Zomato’S Grey Market Shares Jump Ahead Of Ipo, Ola Raises $500 Million In Pre-Ipo Funding, Strip Heads For A Listing
Here are the stories that made headlines in the startup universe this week.
Zomato shares trade at 26% premium in the grey market ahead of IPO next week
Online food ordering platform Zomato’s initial public offering (IPO) is less than a week away, but its shares are already selling on a strong premium in the grey market. The company will allow subscriptions on July 14 and close on July 16, with the allotments being finalised by July 22. The announcement comes days ahead of the launch of Zomato’s initial public offering (IPO) on July 14. Zomato has fixed the price band for its IPO at Rs 72-76 per equity share. The Rs 9,375-crore offer will open for subscription on July 14 and close on July 16. Zomato’s shares are currently being sold at a premium of Rs 16-20, according to IPO Watch and IPO central. Meanwhile, Zomato will launch a grocery marketplace on its app soon and has already begun piloting it, Zomato co-founder Gaurav Gupta told CNBC-TV18. The company had recently invested $100 million into grocery startup Grofers for a nearly 10% stake and is awaiting approval from CCI.
Several litigations against Zomato, DRHP shows
IPO-bound Zomato’s DRHP prospectus has revealed that the food delivery platform is facing multiple litigations. The competition regulator is probing into the Zomato-Uber Eats deal. CCI has also threatened penalty for not making some merger filings for the Uber Eats acquisition. CCI has inquired why Zomato ‘should not be directed’ to notify Uber Eats India Acquisition and impose a penalty on the food-tech giant. Zomato on the other hand has said that the company has responded to CCI on Feb 5, 2021, explaining the Uber Eats India assets acquisition was non-notifiable. Zomato also added that it has requested an oral hearing before the CCI. The matter is currently pending.
Zomato is also involved in 24 consumer-related proceedings that are currently pending. Maharashtra FDA has issued 26 notices, alleging some listed restaurants lacked requisite licenses. The company is also facing civil suits over alleged false information in DRHP and is involved in 18 labour-related proceedings around wrongful termination, incorrect payouts to delivery partners and reduction of pay, as per the prospectus. The food delivery app has an outstanding amount of Rs 136 crore towards creditors. Zomato has received three notices from different state legal metrology departments. These notices are in relation to advertisements of Zomato’s kitchen infrastructure, food items and menu cards of restaurants.
Ola raises $500 million ahead of IPO
Temasek, Warburg Pincus affiliate Plum Wood Investment and Ola co-founder Bhavish Aggarwal have invested $500 million in the ride-hailing platform Ola ahead of its proposed IPO. Ola continues to scale up across various categories and geographies in its ride-hailing business, the company added. Ola chairman and Group CEO Bhavish Aggarwal said that he looks forward to collaborating with the new partners in its “next phase of growth”. The company, however, didn’t specify a timeline for its proposed IPO.
Softbank to invest in Pharmeasy?
SoftBank is reportedly in talks to invest in API Holdings, which owns the online pharmacy chain Pharmeasy. API is seeking a valuation of at least $5.6 billion in new funding round, SoftBank could invest $150 million to $200 million into the online pharmacy owner, as per Bloomberg News. The company is targeting a listing in the next 12 to 18 months.
Tiger Global leads over $100 million round in Spinny: Report
Used car retailing platform Spinny has raised $100 million led by Tiger Global according to Entrackr. This investment more than doubles the firm’s valuation to $800 million in two months. The board of Spinny has approved the allotment of 83,754 Series D preference Shares and 20 equity shares at an issue price of Rs 92,122.93 per share to raise Rs 771 crore or $105 million, according to the report.
Meesho eyes $4 billion valuation: Report
Social commerce company Meesho is in talks to raise over $100 million in a new round from two new and existing investors including SoftBank and Prosus, according to Entrackr. If the deal round goes through, it will be Meesho’s second fundraiser this year. Meesho is likely to be valued at $3.5-$4 billion in this transaction, the report adds. The company turned unicorn last year when it raised $300 million. As per the report, with this new round, Meesho will ramp up its consumer internet play and challenge Amazon and Flipkart in markets beyond the top 10 and tier I cities.
