Truemeds co-founder and CEO Akshat Nayyar said. Truemeds was founded with a mission to make medicine affordable for chronic patients, he added.
D2C brand F5 raises Rs 2.5 crore in Pre-Series A round
D2C brand servicing daily workplace consumption, F5 has raised Rs 2.5 crore as the first tranche of its pre-series A round from angel investors. These include Mohit Satyanand-Chairman Teamwork Arts who led through Lets Venture Platform, Gurgaon based Accelerator Huddle, AngelList, Venture Catalysts, Top Forbes Indian Angel Investor- Rohit Chanana, Dr. Jeevak Gupta- VP, Private Equity, InvAscent among others. The company will use the funds to tap the $34 billion daily workplace needs a market for consumers. In addition to this, the funds will also be used for R&D, customer acquisition, and tech development. F5 had earlier raised Rs 3 crore as part of its Seed Round in May 2020, said the company. “We are thankful to our investors for showing confidence in us and our business model. We are in the middle of closing the next tranche and are very hopeful of the coming times. Covid has made the general public more conscious of hygiene and quality and made them more tech-savvy. Demand for our products is highly inelastic which ensures our demand bounces back immediately post lockdowns,” Raghav Arora, co-founder, F5 said.
SBI invests in digital payment firm Cashfree
Digital payments and banking technology Company Cashfree has received undisclosed funding from the State Bank of India (SBI). As per the official statement, the company has raised $42 million since its inception and is currently valued at $200 million. Cashfree CEO and co-founder Akash Sinha added that that funds will be used to invest in Cashfree’s payment infrastructure. “The investment fits perfectly with its growth strategy as it continues to focus on customer experience and product innovation,” said Sinha. Incubated by PayPal, Cashfree is backed by Apis Partners, Smilegate and Y Combinator. It is also used by companies like Zomato, CRED, Nykaa, Delhivery, Acko, and Shell for various business payments. Apart from India, Cashfree’s products are used in eight other countries including the USA, Canada, and the UAE.
Amazon, Google, Visa eye neo-banking firm Open: Report
Amazon, Google and Visa are separately eyeing a stake in neo-banking startup Open, which is looking to raise about $100-$120 million, the Economic Times reported. If it does manage to raise this amount, Open’s valuation is likely to jump three times to around $600-700 million. As per the report, Open is also in talks with a leading sovereign wealth fund and private equity firm TPG. The company has previously raised $45-50 million from investors such as Tiger Global, 3one4 Capital, Speedinvest and BetterCapital. If the deal goes through, it would be significant for the neo banking space, ET reports. A neobank can be a transactional platform for merchants, an account manager, or a lending service as well.
Bitcoin drops 10% overnight
The price of Bitcoin has fallen to its lowest level in over a week as traders mull the prospects of shifting US monetary policy and China’s continued efforts to restrict cryptocurrency. At the time of writing, one bitcoin was changing hands at $33,041, down nearly 10 percent in the last 24 hours. Ethereum also plunged by about 10 percent to under $2,500 after briefly going above $2,800 on Monday. Other notable cryptos were also trading in red, dropping nearly 10 percent. The fall comes after about a week of relative silence on the crypto market during which most of the leading assets traded in a narrow price range.
Twitter seeks more time from Centre to comply with IT rules
Social media platform Twitter has sought more time from the Central government seeking to comply with the new IT rules. According to sources, the micro-blogging site has said that it intends to comply with the rules but needs more time due to the COVID-19 situation in the country. “Twitter has written to Meity seeking more time to comply with the IT rules. It has expressed its intent to comply with the rules but has been unable to do so because of the pandemic,” a source told PTI. The response from Twitter comes after the government, last week, issued a strongly-worded final notice to the company regarding its non-compliance with the new rules. When contacted, a Twitter spokesperson said that the microblogging site has been and remains deeply committed to India.
DigiSpice Technologies launches Korero Platforms
DigiSpice Technologies has launched a new-age start-up Korero Platforms offering a communication platform-as-a-service solution to enterprises, reports suggest. The newly launched startup Korero will enable omnichannel, contextual conversations between future-ready business and their stakeholders. It will also help enterprises in their digital transformation journey via the latest AI technology.
