April 13, 2024


Unlimited Technology

Zostel approaches SEBI against Oyo IPO, PM Modi launches new space association ISpA


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Here are the top headlines from the startup space.

Zostel approaches SEBI against Oyo IPO; latter calls the move an ‘overreach’ of Delhi HC proceedings

Budget accommodation platform Zostel has now approached the Securities and Exchange Board of India with a letter claiming that Oyo’s IPO is “non-maintainable”.

CNBC-TV18 has seen a copy of the letter which was sent to SEBI on Monday.

Zostel has claimed that Oyo’s DRHP is “illegal” since it is in contravention of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.”. Accordingly, Oravel’s filing of the DRHP in the circumstances, is illegal, in view of the stipulation contained under Regulation 5(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations).”

In the letter to SEBI, Zostel has said that “the IPO is non-maintainable as Oravel’s capital structure is not final”, and that the “DRHP is replete with material omissions and blatant misstatements, intended to mislead the public into investing into Oravel’s shares without appreciation of the risks involved.”

Also Read: How Indian startups have emerged as new ‘cool kids’ on global VC block

Meanwhile, Oyo has condemned Zostel’s move, calling it an ‘overreach’ of Delhi HC proceedings. Oyo said “nothing” in arbitral award prevents Oyo from going ahead with IPO. The company added that the process with Zostel was at stage of exploratory discussions, no definitive agreements were finalised.

Zostel had earlier taken the matter to the Delhi High Court, which has adjourned the case to October 21. Zostel had moved the Delhi High Court late last month seeking to restrain Oyo from ‘altering its shareholding pattern, including through an IPO’ since it claims that an arbitral award it won in March this year grants Zostel’s shareholders 7% shares of Oyo.

Oyo on October 1 filed its DRHP with SEBI for raising Rs 8430 crore through an IPO.

Pine  Labs  mulls filing papers for $1Bn Nasdaq IPO by  Oct  end: Report

Fintech unicorn Pine Labs is looking to file its paperwork with the US Securities and Exchange Commission (SEC) for its $1 billion IPO by October end, according to a Mint report.

Pine Labs, which is aiming for a $6 billion Nasdaq listing has hired investment bank Morgan Stanley to manage the proposed initial share sale and is looking to raise as much as $1 billion through a mix of primary and secondary stake sales, the report added.

In September, the merchant commerce platform raised $100 million from Invesco Developing Markets Fund, valuing the payments company at around $3 billion. Pine Labs is backed by PayPal, Sequoia Capital India, Temasek and Mastercard, and offers a host of services to merchants that include payments terminals, invoicing tools and working capital.

PM Modi launches new space association ISpA

Prime Minister Narendra Modi has launched the Indian Space Association (ISpA) on Monday. The industry association will act as an independent and “single-window” agency for enabling the opening up of the space sector to startups and the private sector, the PM said.

He said that the upcoming space reforms via IsPA will be based on “four pillars” of space technology: The freedom to innovate in the private sector; making the government act as an enabler; preparing the next generation for the future of the space industry; and ensuring the space sector is used as a common resource for the progress of humanity.

Also Read: Why startup IPO can be a good bet

“This is the time for exponential, and not linear innovation. This is possible only when the government plays the role of an enabler, and not the handler. Today, the government is sharing its expertise, and providing launch pads for the private sector. The Indian Space Research Organisation (ISRO) is being opened for the private sector,” he said.

ISpA will perform the role of policy advocacy and engage with stakeholders in the space sector, including the government and all its other agencies, NewSpace India and Indian National Space Promotion and Authorisation Centre, among others.

ADIF moves CCI against Google Play Store commission

Industry body Alliance of Digital India Foundation (ADIF) has moved the Competition Commission of India (CCI) seeking interim relief against Google’s upcoming PlayStore policy changes.

In October 2020, Google had said it was delaying its new policy that would force app developers to only use the Google Billing System (GBS). The policy comes into effect from March 2022 and it will mean that app developers will be dependent on Google’s systems. It would also mean that the 30 percent commission will apply for all transactions on the Google Play Store.

In a statement, ADIF said they have filed a petition before CCI through their lawyers at Sarvada Legal and sought interim relief. According to ADIF, Google’s policy will see developers paying 30 percent fee to the search giant, compared to 2 percent charged by other payment processing systems. The group says the new policy will have a “destructive effect on the operating margins of a large number of startups and make their business models infeasible.”

