Here are the top headlines from the startup space.

Paytm set to launch its IPO on Nov 8; eyes $20Bn valuation

Digital payments and financial services firm Paytm is likely to launch its IPO on November 8 and is targeting a price band of Rs 2,080 to Rs 2150 rupees, sources tell CNBC-TV18.

The company is looking at a valuation of $20 billion. Paytm's IPO, which was already touted as the biggest so far, is set to get bigger. Paytm is set to raise its IPO issue size to Rs 18,300 crore, from the earlier Rs 16,600 crore.

As a result, the new total IPO size will include primary size of Rs 8,300 crore (unchanged) and secondary of Rs 10,000 crore. Company sources say the secondary issue was raised due to increased investor interest.

Roughly half of the offer for sale is going to be by Ant financial, which holds close to 30 percent stake in Paytm and has to bring it under 25 percent to comply with Sebi’s rules for professionally managed companies. The remaining OFS will see participation by alibaba, elevation capital, softbank and other existing shareholders.

Paytm received the Sebi approval for its IPO last week and is set to list in November.

Reinsurance company Swiss Re to buy 23% stake in Paytm Insuretech for about Rs 920 Cr

Switzerland-based reinsurance major Swiss Re will buy a 23 percent stake in Paytm Insuretech for about Rs 920 crore.

Paytm's insurance unit, Paytm Insuretech (PIT), plans to leverage Paytm's customer base and merchant ecosystem to develop innovative insurance products. Through an investment in PIT, Swiss Re and Paytm will work towards closing the insurance protection gap in the market, the company said in a statement.

"Swiss Re will invest (by way of equity shares and compulsorily convertible preference shares) approximately Rs 9,200 million (Rs 3,973 million upfront, and the remaining in tranches, subject to fulfilment of certain milestones) in PIT for an aggregate stake of 23 percent on a fully diluted basis," Paytm said.

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The investments in PIT follows the acquisition of Raheja QBE by Paytm Insuretech. Sharma will also make an investment in PIT in his personal capacity along with Swiss Re.

The company, however, did not disclose the investment details that Sharma will make in PIT.

The investment by Swiss Re and the acquisition of Raheja QBE by Paytm Insuretech are subject to regulatory approvals.

“We look forward to gaining from Swiss Re's global insurance capabilities and building innovative products to tap into the Indian market," Paytm chairman, MD and CEO Vijay Shekhar Sharma said.

Policybazaar's Rs 5,826 Cr IPO to open on Nov 1

The three-day initial public offering (IPO) of online insurance platform Policybazaar

will open for subscription on November 1, and conclude on November 3.

The company has fixed a price band of Rs 940-980 a share for its Rs 5,826 crore initial share sale. The issue size is 6,07,30,265 shares, with a face value of Rs 2 each.

Through the IPO, the company will raise an amount of around Rs 5,826 crore. The IPO comprises a fresh issue of Rs 3,750 crore, along with an offer for sale (OFS) of Rs 1959.72 crore by existing promoters and shareholders. The OFS would be driven by investor SVF Python II (Cayman), which would be selling shares worth Rs 1,875 crore. As of now, Cayman holds 9.45 percent stake in the company.

Proceeds of the fresh issue will be used towards enhancing visibility and awareness of the company’s brands, to look for new opportunities to expand growth initiatives to increase the consumer base including offline presence. Also, the proceeds from the IPO will be used for funding strategic investments and acquisitions, expanding presence outside India and general corporate purpose.

BetterPlace acquires OLX People & Waah Jobs

Blue-collar workforce management platform Betterplace has announced the strategic acquisition of OLX People and Waah Jobs.

With this acquisition, the company aims to strengthen its portfolio of workforce management solutions and become one of the largest providers of solutions in the blue and grey collar gig staffing ecosystem, it said in a statement.

The new joint entity will use proprietary technology that will empower organizations to manage the complete lifecycle of their blue-collar workforce from a single platform. Blue and Grey collar users on the integrated platform will be able to receive a spectrum of services which includes salary credit updates, benefits summary, access to financial services, medical advice and can also upskill themselves through various vernacular training modules, the firm added.

This is the second acquisition announcement from BetterPlace this month after they acquired Oust Labs, a mobile-first micro learning platform tailor-made for upskilling and training distributed workforces. BetterPlace had recently raised $24 million in Series-C funding led by multiple investors like CX Partners, Jungle Ventures, CDC Group, Capria Ventures, 3One4 Capital among others.