WhatsApp won’t mandate new privacy policy till a data protection bill comes to force
WhatsApp tells Delhi High Court it will not compel users to opt for a new privacy policy till the data protection bill comes into force. The messaging app tells Delhi High Court it will not limit functionality for users not opting for a new privacy policy. WhatsApp also clarified before the bench of Chief justice D N Patel and Justice Jyoti Singh that it would not limit the functionality for users who are not opting for a new privacy policy in the meantime. Delhi High Court which was hearing Facebook and WhatsApp pleas challenging a single-judge bench order dismissing their pleas against the Competition Commission of India (CCI) decision. Representing WhatsApp, Senior Advocate Harish Salve tells Delhi High Court that WhatsApp has responded to MEITY’s notice seeking a response. “WhatsApp will not limit functionality for some time and continue to show users the updated until Data Protection Bill comes into force,” he added.
A WhatsApp spokesperson said, “We reiterate that the privacy of users remains our highest priority. As a reminder, the recent update does not change the privacy of people’s personal messages. Its purpose is to provide additional information about how people can interact with businesses if they choose to do so. We will not limit the functionality of how WhatsApp works in the coming weeks. Instead, we will continue to remind users from time to time about the update as well as when people choose to use relevant optional features, like communicating with a business that is receiving support from Facebook. We hope this approach reinforces the choice that all users have whether or not they want to interact with a business. We will maintain this approach until at least the forthcoming PDP law comes into effect.”
Salve said WhatsApp would nonetheless continue to display the update to its users. The court is hearing the appeals of Facebook and its firm WhatsApp against the single-judge order refusing to stop the competition regulator CCI’s order directing a probe into WhatsApp’s new privacy policy. WhatsApp has drawn massive criticism from users globally, including India, over concerns that data was being shared with its parent company, Facebook. WhatsApp, on its part, has maintained that messages on the platform are end-to-end encrypted and that neither WhatsApp nor Facebook can see the private messages on WhatsApp’s platform. Ministry of Electronics & Information Technology (MeitY) took cognizance of the WhatsApp announcement of its new Privacy Policy stated to be applicable to Indian users.
FUNDING THIS WEEK
1> Social e-commerce startup, DealShare has raised $144 million in its Series D round of funding. The round was led by Tiger Global and was co-led led by WestBridge Capital, Alpha Wave Incubation (a venture fund backed by ADQ, and managed by Falcon Edge Capital) and Z3Partners with participation from Partners of DST Global, Matrix Partners India, and Alteria Capital. With the current round, the total funding raised by DealShare stands at $183 million.
2> Furniture subscription company, Furlenco has raised $140 million in a mix of debt and equity, as part of its latest funding round led by Zinnia Global Fund. The fresh funds will be used to cater to much larger audiences with more tailored solutions and brand new offerings while continuing to focus on sustainability at the very core of the business, the company said in a statement.
3> Logistics aggregator Shiprocket has raised $41.3 million in a series D1 funding round co-led by PayPal Ventures and existing investor Bertelsmann India Investments. The latest fundraising has taken the total funding of the direct-to-consumer (D2C) retailer to $94.3 million. According to the company, the fundraise will be used to accelerate product development for both existing and new products, research and development.
4> Venture growth investor Iron Pillar, which backs global companies that build products out of India, has raised $10 million from Allana Group in its Fund II. With the fresh influx of funding, Iron Pillar is planning to collaborate with larger Indian and global business groups who can help their portfolio companies improve operations and expand across the US, Middle East, and the Asia Pacific, it said in a statement.
5> Online teaching platform, Teachmint has raised $20 million in a Pre-Series B round led by Learn Capital with participation from CM Ventures. The company said the fresh influx of funds will power its continued focus on the development of live teaching technology as well as aid the enhancement of its product. The funding will also fuel Teachmint’s expansion into newer markets and the hiring of skilled talent.
