We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
This week in the Indian startup ecosystem, the Companies (Amendment) Bill has been passed by the Rajya Sabha this Tuesday on July 30. According to the new amendments, all companies are mandated to have a physical address and have to maintain a physical register of their operations. Speaking about the bill, Nirmala Sitharaman said that the amendments are aimed at enforcing a check on ‘shell companies’ and promoting ‘ease of doing business’ in the country.
However, the industry response has been quite contrary to the government’s focus. As remote workforces become a popular trend in the Narendra Modi’s Digital India, mandatory physical office and register maintenance has been seen as a regressive step by the startup community.
The week was filled with interesting developments across mobility, ecommerce, data breaches and much more. Here’s a look at the important Indian startup news stories of the week.
Important Indian Startup News Stories Of The Week
Retail Investors Now Have To Invest In IPOs Through UPI-Based ASBA
National Payments Corporation of India (NPCI) announced that retail investors now have to mandatorily invest in the initial public offering (IPO) via Unified Payments Interface (UPI) based Applications Supported by Blocked Amount (ASBA). The plan is applicable to retail investors who invest via syndicate member, registered stock brokers, registrar and transfer agents or depository participant
NITI Aayog To Start Design Innovation Centres In Mid-Tier Towns
Atal Community Innovation Centre aims to support community-driven innovation in the country through solution-driven design thinking. The programme will focus on regions such as Tier 2, Tier 3, smart cities, aspirational districts, north east, Jammu and Kashmir, rural and tribal areas among others. The plan is to offer unique and incentivised solutions which will encourage students, researchers to ideate and design solutions for the good of the country.
From The World Of Ecommerce
- Flipkart will set up a FurniSure Experience Centre in Bengaluru, which would provide shoppers with the ‘touch and feel’ furniture shopping experience in a large 1,800 sq ft space. The company launched Samarth and aims to bring India’s artisans, weavers, and handicrafts producers onto ecommerce. The host of initiatives and benefits under Flipkart Samarth include dedicated support for onboarding, cataloguing, account management, business insights, dedicated seller support, reduced commission where eligible, and warehousing support.
- In an attempt to boost its retail business, Reliance Industries is now reportedly planning to onboard local distributors such as Kirana stores and smaller shops to sell products from its private label brands such as Best Farms, Good Life, Masti Lite, Freshomz, Enzo, Scrubz, Mopz and more. Reliance is said to be hiring FMCG (fast-moving consumer goods) distributors on a trial basis. This network of FMCG distributors can also prove to be helpful for Reliance to meet the logistics and delivery needs of its online channels. The official launch of these services is expected to happen at the company’s upcoming annual general meeting on August 12.
OYO Tells CCI It Is Not A Dominant Player
Gurugram-based hospitality chain OYO Hotels and Homes has told the Competition Commission of India (CCI) that it is not a dominant player in any relevant market in a case over alleged misuse of dominant position in the market. The CCI agreed with OYO’s contention in its conclusion.
The conclusion came in a complaint filed by New Delhi-based RKG Hospitalities which had entered into a ‘Marketing and Operational Consulting Agreement’ with OYO in 2017. The company, running under the brand name, Divine Inn, alleged that the agreement contained clauses which were one-sided, unfair and discriminatory, and which OYO was able to impose only because of its dominant position.
On Demand taxi Players And The Govt
- The Indian government has now approved amendments to the Motor Vehicles Bill, which will allow the centre to regulate the likes of Ola and Uber. The government’s focus would reportedly be on passenger safety, comfort and would also tackle issues such as arbitrary or surge pricing.
- Earlier this week, a group of 40 bike taxi riders have reportedly showed up at a grievance redressal day meeting organised by the Coimbatore district collectorate office. The bike taxi riders have asked the government to lift the stay of bike taxi operations. Besides seeking to legalize their operations, bike taxi riders sought protection from autorickshaw and cab drivers who often corner them and confiscate their vehicles.
- The Madras High Court has now put an interim stay on the ban on bike taxi operator Rapido. A Division Bench of the Madras High Court on Thursday (August 1) stayed the order until the State government frames regulations for services such as car pooling and bike taxis. Justices Vineet Kothari and C.V. Karthikeyan also stayed the lifting of Rapido app from Google Play Store and Apple App Store.
