We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
In one of the biggest chances for the Indian startups, the Reserve Bank of India (RBI) has put out a tender for a mobile app to enable visually impaired persons identify all denominations of Indian banknotes. However, at present, intaglio printing-based sensory aids for the visually challenged are only present in banknotes of INR 100 and above.
The proposed mobile application is expected to identify all legal Indian denomination, give audio feedback to the user on the currency denomination among other features.
Further, this week, Ministry of Corporate Affairs of India has amended Company (Incorporation) Rules, 2014 to ensure clarity and uniformity in registration of company names. The changes clarify issues regarding same names because of use of plurals, special characters, different language tense (such as spoken and speak), names rhyming with existing company names, domain extensions, altered word’s sequence, etc.
These amendments have been brought in after the multiple cases of company name registration requests being rejected due to issues such as trademark disputes, and on account of proposed names being too common.
Also, this week, RBI released its statement on Payment and Settlement Systems in India: Vision 2019–2021. The Vision 2021 emphasises on innovation, cyber security, financial inclusion, customer protection and competition. The report consists of 36 specific action points with 12 specific outcomes. The action points include setting up 24*7 helpline and outcomes include shift Cash on Delivery (CoD) transactions to digital modes for ecommerce.
There’s a lot more that happened this week from INR 10 Cr fraud unearthed at Paytm Mall to the launch of credit cards by Paytm and Ola. Here are the other important news from the Indian startup ecosystem.
Important Indian Startup News Stories
E&Y Investigation Reveals INR 10 Cr+ Fraud At Paytm Mall
After confirming that E&Y is conducting a probe into an internal Paytm Mall scam, the company has said that the cashback fraud is “INR 10 Cr for sure”. Paytm founder Vijay Shekhar Sharma told a news report that the company discovered the Paytm Mall scam last year. They found out that there were some sellers who were colluding with some employees at the junior-level and they, sort of, will get more cash back on their products. Further, with the fraud in open, the company has delisted hundreds of sellers and has fired multiple employees.
COAI Asks DoT To Put A Stop On Online Sale Of Wireless Devices
In a letter to the Department of Telecommunications (DoT), Cellular Operators Association of India (COAI) has argued that certain ecommerce sites are illegally selling these devices despite of the restrictions which is affecting the service quality for telecom users. In March COAI had asked various ecommerce companies such as Flipkart, Amazon, and Snapdeal, to immediately stop the sale of wireless devices such as mobile signal boosters and repeaters. However, as of now, few companies have stopped the sale of these items, while some ecommerce players are still selling these wireless devices. According to COAI, the sale of such products without valid license amounts to an offence and is punishable by fine and imprisonment of up to three years or more.
Mobile Wallet Payments Grow 12% In March
Data released by the Reserve Bank of India showed that in March, 384.89 Mn mobile wallet transactions, worth INR 15,990 Cr, were completed. In terms of Y-o-Y growth, 2018-19 recorded 4.13 Bn mobile wallet transactions worth INR 1.83 Tn. This is 30% Y-o-Y growth in terms of value and 37% in terms of volume of transactions.Many fintech firms have been of the opinion that there has been a sizeable dip in the value of cash loaded into e-wallets by users since KYC was made mandatory.
Visa Is On A Roll: Partners With Ola And Paytm To Launch Credit Cards, Launches NCMC
- Paytm has launched Paytm First Credit Card with Citibank and is powered by the VISA payments network. It offers 1% universal unlimited cashback and has no restrictions on rewards for any transaction. Paytm has created a credit card approval tool, jointly developed with Citi, to assess the credit worthiness of users.
- Ola has now launched an Ola Money-SBI Credit Card after inking a deal with SBI and Visa. It plans to issue as many as 10 Mn credit cards by 2022. The company is allowing onboarding of new users for free for the credit card, and allows them to apply, view and manage their accounts directly on the Ola app. Ola claims the cards will help Visa and SBI bank acquire more customers in India and creates a new monetisation model for the ride-hailing company.
- In line with government guidelines, Visa NCMC cards will allow for the contactless feature of tapping to pay, that provides a card balance for offline usage at transit venues. It will also allow cardholders to store their transit passes on the card, provide multiple ways to top-up the offline balance on the card. The card will also be accepted at participating public transport operators (PTOs) across the country.
Government Support For Fintech Development, Ecommerce Policy
- The central government is looking to mandate a QR code-based payment option using UPI at all shops and establishments for users looking to transfer money digitally. Both the customers and shopkeepers will eligible for GST benefits as the consumer opts for this mode of transaction. This step is intended to promote digital payments as the preferred option.
