We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
In one of the most important developments this week, the Indian government is reportedly considering to ban epharmacies from stocking products in India in order to curb illegal sale of medicines. It is planning to put a clause in the upcoming epharmacies regulations, which will make it mandatory for epharmacies to partner with offline pharmacies to source their medicines. This, in a way, will act as the local delivery services.
In another update, epharmacy companies in India such as 1mg, Pharmeasy, Medlife and Netmeds have come together to highlight the issues on the delay of the guidelines for epharmacy companies under the Drugs and Cosmetics Act released in August 2018. The regulators and ministries have been discussing the issue for over four years. These online companies blame the government for its delay in bringing out the policies, causing issues in ease of doing business for epharmacies across India.
Paytm is likely to turning its payments bank into a small finance bank to provide services to the underserved market, including small businesses and farmers in rural and semi-urban. However, it is still seeking approval from the regulators.
The Confederation of All India Traders (CAIT), reportedly urged the government to take action against ecommerce companies such as Amazon and Flipkart for allegedly violating foreign direct investments (FDI) norms. It had earlier sent a letter addressed to finance minister Nirmala Sitharaman. Recently, it had sent another letter to the commerce minister, Piyush Goyal, where Praveen Khandelwal, CAIT’s national secretary-general, claimed that for the last one year the small retailers have suffered enough because of the ecommerce portals.
The government is currently in the process of updating the national cybersecurity policy. The policy, which was announced in 2013, will be updated by 2020. For this, the government is inviting suggestions from the public for the National Cybersecurity Strategy to cover all areas of cybercrimes and cybersecurity in the country. Those interested in contributing can go give suggestions on the government’s website. The new policy is expected to be in place from 2020 to 2025. The last date for submission is December 31, 2019.
Important Indian Startup News Stories Of The Week
From The Govt Corridors
- In a recent report by the Confederation of Indian Industry (CII) and Tata Consultancy Services (TCS) titled ‘Understanding the Dynamics of AI in Intellectual Property,’ it suggests that India needs to bring in new guidelines and policies for the enforcement of intellectual property rights, patents and intellectual property management in an AI world.
- The Indian government plans to extend benefits under the state-run Employees’ State Insurance Corporation (ESIC) to provide retirement and insurance schemes to those employed in the gig economy such as those working in cab-hailing services, online delivery services, and other app-based services. For instance, it includes employees working with delivery startups such as Zomato, Swiggy, BigBasket, Dunzo, Grofers, UberEats and others as well as driver-partners for Ola, Uber, Rapido, DriveU and other mobile startups.
- The commerce minister Piyush Goyal said that the government registered a massive 1100% hike in the number of exempted startups. In November 2019, the number of startups exempted was around 1,658, compared to 135 startups in March 2019. This year, the angel tax reforms for startups has worked in favour of entrepreneurs and investors.
- The Internet and Mobile Association of India (IAMAI) has set up a new ‘Design and Innovation Committee’ to train Indian masses on sustainable design and innovation. The committee is said to ensure sustainable design education, which will drive growth in the long run. IAMAI aims to increase awareness about the importance of design, across industries. The committee consists of cofounder and chief of technical staff of HFI, Apala Lahiri, and co-chaired by the founder of Sakalya Institute for Design Driven Entrepreneurship, Girish Prabhu.
- MR Rangaswami, an Indian-American venture capitalist from Silicon Valley, lauded Indian startup ecosystem for its phenomenal growth in the last decade. In order to propel the growth of the startups, he suggested businesses to focus on the aspects of liquidity and exits.
From The World of Fintech
- At the bi-monthly Monetary Policy Statement, 2019-20, the Reserve Bank of India has increased the lending cap for each individual lender from the INR 10 Lakh to INR 50 Lakh. This decision will give the necessary push to lending platforms. Many experts said that this will attract more funding for P2P platforms.
