Also in this letter:
■ ETtech Opinion: Startup predictions for 2022
■ Aaditya Thackeray seeks import duty sops for EV makers
■ Facebook critics call for release of India human rights review
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Willing to help, Amazon tells cash-strapped Future Retail
Ecommerce major Amazon has offered financial assistance to cash-strapped Future Retail Ltd (FRL), with which it is embroiled in a legal battle over FRL’s planned sale of assets to Reliance Industries (RIL) for Rs 25,000 crore.
“We reiterate our willingness and ability to assist FRL in addressing any financial concerns of FRL, within the framework of the agreements, including the solution proposed in the term sheet between Samara Capital, and FRL, which contemplated an infusion of [Rs 7,000 crore] in FRL,” Amazon wrote in a letter sent to FRL’s independent directors on Wednesday.
Yes, but: In the letter, Amazon also warned that FRL was prohibited from “directly or indirectly taking any steps to transfer, dispose, alienate or encumber FRL’s retail assets” without Amazon’s consent.
It said any sale of small format stores without Amazon’s consent “would be in violation of the injunctions which continue to operate and are binding on FRL and directors of FRL, including the independent directors of FRL”, adding that it was “more than willing” to explore effective solutions to assist FRL.
Earlier this month, we reported that lenders of Future Retail were likely to seek buyers for its small-format stores to recover dues worth Rs 3,494.5 crore after it failed to honour payments scheduled on December 31.
Timeline: Here’s how the battle between Amazon and the Future Group has unfolded over the years.
- November 2019: Amazon buys 49% stake in Future Coupons, which owns a 7.3% stake in FRL.
- August 2020: Faced with debt, FRL approves a deal to sell the Future Group’s retail, wholesale and logistics business to Reliance Retail for Rs 24,713-crore.
- September 2020: Amazon drags FRL to arbitration in Singapore, saying FRL’s proposed sale violated the terms of their 2019 deal.
- October 2020: Singapore Arbitration rules in Amazon’s favour and puts the Future-Reliance deal on hold.
- July 2021: After FRL and take their case to the Delhi High Court and the National Company Law Tribunal, the Supreme Court commences its final hearing on the matter.
- August 2021: The Supreme Court rules in favour of Amazon, upholding the Singapore tribunal’s ruling.
- December 17, 2021: The Competition Commission of India (CCI) suspends its approval of the 2019 deal between Amazon and Future Coupons, and imposes a penalty of Rs 200 crore on Amazon.
- January 5, 2022: The Delhi High Court stays the arbitration proceedings in Singapore after CCI suspended its approval of the 2019 deal. Amazon has challenged the ruling but the arbitration is on hold for now.
ETtech Opinion: Startup predictions for 2022
I am sitting at home in the midst of another Covid wave.
Why does this matter? Well I think since the pandemic struck, every form of prediction is foolhardy. Things can change overnight. We’ve seen unprecedented creation and unprecedented loss.
But even though it’s a fool’s errand, predicting the future is also the extension of dreaming with conviction. So here we go.
Risky, record-breaking year: 2021 was a crazy year for the Indian investor. More than 50 unicorns, $63 billion in private equity and venture capital money, more than 1,000 disclosed deals, the Sensex up to 61K. Meanwhile, global VC investments jumped to $643 billion, almost twice as much as the $335 billion recorded in 2020.
The bulls are running and the bears are in hiding. The internal line in such runs is that it’s a great time to be a founder and a bad time to be an investor. High valuations kill investor returns.
I think this coming year will be one of consolidation, correction and exits. While many investors still believe the party will continue, my sense is that the cycle is going to turn this year.
Venture capital is a “risk-on” asset class. With the largest money tap in the world turned on at the beginning of the pandemic, the Fed printed $4.6trillion in the last 20 months.
That money had to be deployed somewhere.
With yields at all-time lows, “risk-on” asset classes were the norm. But with yields set to rise, capital will now fly to safety.
That’s why I expect the Indian ecosystem to enter a phase of correction, consolidation and exits.
Click here to read the full column by Aviral Bhatnagar, founder of A Junior VC.
