We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
In one of the most important development for the Indian startup ecosystem this week, India jumped 14 spots in the World Bank’s Ease of Doing Business 2020 rankings report released on Thursday (October 24). From the 77th rank last year, it jumped 14 places to the 63rd position among 190 countries, thereby becoming one of the world’s top 10 most improved countries for the third consecutive time. Only Burundi, Colombia, Egypt, and Georgia have previously managed such a hat-trick, but India’s reform efforts are particularly commendable given the size of the economy, said the World Bank.
Here’s a look at the other major developments in the Indian startup ecosystem this week!
Important Indian Startup News Stories Of The Week
India Continues Thrust On Innovation And Tech
To facilitate knowledge-sharing and holistic growth in the Indian tech industry for big corporations and startups, the National Cyber Security Coordinator’s office in partnership with Data Security Council of India (DSCI), launched a digital portal TechSagar on October 21. TechSagar is meant to act as a repository of over 4K businesses and research entities focusing on technology— IT industry, startups, academia and individual researchers.
At the same time, Prime Minister Narendra Modi advised against the demonisation of AI and similar technology, while saying that artificial intelligence has the potential to transform people’s lives. He also assured listeners that AI will not replace all human jobs in the future. Also, the government recently appointed new committee to resolve NITI, MeitY’s conflict over AI mission.
Week’s Social Media Updates
- The Supreme Court (SC) on Tuesday allowed the transfer of various petitions from high courts to the top court accepting Facebook’s plea related to guidelines for the regulation of social media in India. A bench of Justices Deepak Gupta and Aniruddha Bose said the matter will be heard in January after the Centre formulates new guidelines on intermediaries. Earlier, Facebook had sought transfer of various petitions from different high courts to the SC.
- The Delhi High Court emphasised that social media platforms are bound to globally disable and block any offending content which has been ordered for removal. The social media platforms under scanner include Google, Facebook, Twitter, YouTube etc. The Single Judge Bench of Justice Prathiba M Singh ruled against the practice of geo-blocking or partial disabling content based on territory.
- The government is looking to revise the existing rules for intermediaries or social media apps and platforms that rely on users to create their content, such as TikTok, Instagram and others. The process is expected to be completed by January 2020. The updated draft rules, which were filed last year, are under discussion, as it has to be vetted by the Law and Justice Ministry.
Urbanclap Narrows Down Operations
The company which is now inching closer to reach the unicorn club has planned to shut down its other non-core businesses, including wedding services and photography. However, UrbanClap has planned to scale up its operations in these two categories. The company is going to manage and monitor the quality of the service closely on its platform.
What Ola/Uber Are Upto?
Ola has been rapidly expanding its verticals into everything complementing its core business. The latest product addition came with the launch of Ola Drive, a self-drive car rental service. To further accelerate their growth, the company is now reportedly sending senior Ola employees to its new businesses.
At the same time, rival Uber announced the launch of Uber for Public Transport for the Indian market, starting with Delhi. The company has partnered with Delhi Metro Rail Corporation (DMRC) to enable the service across its 200 Delhi Metro stations.
Companies (Accounts) Amendment rules 2019 Issues New Notification
The ministry of corporate affairs (MCA) on October 22, issued a notification stating that the board of directors will now be liable to provide the details of the independent directors (hired during the year) integrity, expertise and experience to the shareholders. An independent director is one of the members of the board of directors, who do not have any stake in the company.
From The World Of Ecommerce
- Akhil Bhartiya Udyog Vyapar Mandal, along with local retailers and distributors, locked down the Flipkart’s Kanpur warehouse. The protestors alleged that online marketplaces are indulging in unfair means to shrink the business of brick and mortar stores. They even sat outside the Flipakrt’s Kanpur warehouse with banners in hand and interrupted the functioning there.
- As Walmart’s subsidiary Flipkart is all set to launch food retail platform FarmerMart, the multinational retail corporation’s CEO Doug McMillon has written to Prime Minister Narendra Modi seeking an open and stable regulatory environment in India to benefit itself and other global giants. In the letter, McMillion also highlighted data privacy and localisation, permit and other regulatory requirements of India.
- In a move to settle traders’ body’s grievances regarding deep discounting and predatory pricing by ecommerce platforms, the department for promotion of industry and internal trade (DPIIT) has reportedly sought a list of the top five sellers from Amazon and Flipkart. Also, DPIIT has asked ecommerce private labels and digital payments businesses of Amazon and Flipkart to submit various details including total percentage of sales that come from private brands. The minister of commerce and industry, Piyush Goyal, said that the big players are cooperating with the government.
The Profit/Loss/Valuation Updates
- Meesho, the startup has reported a loss of INR 100.42 Cr for the financial year ended March 31. Last year the company reported a loss of mere INR 5 Cr. However, the social ecommerce startup has reported an increase in its revenues.
- In its interim Q3 2019 report, Kinnevik, which holds a 17% stake in Quikr, said that fair value of its stake is SEK 1.7 Bn ($177.02 Mn) for the quarter ended September 2019 (Q3FY19). This brings the valuation of the Pranay Chulet-led company to $1.04 Bn.
