We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
This week, at the 11th BRICS Summit, held on November 13 in Brazil, Prime Minister Modi urged the business leaders to invest in India’s infrastructure development.
PM Modi said that India is a land of limitless opportunities, due to its political stability, predictable schemes and business-friendly reforms. He also said that the country has one of the most open and investment-friendly policies when compared to the rest of the world.
NITI Aayog CEO Amitabh Kant at the TiE Global Summit, held on Thursday (November 14), emphasised that India is in the middle of technology disruption. The technology startups will disrupt the established leaders in the industry, he said.
In a major support to India’s entrepreneurship development plans, the country is said to offer the fourth-highest level of business training and education in schools, a recent study conducted by US mergers and acquisitions broker Latona’s revealed. The finding implied that India offers the fourth-highest level of education in the schools of the countries analysed with a score of 7.42 out of 10.
Further, the Tamil Nadu government will be drafting the AI policy around the safe and ethical use of the technology. The government said it will be releasing the policy in the next three weeks, along with a separate rulebook for the state agencies and vendors.
However, the government of Andhra Pradesh issued an order on November 11, 2019, to shut down the Amaravati Capital City Start-Up project, where the Singapore companies, Ascendas Singbridge Pte Ltd and Sembcorp Development Ltd, had invested a few million dollars. It came as a decision from the state government, as it had other priorities for the state.
However, the Singapore government acknowledge the decision and said that the companies are aware of such uncertainties when investing in overseas ventures. It further clarified saying that this will not affect the two companies’ future plans of Investment in India.
Here are other important news stories of the week:
Important Indian Startup News Stories Of The Week
SoftBank: In Conversation With Portfolio Cos OYO and Paytm
OYO founder and CEO Ritesh Agarwal said that there has been no extra pressure from the company’s biggest investor, SoftBank after WeWork’s IPO debacle and slow growth of Uber and Slack. The CEO Masayoshi Son had urged its portfolio companies to become profitable soon.
OYO, on the other hand, said that it has not received any recommendations or orders about changing strategy or business practices for the company either from Softbank or other shareholders. The hospitality startup believes that it is fully aware of its responsibility to deliver value to the investors. And learning from the lessons of WeWork and Uber, the company seems to be cautious of launching its own IPO in the immediate future.
Optimistic about the company, Agarwal said, “The WeWork situation, as well as criticism from partners in India and the United States, provides the chance to enhance our business.”
In another update, Paytm’s key investors, Softbank reportedly insisted the company to go public in the next five years. The VC firm believes that it has reached a point where terms can be included. In case, if Paytm is not successful in going public, then SoftBank would sell its 19% stake to other investors.
Paytm Eyes Investments In Startups
Noida-based digital payments company Paytm announced that it will be investing in early-stage tech startups that are into building AI-based products and big data solutions to solve complex problems in Indian.
Paytm claims to have kept aside INR 500 Cr ($70 Mn) to invest in tech startups that are boosting the Indian digital ecosystem. The company said that it typically invests INR 200 Cr – INR 250 Cr every year in IPs or startups that develops complementary technologies such as Insider, Nearby, Loginext, TicketNew, Hungerbox, Nightstay, QRQL and RecruiterGrid.
Ecommerce Policy & FDI Issues: Govt Vs Ecommerce Players
- The Confederation of All India Trader’ (CAIT) Gujarat unit, on November 13, demanded a complete ban on ecommerce in the country. It had reportedly accused ecommerce platform of violating foreign direct investment (FDI) norms, causing goods and service tax (GST) and income tax, revenue losses to the government, and involved in unethical practices such as deep discounting, predatory pricing among others.
- CAIT has finally rolled out new rules to check the deep discounting practices of ecommerce platforms such as Amazon and Flipkart. The policy was announced on November 11 and is applicable immediately for all ecommerce marketplaces, which work with third-party sellers.
- According to the new Consumer Protection (e-Commerce) Rules 2019, the ecommerce platforms should not influence the price of the goods, it is not allowed to indulge in any trade practices or promotion of sales, and it is also not allowed to represent itself as consumers and write reviews about the product or services among others.
