STARTUP DIGEST: Byju’s acquires Great Learning and Toppr, Unacademy to issue $40 M in stock options to teachers, Sequoia launches ‘Spark’ for women founders
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
There were several important developments in the startup space during the week. Here are the startup stories that hit headlines this week
Here are the top stories that made headlines in the startup universe this week.
Byju’s acquires Great Learning and Toppr
Edtech unicorn and India’s most valuable startup Byju’s is on an acquisition spree. This week the company bought upskilling platform Great Learning for $600 million in a cash and stock deal.
Byju’s will invest another $400 million in Great Learning as it looks to expand its services globally. After acquiring brick-and-mortar coaching network Aakash Institute for close to $1 billion, Great Learning is now BYJU’s second-biggest acquisition.
The edtech firm has acquired the after-school learning app Toppr too. With this, Byju’s has acquired a total of 14 companies across India and the US.
Unacademy announces Teacher Stock Options for educators; buys Rheo TV
Online learning firm Unacademy is planning to give stock options to educators on its platform so as to motivate them and retain quality talent.
“We are announcing Teacher Stock Options (TSOPs) for all Unacademy Educators. Unacademy Educators will be eligible for fully vested Stock Grants on completion of 3, 4, and 5 years with Unacademy,” co-founder and CEO Gaurav Munjal tweeted.
Munjal added that over 300 educators on the platform are currently eligible for the grant that they will get immediately. The company will give grants of over $40 million to its educators over the next few years.
The learning platform also acquired Rheo TV this week. Rheo TV helps professional game streamers live stream their gameplays and monetise those feeds.
Rheo TV’s existing investors Lightspeed India Partners, Sequoia Capital India’s Surge, AET Fund, Phanindra Sama, Founder and Former CEO of RedBus, and Mahesh Narayanan, Ex-Country Head of Google Mobile will exit fully.
Post the acquisition, Rheo TV founders Saksham Keshri and Prakash Kumar will join Relevel — an Unacademy Group company that enables job seekers to showcase their skills through tests, and secure employment at some of India’s top companies — as Co-Founders.
Re-commerce platform Cashify buys UniShop
Used gadgets marketplace Cashify has acquired UniShop, an omnichannel retail solution platform, for an undisclosed amount. UniShop will be rebranded as PhoneShop and will continue to help mobile retailers across India, the company stated.
Cashify said the new investment will help it further diversify its e-commerce offerings by empowering mobile retailers to get a web presence, build its brand, and make more money to compete with e-commerce giants.
Freshworks, Eka Software founders launch $85 million VC fund
Freshworks founder Girish Mathrubootham and Eka Software founder Manav Garg have launched a venture capital fund—Together— with a corpus of $85 million that has seen participation from leading tech entrepreneurs including Kunal Shah of Cred, Ritesh Arora of BrowserStack and Gaurav Munjal from Unacademy, to back new-age startups that can go global out of India.
“Together is India’s first operator-led fund. The fund is not meant to provide money alone,” Mathrubootham told CNBC-TV18.
The fund has seen participation from institutional funds, venture capitalists, and tech entrepreneurs as well as professionals such as chief marketing officers and chief technology officers.
Temasek, DBS to launch $500 M debt financing platform
Southeast Asian lender DBS Group and Temasek Holdings will jointly launch a $500 million debt financing platform – EvolutionX to finance growth stage technology-enabled companies across Asia, with a focus on China, India, and Southeast Asia.
“Apart from helping founder entrepreneurs avoid dilution of share equity in the company’s initial stages of development, growth debt also serves as a complementary tool to tide these companies, which are often cash strapped,” Tan Su Shan, group head of institutional banking at DBS said in a statement.
Trifecta Capital announces first close of late-stage VC Fund at Rs 1,000 crore
VC firm Trifecta Capital has announced the first close of its late-stage venture capital fund – Trifecta Leaders Fund – I, with commitments of over Rs. 1,000 crore (approximately $130 million).
The fund was launched three months ago and has a target corpus of Rs 1,500 crores (approximately $200 million).
The first close saw participation from domestic investors including large corporates, insurance companies, marquee family offices, UHNIs, and entrepreneurs. Existing investors of Trifecta Capital’s venture debt funds have also made significant investments in this fund.
