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India’s startup ecosystem is reeling under the government’s latest foreign direct investment norms which prohibit automatic routing of Chinese capital. But the move may have made it easy for others.
Private equity firm General Atlantic is finally vying for consumer technology and early-stage startups in India. This is vastly different from its approach towards the fast-growing tech sector not very long back, when the fund came close to backing the likes of Flipkart (acquired by Walmart) in its early days and Zomato a few years back, but eventually refrained from biting the bullet.
Bigger piece of the pie
General Atlantic will begin evaluating startups early on and invest anywhere between $25 million and $500 million in a company. The firm has been one among the rare growth-stage funds to take several bets on fledgling companies in India’s tech space, while most of its peers have steered clear of these high-burn and steeply valued companies.
GA has backed edtech major Byju’s, online learning platform Unacademy, real estate portal NoBroker, and will explore more such opportunities in this segment as consolidation kicks in and valuations soften. Read more.
Driving Internet usage
Rural India is expected to have 304 million monthly active internet users by year-end, according to market research company Kantar. If one uses the internet at least once in 30 days, he or she is tagged as a monthly active user in industry parlance. Kantar estimates that there are 264 million internet users in rural India currently.
Over-the-top platforms, hyperlocal services, social media, communication and online payments will be key elements that are expected to drive the impact. Amid the outbreak, services like online gaming, ed-tech and groceries have already seen unprecedented demand, which is likely to continue due to lockdowns and social distancing measures. Read more.
Jio may offload more stake
Reliance Jio Infocomm’s parent Jio Platforms could potentially offload another 8 percent stake to strategic financial investors, according to analysts.
Why it matters
This comes close on the heels of recent deals with US private equity (PE) firm Silver Lake and social media giant Facebook. Another mega stake sale along the lines of the recent $5.7-billion deal with Facebook would bolster Jio’s balance sheet, reduce its dependence on an initial public offer (IPO) for future cash infusions and give it a first-mover advantage over rivals Bharti Airtel and Vodafone Idea in aggressively buying 5G airwaves in the next sale. Jio’s success as a digital company hinges on its app ecosystem gaining traction and monetisation of its cluster of over 25 apps. Read more.
Social distancing stress
Social isolation and work from home seem to have started eating into the minds of working professionals. There has been a 35-40% increase in the number of cases of stress and panic attack in April over previous months, according to data from counselling firms. Economic insecurity is further adding to the worries in addition to the fear of losing jobs.
Many large companies are waking up to this problem and some are already hiring mental health professionals to deal with the situation. Companies such as Lupin, Tata Steel, Mahindra & Mahindra and TVS & Sons are seeking professional help to enable their employees deal with stress. As a result, counselling firms are seeing a massive surge in new clients. Read more.
Aarogya Setu temporary
Communications and information technology minister Ravi Shankar Prasad dismissed privacy and security concerns over the Aarogya Setu app, saying it was completely safe and that all stored data would be deleted once the Covid-19 crisis was over. The information, he said, was fully encrypted and there was no need for people to panic about safety issues.
Why it matters
The app, which was developed by the government to track those with the disease and alert people about their proximity, has given rise to fears of surveillance by the state as well as the security of the personal data that a user needs to fill in after downloading it. The concerns were heightened after a home ministry notification on May 1 mandating the use of app by all employees while holding heads of respective organisations liable for 100% coverage. Read more.
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