Controversies, Data Breach And More
- A web privacy research group, vpnMentor has found data breaches in two Indian fintech startups — Credit Fair and Chqbook on July 24. Talking to Inc42, Chqbook founder Vipul Sharma agreed that the company’s database was left vulnerable for a couple of hours on one day but it was soon secured by the team. As of July 31, Credit Fair was yet to fix the loophole. vpnMentor said in blog post, “our team discovered that both Credit Fair and Chqbook’s entire databases were unprotected and unencrypted. Credit Fair uses a Mongo Database, while Chqbook uses Elastic Search, neither of which were protected with any password or firewall.”
- The Reserve Bank of India (RBI) has imposed a penalty of around INR 26 Lakh on Mobikwik Systems and HipBar, for non-compliance with regulatory guidelines. Mobikwik Systems Private Limited has been pressed a fine of INR 15 Lakh while HipBar Pvt. Ltd. faced a fine of INR 10.85 Lakh, according to the RBI’s press release. The prepaid payment instrument (PPI) providers will have to pay the penalty within thirty days.
- Several other Truecaller users expressed concerns as they were registered for UPI on Truecaller without consent. The latest Android version 10.41.6 of Truecaller app automatically sent an SMS from the SIM used to register for a UPI bank account to Truecaller Pay without consent, the moment the latest version of the app was installed. Truecaller said it has discovered a bug in the latest update of Truecaller that affected the payments feature, which automatically triggered a registration post updating to the version. This was a bug and the company has discontinued this version of the app so no other users will be affected.
- Gurugram-based foodtech unicorn Zomato took a stand on a religious controversy. App Annie data showed that Zomato’s ranking in the Overall category on Google Play Store fell 10 points from 28 to 38 in one day, while its ranking among apps only (excluding games) fell to 32 from 25 over July 30 and 31.
Digital Payments: The Growing UPI Payments And Awaited Launches
- The yearly RBI bulletin of Payment system indicators shows that the use of prepaid payment instruments (PPI) increased 33% from 3.45 Bn transactions in 2017-18 to 4.6 Bn transactions in 2018-19. In terms of value, PPIs grew 50% reaching INR 2128.76 Bn from INR 1416.34 Bn in the last year.
- Supreme Court has reportedly given the Reserve Bank of India six weeks to examine and report whether WhatsApp Payments has fulfilled its data localisation requirements. The Supreme Court has also asked the government to make clear, within six weeks, its position on whether the company’s grievance officer should be based in India.
- Data by National Payments Corporation of India revealed that in July 2019, UPI recorded 822.29 Mn transactions. In terms of value of transactions in July, UPI recorded INR 1,46,386.54 Cr value of transactions. PhonePe claimed that it recorded 335 Mn UPI transactions in July. The company said that it has achieved an annual TPV (Total payment volume) run-rate of $95 Bn.
Indian Govt & Foreign Players: Ongoing Moves
- India’s Minister of State for Communications, Sanjay Dhotre has reportedly said that there is a need for robust industry investment in 5G innovation, startups and creation of 5G products that have the potential to create India-focused patents.
- Facebook launched a Privacy Application Challenge along with DSCI, and presented five problem areas that privacy and security professionals, researchers, entrepreneurs, students, designers and startups would need to solve. The five problem areas are age-appropriate design, privacy safe-data sharing hub, privacy notice communication, anonymised data driven analytics and consent management.
- Indian government is reportedly looking to levy direct taxes on foreign technology companies who earn more than INR 20 Cr in revenue and has over 500K users from India. This would mean that major tech companies such as Google, Facebook, Amazon and Twitter will have to pay taxes on their profits earned locally. This is said to be part of the Significant Economic Presence (SEP) concept drafted by the Central Board of Direct Taxes (CBDT) in February. The government is reportedly considering making SEP a part of the draft Direct Taxes Code which will reportedly consolidate all laws related to direct taxes in the country. The draft code is expected to be submitted to the ministry of finance soon.
- Google Cloud said that it is now working to tap into the burgeoning cloud service opportunities in the government sector in India. The platform aims to help government clients have scalable, agile and secure multi-cloud experience, with a special focus on artificial intelligence (AI) and machine learning (ML) capabilities.