The fund will invest Rs 100-200 crore ($15–30 million) each in around 10-12 companies for minority stakes, through a combination of primary and secondary positions.
Sequoia announces $100K fellowship for women entrepreneurs
Sequoia India has launched ‘Spark’ fellowship, a year-long programme to support women entrepreneurs in India and Southeast Asia. The fellowship will offer grants worth $100,000 to 15 women-led early-stage startups. The cohort will kick off in November.
Some of the founder mentors who will help the recipients include co-founder and CEO of Zilingo Ankiti Bose, Byju’s co-founder Divya Gokulnath, CRED founder Kunal Shah, Groww co-founder and CEO Lalit Keshre, MobiKwik co-founder Upasana Taku, and Meesho founder and CEO Vidit Aatrey.
Kalaari Capital earmarks $10 M yearly for women-led startups
Early-stage venture firm Kalaari Capital launched CXXO, an initiative for which it has set aside $10 million annually, to invest in startups led by women.
The CXXO programme will create a cohort of eight to 10 female founders and CEOs each year and will provide them with capital and support.
Vani Kola, managing director of Kalaari Capital is also part of the leadership team of CXXO. She has roped in Ankiti Bose, cofounder, Zilingo, Lathika Pai, country head, Microsoft Venture Capital, and PE Partnerships, Paroma Roy Chowdhury, chief communication and public affairs officer, Dream Sports, Priyanka Gill, founder and CEO of POPxo, and others
T-Hub shortlists 21 startups for T-Angel accelerator
T-Hub, a start-up ecosystem enabler, has shortlisted 21 start-ups for the second edition of T-Angel.
As many as 10 start-ups from the accelerator will get an investment of ₹50 lakh each during the 45-day accelerator programme
The list of shortlisted for the accelerator include Vityasa, Opstech, KarryNow, Self Charging EVs, Signasis Technologies, Hueristic Devices and Fidelis Consulting Engineers.
Spinny expands its ESOP pool size to $45 M: Report
Used car retailing startup Spinny has expanded its employees stock ownership plan or ESOP pool size to $45 million, Entrackr reported.
The company has passed a special resolution to alter its existing ESOP scheme to increase the number of shares in its ESOP pool to 36,353 options worth Rs 335.82 crore or $45 million, the report added.
The ESOP expansion scheme at Spinny comes after the company’s latest $108 Series D round led by Tiger Global Management.
Locus assigns $4 M for its ESOP buyback program
Logistics startup Locus said it has designated $4 million for ESOP buyback with an aim to help employees in their wealth creation journey. The buyback is at par with the primary of the Series C fund raise.
This is the second buyback in the company, Locus said. It revealed that both current and former employees will be able to vest their stock options.
The startup also claimed that it will have a rolling plan to facilitate new buyback for teammates in the future as well.
Snapdeal’s fashion sales grew 210% in H1 2021
E-commerce company Snapdeal reported a 210 percent growth in fashion category sales over the first six months of 2021 (January-June).
The growth was driven by users replenishing their wardrobes to meet work-from-home clothing.
Another factor that drove fashion purchases was the desire to buy new clothes to meet friends and family after a long gap and to meet travel needs, the firm said.
“On average, the popular price range for a single fashion item on Snapdeal is now anywhere between Rs 300-450, as compared to Rs 450-550 in 2020. In fact, on Snapdeal the purchases within the Rs 450 segment have doubled to 40 percent in H1 of 2021 as compared to H1 2020,” Snapdeal said in a statement.
Over 1 lakh drivers have received at least one dose of vaccine: Uber
Ride-hailing platform Uber has announced that more than 100,000 drivers on its platform have received at least one COVID-19 vaccine shot. This is part of the company’s Rs 18.5 crore initiative to have 150,000 drivers on its platform vaccinated by year-end.
Once the vaccination process is completed, drivers receive Rs 400 for each of the two shots for time spent getting the jabs.
The company said it is fighting vaccine hesitancy among drivers by using in-app messages, videos and virtual meetings with medical experts to bust myths and spread awareness on vaccination benefits.
Google files second transparency report in accordance with new IT Rules
Google removed over 150,000 pieces of content based on complaints received in India in May and June.
Over 98 percent of the complaints were related to copyright issues, the internet giant said in its transparency report under the new intermediary rules under the Information Technology Act.
Google received 34,883 complaints in May, and 36,265 in June 2021, according to the report.