- The National Payments Corporation of India (NPCI) recently announced to launch a unified payments interface (UPI)-enabled cash withdrawals through ATMs. Bank of India in partnership with AGS Transact Technologies, end-to-end cash and digital payment solution provider, will be introducing this feature in the next three to six months. AGS is in talks with other banks and plans to roll out it in the market soon. However, the NPCI will be managing the Bank of India-AGS operation. Before offering the feature to other banks, NPCI has set up a committee to review the interoperability guidelines, effectively.
- Xiaomi, the Chinese smartphone maker has entered the consumer lending market in India with the launch of Mi Credit. It will be available both on both Google App Store and Xiaomi’s GetApps. Mi Credit, which is a curated marketplace for lending has partnered with Aditya Birla Finance, ZestMOney, EarlySalary, Money View and CreditVidya to offer lending service in the country. Mi Credit will be offering loans up to INR Lakh at interest rates starting from 1,.5% per month, for the tenure of three to 12 months.
- The US retail giant partners with HDFC Bank to launch cobranded credit card, exclusively for members of its Best Price Modern Wholesale ‘B2B Cash and Carry,’ stores. Launched at the Hyderabad store, the card will be available in 26 other store locations across India. Walmart India claimed that this partnership will help its vendors, especially kiranas and other small businesses.
- The NPCI recently collaborated with startup incubator CIIE.CO and Bill and Melinda Gates Foundation to enable UPI transactions for feature phone users, as at present it is accessible for smartphone users.
The Personal Data Protection Bill
- On December 4, 2019, the union cabinet headed by Prime Minister Narendra Modi recently approved the Personal Data Protection Bill, which will enable the protection of personal data and sensitive personal data of users in the country.
- In the Personal Data Protection Bill, the government plans to allow internet giants to store and process Indian users’ non-personal data on international servers.
Key Financials For The Week
- Grofers, an online grocery delivery startup has reported a loss of 56% for FY19. As per the Ministry of Corporate Affairs filings accessed by Inc42, the company reported losses of INR 448 Cr for FY19. In FY18, Grofers had posted a loss of INR 258.3 Cr. While revenue witnessed a spike of 56.5 %, the expenses of Grofers also increased to INR 531.6 Cr in FY19 from INR 311.7 Cr last year. It has also reported an income of INR 83.6 Cr this year from INR 53.4 Cr in FY18.
- Recently, Druva, a cloud data protection firm announced that it has surpassed $100 Mn in annual recurring revenue (ARR).
- The Indian FMCG brand, Paper Boat recently announced a 62% hike in its revenue for FY18 to FY19. Hector Beverage, the parent of Paper Boat, generated INR 189.56 in revenue in FY19 compared to INR 116.94 Cr in FY18. Furthermore, Hector Beverage has managed to marginally cut down on losses by 1.92% to INR 59.88 Cr compared to last year it recorded INR 61.03 Cr.
- Zivame, a Ratan Tata-backed lingerie retailer Zivame reported a narrow down of its losses by 44% for FY19, The losses of the company for the FY19 stood at INR 32.1 Cr. The total revenue for Zivame witnessed a 59.2% hike. It stood at INR 137.9 Cr from INR 86.6 Cr in the past.
- The parent company of Paytm, One97 Communications recorded another year of heavy losses for its FY18 to FY19. The company saw a 2% increase in revenues while its expenses rose by 54% leading to 2x increase in loses for the year ending March 31, 2019. However, One97 Communications revenue increased to INR 3050 Cr from INR 2987.41 Cr in FY18. Its losses went up to INR 3960 Cr in FY19, as against INR 1491.23 Cr in FY18. Expenses wise, the company spent INR 7254.8 Cr in FY19, compared to FY18, where it spent INR 4718.5 Cr. Employee benefit expenses were INR 627.78 Cr, a 16% YoY increase, and most of the expenses were categorised under INR 6534.71 Cr.
- Mumbai-based beauty and wellness startup Nykaa, in FY19, reported a profit of INR 2.31 Cr. Its revenue grew 1.08x with 99% increase in expenses. Expensive wise, Nykaa’s spends increased 1.07x reaching INR 879.4 Cr in FY19.