- Previously, the department of consumer affairs (DA) had released the draft ecommerce guidelines for consumers on August 1, the draft was open for suggestions and queries from the industry stakeholders for the duration of 45 days i.e September 16, 2019. However, the deadline was extended to October 31, 2019.
- Once again for the third time, the ministry of consumer affairs has extended the deadlines to submit feedback on the draft policy on ecommerce to December 2, 2019.
BigBasket Claims To Break Even In 10 Cities
Online grocery delivery platform BigBasket is said to achieve breakeven point in 10 Tier 1 cities, including Delhi, Mumbai and Bengaluru and others in the next three to four months. BigBasket claims to have generated enough revenue to cover all the operational costs incurred over marketing, advertising, delivery and discounts. In the coming days, the company is said to start discussing their way to profitability. But until then, BigBasket plans to micromanage the growth drive by looking at each city as an individual unit.
Amazon, Dineout Co-Create Restaurant Inventory Management
Amazon has tied up with restaurant reservation platform Dineout to enable inventory management for restaurants. Talking to Inc42, Ankit Mehrotra, the cofounder of Dineout explained that the company is working together to create a marketplace for restaurants and vendors, where it will be enabling end-to-end inventory and raw material needs at one place, instead of tying up with several vendors for different requirements.
Cybersecurity Flaws Detected At Paytm, Bounce
Bengaluru-based bike rental startup, Bounce had a security flaw in its application, where the internal application programming interface (API) lets the hacker get into any Bounce account, bypassing the user’s phone number into sending a request, and in response, it returns with the access token and rider ID, which gives the hacker the access into the application.
According to one of the security researcher, the vulnerability could have allowed hackers to access the accounts of 2 Mn users and steal all their sensitive information, such as driving license, selfies, phone number and email address.
Noida-based digital payments gateway Paytm has also come under the social media radar for cyber fraud after an investment banker tweeted on how INR 5K from his Paytm wallet automatically got transferred to a juice shop vendor.
The banker Vikaas Sachdeva tweeted, saying, “Just flagging off a fraud which happened to me. My entire Paytm balance of over 5K got transferred to an entity called Balaji juice centre at 12.15 AM today, while I was asleep at home. Reported it to @Paytmcare but am surprised how vulnerable Paytm is to cyber fraud.”
Amazon: Targeting Fake Products And Private Label Expansion
- The US-based ecommerce giant announced to roll out its project Zero to India. Through this, the company will ensure customers receive authentic goods when shopping on the Amazon platform.
- In order to take a more hands-on approach to private label expansion, Amazon is all set to bring its seller-focussed Accelerator programme to India. Through this, the company will provide partner sellers details of shopping trends, the top-selling products and other digital marketing strategies.
Ola, Uber Drivers Crunch
The drivers of Ola and Uber have led protests on several occasions in the past, and recently after the ban on surge pricing during the odd-even rule in Delhi, the drivers once again protested against the cab-aggregators, causing a huge problem for the commuters.
Apart from this, the issue related to payments and poor incentive structures, alongside the financial instability of several cab owners to repay their loans, have resulted in a shortfall of drivers and cars in some cities, including Bengaluru, Mumbai and other metro cities. For commuters, the crunch in the number of drivers and cars means they will have to wait longer and expect more cancellations.
UPI Buzz: Udaan Gets Onboard, Yes Bank Leads And More
- Bengaluru-based Udaan is working on deploying its QR-code enabled digital payments for retail outlets, restaurants and merchants. The company confirmed to Inc42 that it has been testing digital payments for the last six months In Bengaluru. Soon it plans to expand its services across Delhi-NCR and other metro cities in the coming months.
- Udaan has been listed as one of the official third party payments apps by the National Payments Corporation of India (NPCI), which uses the UPI handle @yesbank. Interestingly, this also shows that Udaan has also partnered with Yes Bank for the business.
- On October 2019, India’s unified payments service (UPI) recorded over 1 Bn transactions. According to recent media reports, it is said that around 80% of these transactions were carried out by five Indian commercial banks, including State Bank of India, HDFC Bank, Axis Bank and ICICI Bank, together accounting for 500 Mn transaction (45% of total UPI transactions).