- Ministry of Electronics and Information Technology (MeitY) has taken an account of deployment of Point of Sales by banks. Having failed the last years target of 2 Mn PoS each, the banks have now been asked to deploy 8.5 Mn PoS terminals across rural areas and the northeastern states to achieve the new targets.
- Niti Aayog has proposed that all data related to all online transactions from various companies would be collected and processed centrally, with safeguards in place to protect user privacy and improve data storage security. Niti Aayog has further proposed to set up an independent regulatory body to oversee that no entity is monopolising the data of consumers and that the data being used is anonymised.
- Finance Ministry has suggested that provisions regarding data protection should not be made part of the new ecommerce policy. The draft ecommerce policy, which was unveiled on February 23, has data as its focal point and was accepting comments from industry stakeholders till March 31. A government official said that the issue of data protection should instead be handled by the IT Ministry, as it is already drafting the bill for every industry and sector where data storage is involved.
Financial Performances For Q4 And FY 2019
- Indian hyperlocal search engine Justdial has recorded an operating revenue of INR 2.3K Mn, which is 15.9% year-on-year revenue growth for the Q4 2019. Further, the number of quarterly unique visitors for Justdial stood at 139.1 Mn users, of which 110.4 Mn were mobile users. Total 25.7 Mn listings were made on the platform till the end of this quarter, while the active paid campaigns were recorded at 500.8K.
- Home services marketplace UrbanClap has grown its operating revenue to INR 116 Cr in FY2019, which is a 150% rise in comparison to last year. However, the operating loss has increased by 26% to touch INR 72 Cr in this fiscal. UrbanClap has reported fulfilling three times the service orders as compared to last year, totalling to 3.3 Mn service orders in FY19. The total transaction value of orders stood at about INR 400Cr, as compared to INR 130Cr in FY18.
- In Q4 2019, Gurugram and New York-headquartered online travel company MakeMyTrip raked in $120.17 Mn in revenue taking the yearly revenue to $486.01 Mn. The company’s unaudited financial results show that the losses for Q4 increased 39% to $40.39 Mn, as against $29 Mn in Q3. The loss for the year was reported at $167.88 Mn overall.
The International Relations
- Xiaomi founder Lei Jun believes that the Chinese investment coming to India could intensify because of the raging trade dispute between the US and China. In such a scenario when the US seems hostile towards investments from China, India becomes a viable option for Chinese entrepreneurs to invest in. “There are currently not many Chinese companies doing business in India, and we have a lot of room to improve. We are bullish,” Jun said.
- Japan has complained against India’s excess import duties for smartphones to the World Trade Organisation. The complaint comes against India’s duties on mobile phones, base stations and routers, as well as the circuit boards and other components that go into these devices. Japan alleges that India is looking to boost its domestic manufacturing and production units by adjusting various taxes, including customs duties.
- Bengaluru-based cab hailing giant Ola has invested about $60 Mn into its international operations over the last 15 months. This capital only reflects the additional costs of running local operations, marketing and incentives. Further, the international business is expected to account for more than one-third of Ola’s consolidated revenue by the end of this financial year.
- Ecommerce giant Amazon is now setting up its export business to allow Indian sellers on its platform to sell products in the UAE and Middle East markets. The service will be leveraged through Dubai-based ecommerce company Souq which was acquired by Amazon in 2017. The products across verticals such as jewellery, apparel, beauty and groceries are expected to increase the sales of Indian sellers in the UAE market.
Flipkart Negatively Affects Walmart’s Earnings And More
- Walmart’s first quarter of FY2019 has showed that the operating income for international operations came down 38% in constant currency terms and 42% on a reported basis. A large part of the decline was due to dilution from Flipkart, which was expected, partially offset by the deconsolidation of Brazil.
- Flipkart is in talks with international original equipment manufacturers (OEMs) to collaborate on manufacturing electronic appliances and products for the Indian market. The company is looking to collaborate with Sansui, Nokia and Motorola, to manufacture Smart TVs, which will expand Flipkart’s MarQ brand of electronics and home appliances
Other Indian Startup News Stories Of The Week
DGCA May Allow Commercial Use Of Drones
The Directorate General of Civil Aviation (DGCA) has invited expressions of interest (EOI) from consortia of experts to conduct experiments in the use of drones. The objective of the proposed operations will be to conduct experimental BVLOS operations of Remotely Piloted Aircraft Systems (RPAS) in controlled condition within identified and segregated low altitude Indian territorial airspace for a period of at least 2 months, collect evidence, prepare safety case and submit Proof of Concept (POC) to DGCA. The experiments, as per the DGCA, will pave the way for requirements to enable BVLOS operations in the future.