Also Read: LetsVenture’s new business entity trica raises $3 million seed fund

ADIF added that the policy will have “a disastrous effect on India’s digital ecosystem by reducing choices available in the hands of app developers and users as well as harming the country’s innovation ecosystem by disrupting the cost structures and margins of multiple industries.”

The matter is already being looked into by the CCI for potential abuse of dominance by Google in the app market. Previously, a similar petition has been filed against Apple, alleging anti-trust violations over the issue of in-app payments and purchases. The Apple petition was filed by another group called “Together We Fight Society.”

Graphy acquires edtech startup Spayee for $25M

Graphy, an Unacademy Group-owned company has acquired edtech platform Spayee for $25 million.

Post the acquisition, Spayee will continue to operate independently, the company said in a statement.

Founded in 2014, Spayee allows content creators to produce customised courses in the form of audio and video tutorials, PDF documents, quizzes, assignments, and live classes.

“The creator economy is booming and at Graphy, we are constantly on the lookout for avenues that will help creators grow and achieve their full potential. We share a common ethos with Spayee, recognising the need for an affordable, secured & scalable medium for content creators to build an online education business,” said Sumit Jain, Co-Founder and CEO, Graphy.

Graphy recently launched multiple programmes like the Creator Grant and Graphy Select Accelerator programme to boost the creator economy and help creators monetise their skills and launch their online school.

The platform helps creators launch their own online school in under 60 seconds. Graphy has over 500 active creators.

Urban Company rejects women workers allegation, says their earning is fair

Home service marketplace Urban Company has denied allegations levelled by its women beautician partners of providing very low commission to them and claimed that the earnings are far more than the amount claimed by them.

Over hundreds of working women have protested outside the office of the unicorn startup in Gurugram alleging abysmally low wages given to them and companies dealing with them in non-transparent manner.

A beautician partner of the company shared a screenshot that she got Rs 67 as payout after providing a service worth Rs 1,626.

“One of the tweets recently claimed that a beauty partner made Rs 67 for 4 orders. This is a mis-representation of facts. The screenshot shown is not that of her earnings page but a settlement ledger of the bank transfer,” Urban Company said in a blog post.

It said that the partner accepted cash payments for 2 orders and online payment for the remaining two.

“Her net earnings after UC commissions and other fees for the 4 orders in question delivered between 13 Oct was Rs 1,941,” UC said.

UC provided a calculation on the cost of service that it offers to users and wage paid to partners from that work.

Paytm founder managing director Vijay Shekhar Sharma tweeted in support of the clarification provided by the UC around complex cost structure involved in offering low cost services.

UC said that it has always been a platform where both customers and partners are equal stakeholders.

“The very genesis of Urban Company was to organize the home services industry for both customers and partners. In the absence of organized players, the market was controlled by middle-men and aggregators, who restricted market access and kept a lion’s share of the margins.

“However, we believe we have made the industry more transparent, reduced the number of middlemen and given a voice to the hitherto voiceless informal labour,” the blog post said.

It said that under no circumstances, the company will ever shy away from doing the right thing for our stakeholders.

The company claimed that its partners earn a net earnings of Rs 2,80,300 per hour, net of commissions, fee and all associated product and travel costs. As partners do more orders on the platform, and spend around 100 hours per month working for the platform, they see very healthy earnings of Rs 25,00030,000 per month.

“The top quartile of service partners earn over Rs 36000 per month net of all commissions and costs. Our platform is bouncing back strongly post the second wave, and we expect earnings to be even better in October and the months ahead,” UC said.

The company said that it will publish an update on this blogpost at the end of October with the revised data.

Dream11 suspends operations in Karnataka after FIR against founders

Fantasy gaming platform Dream11 has suspended operations in Karnataka after a complaint was registered against its founders claiming it was in violation of a new state gambling law.

Police records on Saturday showed a case has been registered in India’s tech capital Bengaluru, in Karnataka, following a complaint by a 42-year-old cab driver who reported it as being operational after a ban on online games involving betting came into force.

“In order to allay our users’ concerns, we have decided to suspend operations in Karnataka. This decision is without prejudice to our rights and contentions under law,” the company said.

Dream11, which provides a fantasy gaming platform for various sports, last year became India’s first gaming startup to be valued at over $1 billion (roughly Rs. 7,535 crores). It has faced legal challenges in the past due to the similarities of fantasy gaming to gambling.

The state law, which came into effect last week, bans online games involving betting and wagering and “any act or risking money, or otherwise on the unknown result of an event including on a game of skill”.

A Dream11 spokesperson told Reuters that the company is examining its legal remedies, and added that “we are a responsible, law abiding company and will extend our full cooperation to any authorities”.