- In Q1FY20, Yatra’s revenue reached INR 225 Cr, a 20.7% fall against INR 283.9 Cr in Q1 FY19. At the same time, the company’s losses reached INR 36.7 Cr, a 17.8% Y-o-Y increase. On a positive front, this was nearly half of the loss of INR 85.9 Cr in Q4 FY19.
- With 11% increase in its revenue, the Indian unit of brick-and-mortar store retail giant Walmart has registered a net loss of INR 172 Cr year-on-year (YoY) for financial year 2019, which has almost doubled since last year.
- The Indian subsidiary of Google, Google India, has reported a profit of INR 473 Cr in FY19, a 16% increase from INR 406 Cr in FY18.
- Microsoft posted $33.1 Bn in revenue with $10.7 Bn in net income, an increase of 21% for the first quarter of the fiscal year 2020.
Zomato/Swiggy Woes Continues
A Swiggy customer from Hyderabad refused to accept an order after knowing that the delivery guy was a Muslim. This news comes just a few months after Zomato’s food and religion controversy made the headlines. On October 21, a Swiggy user placed an order from the app and had specified that the food should be “very less spicy. And, please select Hindu delivery person. All ratings will be based on this.” Swiggy told Inc42, every order is automatically assigned to delivery executives based on their location, availability, etc. and not based on individual preferences. As an organization, we do not discriminate between our partners and customers on any grounds.
Amid the rising controversies surrounding the murder of Hindu Samaj Party leader Kamlesh Tiwari, Zomato has clarified that Moinuddin Pathan, who is allegedly involved in the murder, has never been an employee at the company. However, the company has accepted that he was working as a freelance delivery partner with Zomato. At the same time, Zomato says it is not seeing dwindling membership numbers for the controversial Gold subscription service. Contrary to what the NRAI claims, the number of establishments registered on Gold has increased about 6% since August, to 6,450 restaurants across 41 cities as of now.
Further, with a vision to reduce the wastage of used cooking oil in the country, tech-food unicorn Zomato has inked a partnership with the biodiesel manufacturer, BioD Energy. Also, Zomato claimed that response the company received from Tier 3 to Tier 4 cities has been a pleasant surprise for Zomato’s growth. Tier 3 and 4 cities now contribute to 35% of the monthly order volume.
From The World Of Fintech
- Banks or other payment system providers are not going to impose charges or merchant discount rates (MDR) on either merchants or customers. But the updated provision applies only on digital payments made to establishments with a turnover of more than INR 50 Cr.
- NPCI-backed Unified Payments Interface (UPI) is all set to boost digital payments across the globe. The ambitious global project is expected to take off from the United Arab Emirates (UAE) and Singapore. The implementation of UPI in other countries is expected to solve the payment crisis faced by Indians travelling abroad due to currency conversion and non-availability of credit or debit cards.
- NPCI launched a new version of its Unified Payment Interface (UPI) platform Bharat Interface for Money (BHIM) to make it stand at par with other UPI-based payments platform. It has additional languages, including Konkani, Bhojpuri and Haryanvi, increased transaction limit and an option of applying in initial public offering (IPO).
Other Indian Startup News Stories Of The Week
OYO Faces Heat From US Hotel Partners
Several OYO hotel partners have reportedly raised issues ranging from poor software, loss of revenue as well as criminal activities within rooms that are managed by OYO. The report states that while OYO has acknowledged some of the issues, the company has refused to comment on many of the allegations made by the hotel partners.
India Top-Three Market For Airbnb
Global policy head Chris Lehane said that company has been working with the Indian government in India to promote the local culture and traditions through its offerings to travellers. Lehane added that the company has given special attention to some of the suggestions made by Prime Minister Narendra Modi during his interactions with Airbnb founder Brian Chesky.
Shoptimize Eyes Southeast Asia
Pune-based Startup Shoptimize has announced two new business opportunities in Southeast Asia after the company has started working with local partners in South Korea and Singapore. Shoptimize said that it took the decision as it wanted to function closely with the companies with which it has been working in India.
Visa Ready To Adhere To India’s Data Localisation Norms
At present, the draft personal data protection law proposes that companies have to store all payments related information within India, making overseas companies unhappy since it increases the cost of operation in India. However, multinational financial services corporation, Visa claims that they are ready to adhere to the data localisation norms.
Coconics To Launch Its First Laptop Range By January 2020
Kerala-based original equipment manufacturer (OEM) Coconics is all set to release its first range of laptops by January 2020. The product is being manufactured in collaboration with a Kerala based enterprise Keltron in Thiruvananthapuram, the state’s chief minister Pinarayi Vijayan.
YouTube Gets 265 Mn Users Per Month in India
With more than 1,200 video creators in the country crossing the million-subscriber base, YouTube is experiencing a “staggering growth” in vernacular content consumption, said director of content partnerships of YouTube India, Satya Raghavan. The video-sharing website has over 265 million users per month in India currently and 60 percent of users come from outside the metro cities.
SpiceXpress Ties Up With Throttle Aerospace Systems
Under this partnership, Throttle Aerospace Systems will provide the drones and run it in the testing phase, however, operations will be handed over to SpiceXpress once final regulatory approvals are received.
Stay tuned for the next week edition of News Roundup: Indian Startup Stories Of The Week!