We have a pack of ETtech Morning Dispatch to start your day. A series of articles on what Economic Survey 2023 recommends for startups and the tech sector, and another big scoop on the separation of PhonePe and Flipkart and their ongoing funding.
Also in this newsletter:
■ Ecosurvey calls for simplified tax system to revive startups
■ SaaS will beat Fintech as the biggest unicorn creator in 2022
■ Vedantu’s FY22 loss amounted to Rs 696.3 crore
Exclusive: PhonePe Founders Profit Big After Flipkart Esop Buyback
Hello, I’m Digvijay here from Bangalore.
PhonePe founders Sameer Nigam and Rahul Chari are expected to pay at least $20 million to $25 million in cash each as they liquidate all of their stock options in PhonePe’s former parent company Flipkart Group, the sources said. said a source with knowledge of the We.
how does that work? PhonePe was founded in December 2015 and acquired by Flipkart just four months later. Nigam and Chari, who previously worked at Flipkart, were allotted stock options after the acquisition. The duo is now selling these options for huge sums.
Tell me more? With PhonePe fully separated from the Flipkart group, the founders of the payment company were allowed to sell all options from Flipkart as it would mean losing its role in the company, sources said. Nigam and Chari did not respond to emails sent by ETtech.
who is paying for this? Walmart, the parent company of Flipkart and now PhonePe. In November, ETtech first announced talks about his $700 million Esop buyback on Flipkart as part of PhonePe’s spin-off and ongoing funding round. PhonePe has already received its first tranche worth $350 million as part of a major funding round in January.
Economic Survey 2023 calls for simpler tax rules to lure start-ups back to India
Noting a ‘counter-reversal’ trend for start-ups to relocate to India from tax-friendly countries such as Singapore, the United States and the UAE, economic surveys show the government will accelerate this trend.
What are your main suggestions? Simplified taxation of employee stock options (Esops) and multi-layered taxation and uncertainty caused by tax litigation. The survey also recommends capital flow easing procedures with less restrictions on capital inflows and outflows.
Also read | Economic survey flags regulatory challenges from new technology
why is that important? PhonePe moved its headquarters from Singapore to India last October and CEO Sameer Nigam recently said that since then about 20 unicorns and their investors have inquired about the process and are actively considering returning to India. He said he does. Nigam said fintech investors would have to pay tax of Rs 800 billion “just to allow us to return to India”.
What is flipping? “Flipping” is the process of transferring all ownership rights of an Indian company to a foreign company, transferring all IP (intellectual property) and all data previously owned by the Indian company.
What did the economic survey say? “The aforementioned flipping phenomenon reflects startups’ adventures in a dynamic and uncertain geopolitical world in search of short-term profits. With collective action, it could be reversed.With a solution-oriented strategy, start-ups will continue to be messengers of India’s entrepreneurial dynamism.”
Digital public infrastructure can boost GDP growth: CEA
The 2022-23 Economic Survey just released was important in outlining the role of the globally celebrated Digital Public Goods (DPGs). His DPI for India could add around 60 to 100 basis points (BPS) to the country’s potential GDP growth, with much justified optimism around it, he said, adding that the 2023 economy Announcing the survey, Chief Economic Advisor V Anantha Nageswaran said.
RBI digital currency: The introduction of Central Bank Digital Currencies (CBDCs) will boost digital financial services by building the framework for “another generation of financial innovation,” according to the study.
Agritech Financing: Agritech startups have raised around Rs 660 crore from private equity investors over the past four years and are witnessing annual growth of over 50%, says Economic Research 2022-23. Research shows he has over 1,000 such agritech start-ups that are helping farmers improve their farming techniques.
EV market outlook: The 2023 Economic Survey says the automotive industry is expected to play a key role in the transition to green energy, with the domestic electric vehicle (EV) market growing at a compound annual growth rate (CAGR) of 49%. He points out that it is likely to grow. Between 2022 and 2030, he will achieve annual sales of 10 million units by 2030.
Cryptocurrency approach: The study highlights the need for a common approach for cryptocurrency regulation, adding that unregulated crypto markets are challenging financial systems around the world. It also said that India’s e-commerce market is projected to grow by 18% annually until 2025, citing the Global Payments Report by Worldpay FIS.
