Year End Review 2020
When the world shut down, they survived; when cash flow dried, they raised billions; when deals were few, they got acquired. From exciting launches & mammoth funding to biggest shutdowns, a look back at 2020 through startups’ lens.
It has been a year of life-changing challenges, brave turnarounds, and in some cases, shocking shutdowns across businesses all over the world. The Covid-19 pandemic has left many of us with a deep sense of loss. Yet, some good has also come out of it in the form of rapid innovations and sustainable maneuvers. Businesses and economies may not be ready yet to go back to pre-Covid prosperity. But just like the previous years, the newsmakers have been around, bringing good tidings of growth or ugly stories of mismanagement and fall.
So, we have decided to look at nine movers and shakers, great personalities who helm the ship, set the direction, take crucial decisions and bring to life a business vision no one else has managed to achieve. Many of these newsmakers lead the Indian startup ecosystem while others head the likes of Google, Amazon and Microsoft.
Be part of our year-end journey as we bring to you some well-known business icons, startup heroes and a few others who were the talk of the town for courting controversies.
Jeff Bezos: Braving Good Times And Bad
“I predict that the 21st-century is going to be the Indian century. The dynamism, the energy… Everywhere I go here, people are interested in self-improvement, growth. This country has something special. This is going to be the Indian century,” said Jeff Bezos, during his visit to India in January this year.
For the tech mogul, India is a crucial market, and he had announced during the tour that Amazon would be investing $1 Bn in digitising India’s small and medium-sized businesses. Furthermore, the ecommerce giant aims to export $10 Bn worth of goods from India by 2025.
But his ambitious plans and tall promises did not find a smooth passage to India.
For one, the world’s richest person is vying with Asia’s richest billionaire Mukesh Ambani. The latter had already announced the acquisition of (some) retail businesses owned by Kishore Biyani’s Future Group for INR 24,713 Cr. But Amazon, which holds an indirect stake in the Future Group, did not like this turn of events and approached the Singapore International Arbitration Centre (SIAC) to halt the proposed deal between Future Group and Reliance Industries. But much to Amazon’s chagrin, the Competition Commission of India (CCI) approved the deal on Nov 10.
This came as a big blow to Bezonomics as Reliance got entry to Future Group’s network of 1,500 stores across 437 Indian cities and towns, collectively covering 16 Mn sq. ft of retail space.
The series of allegations raised by the Confederation of All India Traders (CAIT) against Amazon and its India competitor Flipkart (owned by Walmart) also threatens to rock the boat, which is a key reason Bezos was in India. The traders’ body alleges that both Amazon and Flipkart are flouting foreign direct investment (FDI) norms and offering predatory pricing.
Will Bezos Inc. get its mojo back in India or will the desi brigade rule the roost?
Mukesh Ambani: The Unstoppable
The global economy might have come to a halt, thanks to the novel coronavirus onslaught. But the country’s richest man never thought twice about startup shopping, especially if they were businesses in distress.
Of late, Reliance Industries (RIL) acquired quite a few startups, including online pharma marketplace Netmeds and online furniture startup Urban Ladder Home Decor Solutions (the last one was a fire sale). To be precise, the conglomerate got its hands on more than 23 startups in the past three years.
But it was the flurry of global funding to the tune of INR 1.15 Lakh Cr from the likes of Google, Facebook, Silver Lake, General Atlantic and KKR that made RIL’s digital unit Jio Platforms net debt-free much before its March 2021 target. Even in the middle of a gloomy recession, Jio Platform was basking in the glory of its success – a massive spike in the user base, thanks to its growing network of apps and digital businesses. Then there was Reliance Jio Infocomm, the mobile arm of RIL, that crossed the 40 Cr subscriber base in October. It was the first telco to do so in India.
The growth story continues. Despite the uncertainty over 5G spectrum’s availability in India, Ambani planned to roll out 5G-enabled smartphones and began the tech trials in October in partnership with the US-based Qualcomm. Is Reliance pushing hard for a ‘2G-mukt Bharat’ by leveraging its strategic partnership with global tech giant Google? Only time will tell.
Vijay Shekhar Sharma: Braving Big Battles
Paytm founder Vijay Shekhar Sharma has never hesitated to rise to the occasion. He did it again when he called out American tech giant Google for its monopolistic power in India and protested against the ‘Google tax’.
It all started with Google Play Store taking down the Paytm app in September. Although Google restored the app hours after removing it, this was a shock for Sharma, and the nature of the allegation against the Indian unicorn angered him further. The digital payments app had allegedly violated Google’s online betting policies, and the accusation led to a war of words. Sharma said Google had acted “arbitrarily”, but Google insisted that its policies are “consistently” enforced.