AMO Mobility plans to raise around $200M in three years to fund expansion

Electric mobility startup AMO Mobility plans to raise around $200 million (nearly Rs 1,500 crore) in the next three years to fund its expansion, including enhancing production capacity to around 5 lakh electric two-wheelers per annum by 2025.

The company, which sells a range of high-speed and low-speed (top speed of less than 25 km/hr) electric scooters such as Jaunty, Feisty, Inspirer and Spin, currently produces around 2,000 units a month at its facility at Noida, Uttar Pradesh.

The funds will be utilised for various business activities, including enhancing production capacity and new product development, founder Sushant Kumar said.

The fundraising is for investment, Kumar said, adding that the company is “looking to invest at least 40% of our total budget towards development of futuristic technology, which will make us independent within four to six years”.

He said AMO Mobility is also targeting B2B customers considering how the fast growth of e-commerce in India has accelerated the demand for electric scooters.

JSW Sports partners India Accelerator to mentor sports startups

JSW Sports, which co-owns the Indian Premier League team Delhi Capitals, has partnered with India Accelerator, a business accelerator firm, to mentor startups working in the area of sports, sports data, gaming and esports.

The two firms will jointly offer a 16-week long accelerator programme to a cohort of five to seven seed-stage start-ups. The program will cover areas such as sports data analysis, wearables and performance, e-sports, stadiums and venues, fan engagement followed by support and funding, the company said in a statement.

The selected startups in the programme will gain product and technical support, strategic delivery guidance, opportunities for concept testing, and network-building opportunities. The closure of the programme will involve a demo day attended by corporates, VCs, mentors and other partners, as well as external investors.

Byju’s pauses ads featuring Shah Rukh Khan after Aryan’s arrest in drugs case: Report

IPO-bound edtech major Byju’s has temporarily halted advertisements featuring Bollywood superstar Shah Rukh Khan as his son Aryan Khan undergoes a drug bust probe.

According to reports, Byju’s stopped all ads featuring its brand ambassador Shah Rukh Khan, apparently after social media users criticised the edtech company for endorsing ads featuring the actor.

Shah Rukh has been associated with Byju’s since 2017.

Aryan Khan was arrested last Sunday with seven others when the Narcotics Control Bureau (NCB) busted a drugs party onboard a cruise ship off the Mumbai coast.

Byju’s is looking to raise $400-600 million ahead of its IPO next year. Byju’s recent regulatory filing revealed that it recorded an 80 percent growth in its revenue but expenditure had also shot up by 30 times over last year.

AI-powered professional networking platform Lunchclub is now open for Indian users

Lunchclub, a networking platform that uses machine learning algorithms to connect professionals with common interests, values, goals and objectives, is now open for Indian users.

Launched in 2017 in the US, the platform was first rolled out as an invite-only concierge service for in-person introductions, but the company pivoted to video calls when the pandemic hit last March.

It optimises the professional matchmaking experience, leveraging AI to facilitate connection based on shared interests and goals — regardless of geographic location, industry, or generation.

It plans to grow to over 100,000 users in India by the end of 2021.

“India is a key global destination when it comes to professional networking. We have seen great success and growth in the US market and are now confident of replicating the same in India. With the kind of audience, we have in India, we believe this will be a breakthrough moment,” said Vladimir Novakovski, Co-Founder and CEO, Lunchclub, in a statement.

The startup is valued at over $100 million. It has raised a total of $30 million that includes investors from Lightspeed, Andreessen Horowitz, Coatue, and other strategic investors. Lunchclub has created 1 million connections and achieved 15x growth in 2020 alone.

Tide launches ESOP secondary sale programme post $100M+ Series C round

Tide, the UK’s leading business financial platform, which began operations in India in 2020, recently launched the secondary sale of Employee Stock Ownership Plan (ESOPs) to investors for its employees in India, Bulgaria and the UK.

The announcement follows its recent Series C funding in which the company raised more than $100 million.

Liza Haskell, Chief Administrative Officer, Tide, said, “Due to our oversubscribed Series C round, we had enough investor interest to give employees an opportunity to sell a portion of their vested shares to investors.”

Approximately 50 percent of all permanent employees have been allotted ESOPs at various levels across all departments, the company added.

Earlier this year, Tide announced it will create over 1,000 jobs in India in the next five years. These positions will be across a wide variety of roles, including product development, software development, marketing, risk & compliance, and member support.