In May, 98.9 percent (71,132) and in June, 99.3 percent (83,613) removal action was taken because of copyright issues.
Amazon and Flipkart head to SC in anti-trust probe
Flipkart and Amazon have filed appeals in the Supreme Court challenging the July 23 order of the Karnataka High Court that had allowed the Competition Commission of India to probe both the companies over alleged anti-competitive practices.
The Karnataka High Court had last week dismissed cases filed by Amazon and Flipkart which sought to quash the CCI investigation on accusations that the companies circumvent Indian law by creating complex business structures.
The companies have denied wrongdoing but the high court said, “they should not feel shy in facing an inquiry”.
Meanwhile, Flipkart in its plea had named Amazon as a respondent in the case, along with the CCI, Delhi Vyapar Mahasangh, and the Confederation of All India Traders.
E-commerce rules could be detrimental to sellers, says Amazon as Prime Day turns more sellers into crorepatis
Amazon India wrapped up Prime Day 2021 this week on July 26-July 27 under the shadows of proposed e-commerce rules that could restrict flash sales and could also prevent platforms from selling their private labels.
The e-commerce industry, including Amazon and Flipkart, has already shared feedback with the Ministry of Consumer Affairs on the draft rules that were released last month, highlighting concerns over several such aspects.
“There are certain aspects of draft e-commerce rules which might be detrimental to sellers. Amazon has shared that feedback on draft rules with the government,” Akshay Sahi, Director – Prime and Fulfillment Experience, Amazon India, told CNBC-TV18.
“Amazon always complies with the law, and we will comply with policies that the Indian government brings,” he added.
Amazon’s Prime Day saw more sellers turn crorepatis, and more shoppers from Tier 2 and beyond. Nearly 25% more sellers’ grossed sales over Rs 1 crore as compared to the last Prime Day, the company said.
Nothing launches Nothing Ear (1)
Carl Pei’s consumer tech company, Nothing has launched its first product – Nothing Ear (1).
The highly anticipated true wireless earbuds feature a transparent design and promise a premium user experience. With up to 34 hours of playtime, a powerful 11.6mm driver including Active Noise Cancellation, Nothing ear (1) claims to deliver a pure sound experience at just Rs 5,999.
Nothing ear (1) will be available in India from 17th August 2021 on Flipkart.
Micromax In 2b launched
Homegrown smartphone maker Micromax has launched a smartphone in the crowded budget space from its flagship Make in India brand called ‘In’.
Micromax rolled out the ‘In’ brand of phones after the government announced that the manufacturer of Micromax’s phones was eligible for the PLI scheme.
The phone called IN 2-b will go on sale on August 6 at Rs 7999 and Rs 8999 for its two variants. The company has also forayed into the TWS or True Wireless market with the launch of its wireless earbuds called the Airfunk Stereo buds, both of these products, will compete in the highly competitive budget segment currently dominated by Chinese players.
GLOBAL TECHNOLOGY AND STARTUP NEWS
Amazon posts third $100 bn quarter in a row, but shares slide
Amazon shares fell more than 7 percent in extended trading on Thursday after the company reported its first revenue miss in three years and gave weak third-quarter guidance.
Amazon has posted the third $100 billion quarter in a row – Q2 revenue grew by 27% year over year to $113.08 billion -but a significant slowdown from the second quarter of 2020, when sales skyrocketed 41 percent year over year.
For the third quarter, Amazon expects to book sales between $106 billion and $112 billion, representing growth of 10 percent to 16 percent compared to the same period last year.
The June quarter reflects the last full quarter of Jeff Bezos’ tenure as CEO. On July 5, Bezos handed the role of CEO over to Andy Jassy, who previously led AWS. Bezos is now executive chairman.
Tech giants’ revenue surges in April-June quarter
Tech giants Apple, Microsoft and Google owner Alphabet reported combined profits of more than $50 billion in the April-June quarter.
For April, May, and June, Apple recorded revenue of $81.43 billion, up 36 percent year-on-year.
According to the company, it made a profit of $21.74 billion in this quarter. Apple CEO Tim Cook acknowledged the brand’s rapid growth in India and put the country in his list of ’emerging markets’.
Powered by Google, Alphabet earned $18.53 billion, or $27.26 per share, during the quarter, a nearly threefold increase from last year’s earnings of $6.96 billion, or $10.13 per share.
