Startups switch gears as VC large funding deals dry up

The flood of venture capital directed at Indian startups in recent years is drying up. Big-ticket funding rounds have suffered a huge blow in the past two months, and several global investors including Sequoia Capital have cautioned entrepreneurs about turbulent times ahead.

Liquidity crunch prompts NBFCs, venture debt firms to eye supply chain finance: Non-banking financial companies (NBFCs) and venture debt firms are getting into the business of supply chain finance (SCF). The move comes amid a liquidity squeeze following the Reserve Bank of India’s (RBI) decision to hike interest rates, even as startups are seeing increased customer stickiness.

FrontRow lays off 145 employees, MPL to sack 100

Edtech firm FrontRow has laid off close to 145 full-time and contractual employees, almost 30% of its workforce, as funding dries up amid the market downturn. Meanwhile, esports app Mobile Premier League (MPL) is laying off 100 people, or about 10% of its workforce, and is exiting Indonesia, the company wrote in an email to employees, which we have reviewed.

Edtech startup Udayy sacks employees and shuts down: Edtech startup Udayy has fired 100-120 employees and shut down. The company’s business has slowed since physical schools began to reopen.

Indian IT firms are seeing record attrition even as startups are laying off workers: Top Indian IT service providers have become the biggest poaching ground for the Big Four accounting and consultancy firms, KPMG, Deloitte, PwC, and EY, which are fuelling record attrition rates at these firms, data exclusively sourced by ET showed. Over 15% of the net addition by the Big Four in FY22 are from the top five IT companies.

Venture capital fund Sequoia Capital has shot off a note to a select group of portfolio companies informing them that it has stopped working with law firm Algo Legal post an investigation at one of its investee firms, multiple people aware who had received the email told ET.

Swiggy in contention to buy Metro AG’s India operation

Swiggy has emerged as a possible contender for the India operations of German wholesaler Metro AG, executives with knowledge of the matter told us. Thailand’s CP Group and Reliance Retail are the other two likely candidates for a possible acquisition of Metro Cash & Carry at the moment, they said. We reported on May 20 that the wholesaler, which operates 31 cash-and-carry stores in India, has approached more than 10 companies to acquire its India operations for an estimated $1.5 billion to $1.7 billion. Metro AG, which set up its first store in the country in 2003, reported a turnover of Rs 6,738.3 crore from its India unit in FY21.

Reliance Retail pilots grocery delivery service through new platform, app: Reliance Retail has started instant grocery delivery service through a new platform and app under the JioMart Express brand, with trials currently ongoing in Navi Mumbai. The company plans to expand the service by this calendar year end to more than 200 cities and towns where JioMart is currently operational , two industry executives said.

MeitY’s proposed changes to IT rules withdrawn within hours

An official draft proposing changes to the country’s technology and social media rules was abruptly withdrawn on Thursday, hours after it had been made public. The proposed changes included creating one or more grievance appellate committees that review and possibly overturn content moderation decisions by social media companies.

MeitY withdraws circular on not sharing copies of Aadhaar cards: On Sunday, the Ministry of Electronics and Information Technology (MeitY) withdrew a circular issued by a regional office of the Unique Identification Authority of India (UIDAI) that asked people to not share photocopies of their Aadhaar cards.

ExpressVPN rejects new VPN rules, to pull all servers from India: ExpressVPN has announced that it will remove all of its VPN servers in India in response to the government’s new rules for VPN companies, which are scheduled to take effect on June 27.

TikTok owner Bytedance in talks to relaunch in India

Bytedance, parent company of TikTok, is looking to strike a new partnership in India and hire former and new employees as it seeks to re-enter one of the world’s largest internet markets, several sources told us.

Chinese funds to face more scrutiny on board appointments: Chinese nationals as well as those from Hong Kong who are appointed as directors on boards of Indian companies will need security clearance, according to a government notification issued on June 1. The rules, in fact, will apply to people from all countries that share a land border with India.

Xiaomi India names Alvin Tse as India head, Anuj Sharma as CMO in big rejig: Xiaomi has appointed Alvin Tse as general manager for its operations in India, the company announced on Friday. Tse replaces Manu Jain, who was elevated to group vice president at Xiaomi last year.

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IT corner

Some IT workers start voluntarily returning to office

More employees are voluntarily reporting to work from offices at IT service providers such as Infosys, HCL Technologies, Wipro and Tech Mahindra, though these companies haven’t yet mandated a return to office.

Infosys to sharpen focus on cloud, digital biz: Infosys sees a huge opportunity in the cloud and digital business and will continue to focus on expanding its capabilities in these areas, chief executive Salil Parekh said on Tuesday.

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ETtech Done Deals

Software-as-a-service (SaaS) startup MoEngage, Math tutoring startup Cuemath, and card-based lending and payment solutions provider Slice were the other startups that landed big bucks. Here’s a look at the top funding deals of the week.

Sanjeev Bikhchandani-led Info Edge has been investing in Housing.com founder Rahul Yadav’s latest startup, Broker Network. Operated by parent 4B Networks, it provides a technology platform to help brokers connect with properties, buyers and other brokers.

Binance Labs, the venture capital and incubation arm of crypto exchange Binance, has closed a $500 million fund from investors such as DST Global, Breyer Capital and others.

14 new unicorns in Jan-June: India saw 14 companies join the unicorn club from January 1 to June 1, 2022, according to data from market intelligence provider Tracxn. The same period last year saw 13 companies turn unicorn, Tracxn said.

Veteran banker and deal maker Sanjay Nayar is setting up a new $135 million fund to invest in early-stage technology startups. The India chairman of private equity behemoth KKR is looking to fill up a funding gap left by global institutional venture capital firms, which have turned cautious on India bets.

Curated by Judy Franko in Bengaluru.

That’s all from us this week. Stay safe.