Also in this letter:
Byju’sbuys US coding platform Tynker
- Andreessen Horowitz set for India debut
Madras High Courtstays parts of new IT rules
Tata Digital to launch online platform for beauty, wellness products
Tata Digital is finalising plans to launch a new ecommerce platform for cosmetics and wellness products, executives at the firm told us. This would put the company in direct competition with several new-age firms such as Nykaa, Purplle and MyGlamm.
The cosmetics platform will be separate from Tata CLiQ and Westside.com, which also sell beauty products, apart from clothes, electronics, household products and more.
“Tata Digital is diversifying rapidly to capture fast-moving consumer-facing segments within the digital ecosystem. The group sees the upcoming venture as a strategic high-growth platform,” said one of the executives, who asked to remain anonymous.
The latest developments come even as Tata Digital is learnt to have delayed the launch of its Super App as it awaits clarity on the new
SuperApp delayed: The news comes a fortnight after we reported that Tata Digital, which was planning to launch its ‘super app’ later in month, had put it on hold until the government clarified the proposed ecommerce rules.
Since Tata Digital is an ecommerce entity, it will have to rework plans — and may even have to set up a separate company — if the draft Consumer Protection (E-Commerce) Rules, 2020 are implemented in their current form.
That’s because the app hinges on goods and services offered by various Tata group companies. The proposed amendments, however, bar ecommerce entities from selling goods on their own platforms.
Acquisition spree: In May, Tata Digital acquired a majority stake in online grocery supplier BigBasket. Soon after, it picked up a majority stake in online pharmacy 1mg Technologies. It has also invested Rs 546 crore in domestic fitness startup Cult.fit.
The competition: Beauty and fashion ecommerce firm Nykaa is set to launch its initial public offering at a valuation of $4 billion. Mamaearth and MyGlamm raised funds from investors in July and are expanding their presence both online and offline. Purplle meanwhile raised $45 million from Sequoia, Verlinvest and others in March.
Making hay: With many malls and markets still shut, the online beauty and wellness space is seeing frenzied action this year. According to a 2021 report by Avendus, India’s online personal care and beauty market will touch $4.4 billion by 2025. The number of people who shop for beauty and personal care products online is expected to grow more than 4x, from 25 million in FY20 to 110 million in FY25, it said.
Byju’s buys US coding platform Tynker
Edtech platform has bought US-based coding platform Tynker in a stock-and-cash deal.
Details: The companies did not disclose the financial terms, but a person briefed on the matter told us Byju’s was paying $150-$200 million (Rs 1,100-1,470 crore) for Tynker.
Tynker cofounders Krishna Vedati, Srinivas Mandyam and Kelvin Chong are expected to continue as chief executive, chief technology officer and chief architect, respectively.
The acquisition will give Byju’s access to Tynker’s 60 million students and 100,000 schools, the company said in a statement.
- “We have been looking at their product for a long time. They have built a strong community of students who love to code. What we are getting here is a strong asynchronous platform complementing the synchronous expertise which we have through WhiteHat Jr — a combination of this creates more options for students,” founder and chief executive Byju Raveendran told us.
Buy, buy, buy: Byju’s has acquired around 15 companies in total since it was founded in 2011. Earlier this month, it announced the acquisition of online exam preparation platform Gradeup.
Its acquisition spree has been fuelled by the more than $1 billion it raised from investors last year and the $1.5 billion or so it has already raised in 2021.
Valued at $16.5 billion after its last funding round in April, Byju’s is currently in talks to raise another $1.5 billion from investors at a valuation of around $21 billion, according to sources.
Other done deals
■ Pine Labs has raised $100 million from US-based Invesco Developing Markets Fund. The funding comes just months after it raised $600 million in two tranches from a host of global and domestic investors, which valued the firm at $3.5 billion. The company, which plans to go public in the US next year, has appointed Wall Street bankers Goldman Sachs and Morgan Stanley to steer its listing. It is eyeing a valuation of $6 billion for its IPO.
■ Chat platform Discord has raised $500 million in a new funding round led by investment firm Dragoneer Investment Group. The deal values the company at about $15 billion, Bloomberg News reported. Baillie Gifford & Co., Coatue Management, Fidelity Management & Research Co and Franklin Templeton also participated in the financing, alongside existing investors.
■ Agritech startup BharatAgri has raised $6.5 million in a Series A round led by agri-focused fund Omnivore. The startup plans to use the funds to expand its subscriber base beyond Maharashtra and Madhya Pradesh and refine its existing technology offering. The round also saw participation from existing investors India Quotient and 021 Capital.
■ Direct-to-customer online casual sneakers brand Flatheads said it has raised $1 million in a funding round led by We Founder Circle and Dexter Angels. The pre-Series A round also involved investors such as Gaurav Kapur (TV presenter and founder, Oaktree Sports), Sahil Barua (cofounder, Delhivery) and Radhika Ghai (cofounder, ShopClues). Including the current round, Flatheads has raised $1.5 million since its inception.
■ Bright Money, an AI-enabled personal finance platform, has raised $31 million from Sequoia Capital India, Falcon Edge Capital and Hummingbird Ventures in a Series A funding round at an undisclosed valuation. The fintech startup counts the likes of Naveen Tewari and Abhay Singhal of InMobi, Kunal Shah of Cred, Jitendra Gupta of Jupiter, and Ram Shriram of Alphabet Inc. as its angel backers. The fresh capital will be used for hiring and building the product suite.