- The eyewear etailer Lenskart, the financial year ending March 31, 2019, it saw a fall while revenue and expenses grew at a 24% rate YoY. In FY19, the company’s net profit fell to INR 8.76 Lakh from INR 2.36 Cr in FY18, a 96% YoY fall.
- The online grocery unicorn BigBasket reported revenue of INR 2380 Cr in FY19, a 69% jump compared to last year where the revenue was INR 1409 Cr. However, the losses in FY19 stood at INR 348 Cr, compared to INR 179 Cr in the previous year, where the loses increased by 94%.
- Edtech startup Unacademy, reported revenue growth of 3.19x in FY19, reaching INR 21.89 Cr, compared to the previous year, where it was INR 5.22 Cr. In terms of losses, the company increased 4.12x of its total revenue reaching INR 90.27 Cr, as against INR 23.58 Cr in FY18.
The Never-Ending WhatsApp Saga
- The union territory of Jammu and Kashmir (J&K) enters its fifth month of the ongoing internet blackout. It is not just the internet connectivity, the WhatsApp users in J&K are booting them out of their accounts because of the messaging platform’s policy on inactive accounts after Narendra Modi imposed a ban on all internet communication in the union territory.
- The IT minister, Ravi Shankar Prasad, responding to a question titled ‘Extent of WhatsApp Privacy Breach,’ at the Lok Sabha, said that WhatsApp is currently reviewing the available information and out of 121 users whose devices were attempted to hack using Pegasus spyware, only 20 users in India were compromised.
- The RSS ideologue, KN Govindacharya’s petition against WhatsApp for perjury on the grounds of its claims of securing messages by providing end-to-end encryption on its application. The Supreme Court (SC) of India, has asked Govindacharya to withdraw his petition seeking substantial measures against the social media company.
What Social Media Platforms Are Up To?
- The parlimentary standing committee for empowerment of women headed by BJP MP Heena Gavit, on Wednesday, has asked Twitter to limit the anonymity of users to ensure women’s safety and proactively remove abusive content from its platform.
- The Facebook-owned social platform, Instagram has decided to make the date of birth mandatory to block out all age-inappropriate ads and post for children below 13.
- A university student from California, Misty Hoon has filed a lawsuit against TikTok stating that the collected data by the application is used to identify, profile and trace users in the US. She said the app created an account on the platform on her behalf and was secretly taking the draft videos, which she did not intend to publish on the platform.
- The ByteDance-owned short video platform has been used as a strategic tool to enhance political power in the country. Political agencies, campaigners and strategists are reportedly planning to increase their presence on the platform for the upcoming elections in India.
From The World Of Ecommerce
- CAIT has once again written a letter to Prime Minister Narendra Modi highlighting their concerns. In the letter, CAIT urged PM Modi to take notice of the business models of ecommerce, like Amazon and Flipkart as they are violating the FDA norm and affecting the brick and mortar stores in the country.
- The online shopping platform Myntra has introduced a new feature called ‘Alterations’ on its platform, which allows users to fix up appointments and get clothes, ordered from Myntra, and get it altered at the customers’ doorstep with no extra cost. For this, the company has partnered with over 200 local tailors. This, in a way, will not only help the platform enhance service portfolio, but it will also help the local players generate additional income and grow their businesses. Currently, it is limited to four cities, i.e. Delhi, Mumbai, Bengaluru and Kolkata.
- In order to understand the fight against ecommerce platforms like Amazon, Flipkart among others, Inc42 spoke to the national secretary-general of CAIT, Praveen Khandelwal, and national secretary of CAIT, Sumit Agarwal, and other traders. They said that they welcome ecommerce because it is the potential future mode of business. If these ecommerce platforms obey the FDA policy, the trader’s body has no objection. However, that is not the case, they added.
Foodtech Startup Tinmen Shuts Shop
Hyderabad-based food delivery startup, Tinmen, which was also backed by foodtech unicorn Zomato in 2017, has shut down its operations. The company announced this on its official website.