Growth of the IT sector: Growing interest in the digitization of services and India’s emergence as an important ‘powerhouse’ for conducting engineering research and development (ER&D) activities by global multinationals has driven India’s IT business process management (BPM ) helped record 15.5% YoY growth in FY22. , according to Economic Research Report 2022-23. This compares to his 2.1% growth in the 2020-21 fiscal year.
SaaS will overtake Fintech to become the biggest unicorn creator in 2022
Software-as-a-Service (SaaS) has overtaken fintech as the sector that created the most unicorns last year, according to a report from early-stage venture capital fund Orios Venture Partners.
what to give Managing partner Rehan Yar Khan said many of the software unicorns were hitting the coveted $1 billion valuation as their revenue-to-valuation ratio ballooned until valuation negotiations took place. said to have reached
Unquote: “What I would definitely do is check the top lines of these companies. ‘” Khan told ET.
what else? Apart from how SaaS created 6 of the 24 unicorns in 2022, other top findings by PharmEasy backers’ annual report, India Unicorns and Exits Tech Report 2022, included: It included startups that raised a total of $25 billion. 13 of his 13 unicorns in the world were born in India, with 229 acquisitions and 4 technology listings.
Vedantu’s FY22 loss hits Rs 696.3 crore
Bengaluru-based Vedantu Innovations, which owns and operates the eponymous online education platform, puffed up a gross loss of around 13% in its latest financial report, fueled by labor costs.
By numbers: Total loss for the financial year ended March 2022 amounted to Rs.696.3 million compared to Rs.616.27 million for the previous year. This is due to the consolidated earnings that Toffler filed with the Ministry of Enterprises as a source.
In the reporting period FY2022, investment income increased by 80% to Rs 168.91 crore.
The remaining ‘Other Income’, which comprises interest income and gains on the sale of current investments, decreased by 38% to Rs 2.574 crore, bringing the total income from Rs.13.493 crore to Rs.19.464 crore.
Total expenses, driven by staff costs, increased by 19% to Rs.890.93 crore in the reporting period 2022.
Dismissal: Labor costs, a long-standing concern for the company, increased by 20% to Rs 48.929 billion.
To remedy these costs, Vedantu has laid off employees four times since early 2022. In the latest layoff, he cut 385 employees last December.
In total, the company laid off more than 1,100 employees last year. This is because coronavirus-led growth has slowed and late-stage funding slump has made it difficult for Indian edtech companies to raise new capital.
in numbers
A study by Amazon Web Services (AWS) found that large organizations in India could increase their annual business revenue by 13.6% or about Rs 745 crore if they could harness the power of data.
The Demystifying Data 2022 report, commissioned by AWS and produced by Deloitte Access Economics, surveyed 521 senior business decision makers in Indian organizations.
Other Top Stories by Reporters
Profit.co Raises $11 Million: Profit.co, which offers software that helps clients set, track and measure employee goals and key results (OKRs), announced Tuesday its first external funding round after nearly four years of bootstrapping. announced that it has raised $11 million. The new capital will be used to expand the company’s sales and customer success teams, according to a statement.
Sameer Singh has been appointed Head of Global Business Solutions for North America at TikTok. Sameer Singh has been promoted to Head of Global Business Solutions for TikTok in North America. After TikTok pulled out of India in his 2020, Singh has been leading the platform’s business solutions in Southeast Asia. His move into the North American market comes at a time when TikTok is under intense scrutiny by the US government and calls for a blanket ban are widespread.
Zoho expects $1 billion in annual revenue from ManageEngine. Zoho Corporation co-founder Sridhar Vembu said Tuesday that cloud demand will push India to become the second largest market for enterprise IT management software ManageEngine. Speaking at ManageEngine UserConf Mumbai 2023, Vembu said Zoho management expects enterprise IT management revenue to exceed $1 billion by next year, given demand indicators. I was.
Global picks we’re reading
Instagram co-founder launches comeback (platformer)
How a Small Bank in Rural Washington Got Caught in FTX (WSJ)
Binance’s offshore exchange tapped the same Washington lobbyist as its US affiliate (FT)