6> CRMNEXT, a digital and customer experience transformation platform for enterprise banks and financial service providers globally, has raised $16 million in Series B funding co-led by Avataar Ventures and Ascent Capital. The company will use the funding to accelerate its global expansion and invest in doubling its team.
7> Digital care ecosystem for chronic condition management, BeatO has raised Rs 42 crore in funding led by US-based venture capital firm W Health Ventures. The funding also saw participation from PharmEasy, Merisis VP and existing investors Orios VP, Leo Capital and others. With this new funding, BeatO has raised Rs 75 crore over the last year across its Series A and Pre-series B rounds.
8> Transport marketplace startup Vahak has raised $5 million in a pre-series A funding round, which was led by RTP Global with participation from Luxor Capital and Leo Capital. The fresh infusion of capital will be used to strengthen the team and technological capabilities, and expand its customer and network base, Vahak said in a statement.
IPO-bound Paytm to file a draft prospectus
Paytm is likely to file its DRHP as early as July 12 for its upcoming IPO seeking to raise $2.3 billion, as per a Reuters report. The funds will be raised via the sale of new Paytm stock as well as a secondary offering of shares at an expected valuation of $24 billion to $25 billion with an option to raise the amount at a later stage if required. The prospectus will be filed shortly after Paytm’s extraordinary general meeting (EGM) of shareholders in Delhi on July 12, possibly on the same day, the report added.
Paytm board rejig ahead of IPO, sees Chinese nationals exit
Ahead of its IPO, payments company Paytm has rejigged its board, which will see the exit of the two Chinese nationals who were on the board. Jing Xiandong, CEO of Ant Group, has resigned as director, and Paytm has brought in Douglas Lehman Feagin of Alibaba instead, as per regulatory filings. Michael Yuen Jen, who is senior vice president of Alibaba Group has also retired effective June 30. Paytm has also brought in Ashit Lilani of Saama Capital appointed as independent director Todd Anthony Combs of Berkshire Hathaway also retired post-June 30. Munish Verma of Softbank has been temporarily replaced by Vikas Agnihotri, as per the filings. The other members on the board are founder Vijay Shekhar Sharma, Ravi Adusamalli, Elevation Capital, Pallavi Shroff, Managing Partner of Shardul Amarchand Mangaldas law firm, and Mark Schwartz, Goldman Sachs.
Naspers-backed PayU in a race to buy BillDesk: Report
Fintech giant PayU, which is backed by one of the world’s top technology investors Naspers, is one of the multiple suitors in talks to acquire top domestic payment gateway firm BillDesk, as per Moneycontrol. The deal if sealed would be the biggest in the Indian internet space since the disruptive $16 billion buyout of Flipkart by Walmart.
Moglix acquires used machinery e-commerce firm Vendaxo
B2B e-commerce platform Moglix has acquired Vendaxo, an e-commerce platform for buying and selling used machinery. The acquisition will allow Moglix to provide high-value capital goods at economical prices to manufacturers, the unicorn claimed. The company did not reveal the details financial information about the acquisition. Vendaxo is a B2B e-commerce player just like Moglix. Its users include MSMEs as well as large manufacturing enterprises such as Siemens, Arvind India, Marico, Raymond and Torrent Pharma.
Global payments platform Nium to acquire Wirecard Forex India
Global payments platform Nium has announced its plans to acquire Wirecard Forex India – a foreign currency exchange, prepaid card and remittance service provider. The acquisition not only gives Nium greater access to India’s burgeoning payments markets but also secures Wirecard’s licenses to carry out operations, which includes currency conversion, money transfer and prepaid card issuance.
Clear acquires yBANQ eyeing B2B payments
Clear, a fintech SaaS company has acquired a B2B payments startup yBANQ in a cash and equity deal. yBANQ helps businesses with payments collection, reconciliation, and automated bookkeeping. With this acquisition, The company said it to build India’s largest B2B Business Network.
