 "WhatsApp")
This had to happen... It was only a matter of time... This was a foregone conclusion… You can use your favourite cliché here about the inevitability of this happening. For, the so-called funding winter for India's start-ups has segued into a scorching summer of valuation erosion.
Story of the week: Valuation Erosion
EdTech giant Byju's is believed to be close to raising $1 billion. Will this lead to a thaw in the funding winter, which has seen investors tightening their taps and forcing India's start-ups to cut jobs and focus on profitability?
Byju's round will likely have a mix of equity and "structured" instruments. We will have to see the valuation it gets. In its last funding round, it was the world's most-valued EdTech start-up at $22 billion.
This time, the signs are ominous. Invesco marked down Swiggy's valuation by 33 per cent. In January last year, Swiggy raised $700 million in a funding round led by Invesco, which valued it at $10.7 billion.
Vanguard marked down the valuation of ANI Technologies, the parent company of ride-hailing firm Ola, by 35% to $4.8 billion.
Neuberger Berman marked down the valuation of its shareholding in Pine Labs by 38% and in PharmEasy by 21%.
However, in a breather for Pine Labs, Invesco, while it marked down the value of its holding in Swiggy, kept its valuation of Pine Labs intact at $5 billion.
Amid the carnage, the value of my colleague, Peerzada Abrar (@PeerzadaAbrar), may have risen as he chased and covered each of the stories listed above. We will have to check our spreadsheets to confirm that.
In other news…
The National Company Law Tribunal accepted Go First's insolvency plea, putting the Wadia-controlled airline under a moratorium in accordance with the Insolvency and Bankruptcy Code. Talking to Business Standard, Go First's CEO, Kaushik Khona, said: "The order prevents a viable airline from becoming an unviable one." The airline has informed the civil aviation ministry it was mobilising funds and would be able to resume operations in two weeks.
The Adani Group promoters have decided not to raise any more debt to fund the conglomerate's expansion and growth. It is part of their new "risk management" strategy after the group's market capitalisation plummeted after the Hindenburg report accused it of market manipulation.
Meanwhile, the Supreme Court said it might grant a three-month extension to Sebi, the stock markets regulator, for its probe into the allegations of stock price manipulation by the Adani Group and the alleged lapses in regulations. Sebi had asked for six more months.
India can repeat its UPI success in e-commerce, Walmart's CEO, Doug McMillon, told Nivedita Mookerji and A K Bhattacharya in an interview. McMillon also indicated that Walmart's aspiration for multi-brand retail in India was a thing of the past.
India's consumer inflation fell to 4.7 per cent in April, the lowest in 18 months, and sharply down from the March figure of 5.66 per cent. Food inflation also eased to 3.84 per cent in April from 4.79 per cent in March. However, the Index of Industrial Production was the dampener, falling sharply to 1.1 per cent in March from 5.6 per cent in February.
In the meantime, it is a win-win for the rich in Karnataka's Assembly elections, says our weekly data newsletter, Number Wise.
Tech that: Word from the world of technology and start-ups
Months after pledging to step down, Elon Musk said he had found a new CEO for Twitter who would take over in the coming weeks. He did not say who it was, but The Wall Street Journal reported that NBCUniversal's head of advertising, Linda Yaccarino, was in talks for the job.
Watch it: From The Morning Show
We will get to know soon which way the Karnataka Assembly Elections go. The results are out today, but we are not sure how much they will influence the state's fortunes. The Chief Minister's job in the state has not been the most stable one. In fact, it has been shrouded in the kind of uncertainty that goes with a job in one of the troubled start-ups in the state's capital. However, the state's economy has been growing faster than the national average, prompting The Morning Show to ask: What's behind Karnataka's economic miracle?
What is Suveen obsessing over these days?
There is a joke whose variations have been all over social media and social circles for a few years (@RichRogers_ tweeted it in June 2019). This is how it goes.
"My wife asked me why I was speaking softly at home. I said Mark Zuckerberg might be listening in. She laughed. Alexa laughed. Siri laughed."
My wife asked me why I was speaking so softly at home.
— Rich Rogers (@RichRogers_) June 2, 2019
I told her I was afraid Mark Zuckerberg was listening!
She laughed. I laughed.
Alexa laughed. Siri laughed.
This is not verbatim from Rich Rogers' tweet, but the indications are that some technologies that accompany us around the clock may be able to narrate it verbatim. And more names can be added to that list of Alexa and Siri.
Foad Dabiri (@foaddabiri), an engineer with Twitter, tweeted on May 6 that WhatsApp had been using his phone's microphone in the background while he was asleep.
"What's going on?" Dabiri asked, and attached a screenshot of nine alerts indicating microphone usage by WhatsApp throughout the night on his phone, a Pixel 7 Pro by Google, which runs on the Android operating system.
WhatsApp has been using the microphone in the background, while I was asleep and since I woke up at 6AM (and that's just a part of the timeline!) What's going on? pic.twitter.com/pNIfe4VlHV
— Foad Dabiri (@foaddabiri) May 6, 2023
Not surprisingly (Twitter has started a new encrypted messaging service), Elon Musk, the new owner of Twitter, waded into the debate. Quoting Dabiri's post, Musk tweeted: "WhatsApp cannot be trusted."
The Government of India has promised to examine the alleged breach of privacy and might consider weaving safeguards into the Digital Personal Data Protection Bill that is in the works.
Meta, Facebook's parent company, owns WhatsApp, which has an estimated 500 million users in India. The messaging app was already at the centre of a debate about scam calls from overseas phone numbers to Indian users.
A few days ago, a colleague said he and his wife, when they discuss banking passwords, make sure to be in a room without a digital device.
This made me laugh. Now I wonder whether Siri, Alexa, WhatsApp, Facebook, Twitter, Google, YouTube, and Instagram laughed with me.
This is Suveen signing off. Please send comments, news, or views about anything — from falling valuations to laughing apps — to suveen.sinha@bsmail.in.
(Suveen Sinha is Chief Content Editor at Business Standard)