- However, Yes Bank individually completed over 415 Mn transaction, followed by Paytm with 200 Mn UPI transactions. The success of Yes Bank was backed by PhonePe, where it handled its UPI transaction completely. Apart from PhonePe, YesBank has also partnered with various third-party apps such as MakeMyTrip, Cleartrip, Swiggy, Redbus and others.
- Yes Bank is helping developers and businesses create meaningful fintech products with Sandbox, which boasts of 50+ virtual APIs. The Sandbox is expected to host 100+ APIs by the end of 2020. Besides this, it is also planning to launch the Innovation Lab soon.
- India’s ambitious project of taking its UPI to a global level has come to life. The Singapore Fintech Association (SFA) signed an agreement with the Federation of Indian Chambers of Commerce and Industry (FCCI) on Monday, November 11.
- The BHIM UPI QR code-based payment gateway will now be available in Singapore, as it is expected to solve the payment crisis faced by Indians travelling abroad. More than anything, it is expected to enrich the Singapore-India fintech ecosystem.
Financials FY18 and FY19: Paytm Mall, Furlenco, Zomato and more
- The ecommerce arm of Paytm, Paytm Mall recorded consolidated revenue of INR 968.25 Cr with expenses of INR 2138.77 Cr leading to a loss of INR 1170.97. The company has had a steady improvement on a Y-o-Y basis in terms of the complete transition, where the revenue improved by 24.7% against FY18, expenses decreased by 17.16% and the losses also narrowed down by 34.4%. On a standalone basis, Paytm Mall reported revenue of INR 868.16 Cr, a 24.9% increase with a 17.11% decrease in expenses reaching INR 2139.60 Cr. Its losses decreased by 34.4% to INR 1171.62 Cr.
- Furniture rental startup, Furlenco’s expenses are 2.2x of its revenue reached INR 144.6 Cr in FY19 with a loss of INR 80.03 Cr for the year. The company has reduced its advertising expenditure over the last three years. In FY17 the company spent INR 13.6 Cr. However, in FY19, it spent INR 9.7 Cr, almost similar to FY18. Employee benefit expenses wise, it has increased by 27.7%, reaching INR 33.5 Cr in FY19 from INR 26.22 Cr in FY18.
- The restaurant aggregator company, Zomato reported total revenue of INR 1350.47 Cr and expenses of INR 3109 Cr leading to losses of INR 570.52 Cr. The company earned INR 1130.81 Cr in FY19 from sale of services, a 2x growth compared to FY18, INR 366.54 Cr. Additionally, it earned INR 16.28 Cr from provision platform and food delivery services.
- US-based software company Ebix’s reported a 14% rise in revenue to $147.2 Mn in Q3 FY19, compared to Q3 FY18, $128.6 Mn. After excluding the revenues from the de-emphasised egovernance business, Q3 FY19 revenue grew 17% in Q3 2019 as compared to Q3 FY18. Exchange cumulative, including the insurance and EbixCash financial exchanges, accounted for 88% of Q3 2019 revenues.
- Walmart has taken a non-cash impairment of $290 Mn on account of Jabong’s trade name. The Flipkart-owned fashion ecommerce platform’s value was reduced in the third quarter of the current financial year. According to the earnings release on November 13, Walmart International has noted a 46.2% decline in its operating income and 40.8% fall in the constant-currency term.
Other Indian Startup News Stories of The Week
Govt Spends INR 20K Cr To Make India Job Ready
Due to the rise in the unemployment rate in the country, the Indian government is now planning to introduce advanced technology courses such as cybersecurity, artificial intelligence, big data among others, at the graduation level. The government has also allotted INR 20K Cr to the project which is aimed at introducing employable skills as part of a graduate course and is awaiting cabinet nod.
Google News Update: Now Shows News In Regional Languages
The aggregator application developed by the tech giant, Google News released a new update last week, where it will show news articles from multiple languages and countries on its platform. The update is now available for Google News users on both Android and iOS across 141 countries in 41 languages. In India, the platform includes more than ten regional languages such as Hindi, Bengali, Marathi, Odia, Tamil, Telugu, Gujarathi, Malayalam, Kannada, Urdu and more.
Mastercard Goes Beyond Cash & Card Payments
On November 11, the payments technology company Mastercard and wearable token service provider Tappy Technologies announced a partnership to take digital payments to the next level.