Chiratae Ventures’ new startup accelerator promises Seed Funds at ‘Supersonic’ speed
Chiratae Ventures has announced the start of its accelerator program – Chiratae Sonic, which seeks to fast-track fundraising for early-stage startups in India. Under the initiative, startup founders would be able to secure seed funds within 48 hours if the required investment is less than or equal to $500,000. To quicken the application process, Chiratae Ventures has created a template form and a dedicated website for the Chiratae Sonic Program, which will accept entries for the next 30 days under the first phase of the seed initiative. This is the 8th seed investment program rolled out by Chiratae Ventures. The focus remains on investing in startups with technology at the core, the company said in a statement.
Razorpay, Mastercard launch MandateHQ for recurring payments
Payments solution provider Razorpay has partnered with Mastercard to launch ‘MandateHQ’ – a payment interface that will help card-issuing banks to enable recurring payments for its customers. To help banks comply with the RBI directive and provide convenience to banks’ customers, Razorpay and Mastercard launched MandateHQ. With the launch of MandateHQ, Razorpay said they stand in support of the RBI directive of making auto-debit transactions safer from potential fraud.
Rhiti and Kanodia Group collaborate to launch ‘Deep Pockets Capital Venture LLP’
Sports-focused Rhiti Group has collaborated with cement maker Kanodia Group to launch Deep Pockets Capital Venture, to fund and incubate budding entrepreneurs. The criteria of funding will be Innovation, creativity and business potential with an aim to nurture India’s new business generation and contribute to the $5 trillion economy goal of the Central government. Deep Pockets will focus on tech-specific sectors—including filmmaking, web series and TV shows, sports technology and consumer healthcare. The company aims to partner with founders of selected companies and amplify their business from seed to scale.
LGBTQ partners now included in corporate health insurance By Plum
Plum, an employee health insurance start-up has rolled out LGBTQ partner cover for companies, allowing employees to enroll same-sex partners in their corporate health insurance policy. Plum is committed to building the highest quality and most inclusive health benefits plan for companies and shaping better workplaces in India. The company is working with insurers to make LGBTQ cover the default option for every health insurance policy they offer to customers, it said in a statement.
Govt extends deadline for feedback on new e-commerce rules
The Centre has extended the timeline for feedback on draft e-commerce rules to July 21 from July 6. The move comes after top companies including Amazon, Tata Group, Flipkart, Paytm and Snapdeal reached out to the government, requesting more time to study the proposed changes in the consumer protection rules on e-commerce and extend the deadline for submitting comments by a few weeks or at least by 20 days. The government announced the tough new e-commerce rules on June 21, limiting flash sales, barring misleading advertisements and mandating a complaints system.
Delhi HC denies interim protection to Twitter
The Delhi High Court on Thursday refused to allow any interim protection to Twitter. The court also directed interim officers appointed by Twitter to file affidavits before it within two days so that they can take responsibility for the duties given to them. Earlier in the day, the social media giant had informed the court that it would take another eight weeks to appoint a resident grievance officer (RGO) in compliance with the new IT Rules. It submitted an affidavit in the court clarifying its stand on the issue of compliance under the new IT Rules and said that it was in the process of setting up a liaison office in the country.
On July 6, the court said no interim protection is granted to Twitter and the Centre is free to take action against them for non-compliance with IT rules. Twitter told the court that it has appointed an interim chief compliance officer through a third-party contractor to be a chief compliance officer for now. The Ministry of Electronics and Information Technology (MeiTY) has also been informed in this regard, it said. The next hearing in the case has been scheduled for July 28.
Karnataka HC slams UP Police on notice to Twitter India MD in Ghaziabad FIR
The Karnataka High Court lashed out at the Uttar Pradesh Police for insisting on the appearance of Twitter India’s managing director Manish Maheshwari for investigation in the FIR related to the Ghaziabad video, without ascertaining even the basic facts about his and Twitter India’s culpability in the matter. Justice G Narender noted that the crux of the matter is that a doctored video was uploaded on the Twitter platform, however, Twitter India may not be connected with the alleged incident. UP Police on the other hand claimed the 41A notice was issued to the Petitioner only in a representative capacity and their aim is to merely identify.