Lotus Herbals acquires 32% strategic stake in Fixderma India

Beauty and personal care products company Lotus Herbals has acquired a 32% strategic stake in dermaceuticals maker Fixderma India.

With this move, Lotus Herbals now plans to foray into the dermaceutical segment offering a premium range of skincare and hair care products that bridge prescription-based products and over-the-counter cosmetics, the company said.

“With our strategic planning and marketing expertise, we aim at enhancing the global footprint for Fixderma and FCL and capture significant market share within the next five years as part of our long-term growth strategy,” said Nitin Passi, joint managing director, Lotus Herbals.

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This is Lotus Herbals' second investment. In 2020, it bought a 100% stake in organic Ayurveda brand Soul Tree.

Google, MeitY Startup Hub partner to help Indian startups drive global app innovations

Google and MeitY Startup Hub on Wednesday said they have partnered to launch Appscale Academy to help Indian startups build high-quality apps.

MeitY Startup Hub is an initiative of the Ministry of Electronics and IT.

Appscale Academy will focus on helping local early to mid-stage startups build and scale a range of world-class apps across domains, including gaming, healthcare, fintech, edtech, social impact, and others, the company said.

Applications will be open till December 15, 2021, from which 100 startups will be selected based on defined qualitative and quantitative parameters by a panel of industry experts, members of MeitY Startup Hub, and Google Play.

The programme will also provide a special focus to the emerging startup ecosystem in tier II and III cities of India, aiming to provide them with the help needed to build scalable app solutions, the statement added.

“We are excited to see India's thriving startup ecosystem not only solve for India but also reach global audiences. At Google Play, we believe Indian startups and developers have the ability to set an example for the rest of the world to follow," Purnima Kochikar, Vice President of Google Play Partnerships, said.

She added that the partnership with the MeitY Startup Hub will help further tap into the tremendous potential of this ecosystem and help them build sustainable and scalable global businesses.

As part of the six-month programme, the selected startups will get trained through a curriculum designed to help them drive high-quality apps for a global market, including sessions on data safety and security practices, monetisation, UX design, and global market expansion.

"It is great to see startups and developers across India, especially those in Tier II and Tier III towns, gain momentum and provide solutions for complex problems unique to India. We look forward to working with them on this journey and helping them scale to new heights," noted MeitY Startup Hub CEO Jeet Vijay.

Euler Motors launches HiLoad Electric 3-Wheeler in India

Electric vehicle startup, Euler Motors, has launched its first product - Euler HiLoad electric three-wheeler for the cargo segment.

The new Euler HiLoad electric cargo three-wheeler has been launched in India at Rs 3,49,999. The pre-bookings for the same are now open across the country, the company said in a statement. The Euler HiLoad EV has been designed in India and the company claims that it is the most powerful electric cargo three-wheeler in the country.

The electric three-wheeler is offered in four variants - PV, DV, HD and FB, and you get two payload options - 655 kg and 688 kg, with a Gross Vehicle Weight (GVW) of 1,413 kg.

The companies will deploy Euler Motors’ EVs across Delhi NCR, Bengaluru, Hyderabad and Chennai. Deliveries of these vehicles are scheduled to take place in the next 6-8 months, the startup added. It already manages a network of 200+ charging infrastructure in Delhi NCR to support electric vehicles on ground.

Euler has already an order book of 2500 vehicles from several eCommerce giants, including BigBasket, Flipkart, Udaan, Hyperlocal and a few B2B delivery players.

Flipkart integrates Snap’s Camera Kit into its app for enhanced AR-led e-commerce experience

E-commerce giant Flipkart has entered a partnership with Snap to integrate the latter’s Camera Kit into its app.

The integration will allow users to virtually try on products or view them in their physical world before any purchase. With this partnership, Flipkart wants to expand its augmented reality-led e-commerce experience for its customers, the company said in a statement.

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“The e-commerce landscape in India is changing rapidly with millions of new customers from all geographies looking for richer experiences online. This partnership will herald a new era in the e-commerce industry, enabling easy access for customers while driving growth for lakhs of our sellers,” said Jeyandran Venugopal, Chief Product and Technology Officer at Flipkart.

This announcement also marks Snap’s first collaboration with an e-commerce platform in India.