Tinmen website read: “We are sorry to inform you that Tinmen will be shutting down from Dec 1st, 2019 onwards. If there is one thing that had remained constant in the last 4 years, it was the constant love we got from most of the users who ordered food from Tinmen. We are very grateful for this.”
Other Startup News Stories Of The Week
What Google Is Upto In India?
Last week, Google revealed details about government-backed cyberattacks which impacted 12K users across 129 countries on its blog post. In India, it reported that at least 500 were impacted by cyberattacks. The government said that it will be seeking more details on the matter and the impact it had on the Indian users. However, it said that it has decided to look past the incident.
In another update, Google recently set up a tech lab in Bengaluru for finding solutions to India’s problems in education and healthcare. The lab is part of Google’s global network of researchers, who work on various emerging technologies across the world. Anand Rangarajan, Google’s engineering director said that the artificial intelligence (AI) lab will be operating in the areas of machine learning (ML), computer vision, languages, speech, and systems among others. “Google believes that India will play a key role in the development of these new-age technologies,” Rangarajan added.
Ola Strengthens International Presence
Bengaluru-headquartered mobility unicorn Ola is set to launch in 11 new locations each in Australia and New Zealand, taking its total presence across 33 cities in the region. With over 85,000 driver-partners signed up, Ola aims to double its scale by 2021, as it introduces technology and category innovations to cater to local mobility needs.
Ola has differentiated itself by focusing on driver benefits and by charging industry-low commission rates of 15% in Australia and 18% in New Zealand. Drivers have served well over 160 Mn kilometres with Ola across Australia and New Zealand since launch last year.
Titan Enters Omnichannel Retail
The watchmaker company Titan has shifted its focus from physical retail market to the online channel. The company now joins the league of other online retail brands and startups that are adopting the hybrid approach.
Through this omnichannel upgrade, Titan will be offering home delivery options and pickup services from the nearest stores among others. Interestingly, Titan has tied up with three delivery companies for last-mile deliveries. It will be launching its services across India in the next 12 months.
AWS Launches Wavelength To Support Cloud Computing On 5G
At the AWS re:Invent 2019 event, Amazon Web Services announced the launch of its AWS Wavelength. The new service from AWS will help software developers build applications that run latency-sensitive programmes on smartphones and connected devices designed keeping in mind the 5G network. In fact, to push this forward, the company has collaborated with various telecom network operators, including Verizon, Vodafone, KDDI, and SK Telecom.
The new cloud computing and storage services, when integrated with 5G networks, would enable developers to run latency-sensitive applications such as machine learning platforms, autonomous industrial equipment, smart cars and cities, augmented reality and virtual reality, internet of things (IoT) among others.
Jio, Vodafone Idea Urge TRAI To Set Minimum Price
Reliance Jio, Vodafone Idea, Bharti Airtel have all agreed on the need to regulate data tariff. The Cellular Operators Associations of India (COAI) has asked the Telecom Regulatory Authority (TRAI) to step in and set a minimum price for data plans. Interestingly, the move comes as a surprise since telecom players were against such a regulation in the past.
Additionally, the telecom players urged TRAI to fix a minimum price for mobile data as the industry body COAI is not in a position to decide the same, due to the intense competition in the telecom industry. However, the private telecom operators want the call rates to remain unregulated.
Milkbasket Forays Into Meat Delivery
The milk and grocery delivery startup from Gurugram, Milkbasket, announced the launch of its in-hand delivery service for fresh meats. It will now compete with other meat delivery startups such as FreshToHome and Licious, among others. Prior to meat delivery, Milkbasket has already delivered over 75K products across dairy, FMCG, fruits and vegetables among other household products.
HDFC Customers Go Without Salary, RBI To Come Up With Framework
Earlier this week, HDFC Bank’s customers could not access net banking and mobile banking app because of a technical glitch. The two-day outage affected thousands of customers where they were not able to access their salary, pay credit card bills, autopay bills among others. Many users expressed their frustration via social media platforms. RBI aware of the issue is planning to come up with a new framework to stop such incidents in the future.
Stay tuned for the next edition of the News Roundup!