CropIn joins European Carbon+ Farming Coalition
AI-driven agri-tech firm CropIn has joined the newly-formed European Carbon+ Farming Coalition to accelerate progress towards the carbon neutrality goals of the European Green Deal. The coalition will be working towards decarbonising the European food systems while maximising benefits such as soil health and farmer resilience, CropIn said in a statement. “Digital and data-driven platforms are key enablers in bringing large-scale transformation by engaging stakeholders, including farmers, that will join the program. We are excited to be a part of the European Carbon+ Farming Coalition. Our decade-long experience of working in 52 countries with our agtech platform will help us to contribute positively to accelerate the transition to a zero-carbon world,” CropIn CEO Krishna Kumar said.
GLOBAL TECHNOLOGY & STARTUP NEWS
Massive internet outage, some of the world’s biggest sites go down
Thousands of government, news, and social media websites across the globe limp back online after being hit by a widespread hour-long outage linked to US-based Cloud Company Fastly Inc. High-traffic sites including Reddit, Amazon, CNN, Paypal, Spotify, Al Jazeera Media Network, and the New York Times were out of commission, according to outage-tracking website Downdetector.com. They came back up after outages that ranged from a few minutes to around an hour, Reuters reported. Fastly, one of the world’s most widely-used cloud-based content delivery network providers, said “the issue has been identified and a fix has been applied. Customers may experience increased origin load as global services return.” The company, which went public in 2019 and has a market capitalization of more than $5 billion, is far smaller than peers like Amazon’s AWS. It helps websites move content using less-congested routes, enabling them to reach consumers faster. The United Kingdom’s attorney general earlier tweeted that the country’s main gov.uk website was down, providing an email for queries. The disruption may have caused issues for citizens booking COVID-19 vaccinations or reporting test results, the Financial Times reported. Fastly’s website said that most of its coverage areas had faced “Degraded Performance”. Error messages on several of the websites pointed to Fastly problems. Websites operated by news outlets including the Financial Times, the Guardian, and Bloomberg News also faced outages. News publishers came up with inventive workarounds to report about the widespread outage when their websites failed to load up.
Apple adds virtual IDs on iPhone, video plans that rival Zoom, Teams
Apple on Monday outlined plans to increase user privacy and keep consumer data out of other companies’ hands, laying out features including expanded video conferencing and storing virtual government IDs on iPhones, reports Reuters. Many of the new features allow users to safeguard data, trusting the information to the Apple brand. Users will be able to scan ID cards in participating US states, and the cards will be encrypted in a user’s digital wallet, along with credit cards and transit cards in some US cities. It is working with the US Transportation Security Administration to accept digital IDs at airports. This comes amid allegations on the company that it has too much control over its App Store. The changes came at Apple’s annual Worldwide Developers Conference (WWDC) for software developers, some of whom have started to complain about Apple’s grip over which apps can appear on its devices, as well as its 15 percent to 30 percent commissions on digital sales. Apple has said its App Store practices increase the market for mobile software by creating an environment for paid apps that consumers trust, and Apple Chief Executive Tim Cook and his team did not address frayed developer relations during the presentation. Apple also tweaked some of its apps and services in ways that could intensify its rivalries with Zoom and Microsoft Teams.
Apple launches new iOS 15 at WWDC, official release in September
Apple has announced at the WWDC their much-awaited iOS 15 operating system with new features and privacy as its focal point. The first developer beta of iOS 15 will be rolled out shortly, but the official release will coincide with the iPhone launch scheduled for September. The new iOS 15 will support every iPhone device that supports iOS 14. The new OS will be compatible with the iPhone 6s with the latest iPhone model. Apple as a company policy has always dropped one generation of iPhone every year from its support list but has not done so this year. The reason for this has not been provided by the company. A list of iPhone devices that can be compatible with the new iOS 15 are: iPhone 12 Pro and iPhone 12 Pro Max, iPhone 12 mini and iPhone 12, iPhone 11 Pro and iPhone 11 Pro Max, iPhone 11, iPhone XS and iPhone XS Max, iPhone XR, iPhone X, iPhone 8 and iPhone 8 Plus, iPhone 7 and iPhone 7 Plus, iPhone 6s and 6s Plus, iPhone SE (1st gen), iPhone SE (2nd gen) and iPod touch (7th gen). As per a report by Gadgets360, a feature that was not mentioned in the WWDC 2021 opening keynote presentation, but had appeared in a background slide, was the Hindi language support for the iOS Quickpath swipe keyboard. Other features such as the new FaceTime in iOS 15 which is easier and more spontaneous, the new iMessage will allow users to quickly locate articles, photos, chats, etc. A host of new features have also been added.