Indians paid Rs263 Bn in foreign exchange fees in 2020: Wise Report

Indian consumers paid more than Rs 263 billion as foreign exchange fees in 2020, of which roughly Rs 97 billion was hidden as exchange rate markups on currency conversions, payments, and card purchases, Wise, a global payments company revealed in a new study.

The remaining Rs 166 billion was spent on transaction fees. On a base of about Rs 80 billion of inward remittances and Rs 7 billion in outward remittances, this translates to about 4% in costs, the report added.

A significant portion of these fees paid on remittances to India come from people in Gulf countries, most of whom are employed in blue collar jobs to support their families back home in India, the study showed.

Of the share of total fees paid on inward remittances to India in 2020, Saudi Arabia ranked first at 24%, followed by the US (18%), United Kingdom (15%), Qatar (8%), Canada (6%), Oman (5%), United Arab Emirates (5%), Kuwait (5%), and Australia (4%).

The study also revealed that pre-pandemic, Indian travellers spent ₹42 billion in foreign exchange fees in 2019 alone, of which ₹24 billion is hidden in exchange rate markups.

The findings further showed that most people today are unable to understand the actual costs of sending money abroad due to a continued lack of transparency around fee structures. There are two costs associated with foreign currency transactions: the upfront transaction fee and the exchange rate.

The upfront fee can vary but would often not represent the total cost of the transaction as traditional banks and providers tend to add an undisclosed markup on the exchange rate, instead of using the fair, mid-market rate.

The difference between rates result in a hidden fee, which unnecessarily costs people a lot more when sending money abroad, Wise added.

Niro hires industry collections veteran Narendran Prabhakaran

Fintech platform Niro has announced the appointment of collections veteran Narendran Prabhakaran, ex-Collections Head at Navi as Head of Collections and Operations, as it scales its business.

Narendran's valuable expertise will help the company in driving scale aggressively while building out world-class risk-management capabilities and transforming all customer-facing digital platforms into fintechs, the company said in a statement.

The company recently raised $3.5 million in a seed funding round led by Elevar Equity and angel investors.

SACC India signs MoU with TBDC to help startup founders scale in North America

Startup Accelerator Chamber of Commerce (SACC) India has signed a MoU with Toronto Business Development Centre (TBDC) to help startup founders from its community to scale in the North American market via Canada.

The intention is towards collaborating to select suitable startups from the platform to go through the Startup Visa selection process and relocate, if selected, to Canada, a statement said.

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SACC runs more than eight incubation centres across Punjab and Haryana. Meanwhile, TBDC is a business incubator in the Toronto and Ontario and provides advisory support, physical facilities, and tools appropriate to emerging businesses.

smallcase onboards more partners to expand ecosystem

Digital investment platform smallcase has onboarded a new set of partners, including Groww, HDFC AMC, Motilal Oswal AMC, Axis AMC, DSP Investment Managers, Mesha, MintGenie, and GoalTeller.

The integrations include a host of businesses coming on board, including new broker partners, asset management companies (AMCs), social investing apps, digital wealth platforms and fee-based smallcases on existing broker partner platforms, the company said in a statement.

“With more partners joining in, we aim to enable more investors to invest in stocks, ETFs, and smallcases inside their preferred apps and environments natively,” said Vasanth Kamath, founder and chief executive officer, smallcase.

The company said that Groww has become the 13th broker partner in the smallcases ecosystem. This launch enables users to invest in smallcases with a Groww trading and demat account.

In terms of AMCs, HDFC AMC, Motilal Oswal AMC, Axis AMC and DSP Investment Managers will now enable ETF transactions natively on their website and apps with transactions powered by the smallcase gateway.

The startup also said that Mesha, a social investing app, will use the smallcase gateway to enable its members to invest natively from the platform and track their holdings.

Online music learning platform Muzigal has launched Muzigal Academy to bring structured music education within reach in a brick and mortar setting.

Muzigal launches an offline music learning centre ‘Muzigal Academy’

Muzigal Academy will cover various cities with a network of music learning centres, and it plans to launch four academies by next month across India. The academy is open to all above five years of age.

“Starting with Hyderabad, Muzigal Academy will expand across all major cities in India. We hope that through our academy, we can nurture musicians who truly appreciate and embody the art of music and some of them would even go on to build their careers in music,” said Dr Lakshminarayana Yeluri, Founder of Muzigal.