Relief for OYO, insolvency case closed by NCLAT
The insolvency process against hospitality company Oyo has been closed by the NCLAT, giving relief to the Softbank-backed company, especially as the claims by several operational creditors against the company had climbed to over Rs 200 crore. The NCLAT closed the case against Oyo by a Gurgaon-based hotel owner, who had alleged dues of Rs 16 lakh, and also dismissed intervention applications by other creditors.
GLOBAL TECHNOLOGY & STARTUP NEWS
Online payments firm Stripe takes the first step toward blockbuster listing
Digital payments processor Stripe Inc, the most valuable US technology startup, has taken its first major step toward a stock market debut by hiring a law firm to help with preparations, Reuters reported. The 11-year-old company, which was valued by investors at $95 billion in a fundraising round in March, has sat out this year’s red-hot market for initial public offerings (IPOs), using private tender offers to allow some of its existing investors and employees to cash out their holdings. Remaining private has enabled Stripe to keep such financial details as revenue and profitability under wraps. Yet this has also deprived it of using its shares as a publicly-traded currency to help finance acquisitions and to incentivize employees.
Stripe has tapped Cleary Gottlieb Steen & Hamilton as a legal adviser on its early-stage listing preparations, the sources said. There has been no decision on the timing of the stock market debut, and the next step would be the hiring of investment banks later this year, the sources added. The listing would be unlikely to happen this year. Stripe is considering going public through a direct listing, rather than a traditional IPO, because it does not need to raise money, as per Reuters, cautioning that those plans could change.
Wise valued at $11 billion in record London direct listing
Shares of financial technology company Wise ended 10 percent up on their first day of trading on Wednesday in London’s largest-ever tech listing that could pave the way for other firms looking to go public without the help of underwriters. Britain’s government has been keen to attract technology groups to list in the country and its financial watchdog earlier this week outlined proposals to make it easier for them to list to help London compete with New York and the EU post-Brexit.
Didi sued in the US as shares slide
Chinese ride-hailing giant Didi Global is being sued by US shareholders after a crackdown by Beijing triggered a slump in its share price. The two lawsuits come a week after Didi’s New York Stock Exchange debut, as per a report by BBC. The company’s US market value has fallen by more than 20 percent since a Chinese regulator told online stores to pull the app. Beijing’s cybersecurity watchdog says the app illegally collected users’ personal data. The lawsuits, which were filed in federal court in New York and Los Angeles on Tuesday, say Didi failed to disclose ongoing talks it was having with Chinese authorities about its compliance with cybersecurity laws and regulations.
US set to add more Chinese companies to blacklist over Xinjiang
The Biden administration is set to add more than 10 Chinese companies to its economic blacklist over alleged human rights abuses and high-tech surveillance in Xinjiang, sources told Reuters. The US Commerce Department action will follow its announcement last month adding five other companies and other Chinese entities to the blacklist over allegations of forced labor in the far western region of China. The additions to Commerce Department’s Entity List are part of the Biden administration’s efforts to hold China accountable for human rights violations, the sources said.
Chinese antitrust regulator to block Tencent’s videogaming merger
China’s antitrust regulator is set to formally block Tencent Holdings plan to merge the country’s top two videogame streaming sites, Huya and DouYu, sources told Reuters. Tencent has failed to come up with sufficient remedies to meet the State Administration of Market Regulation’s (SAMR) requirements on giving up exclusive rights, as per the report. The internet giant recently withdrew the merger application for antitrust review and refiled it after SAMR told the company it could not complete the review of the merger within 180 days since its first filing.
US reverses $10 billion cloud deal
US Department of Defense has called off a $10 billion Trump-era cloud contract that was the subject of a legal battle involving Amazon and Microsoft. The Pentagon will launch a new multi-vendor cloud computing contract where Amazon and Microsoft will both be solicited for proposals, CNBC reported.
