We bring you the latest edition of the news roundup: Indian startup news stories of the week!
This week, major announcements for India’s digital economy were made at the Global Fintech Festival 2020 (GFF) a virtual fintech event organised by the National Payments Corporation of India (NPCI) and the Payments Council of India (PCI). NPCI launched UPI AutoPay, a feature through which customers will be able to set an e-mandate for recurring payments on the Unified Payments Interface (UPI). UPI AutoPay will allow customers to set an e-mandate for recurring payments of up to INR 2,000. For payments worth more than INR 2,000, the customers would have to enter their UPI Pin for each recurring payment.
On the day of the launch of the product, Nandan Nilekani, chairman of UIDAI which leads the Aadhaar project, said that the new UPI feature will allow the NPCI to reach its goal of $1 Bn transactions a day. The facility for e-mandate helps customers in making payments for insurance premiums, SIPs and subscription fees, among others.
On the second day of GFF, NPCI again made news. This time, for launching a business credit card for small and medium businesses and startups, the RuPay business credit card, in collaboration with SBM Bank India and fintech startup EnKash. The SBM EnKash RuPay Business Card is expected to streamline business operations with a 30-day credit period on business purchases, bill payments, travel expenses, automated GST, rental payments, payments to suppliers and online purchase of software, among others.
Democratising access to credit has been a major focus of digital technologies in India. The GFF certainly demonstrated that. At the same event, Nilekani also launched a new credit protocol infrastructure, the ‘Open Credit Enablement Network’ (OCEN) to connect lenders and marketplaces, saying it will democratise credit in India and help small businesses and entrepreneurs get loans. While the OCEN protocol, developed by the Indian Software Product Industry Round Table (iSPIRT) over the past few months, is currently under discussion, Nilekani claimed that its implementation could democratise lending to micro-enterprises and street vendors in a big way. Both the RuPay business credit card and the proposed implementation of the OCEN are aimed at addressing the financial needs of India’s small businesses, who’ve had it tough in the past few months because of the Covid-19 pandemic and the ensuing financial disruption.
OYO Considers Giving Up Head Office
Hospitality unicorn OYO is planning to experiment with a ‘hybrid workplace model’, whereby, the company’s employees have been divided into three categories — corporate employees, capability functions and field staff. While the nature of their duties have meant that the field staff have begun stepping out, employees in the other two categories have the option to either ‘work from home’ or out of corporate co-working centres, offered by OYO Workspaces, which is OYO’s coworking space arm.
Facing a severe revenue crunch due to the financial disruption caused by the Covid-19 pandemic, OYO has also given up leases of two of its flagship corporate offices in Gurugram invoking the ‘force majeure’ clause which provides a temporary reprieve to a party from performing its obligations under a contract due to natural calamities. The company is also negotiating to terminate the lease for a third property in Gurugram.
PolicyBazaar To Make Stock Market Debut
Online insurance aggregator PolicyBazaar is planning to raise $250 Mn in a round of financing at a valuation of $2 Bn, before issuing its initial public offering (IPO) in September 2021. The company is planning to go public this year, by the time it expects to turn profitable, after incurring a loss-making FY 2019.
PolicyBazaar plans to list in Mumbai, but the company’s co-founder Yashish Dahiya is open to a dual listing if the rules change. India is reportedly planning to tweak regulations to permit overseas listing. Many startups have incorporated in the US and Singapore, where public listing rules and other considerations are friendlier but India currently prohibits that for sensitive sectors like financial services.
Paytm Registers 3.5x Growth In Transactions During Lockdown
The GFF also saw Indian startups talk about the impact of the Covid-19 pandemic on business and ways in which they tried to tide over the crises. Bucking the trend for the overall fall in digital payments due to the financial disruption during the pandemic, digital payments giant Paytm has registered 3.5x growth in transactions during the Covid-19 lockdown and is now planning to venture into stockbroking, it announced during the festival. Further, the company’s founder and CEO Vijay Shekhar Sharma claimed that Paytm had taken the second spot in terms of ticketing and events business, and was a distant third in ecommerce.
Cars24 Forays Into Loan-Against-Car Segment
While customers could traditionally avail a loan when they were buying a new or pre-owned car, Indian auto-tech company Cars24 has introduced a new offering where customers can avail loan against their existing car. The launch of the new service comes after a Cars24 survey revealed that the number of customers who sold their cars due to a liquidity crunch during the pandemic has doubled, compared to pre-corona times.
Customers, applying for a loan against their cars, will get benefits such as same-day loan approval and disbursement, up to 100% funding against the car’s latest value (for vehicles up to 12 years old), loan initiation with minimal documentation (PAN, Address Proof and Bank Statement) and additional benefits like the installation of an anti-theft device and easy foreclosure options.
Reliance Plows 35K Cr In Debt Mutual Funds
Even a week after its 43rd Annual General Meeting (AGM), Reliance continues to make news for the massive inflow of capital it has got — with a strategic stakes sale in its digital subsidiary Jio Platforms, fetching INR 1.5 Lakh Cr in investments — and the slew of announcements made at the AGM. This week, Reliance Industries Limited (RIL) deposited INR 35,000 Cr into ultra-short and ultra-money market funds, and in other funds focused on debt with three-to-five-year maturities. With the deluge of Reliance-related money pouring into the country, the Indian rupee also witnessed a good last month, where it rose 1% against the US dollar and is now the best performing Asian currency.