AWS Launches Availability Zone In Mumbai
Amazon’s cloud services unit, Amazon Web Services (AWS), has added a third cluster of data centres, known as an ‘Availability Zone’ (AZ) to the AWS Asia Pacific (Mumbai) Region. This will help the company accommodate a growing number of customers and increasing usage of the region. With this, total AWS AZ globally come to 65 within 21 geographic regions around the world.
EC Directs Twitter To Pull Down Exit Poll-Related Posts
The order comes at a time when the seven-phased Lok Sabha elections are nearing towards their end on May 19. Twitter is yet to react to the election commission’s order. Apart from the social media company, ECI has also pulled up and sent notices to three media houses for publishing surveys which predicted the election results. The commission has asked them to explain as to why should action not be taken against them for violating the provisions of section 126A of Representation of the People Act.
Xiaomi Launches Mi Express Kiosks
Manu Kumar Jain, managing director, Xiaomi India said that the company has launched Mi Express Kiosk initiative across India. This Mi Express Kiosks are essentially vending machines that allow consumers to purchase Xiaomi smartphones and mobile accessories directly. The first Mi Express Kiosk has been launched at Manyata Tech Park in Bengaluru. The company aims to set up 50 more kiosks in the coming months, and gradually expand the retail plan across more cities.
Vaping Consumer Body Asks Karnataka Govt To Lift Ban On E-Cigarettes
Association of Vapers India says that the e-cigarette ban imposed by the Karnataka state government is anti-people and imperils the lives of over 1.8 Cr smokers in the state. Last year, the association had filed a public interest litigation (PIL) in the Karnataka High Court against the ban on e-cigarettes. AVI says that banning their use while allowing cigarettes to be sold violates basic principles of public health; protects the tobacco industry and criminalises citizens who are trying to avoid tobacco-related death and disease.
Vodafone Idea May Hive Off M-Pesa To Comply With RBI
Vodafone M-Pesa, Vodafone’s fully-owned payment platform is considering merging with its associate, Aditya Birla Payments Bank, or a third party. The plan to find takers for M-Pesa was announced during Vodafone Idea’s fourth-quarter earnings call. For the time being, M-Pesa has applied to RBI for an extension of its prepaid payment instrument (PPI) license which expired on March 31, 2019.
WhatsApp Faces Security Bug, Illegal Copies And More
- According to a Reuters report, modified versions of the WhatsApp app and other software tools to manage the application that cost a mere $14 are helping Indian digital marketers and political activists bypass anti-spam restrictions set up by the Facebook-owned company.
- WhatsApp was linked to a bug which allowed attackers to inject spyware on phones with WhatsApp by using the app’s voice call function. The attack allowed hackers to surreptitiously install apps in the background during a voice call. However, WhatsApp has now fixed the issue and informed the relevant authorities in the European Union.
- Following the detection of this vulnerability, Ministry of Electronics and Information Technology (MeitY) has asked for the details of the loophole. The Indian government has asked for details such as the number of users affected and the steps taken by WhatsApp to address the issue.
Spotify And OYO Launch Lite Apps
- Spotify has launched 10 MB-sized app, a beta version of which is currently available for Android users. The company claims that the Spotify Lite Beta app uses less storage, making it an ideal option for older phones with limited capacity. Amarjit Batra, managing director India, Spotify said that they had committed to localising the app so that more and more people can listen to music.
- OYO Hotels and Homes has launched OYO Lite, a lighter version of the consumer app. The Lite app incorporates all the functionalities of the OYO app and has been designed to work in low connectivity areas or low networks to enhance the user experience. With a size of less than 800 KB, OYO Lite app consumes less space while offering an optimized user interaction time and a seamless experience no matter how connected the user is.
Facebook India Launches Thumbstoppers
Facebook India has launched ‘Thumbstoppers’, an initiative to redefine short-form mobile video creativity in the country. In partnership with Wunderman Thompson, Ogilvy, Leo Burnett, McCann and Mullen Lintas, Facebook India aims to transform storytelling for mobile advertising. The initiative sees the participation of Sukesh Nayak, Chief Creative Officer at Ogilvy India, Senthil Kumar, Chief Creative Officer Wunderman Thompson India, Rajdeepak Das, Chief Creative Officer at Leo Burnett India, Garima Khandelwal, Chief Creative Officer,Mullen Lintas, and Ashish Chakravarty, Executive Director, and Head of Creative at McCann Worldgroup (India).
Stay tuned for the next week edition of Indian Startup News Stories Of The Week!