Next came another big clash when Google said all app developers on its Play Store must use Google’s payment platform from September 2021 and pay 30% commission for in-app purchases. The Indian tech community was deeply unhappy, and Sharma led from the front. His company also launched a mini-app store for Android to curb Google’s control over the smartphone ecosystem and make sure people can use “their preferred payment option”. Sharma and 50-plus tech startup founders have been collectively fighting against the power of Big Tech ever since. Meanwhile, Google said it would delay enforcement of the policy in India until April 2022. Sharma called the deferment an “admission of guilt”.
In a separate case, Sharma moved the Delhi High Court in May, seeking damages worth INR 100 Cr from Airtel, Vodafone and Reliance Jio and alleging that telcos should be liable for curbing unsolicited commercial communications on their networks.
Kishore Biyani: A Much-Relieved Man
Future Group’s mounting debts have been hitting the headlines for over a year, and owner Kishore Biyani was an unhappy man. The situation worsened during Covid-19 lockdowns when stores and markets stayed shut, and the retail major reportedly lost INR 7,000 Cr in revenue in the first three-four months of the pandemic.
“The problem is rent doesn’t stop, interest (on debt) doesn’t stop… We did too many acquisitions in the last six-seven years… I thought there was no other answer but to exit,” said Biyani.
Selling a controlling stake in Future Retail to Reliance Industries seemed to be the only option to save his company from bankruptcy. But the solution did not work out as smoothly as he expected.
When Mukesh Ambani-led RIL finally announced the acquisition of Future Group’s retail assets for INR 24,713 Cr after months of deliberation, the deal hit a speed bump. The antagonist was none other than Jeff Bezos-led Amazon that did not approve of the proposed deal and contested it at the Singapore International Arbitration Centre (SIAC). Amazon also served a legal notice to Future Group for breach of contract. The ecommerce giant has intervened as it holds a small indirect stake in Future Retail and has a ‘call option’, allowing it to buy partial or controlling stake subject to prevalent FDI norms.
For a while, the case seemed to turn in favour of Amazon as the SIAC put the Reliance-Future Group deal on hold on Oct 26. In desperation, Biyani filed two caveat petitions against Amazon in Delhi High Court and claimed that the SIAC order would not be enforceable under the Indian law. In the end, Biyani did win as the Competition Commission of India (CCI) approved the acquisition on Nov 10.
Interestingly, the Delhi HC, too, left it to regulators to decide the deal’s fate but allowed US partner Amazon.com Inc to raise objections to it. Will there be more trouble brewing in the battle of the billionaires as Bezos and Ambani flex their retail muscle?
Karan Bajaj: Manoeuvring Growth, Acquisition, Controversies
How did a startup founder become a household name in India even though his company was less than two years old? How did the company get acquired by a unicorn for a $300 Mn all-cash deal? Or how did he get embroiled in social-legal spats for that matter?
It pretty much sums up the journey of Karan Bajaj who started his career as a marketing professional, later worked as a management consultant at the Boston Consulting Group and then led Discovery’s India operations before the startup world beckoned. As the Indian edtech market started growing, Bajaj launched WhiteHat Jr, a coding platform for kids aged 6-14, in 2018. The idea clicked, and by January 2020, WhiteHat Jr was growing at 30-40% annually.
The founder came into the limelight when his startup was acquired by the edtech unicorn BYJU’S in August 2020. Bajaj told the media “it was a deal at first sight”. Their mutual vision of going deep into India and global expansion matched so well that the rest of the procedure quickly fell in place.
Soon afterwards, social media users called out the company for its non-stop advertisements. Software engineer, Pradeep Poonia, and angel investor, Dr Aniruddha Malpani, were particularly vocal against the platform’s claims.
Around 15 complaints were filed with the Advertising Standard Council of India (ASCI) over seven ads. In October 2020, WhiteHat Jr was asked to pull down five of them due to a violation of ASCI code. Bajaj complied but also filed defamation cases against Poonia and Malpani.
The verdict came in his favour, and both his critics were asked not to post any derogatory content about the edtech startup and take down the existing ones. Poonia’s Twitter account was also suspended. Now, both are fighting for their ‘social media rights’ in law courts and Whitehat Jr is still getting trolled for its high-handed treatment of critics.
Sundar Pichai: From India, For India
When the tech leader hailing from a middle-class Indian family was named the CEO of Alphabet (Google’s parent company), celebrations were on right here in India. Both startups and big corporate houses were eagerly tracking the company’s deep dive into India and how Pichai would helm it to ensure a more inclusive and democratised technology ecosystem that would benefit all.
They were not disappointed.