Economy poised to attain a double digit growth trajectory in 2021-22: PHD Chamber

The PHD Chamber of Commerce and Industry has projected a double digit GDP growth trajectory at 10.25% in FY 2021-22, supported by the effective policies of the Government, RBI’s accommodative policy stance and significantly improved business sentiments in the country, said Mr Pradeep Multani, President, PHD Chamber of Commerce and Industry.

The declining new Coronavirus cases, accelerated vaccination drive, improved consumer and business confidence, anticipated high demand amid upcoming festive season, among others, will further enhance the pace of economic recovery in the coming months, Multani added.

As per the report, meaningful and proactive reforms undertaken by the Government in last many quarters have led to a strong rebound in India’s GDP growth rate to 20.1% in Q1 FY 2021-22 from the lows of (-)24.4% in Q1 FY 2020-21. This reflects a stronger-than-expected pickup in recovery, improving demand momentum and improving investments sentiment.

This as ecommerce platforms including social commerce and grocery, garnered ~ $2.7 billion in sales in the first four days of the festive sales, according to consulting firm Redseer.

Snapdeal announced that its overall sales volume in its first sale of the season went up by 98% compared to last year. Sharing analysis from the first sale, it said that nearly 60% of its total orders came from Tier 3 towns. Tier 1 & 2 cities accounted for nearly 26% of orders, while metro buyers accounted for the balance 14%.


Facebook will try to ‘nudge’ teens away from harmful content

A Facebook executive has told Reuters that the company would introduce new measures on its apps to prompt teens away from harmful content, as US lawmakers scrutinize how Facebook and subsidiaries like Instagram affect young people’s mental health.

Nick Clegg, Facebook’s vice president of global affairs, also expressed openness to the idea of letting regulators have access to Facebook algorithms that are used to amplify content. But Clegg said he could not answer the question whether its algorithms amplified the voices of people who had attacked the US Capitol on January 6.

The algorithms “should be held to account, if necessary, by regulation so that people can match what our systems say they’re supposed to do from what actually happens,” Clegg told CNN’s “State of the Union.”

He spoke days after former Facebook employee and whistleblower Frances Haugen testified on Capitol Hill about how the company entices users to keep scrolling, harming teens’ well-being.

“We’re going to introduce something which I think will make a considerable difference, which is where our systems see that the teenager is looking at the same content over and over again and its content which may not be conducive to their well-being, we will nudge them to look at other content,” Clegg told CNN.

In addition, “we’re introducing something called, ‘take a break,’ where we will be prompting teens to just simply just take a break from using Instagram,” Clegg said.

US senators last week grilled Facebook on its plans to better protect young users on its apps, drawing on leaked internal research that showed the social media giant was aware of how its Instagram app damaged the mental health of youth.

Clegg noted that Facebook had recently put on hold its plans for developing Instagram Kids, aimed at pre-teens, and was introducing new optional controls for adults to supervise teens.

Facebook apologises for second outage in a week

Facebook has apologised to users for a two-hour disruption to its services on Friday and blamed another faulty configuration change for its second global outage last week.

The company confirmed its social media platform, Instagram, Messenger and Workplace were impacted by the latest outage.

“Sincere apologies to anyone who wasn’t able to access our products in the last couple of hours,” the company said. “We fixed the issue, and everything should be back to normal now.”

On Monday, the social media giant blamed a “faulty configuration change” for a nearly six-hour outage that prevented the company’s 3.5 billion users from accessing its social media and messaging services such as WhatsApp, Instagram and Messenger.

The outage on Monday was the largest that web monitoring group Downdetector had ever seen and blocked access to the apps for billions of users, leading to a surge in usage of rival social media and messaging apps.

Both the outages piled pressure on Facebook after a former employee turned whistleblower accused the company on Sunday of repeatedly prioritizing profit over clamping down on hate speech and misinformation.

WhatsApp might soon let you pause and resume voice recordings before sending

WhatsApp might soon allow users to be able to pause their recordings and then restart them later, according to a report from WABetainfo.

This will be useful for people who send multiple voice messages during a chat, as it will let them pause in between takes, if they have to take care of something else. This will also save you time, by not forcing you to record the whole thing again, which is the way voice messages work.

It’s not clear when this feature will be available to general users since it’s not even in the public Beta for iOS and Android yet. WABetainfo spotted the feature in the development builds for iOS but stated that it will arrive in Beta for iOS and Android sometime later.

In another development, WhatsApp said it has banned 20,70,000 Indian accounts as part of its compliance report. Around 95 percent of the bans were due to unauthorised usage for automated messaging or bulk messaging.