Other top cloud companies include Oracle Corp, Alphabet Inc’s Google and IBM Corp. The contract awarded by the Pentagon in late 2019 has been on hold after Amazon filed a lawsuit challenging the decision under then-President Donald Trump. The Pentagon hopes to have the first awards by April 2022 for its new Joint Warfighter Cloud Capability (JWCC).
Jeff Bezos hits wealth record of $211 billion
Just days after Jeff Bezos stepped down as Amazon CEO, his net worth has hit a record $211 billion after the e-commerce company’s shares rose 4.7 percent.
The surge came after Amazon’s shares rose 4.7 percent after the Pentagon announced it was canceling a cloud-computing contract with rival Microsoft Corp. The rally raised Bezos’s fortune by $8.4 billion, according to the Bloomberg Billionaires Index. The last time anyone in the Bloomberg ranking neared this amount was in January when Tesla’s Elon Musk briefly hit $210 billion.
Square plans to make hardware wallet for bitcoin
Square will make a hardware wallet for bitcoin, the payments company confirmed in a tweet on Thursday shortly before US Senator Elizabeth Warren flagged growing risks posed to consumers and financial markets by the cryptocurrency market. Bitcoin wallets can be stored offline or online at cryptocurrency exchanges, venues where bitcoin can be bought and sold for traditional currencies or other virtual coins. “We have decided to build a hardware wallet and service to make bitcoin custody more mainstream”, Jesse Dorogusker, head of hardware at Square said.
Microsoft is giving employees Rs 1.12 lakh as a pandemic bonus
Microsoft is giving all its employees a $1,500 pandemic bonus, in recognition of a challenging fiscal year that the tech giant just completed. According to The Verge which has seen an internal memo, Microsoft is gifting the bonus to all staff below the corporate vice president level that started on or before March 31, 2021. It will also include part-time workers and those on hourly rates. However, employees of its subsidiaries LinkedIn, GitHub and ZeniMax are not eligible for the pandemic bonus, the report added. Earlier, Facebook gifted its 45,000 employees $1,000 each and Amazon gave $300-holiday bonus for frontline workers.
Oversight Board says Facebook ‘lost’ an important rule for three years
Facebook “misplaced” guidance on an important exemption to its rules on dangerous individuals and organizations for three years, the company’s independent oversight board said on Thursday. As per Reuters, the board, which was created by the company to rule on a small slice of contentious content decisions, said it had overturned Facebook’s original removal of an Instagram post encouraging people to talk about the solitary confinement of Abdullah Ocalan, a founding member of the Kurdistan Workers’ Party (PKK).
It said the content should never have been removed, but it also said that after it selected the case, Facebook found a relevant piece of its internal rules had “inadvertently not transferred” to a new review system in 2018. Facebook has long been under scrutiny over what is allowed on its platforms and has been criticized by the board for a lack of transparency around its rules. The board said it was “concerned” that Facebook had lost an important policy exemption for this time and that this could have led to other posts being wrongly taken down.
Weibo to go private: Report
Weibo’s chairman and a Chinese state investor plan to take China’s answer to Twitter private, Reuters reported. The deal could value Nasdaq listed Weibo at more than $20 billion, facilitate shareholder Alibaba’s exit and see Weibo eventually relist in China to capitalise on higher valuations. Chairman Charles Chao’s holding company New Wave which is Weibo’s top stakeholder, is teaming up with a Shanghai-based state company to form a consortium for the deal, sources told Reuters. The consortium is looking to offer about $90-$100 per share to take Weibo private, representing a premium of 80-100 percent to the stock’s $50 average price over the past month. As per Reuters, the group aims to finalise the deal this year.
WeChat deletes dozens of LGBT accounts
Chinese tech giant Tencent’s WeChat social media platform has deleted dozens of LGBT accounts run by university students, saying some had broken rules on information on the internet, sparking fear of a crackdown on gay content online. Members of several LGBT groups told Reuters that access to their accounts was blocked late on Tuesday and they later discovered that all of their content had been deleted. A notice sent to Reuters by WeChat claimed that the groups “had violated regulations on the management of accounts offering public information service on the Chinese internet”