■ Health-tech startup Ayu Health has raised $6.3 million in Series A financing from Vertex Ventures and Stellaris Venture Partners. The funding will help Ayu expand its hospital network and build new technology solutions to enable insurance processing, efficient procurement and clinical quality management at network hospitals. The round also saw participation from angel investors including Varun Alagh of Mamaearth, Ashish Gupta of Helion and Rajat Goel of EyeQ Hospitals.
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Andreessen Horowitz in talks with CoinSwitch Kuber for its first India bet
CoinSwitch founders (from left) Ashish Singhal, Vimal Sagar and Govind Soni
Andreessen Horowitz, one of Silicon Valley’s top venture capital firms, is in talks to invest in CoinSwitch Kuber, a cryptocurrency platform for retail traders, sources told us.
“The deal is likely to be completed soon and could be made official later this month,” one of the sources said.
Between the lines: The latest fundraise comes amid continuing policy uncertainty around the status of crypto assets in India. “What’s interesting (about the funding) is the huge investor bullishness despite the policy uncertainty,” another source added.
A16z’s India debut: If the deal goes through it will be the first investment by a16z, as it is popularly known, in an Indian startup. It will also be the company’s third funding round this year and turn it into a unicorn, with a valuation of just under $2 billion, the sources said.
Why a16z? It’s the first and last letter of the firm with the character count in between. That’s called a numeronym, by the way.
Other heavyweight investors: Singapore-based CoinSwitch was last valued at $500 million in April, Tiger Global invested $25 million in it—the first investment by the New York-based investing powerhouse in a crypto platform in India. CoinSwitch’s early backers include Sequoia Capital India.
Largest crypto platform: Since April, CoinSwitch has more than doubled its user base from 4.5 million to 10 million. This makes it India’s largest crypto platform, followed by Binance-owned WazirX, which has more than 7.5 million users. The company was founded in 2017 as a global aggregator of cryptocurrency exchanges. It launched its India-exclusive crypto platform, CoinSwitch Kuber, in June 2020.
About a16z: Founded in 2009, Andreessen Horowitz is named after its founders Marc Andreessen and Ben Horowitz, whose investments in Twitter and other tech firms in the mid-2000s earned them the title of super angel investors. They launched their fund on July 6, 2009 with an initial capitalisation of $300 million.
A16z is now one of the largest venture funds in the world, managing more than $19.2 billion in assets across several funds. These include a $1.4-billion biotech and healthcare fund, a $3.1-billion crypto fund, and a cultural leadership fund.
It has invested in major US startups such as Airbnb, Affirm, Lyft and crypto exchange Coinbase, which have all gone public.
Now, Madras High Court stays parts of new IT rules
Yesterday the Madras High Court stayed parts of the Information Technology Rules, 2021, saying the control mechanism they laid out could rob the media of its independence.
Which parts? The court stayed sub-rules 1 and 3 of rule 9, which demand adherence to a Code of Ethics. These are the same sub-clauses that the Bombay High Court had stayed in August, terming them “manifestly unreasonable”. It had said, “The indeterminate and wide terms of the rules bring about a chilling effect [regarding] the right of freedom of speech and expression of writers/editors/publishers” as they could be hauled up for anything.
Yesterday’s stay came in response to a batch of petitions from Carnatic musician TM Krishna, the Digital News Publishers Association, and another individual challenging the constitutional validity of the new rules.
Quote: “Prima facie, there is substance in the contention of the petitioners that the mechanism to control the media by government may rob the media, both print and electronic, of their independence and the democratic principles,” the bench said.
What’s next: The court adjourned the matter to the last week of October when it was told that similar cases pending before the Supreme Court are scheduled for hearing in the first week of October.
WhatsApp tests in-app business directory in Brazil; India next
WhatsApp has launched a new feature which allows users to search for businesses within its app for the first time.
What’s new: The feature makes it possible for WhatsApp users to search for shops and services through a directory within the app. It includes various businesses in areas such as food and retail. Currently available only in Sao Paulo, Brazil, the feature will be rolled out in India and Indonesia next.
Quote: “This could be… the primary way that people start a commerce process in WhatsApp,” Matt Idema, Facebook’s vice president of business messaging, told Reuters this week.
The news comes at a time when Facebook is looking to increase ecommerce on its platforms and has announced several in-app shopping features. In June, CEO Mark Zuckerberg announced Facebook Shops feature would expand to WhatsApp in several countries. In recent years, WhatsApp also has also launched shopping tools such as product catalogues and shopping carts.
On eve of elections, foreign tech firms under pressure in Russia
On the eve of parliamentary elections, the Russian government has threatened US social media firms with huge fines if they fail to delete content it deems illegal, and demanded that Apple and Google stop their alleged meddling in its internal affairs, Reuters reported.
Internet services are coming under increasing pressure ahead of Russia’s September 17-19 parliamentary vote. Russia’s authorities have said foreign firms are hampering their efforts to block virtual private networks (VPNs) and online resources linked to jailed Kremlin critic Alexei Navalny.
Now, a long-running dispute over banned content has reared its head again after Vadim Subbotin, deputy head of state communications regulator Roskomnadzor, said sizeable fines were possible.
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