Zukerberg takes potshot at Apple; says Facebook won’t take a cut from creators until 2023
Facebook CEO Mark Zuckerberg has announced that the social media company will not take a cut revenue from creators who make money on its platforms until 2023. The company will not take a cut of any revenue generated by paid online events, fan subscriptions, badges and Facebook’s upcoming independent news product, Zuckerberg said in a post on Facebook.
Zuckerberg also used his post to jab at its rival Apple by saying that it would be less than what the iPhone maker will take. “When we do introduce a revenue share, it will be less than the 30 percent that Apple and others take,” Zuckerberg wrote, referring to the cut Apple takes on all products sold through apps that users have downloaded through its App Store. Zuckerberg added that Facebook is also launching a new payout interface so creators can see how different companies’ fees and taxes are impacting their earnings.
Apple in talks with China’s CATL, BYD over battery supplies for its EV
Apple is in early-stage talks with China’s CATL and BYD about the supply of batteries for its planned electric vehicle, Reuters reported. However, it’s not clear if agreements with either CATL or BYD will be reached. Apple has made building manufacturing facilities in the United States a condition for potential battery suppliers, sources told Reuters. As per Reuters, CATL, which supplies major carmakers including Tesla, is reluctant to build a U.S. factory due to political tensions between Washington and Beijing. Apple, which has yet to make a public announcement about its car plans, declined to comment. CATL, the world’s biggest automotive battery maker, and BYD also declined to comment.
Amazon to invest $3 billion to open data centres in Spain in 2022
Amazon is all set to invest $3.04 billion in new data centers in Aragon, Spain. Reuters report that these new data centers will open in mid-2022. The cloud computing service unit of Amazon, Amazon Web Services, will invest the amount over a period of ten years, the company told Reuters. The investment includes capital expenditure, the construction of the centers, imports of equipment and operating expenses such as the salaries of the 1,300 employees the company will hire there. Amazon Web Services has had a presence in Spain since 2012 and is building more infrastructure to be able to host data in Spain for its customers who require it.
Canada’s ID startup Trulioo raises $394 million; valued at $1.75 billion
Trulioo, a Canada-based startup that provides electronic identity and addresses verification globally, has raised $394 million in a funding round led by venture capital firm TCV at a valuation of $1.75 billion. Among the participants in the latest funding round, Trulioo said, were existing investors Amex Ventures, Citi Ventures, Blumberg Capital, and Mouro Capital, Reuters reported. The mega funding round comes as the pandemic accelerated digitisation of businesses and e-commerce firms, and financial firms need ways to verify customers’ identities for secure transactions. The Vancouver-based company has access to over 450 different data sources, including those of governments and credit bureaus, as well as phone records and information from non-traditional sources, Trulioo’s Chief Executive Officer Steve Munford said. Trulioo said the US digital ID market is projected to exceed $30 billion by 2023, according to consulting firm One World Identity.
Mark Cuban-backed banking app Dave to go public in $4 Bn SPAC merger
Billionaire Mark Cuban-backed Dave said it would go public through a merger with a blank-check firm sponsored by investment firm Victory Park Capital. This will hike the value of the banking app to $4 billion. Financial services startup Chime has also held preliminary talks with investment banks about launching a stock market flotation, which could value it at more than $30 billion, Reuters reported in March. The deal with a special-purpose acquisition company (SPAC), VPC Impact Acquisition Holdings III Inc (VPCC.N), includes a $210 million investment led by Tiger Global Management, with additional participation from Wellington Management and Corbin Capital Partners.
The merger, which comes after a lull in dealmaking due to weak investor appetite and greater regulatory scrutiny, is expected to close later this year.
Launched in 2017, Dave is an app used to help Americans avoid billions of dollars in overdraft fees charged by traditional banks. It currently has 10 million customers.
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow
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