WhatsApp said it received 420 user reports spanning across account support (105), ban appeal (222), other support (34), product support (42) and safety (17) during August. During this period, 41 accounts were “actioned”, as per the report.

Apple asks judge to pause Epic Games antitrust orders as it appeals ruling

Apple has asked a US federal judge to put on hold orders that could require it to change some of its App Store practices and said that it is also appealing the ruling in an antitrust case brought by “Fortnite” creator Epic Games, according to Reuters.

US district Judge Yvonne Gonzalez Rogers in September largely ruled in Apple’s favor after a weeks-long trial. But she did require one key concession: Apple starting December 9 could no longer prohibit app developers from including buttons or links in their apps that direct users to means of paying beside Apple’s in-app payment system, which charges a commission to developers.

In her full 180-page ruling, Gonzalez Rogers expressed concern that developers were being prevented from communicating with iPhone users about alternative prices.

Apple said in its filing that complying with the order could cause it and consumers harm. It said it expects to win an appeal challenging the order and that it wants the legal process, which could last about a year, to play out first.

Epic separately is appealing the judge’s finding that Apple has not violated antitrust law through its payment rules.

China has won AI battle with US: Pentagon’s ex-software chief

China has won the artificial intelligence battle with the United States and is heading towards global dominance because of its technological advances, the Pentagon’s former software chief told the Financial Times.

China, the world’s second largest economy, is likely to dominate many of the key emerging technologies, particularly artificial intelligence, synthetic biology and genetics within a decade or so, according to Western intelligence assessments.

Nicolas Chaillan, the Pentagon’s first chief software officer who resigned in protest against the slow pace of technological transformation in the US military, said the failure to respond was putting the United States at risk.

China was set to dominate the future of the world, controlling everything from media narratives to geopolitics, he said.

Chaillan blamed sluggish innovation, the reluctance of US companies such as Google to work with the state on AI and extensive ethical debates over the technology.

China state media says gaming time limit loopholes should be closed

Chinese state media said loopholes allowing minors to bypass new rules aimed at curbing gaming play time to three hours per week should be removed to “prevent addiction.”

China introduced new rules in August limiting the amount of time under-18s can spend on video games to three hours a week, a move it said was necessary to combat gaming addiction, but causing young Chinese gamers to express outrage at the rules.

“On some online trading platforms, there are game account rental and sales businesses, users can bypass the supervision by renting and buying accounts and play online games without restrictions. This means that there are still loopholes for teenagers to enter online gaming, which is worthy of attention,” a commentary in the Communist Party’s official People’s Daily newspaper said on Monday.

The commentary also said that some game trading platforms have said that strict measures have been taken to prohibit minors from buying, selling and renting accounts. Gaming enterprises must “actively fulfill social responsibilities,” “be responsible for the healthy growth of the next generation” and “promote the healthy development of the industry.”

Families and schools are also urged to create a conducive environment “for the healthy growth of minors,” according to the commentary, especially parents, as some minors use their identities to register for a gaming account, making the gaming time limit ineffective.

First Berlin Teslas could come next month, Elon Musk tells fans

The first cars to emerge from Tesla’s new Berlin factory should roll off the production line as early as next month, CEO Elon Musk said but added that volume production would take much longer to achieve.

As per Reuters, Musk hopes to get the green light in coming weeks to start production at the site. The latest consultation on public concerns towards the site closes on October14, after which the Environment Ministry will make a decision.

“Starting production is nice, but volume production is the hard part,” Musk told a cheering audience at a festival at the plant site, many of whom livestreamed the speech on social media. “It will take longer to reach volume production than it took to build the factory.”

He said volume production would amount to 5,000 or “hopefully 10,000” vehicles per day, and battery cells would be made there in volume by the end of next year.

El Salvador to use bitcoin gains to fund veterinary hospital, president says

El Salvador will invest some of the $4 million gains it has obtained from its bitcoin operations to build a veterinary hospital, President Nayib Bukele said.

As per Reuters, Bitcoin lost almost 10% of its value on September 9, after the Central American nation became the first worldwide to authorize the cryptocurrency as legal tender. But it has surged more than 30% in the past week to its highest levels since May.

The Bitcoin Trust, which Congress authorized in August, with a balance of $150 million, now has a “surplus” of $4 million, Bukele said.

“So we decided to invest a part of that money in this: a veterinary hospital for our furry friends,” Bukele wrote on Twitter.

Bukele said the veterinary hospital would services for basic and emergency care as well as rehabilitation.

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