Morgan Stanley Expects Ecommerce To Boost Sales For Reliance Retail
US Investment Bank Morgan Stanley expects ecommerce to account for almost 15% of Reliance Retail’s total sales by 2023, estimated to be worth $19 Bn. The retail sales estimates exclude connecting revenues, such as mobile recharges, and petro-retail, where it has sold a stake to British Petroleum. Based on the retail sales estimates, the net asset value of Reliance Retail was pegged at $29 Bn. Reliance’s plans for ecommerce are certainly taking note of the sector’s potential. During the company’s 43rd AGM last week, Reliance chairman Mukesh Ambani announced that its online grocery store JioMart would soon evolve into a full-fledged ecommerce store, selling electronics, fashion, healthcare and pharmaceuticals, among other products. On July 19, JioMart launched its mobile application on the Play Store and App Store. Within a week of its launch, the app has crossed 10 lakh downloads on the Play Store alone.
Flipkart Acquires Walmart’s Loss-Making B2B Wholesale Store
In a perplexing development, Flipkart, which was acquired by US retail giant Walmart in 2018, has now bought its parent company’s loss-making B2B wholesale store in India, Best Price Modern Wholesale, to launch its own service ‘Flipkart Wholesale’ in a bid to expand its presence in the food and retail segment. The deal, a reverse acquisition in business parlance, will help Flipkart Wholesale strengthen its capabilities and B2B service offering. Walmart India employees will join Flipkart Group and the home office team will integrate over the next year. The company has assured that the Best Price brand will continue to serve its 1.5 Mn customers through its omnichannel network of 28 stores and ecommerce ventures.
Ecommerce Key Focus Of Revamped Consumer Protection Law
The Consumer Protection Act (CPA), which came into effect this week, brought ecommerce within its ambit and as such, broadened the definition of a consumer. The CPA, which replaces the earlier Act from 1986, has brought some salient features for consumer redressal, namely the setting up of a three-tier consumer redressal mechanism, with nodal authorities at the central, state and district levels to deal with consumers’ complaints.
The Act also mandates the setting up of a Central Consumer Protection Authority (CCPA) for protecting the rights of consumers. While the Act has been largely praised by experts for addressing the needs of dramatically changing marketplaces and empowering consumers, some domain experts have expressed concerns regarding a few provisions in the Act. At least one such expert who Inc42 spoke to, pointed out the need for segregation and clarity to remove overlapping compliances. Rameesh Kailasam of IndiaTech.org said that where there’s should be a carve-out provision which should specify that where there is an existing regulation or an Act that binds a business for consumer protection, such businesses would not be bound by certain provisions of the CPA.
Facebook Combines Video Conferencing Messenger Room And Live Feature
Social media giant Facebook has combined its video conferencing product Messenger Rooms with its Facebook Live feature to enable the live stream of video calls with up to 50 participants. The latest offering will make it possible for large audiences to tune in and watch group video calls in real-time. This could include events like speaker panels and networking events as well. The Mark Zuckerberg-led company introduced Messenger Rooms in April 2020 for Facebook and messaging platform Messenger to participate directly in the booming video conferencing segment.
Amazon To Buy Stake In Reliance Retail?
Ecommerce giant Amazon may figure in Mukesh Ambani’s ambitious plans for the expansion of Reliance Retail. Reportedly, Amazon is considering buying a 9.9% stake in Reliance Retail. However, the value of this supposed deal remains unknown. It is worth noting that in April, another US tech giant Facebook picked up a 9.9% stake in Reliance’s subsidiary Jio. Is Reliance Retail, the next Jio? The news comes in the same week when US Investment Bank Morgan Stanley’s estimates pegged Reliance’s core retail sales by 2023 at $19 Bn, of which, 15% are expected to come from ecommerce.
As for Amazon, the ecommerce giant also made the news for trying to recover its lost business in India by making its Prime Day sales even bigger, with better offers, technology intervention and more. The two-day sale will begin on August 6 and will provide 48-hour delivery, exclusive discounts, early deals, streaming music, video, and other benefits to Prime customers. Meanwhile, Amazon’s digital payments venture Amazon Pay has entered the insurance distribution business by partnering with Mumbai-based motor insurance provider Acko General Insurance. The development is in alignment with Amazon Pay’s plans to become a full-fledged financial services platform.
India’s Infamous Angel Investor Mukund Mohan Arrested In The US
Former Amazon and Microsoft executive Mukund Mohan has been arrested in the US for forging documents to acquire more than $5.5 Mn from the coronavirus relief funds meant for startups to retain workers. Previously, Mohan was the subject of an Inc42 investigative report, Mukund Mohan: The Chronicles Of Napkin-Ville, which scrutinised the claims made by him, of having founded over five companies, invested in 11 companies between 2008 and 2012 in his personal capacity and funding two companies through investment fund Napkin Stage.
Stay tuned for the next edition of News Roundup!