The duo is set to enable payments through analogue watches from Timex Group. It will be launched in the first half of 2020, includes India. Similarly, the companies said that this feature will soon be available to other wearables, where it will help the merchants accept any Mastercard Digital Enablement Services (MDES) through contactless payments.
MedPlus To Go For IPO For Expansion
Pharmacy retail company, MedPlus announced that it would be going public (IPO), with its plans to raise 700 Cr. And the preparation of IPO draft prospectus (DRHP) will start from next month. The company could re-evaluate the ideas of an IPO if it gets the right investors. The founder Madhukar Gangadi has over 77% stake in the company, and he would be looking to offload stake to manage promoter level debt.
Wipro Partners With Telecom Infra Project
Wipro Collaborates With The Telecom Infra Project (TIP) to drive 5G adoption in the global communications service provider and enterprise markets. This is said to promote collaboration between Wipro’s 5G strategic plans, academia and industry thought leaders across communications and network equipment provider (NEP) companies, globally.
Twitter To Put An End To Fake News
The social media platform, Twitter announced a draft policy to curb the ‘synthetic and manipulated media’ tweets, which are used to confuse or mislead users with fake news.
In the new policy, Twitter plans to identify such posts, place a notification next to the tweet, and warn users before they share it with others. And Twitter said that any tweet that can threaten someone’s safety or can be harmful in any way, should be removed.
Medical Device Parks For Affordable Treatment
The central government through its Make In India initiative has now approved setting up of four medical device parks in the country to offer world-class treatment at affordable prices. Through this plan, it will support medical equipment manufacturers to easily access the testing facilities and reduce the cost of production.
The government is also said to make these parks scalable by proposing to fund $3.2 Mn (INR 25 Cr) or 70%, whichever is lesser the project cost of setting up of common facility centres (CFCs). The medical parks will be set up in Andra Pradesh, Telangana, Tamil Nadu and Kerala. Followed by Uttarakhand and Gujarat, which has approached the centre for installing such parks.
Govt Takes Down Over 8K Ayodhya Social Media Posts
After the Ayodhya verdict was announced by the Supreme Court (SC) on Saturday (November 9), the government’s surveillance machinery team monitored all the social media platforms round the clock, as a measure to stop any kind of violence from happening.
The so-called ‘Operation Eagle’ was commissioned at the Signature Building headquartered in Uttar Pradesh, where more than a dozen of cybercops and 250 social media personnel were deployed to remain vigilant and on-guard about the mishaps happening across social media platforms.
The special task force was trained to handle the reactions to the Ayodhya verdict. Accordingly, the team reported, to have acted against 8,275 posts on various platforms, including Twitter, Facebook and YouTube.
Inspired By Aadhar, Govt Proposes Unique Health ID For Indian Citizens
The ministry for health and family welfare, under the National Digital Health Mission (NDHM), proposed unique health identification cards (IDs) for Indian citizens. These IDs will be similar to the Aadhaar card and is said to effortlessly generate a medical history of any individual. The ministry believes that this is a step towards leveraging technology for improving healthcare services in India.
Travis Kalanick Is Onto Cloud Kitchen
Uber cofounder, Travis Kalanick, may start building a team in India for his new venture, City Storage Systems — a cloud kitchen startup.
According to various media reports, the company is already in talks with restaurant chains, real estate developers in Mumbai and online delivery marketplaces, including Swiggy, UberEats and Zomato. The company is said to launch its first cloud kitchen platform in Mumbai, followed by Bengaluru, Delhi and Hyderabad.
Clone Futura Ropes In IIT Alumni To Teach Data Analytics To Kids
Mumbai-based edtech startup, Clone Futura, partners with IIT Alumni to organise artificial intelligence (AI) bootcamps for school children across leading schools in the country to educate and prepare them for their future prospects. The courses include data analytics and AI, where the children will be mentored by the IITians for three months.
Indian Army Tells Officers To Logout of Facebook, WhatsApp
After the WhatsApp-Pegasus controversy, the Indian Army advisory board, taking a safety measure, has announced a ban on Facebook and Whatsapp for officers holding critical posts and others who are vulnerable to hacks and leakage of confidential information.