Meanwhile, Microsoft on Tuesday reported fourth-quarter profit of $16.5 billion, up 47 percent from the same period last year. Net income of $2.17 per share beat Wall Street expectations.
US-listed shares of Canada’s e-commerce giant Shopify rose 2% in premarket trading. Shopify’s value nearly tripled over the last year due to unprecedented growth of the e-commerce sector.
Spotify beat Wall Street estimates for second-quarter revenue on Wednesday, as the music streaming company reported a 20-percent jump in paid subscribers for its premium service driven by demand in Europe and North America.
Global Cos’ impose mandatory vaccination for staff
Big tech companies are making it mandatory for employees in the United States to get COVID-19 vaccinations before entering campuses, as the highly infectious Delta variant of the virus drives a resurgence in cases across regions.
Twitter, Google and Facebook said all US employees must get vaccinated to step into offices.
Twitter is once again shutting its reopened offices in the US and has paused future office re-openings.
Meanwhile, LinkedIn will allow most employees to opt for full-time remote work as offices gradually reopen.
Uber is pushing back its back-to-office date to late October globally, and all employees in the
US will have to be fully vaccinated before returning to the office.
San Francisco-based ride-hailing company Lyft has also postponed its reopening to February from September.
According to a Deadline report, streaming giant Netflix has also implemented a policy mandating vaccinations for the cast and crew on all its US productions.
Bezos-backed plant food firm NotCo joins unicorn club after latest funding
Jeff Bezos-backed food-tech firm NotCo has raised $235 million in its latest funding round that also included athletes Lewis Hamilton and Roger Federer, valuing the plant-based food company at $1.5 billion.
The funding, led by Tiger Global, also saw venture capital firm DFJ Growth Fund and social impact foundation ZOMA Lab pitch in.
According to Reuters, NotCo plans to invest more on its artificial intelligence technology, Giuseppe, which explores new combinations of plants to replicate animal-based food products.
US-listed Chinese Cos must disclose govt interference risks -SEC official
Chinese companies listed on US stock exchanges must disclose the risks of the Chinese government interfering in their businesses as part of their regular reporting obligations, a top US Securities and Exchange Commission official has said.
Democratic commissioner Allison Lee’s comments are the first by an SEC official since Chinese regulators launched a massive cyber probe of ride-hailing giant Didi Global last week, just days after its $4.4 billion New York listing, wiping 25% off its share price.
“Public companies must disclose significant risks which, for China-based issuers, may sometimes involve risks related to the regulatory environment and potential actions by the Chinese government,” Lee, who served as acting head of the SEC from late January to mid-April, told Reuters in an interview.
EU gives Google 2 months to improve hotel, flight search results
The European Commission and EU consumer authorities have given Google two months to improve the way it presents internet search results for flights and hotels and explain how it ranks these or face possible sanctions.
“EU consumers cannot be misled when using search engines to plan their holidays. We need to empower consumers to make their choices based on transparent and unbiased information,” EU Justice Commissioner Didier Reynders said.
The agencies also told Google to revise the standard terms of its Google Store because some cases showed that traders have more rights than consumers.
If Google’s proposals are not sufficient, the agencies will discuss the issue further with the company and may impose sanctions.
Bezos offers NASA $2 Bn in exchange for moon mission contract
Fresh off his trip to space, Amazon founder Jeff Bezos has offered to cover up to $2 billion in NASA costs if the US space agency awards his company Blue Origin a contract to make a spacecraft designed to land astronauts back on the moon.
In a letter to NASA Administrator Bill Nelson, Bezos said Blue Origin would waive payments in the government’s current fiscal year and the next ones after that up to $2 billion, and pay for an orbital mission to vet its technology. In exchange, Blue Origin would accept a firm, fixed-priced contract, and cover any system development cost overruns, Bezos said.
The GAO’s decision is expected by early August, though industry sources told Reuters that Blue Origin views the possibility of a reversal as unlikely.
Facebook sets up new team to work on the ‘metaverse’
Facebook is creating a product team to work on the “metaverse,” a digital world where people can move between different devices and communicate in a virtual environment, CEO Mark Zuckerberg said.
The team will be part of the company’s virtual reality organization, the group’s executive Andrew Bosworth said in a Facebook post.
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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