In his first year as the Alphabet CEO, Pichai announced that the company would invest $10 Bn in the Indian tech and startup ecosystem from its Google For India Digitisation Fund. Moreover, Google Pay has started doing a roaring business on India’s UPI platform, cornering close to 43.4% of the market share, which is another feather in his cap.
On a global note, Pichai is a strong advocate for diversity and inclusion even though there are significant gaps within the tech conglomerate. But the CEO hopes long-term planning will work well in creating change and reimagining stereotypes in sync with our times.
However, Pichai has more reasons to worry about Google’s India operations as the company is facing a couple of antitrust cases. In November 2020, the Competition Commission of India (CCI) opened a case against the global tech giant, alleging that Google unfairly promotes its own payments app through “prominent placement on the Play Store”. Earlier this year, another case was filed against the company for abusing its Android operating system’s position in the smart TV market.
The Indian tech community is also up in arms against Google’s supremacy over the Android app ecosystem. The initiative to develop an alternative to Google Play Store will be a crucial challenge for Pichai. Will he be able to reconcile all and work out a mutually beneficial business strategy?
Satya Nadella: Decoding India’s Innovations
“The India stack is pretty impressive. Bill Gates is always talking about how we can take what has been developed in India and make it available as a stack to all countries,” the Microsoft CEO said at the Global Technology Summit, 2020, organised by Carnegie India.
During his three-day India visit in February, Nadella further urged homegrown tech companies to develop more inclusive solutions by leveraging their tech capabilities.
Nadella has always insisted on Microsoft’s mission to help businesses in India work independently through technology intervention. This year too, he talked about Microsoft’s investment in India’s local entrepreneurs. In June 2020, Microsoft’s venture fund M12, which has invested in Indian startups such as Innovaccer and FarEye, set up an office in Bengaluru to promote fundraising and partnership opportunities for the country’s growth-stage startups. Nadella also announced the launch of Microsoft’s programme for agritech startups to bolster these businesses.
Sachin Bansal: Personal And Professional Setbacks
Since Sachin Bansal took over as the CEO of Chaitanya Rural Intermediation Development Services (CRIDS) in September 2019, his intention to focus on the fintech sector became evident. He is now putting all his money (or at least what is left after investing INR 650 Cr in the homegrown ride-hailing platform Ola) in Navi, his all-new financial services startup.
But this year, Sachin made news for several reasons. The Flipkart cofounder’s wife Priya filed a dowry harassment case against him, saying that the harassment started even before their marriage in 2008 and her father spent more than INR 50 Lakh on their wedding. Priya, a 35-year-old dentist, also said that her father had given Sachin INR 11 Lakh in cash.
But that was not the end. He was trolled on social media for tweeting “WFH (work from home) sucks”. Many pointed out that business leaders like him should consider themselves lucky when millions of daily wage earners and retrenched people do not have that choice.
Next came a round of layoffs at Navi when as many as 40 employees were given the pink slip. Those asked to leave included the general insurance division’s CEO and other senior and mid-management officials of COCO, one of its insurance products. The layoffs reduced Navi’s team of 163-odd employees by a fourth.
Now that things are looking up, Bansal is reportedly in talks to buy out the insurance business of Liberty General Insurance as he aims to bring more insurance and fintech companies under the Navi brand.
Ritesh Agarwal: Waxing And Waning
In spite of hoteliers’ protests and massive layoffs in 2019 and 2020, Ritesh Agarwal continues to be in the news. The year started on a high note, with the U.S. President Donald Trump praising the Indian entrepreneur. During his interaction with Trump, Agarwal introduced his company as a young startup with around 313 hotels in the US under the OYO brand. In response, Trump said he already knew about OYO. “Not such a small company, by the way. Good job.”
The 26-year-old founder was also named the second-youngest billionaire in the world, yet another feather in his cap.
Even though the hotel industry has been badly hit by the Covid-19 pandemic since March, Agarwal kept his spirits up. “I have always believed that tough opportunities and tough places are where the value accretion happens across businesses,” he told Inc42 in June. And to offset massive salary cuts, furloughs and de-escalation of its presence in India, the company offered ESOPs (employee stock ownership plans) to its workforce.
In September, Agarwal even said that OYO hotels and homes in India were back to 40% occupancy except for a few states such as Himachal Pradesh. He has also set up an investment firm in Singapore called Aroa Ventures to invest in early-stage startups working across consumer, technology and leisure infrastructure sectors.
Uncertainty still looms large for the hotel industry, but Agarwal stays hopeful. He believes that contactless check-ins will be a huge opportunity very soon, and entrepreneurs can also experiment with food experiences by leveraging technology.