The academy will start with classical and Western vocals, guitar, keyboard and drums, with classes across beginner and advanced levels, which will be affordable and accessible to all the music learners, the firm added.

The academy is also planning guided master classes with well-known music celebrities, and it will create workshops and concerts that will prepare learners for a professional life in music.

With more than 10,000 learners from 10 countries, and 400 teachers now on board, the company connects music students with expert music teachers for online lessons for over 20 different subjects.

GLOBAL TECHNOLOGY & STARTUP NEWS

Alphabet earns record profit on Google ad surge

Google owner Alphabet has reported higher than expected third-quarter ad sales, a sign that the business is overcoming new limits on tracking mobile users and that online shopping is as popular as ever heading into the holiday season, Reuters reported.

Google advertising revenue rose 41% to $53.1 billion during the third quarter. Alphabet's overall sales jumped to $65.1 billion, above the average estimate of $63.3 billion among analysts tracked by Refinitiv.

Quarterly profit was $18.936 billion or $27.99 per share, beating expectations of $24.08 per share and marking a third-straight quarter of record profit. Alphabet's profit is subject to wide fluctuations because accounting rules require the company to measure unrealized gains from its investments in startups as income.

Google Cloud, which trails Amazon.com Inc and Microsoft Corp in cloud services market share, increased revenue by 45% to $4.99 billion, slightly below estimates of $5.2 billion.

Alphabet's total costs increased 26% to $44.1 billion in the third quarter and the company's workforce size passed 150,000 employees.

Microsoft beats quarterly revenue estimates on cloud boost

Microsoft has beaten Wall Street expectations for quarterly revenue on Tuesday, as demand soared for the software giant's cloud-based services from businesses adopting hybrid work models.

The company's revenue rose to $45.32 billion in the first quarter ended September 30, from $37.15 billion a year earlier. Analysts on average had expected revenue of about $43.97 billion, according to Refinitiv data.

Microsoft's revenue from selling Windows to PC makers grew 10% year over year, beating the overall PC market, which only grew 3.9% over the same period because of supply constraints, according to data from IDC.

Overall, revenue rose 22% to $45.32 billion in the first quarter ended Sept. 30, beating expectations of about $43.97 billion. Net income rose to $20.51 billion, or $2.71 per share. The company said its results included a $3.3 billion net income tax benefit.

For the fiscal second quarter, Microsoft predicted a midpoint of $18.23 billion in revenue for its intelligent cloud business for the fiscal second quarter, above estimates of $17.84 billion, according to Refinitiv data.

Twitter avoids revenue hit from Apple privacy changes

Twitter has reported its quarterly revenue grew 37% and avoided the brunt of Apple Inc privacy changes on advertising that hobbled its rivals, sending its shares up 3%.

The social networking site has been working to add new features such as audio chat rooms to attract users, and also rolled out improvements to its advertising capabilities to reach its goal of doubling annual revenue by 2023.

Advertising revenue was $1.14 billion during the quarter ended Sept. 30, in line with consensus estimates.

The company said it saw a "modest" impact to ad revenue due to privacy changes Apple rolled out, which prevent advertisers from tracking users on their devices without their consent.

Twitter said monetizable daily active users, its term for users who are served ads, was 211 million during the third quarter, missing analyst estimates of 212.6 million, according to IBES data from Refinitiv.

Total revenue, which also includes money that Twitter earns from data licensing, was $1.28 billion, also in line with Wall Street targets.

Twitter said its costs this year from hiring and investing in a new data center will flow into next year, resulting in a mid-20% increase in total costs for 2022. The company forecast fourth-quarter revenue between $1.5 billion to $1.6 billion.

Spotify adds more subscribers, podcasts fuel ad rebound

Spotify beat Wall Street estimates for third-quarter revenue as more paid subscribers signed up for its premium service and advertisers lined up to air ads in between music and podcasts.

Premium subscribers, which account for most of the company's revenue, hit 172 million, just beating analysts' expectations of 171.7 million.

Total monthly active users rose 19% to 381 million, as per Reuters.

Spotify earns from subscriptions and by presenting adverts to non-paying members. Revenue from ads, which fell at the height of the pandemic, jumped 75% to 323 million euros ($376 million), and the company is planning to hire hundreds of staff to further boost advertising sales.