An analysis conducted on social media trends by the army cyber division identified a new set of challenges, on the ways its officials use the platforms. The army claimed that social media applications have the potential to gather intelligence, and can pose a threat to the army personnel families and friends.
Facebook Receives Second Highest Scrutiny Request From The Indian Government
After the journalists, activists and lawyers were hacked by the Pegasus spyware, the Indian government’s fingerprint was all over the place. However, the government denied its involvement and redirected it back to WhatsApp’s negligence and not altering the security authority.
The Facebook report on different government’s scrutiny requests gives a different perspective. In the first half of 2019, the Indian government had asked for 22,684 requests for user data of 33,324 users/accounts from the social media company. Interestingly, India was only in the second position behind the US, which asked the social media company for 50,714 user data requests of 82,461 users/accounts.
Cheap Data, Penetration of Smartphones Increases the Demand For Online Streaming
The report titled ‘The trillion (and growing) touchpoint story recognising the monetisation conundrum,’ by the Boston Consulting Group (BCG), in collaboration with Confederation of Indian Industry (CII), revealed that the average digital video consumption in the country has witnessed a 2x growth in the last two years.
The average time spent in video consumption by Indian users as now increased to 24 minutes per day, from 11 minutes per day, and the report suggested that with the low-cost internet data and smartphone penetration the number could be increasing in the coming days.
Bombay High Court Lifts Ban On Ecigarettes
On November 15, 2019, Bombay High Court (HC) allowed the ecigarette manufacturers and distributors to resume the sales of the products, stating that ecigarettes are not drugs. It also told the Food and Drugs Administration (FDA) to release the seized stock of ecigarettes.
Making the ban unsustainable, the bench’s order added nicotine or nicotine preparations are not covered under the Drugs and Cosmetics Act, 1940 or Cigarettes and Other Tobacco Products Act, 2003.
Chandrayaan 3 Under Way
On Thursday (November 14), the Indian Space Research Organisation (ISRO) announced that it is planning to launch its next lunar mission, Chandrayaan 3, by November 2020. ISRO said that the work has already begun, and the Indian space agency has formed several committees consisting of various panel members, three sub-committees and experts. It is said to be a lander-rover mission, as the Chandrayaan 2 orbiter is functioning smoothly.
Govt Urges Corporates To Adopt Digital Villages
The union minister for electronics, information technology and communication, Ravi Shankar Prasad requested corporates to adopt digital villages as part of their corporate social responsibility (CSR) activities. He asked companies to adopt 500 villages as part of their CSR initiatives, and the government will support any development at these villages.
To take this programme forward, the government plans to create one lakh digital villages in the next three to four years, and it claims to have already set up 700 digital villages last year.
Samsung-Backed TagHive to Digitise Public Schools In India
South Korea-based edtech startup, TagHive has recently launched its flagship product Class Saathi in Madhya Pradesh. It has collaborated with the state government, to take its Class Sathi mobile clicker solutions and the champion app to more than 13 schools in two districts.
Its AI-powered classroom engagement solution Class Saathi aims to make tech-based learning accessible and affordable for schools in rural India with little or no infrastructural investments. The edtech startup also plans to increase student participation and learning outcomes, while at the same time it helps in supporting and motivating teachers to improve their teaching techniques/methods.
Foreign Minister Raises Alarm On Cybersecurity Issue
At the Paris Peace Forum, India’s Foreign Minister S Jaishankar shared his concerns about cybersecurity issues, claiming state and non-state entities targeting to break into the cyber infrastructure are a clear threat to national, regional and global security.
He further said that in the Indian context, any action plan to advance opportunities for security researchers and respond to challenges in cyberspace would need clear roles of all stakeholders.
PayNearby Partners With NPCI
The hyperlocal fintech network PayNearby partnered with National Payments Corporation of India (NPCI) and Equitas Small Finance Bank to set up its micro ATMs at retail shops to provide undisrupted cash flow to the users.
On November 11, 2019, the company announced that it will be aiming to deploy over 1 Lakh point of sales (PoS) ATMs in the first year and slowly increase the number of ATMs with time. The system is said to include a fingerprint scanner, allowing users to withdraw cash through Aadhar cards, apart from debit cards.