Happy Wednesday!
A day after Jack Dorsey, co-founder of microblogging site Twitter, said that all employees of the San Francisco-based firm have been given the option to work remotely forever, Indian edtech startup Unacademy followed suit.
WFH forever
Facebook-backed Unacademy said that 60% of its entire workforce will be working from home on a permanent basis.
Why it matters
The move comes at a time when the Covid-19 pandemic has upended the way people live and work. Most technology companies, including Amazon and Google as well as startups, have given staff the option to work from home, but only till later this year. Others, like Flipkart and Udaan, have resumed operations with minimal staff. Read more.
Funding freeze
Already cash-strapped due to the Covid-19 pandemic, Indian startups may be staring at a funding squeeze. Weeks after the government said that all investments from countries sharing a land border with India will need its prior approval, Chinese venture capital investors are turning increasingly anxious about India’s new foreign direct investment policy. Some investors have even withdrawn term sheets that were on the table. Others are waiting for clarifications from the government on the policy tweak.
Over the last few years, venture capital firms such as Shunwei Capital, Fosun RZ Capital, CDH Investments, Hillhouse Capital and Morningside Venture Capital have also set up their local offices and hired investment professionals to scout for deals in Asia’s third-largest economy.
But the finance ministry’s notification on April 22 dealt a body blow to these investors. Their investments–both new and follow on—will now come under the government’s scanner.
How does it affect Indian startups?
Venture capitalists are calling for a more investment-friendly landscape and have pointed out that if the situation does not change or if deals are not fast-tracked, capital could be diverted to other emerging economies.
Pull quote
“In our discussions with Chinese investors, we have seen that such investors are now dissuaded from investing in India, considering the obvious reluctance of the government in inviting Chinese investments freely. Rather, Chinese investors are now exploring alternative jurisdictions like Vietnam and Indonesia.”
– Atul Pandey, partner, Khaitan & Co.
Why it matters
Chinese investors have poured in close to $6 billion into India’s digital ecosystem over the last two years, as they looked to park capital in the world’s fastest growing, yet largely untapped, consumer market. Read more.
27 million jobs lost
The Centre for Monitoring Indian Economy said that 27 million people in the age group of 20-30 years lost their jobs in April 2020, following the nationwide lockdown due to the coronavirus outbreak.
By the numbers
- Unemployment rate fell from 27.1% to 24% for the week ended May 10.
- Youngsters in the age group 20-24 years accounted for 11% of those who lost jobs while they constituted 8.5% to the total employed persons in the country in 2019-20.
- 33 million men and women in their 30s lost jobs in April out of which 86% of the job losses were among men. Read more.
Booze delivery at home
While people are sceptical about ordering food due to the Covid-19 pandemic, they may be less likely to think twice before home delivery of liquor. After Zomato, Swiggy is in talks with multiple state governments to seek permission for home delivery of alcohol from local licensed retailers.
States treading cautiously
- The Maharashtra government has allowed home delivery of alcohol from May 14, but only to those who have permits to consume alcohol. The service would not be applicable in Mumbai and Pune Mumbai Metropolitan region, Aurangabad and Nagpur.
- Karnataka is examining the Supreme Court suggestion to make liquor available through online and home delivery channels, but a decision is going to take time.
- Kerala has begun consultations with the Kerala Startup Mission, a central agency of the state government, to build a portal for people to make online payments for liquor from retail outlets and bars.
- Telangana has started exploring the option of delivering alcohol to homes with private companies.
- Although Punjab was the first to moot home delivery of alcohol, the implementation is still pending as the Cabinet is mulling changes to its excise policy. Read more.
Lockdown to shut shops
About a fifth of the retail shops across India may fold even if the lockdown is lifted soon. Overheads such as high rents will make businesses unviable amid muted sales, with customers expected to shop mostly for essential goods.
Cause of concern
More than 60% of the retail outlets in the major markets including Colaba, Nariman Point and Andheri in Mumbai and Khan Market, Connaught Place and the wholesale hub of Sadar Bazar in New Delhi are occupied by tenants. Already, many shopkeepers have defaulted on rent payments and this may continue in the current business scenario. In congested areas, where social distancing is impossible, traders themselves have decided to remain shut even after the restrictions are relaxed. Read more.
(Illustrations by Rahul Awasthi)
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