Cisco Partners With Google For Public Wi-Fi Zones Across India
American technology conglomerate, Cisco has partnered with Google Station to roll out free high-speed Wi-Fi zones across India. Through this partnership, the company said, it aims to provide communities around the country access to a free, open, high-quality public Wi-Fi.
The project is said to have already begun its first phase and aims to setup 200 Wi-Fi enabled locations in Bengaluru by September 2019. This will be followed by enabling of another 300 locations in the second phase of the project. The locations being targeted under this project include public spaces such as bus stops, hospitals, government offices and more.
Dineout Launches Dine-In Digital Menu For Dynamic Pricing
Talking to Inc42, Dineout cofounder and CEO Ankit Mehrotra said that Dine-in is a digital menu solution with support for variable and dynamic pricing thanks to data analytics and artificial intelligence processing of that data. Dine-in partner restaurants would have a QR code on the table for customers to browse through Dineout discounts through a digital menu. Mehrotra added that customers would get recommendations based on their past orders, if that data is available with Dineout.
Other Indian Startup News Stories Of The Week
Club Factory Looks Beyond Customs Crackdown With Deeper India Seller Focus
Chinese ecommerce platform Club Factory is reportedly onboarding over 10K sellers in India this year, and has plans to set up new offices in Bengaluru and Mumbai too. India is the largest market for Club Factory with users in the country accounting for 40 Mn of its 70 Mn global users. In April, the company had issued a media statement saying it will make significant investments in warehousing, delivery, technology and marketing to strengthen its India presence.
Open Ties Up With Visa To Offer Business Credit Cards To Funded Startups, SMEs
Bengaluru-based fintech startup Open has tied up with global card payment network, Visa to launch a suite of innovative products that include a business credit card for SMEs, payment gateway and real-time payments. The companies said that the business card from Open will be specifically designed to help startups qualify based on funding rather than credit history.
Delhi High Court Restrains Snapdeal From Selling Titan Counterfeits
The Delhi High Court has asked Snapdeal to crack down on fake product listings on its website in response to a civil lawsuit filed by Titan against the ecommerce marketplace and some of its sellers. Titan alleged that sellers were posting counterfeit/infringing FASTRACK watches on Snapdeal and further that Snapdeal had also not taken down the various listings despite being notified by Titan.
India Post Payments Bank Plans To Convert To Small Finance Bank
Government-owned India Post Payments Bank has decided to change its future course by converting to a small finance bank. With this, the postal department aims to offer small loans to customer and open one crore bank accounts in 100 days. The decision to convert to small finance bank will work towards providing micro credit at the doorsteps to individuals and SMEs.
India Post will partner with common service centres under Digital India programme to provide a suite of citizen centric services such as banking, remittance, insurance, DBT, bill and tax payments etc at post offices.
Tesla May Launch In India By 2020
Elon Musk has once again set a timeline for Tesla’s entry into the Indian market. In a recent interaction with the students of IIT Madras, Elon Musk said that the Tesla might run on Indian roads by 2020. Tesla has been trying to enter the Indian market since a long time but has been unsuccessful due to lack of infrastructure, policies and the market for electric vehicles.
TikTok Parent ByteDance Set To Launch Its Own Smartphone
TikTok and Helo’s parent company, ByteDance has confirmed its plans to foray into smartphone manufacturing. Earlier in January, ByteDance has acquired a Chinese electronic device maker Smartisan. According to a media report, a ByteDance spokeswoman has said that smartphone had been part of Smartisan development plans even prior to their acquisition of ByteDance. Also, a Chinese media report noted that ByteDance phone had been in development for the past seven months and the project is led by a former Smartisan executive, Wu Dezhou.
Amazon Planning To Enter Auto Sector Armed With Multiple High-Tech Patents
Amazon is reportedly working on a strategy to dominate the global auto sector, with the support of its existing logistics, cloud computing and digital services capabilities. The ecommerce giant has filed 210 patents related to transportation between December 2016 and May 2019. These patents are said to range from drones to automated delivery vehicles and even include a scheme to transport passengers through a network of driverless vehicles.
Stay tuned for the next week’s edition of Indian Startup News Stories Of The Week!