Truecaller revenue more than doubles in first post-IPO earnings report

Swedish mobile phone directory and caller identification service Truecaller reported a 129% rise in quarterly revenue in its first earnings report as a public company.

Revenue rose to 312.8 million Swedish crowns ($36.48 million) from 136.5 million crowns a year earlier while monthly active users rose 20% from a year earlier to around 292 million.

"All the investments we have done on the tech side in regards to an ad tech platform, Truecaller for business and subscriptions are showing results for us," CEO Alan Mamedi told Reuters.

The company, which counts India as its biggest market, listed its Class B shares late last month.

US Federal Trade Commission examining Facebook disclosures - WSJ

The US Federal Trade Commission (FTC) has started looking into disclosures that Facebook internal company research had identified ill effects from its products, the Wall Street Journal reported.

Officials are looking into whether Facebook research documents indicate that it might have violated a 2019 settlement with the agency over privacy concerns, according to the report.

The company has come under fire after Frances Haugen, who worked as a product manager on the civic misinformation team at Facebook, revealed that she was the whistleblower who provided documents underpinning a recent WSJ investigation.

Russia opens case against Apple in App Store payment dispute

Russia has opened an antitrust case against Apple for failing to allow app developers to tell customers about alternative payment options when using its App Store platform, according to Reuters.

The US tech giant could face a fine based on its revenue in Russia if found guilty of a breach, the regulator said. It did not indicate the size of any potential fine.

The company was earlier issued with a warning over the issue and given a Sept. 30 deadline to "stop abuse on the market", the Roskomnadzor regulator said in a statement.

Russia has stepped up a long-running crackdown on U.S. tech giants this year in a push to expand its sovereignty over the internet in Russia.

Apple faced pushback over its App Store rules in the United States last month when a federal judge issued a ruling forcing the company to allow developers to send their users to other payment systems.

US SEC obtains asset freeze to halt alleged penny stock scheme on Twitter

The US Securities and Exchange Commission (SEC) said on Tuesday it has obtained an injunction and asset freeze against a man behind a popular Twitter account that promoted the trading of penny stocks before selling them at inflated prices.

As per Reuters, the SEC alleges that since at least December 2019, Steven Gallagher of Ohio, manipulated stocks by sending thousands of tweets using his handle @AlexDelarge6553 to encourage his numerous followers to buy stocks in which Gallagher had secretly amassed holdings, according to the complaint.

The SEC said it has imposed a permanent injunction, disgorgement, prejudgment interest, civil penalties and a freezing of Gallagher's assets.

The US Department of Justice also said in a related charge that Gallagher had been arrested for additional violations, including wire fraud and market manipulation, after he gained over 70,000 followers related to the same pump-and-dump scheme. The charge also specified that Gallagher earned over $1 million in profit.

The SEC's charges come after the agency in February suspended trading in the securities of 15 companies because of "questionable trading and social media activity."

TikTok tells US lawmakers it does not give information to China's govt

An executive at TikTok faced tough questions during the video-sharing app's first appearance at a U.S. congressional hearing, saying it does not give information to the Chinese government and has sought to safeguard US data.

Senators at the hearing also voiced concerns that TikTok, owned by Beijing-based internet technology company ByteDance, and rivals YouTube, owned by Alphabet, and Snapchat have algorithms that can be harmful to young people, Reuters reported.

Michael Beckerman, TikTok's head of public policy for the Americas, became the company's first executive to appear before Congress, testifying to a subcommittee of the Senate Commerce Committee. Republicans in particular pressed Beckerman on worries regarding TikTok's stewardship of data on the app's users.

Under questioning by Republican Senator Ted Cruz, Beckerman said that TikTok has "no affiliation" with Beijing ByteDance Technology, a ByteDance entity at which the Chinese government took a stake and a board seat this year.

Beckerman also testified that TikTok's U.S. user data is stored in the United States, with backups in Singapore.

Republican former President Donald Trump had sought to bar TikTok - a popular platform used by millions of Americans to post short videos - from US app stores, saying it collected data from American users that could be obtained by China's government and posed a threat to US national security.

Democratic President Joe Biden later revoked Trump's plan, but sought a broader review of various foreign-controlled apps.

(Edited by : Priyanka Deshpande)

First Published:Oct 27, 2021 8:02 PM IST