Offer import duty sops to EV makers, Aaditya Thackeray urges FM
Elon Musk, who has been unable to convince the Indian government to lower import duties on electric vehicles, has found an unexpected ally in Aaditya Thackeray, Maharashtra’s tourism and environment minister.
What’s going on? On Wednesday night, Thackeray announced on Twitter that he had written to Finance Minister Nirmala Sitaraman with a list of recommendations for India’s EV sector, including lowering import duties for all electric car makers for a certain period.
“Pioneering companies like Tesla, Rivian, Audi, BMW among many others must be given a time-bound concessionary customs rate for the import of vehicles for retail sale. This will drive [their] aspiration value in the market, boost investment in our supply chain and encourage the startup ecosystem to follow the lead of such companies,” Thackeray wrote.
He said the concessionary rate could be temporary – up to three years – or could apply to a fixed number of vehicles.
Tesla’s hurdles: Tesla has been seeking a reduction in India’s import duties ever since it incorporated its Indian entity in 2021. Last August, Musk said on Twitter India’s import duties on EVs were “the highest in the world by far of any large country”. Last week, he tweeted about “challenges” his company was still facing with the Indian government.
Tweet of the day
ETtech Done Deals
■ Financial infrastructure provider M2P Fintech has raised $56 million led by New York-based global private equity firm Insight Partners. ET had first reported in October last year that the company was in talks to raise the fresh funding, which would almost double its valuation to $600 million in a few months.
■ California-based technology company Pixis (formerly known as Pyxis One) said it has raised $100 million (about Rs 743.8 crore) in funding in a round led by SoftBank Vision Fund 2. The round also saw participation from new investor General Atlantic, and existing investors Celesta Capital, Premji Invest, and Chiratae Ventures.
■ SaaS Labs, which builds business automation tools for sales and support teams worldwide, has raised $42 million (about Rs 312 crore) in a funding round led by Sequoia Capital India. The Series B funding round also saw participation from existing investors Base 10 Partners and Eight Roads Ventures.
■ Bengaluru-based silver jewellery startup Giva has raised $10 million (Rs 74.5 crore) in a Series-A funding round led by Sixth Sense Ventures, A91 Partners and other investors such as India Quotient, Grand Anicut Angel Fund and Founder’s Bank Capital.
■ Investors led by JM Financial Private Equity are leading a Rs 100 crore funding in Bengaluru-based agritech firm BigHaat Agro, the company said. Japanese investor Beyond Next Ventures, which led BigHaat’s previous round in August 2020, also participated in the fundraise.
■ Stader Labs, a cryptocurrency staking management platform, said it has raised $12.5 million in a funding round led by Three Arrows Capital, pushing its valuation to $450 million. The company had a valuation of $50 million when it had raised its seed round in October last year.
Facebook critics call for release of India human rights review
Facebook critics have called on the world’s largest social network to release a human rights impact assessment it commissioned in 2020 to investigate hate speech on its platforms in India.
The company, which is now called Meta, faces increasing scrutiny over its handling of abuses on its services, particularly after whistleblower Frances Haugen leaked internal documents showing its struggles monitoring problematic content in countries where it was most likely to cause harm.
In a letter sent to the company this month and made public Wednesday, rights groups, including Amnesty International, Human Rights Watch and India Civil Watch International urged Facebook to release the report.
Gare Smith, partner and chair of global business and human rights practice at the US law firm Foley Hoag, which Facebook commissioned to carry out the assessment, said: “Such projects are complex, particularly in a country as diverse and large as India.”
Meta’s director of human rights policy Miranda Sissons said in a statement: “Given the complexity of this work, we want these assessments to be thorough. We will report annually on how we’re addressing human rights impacts, in line with our Human Rights Policy.”
Bulli Bai case: Mumbai police arrest MBA graduate in Odisha
The Mumbai Polie have arrested a 28-year-old man from Odisha in connection with the ‘Bulli Bai’ app case, which targeted Muslim women by putting up their images online for auction.
The accused, identified as Neeraj Singh, holds an MBA degree. The police claim he was involved in planning the app with the main accused.
“His role came to light during the interrogation of the accused who were arrested earlier, following which a team of the cyber police station was sent to Odisha and he was placed under arrest,” an official told PTI. He is being brought to Mumbai and will be produced in court here, he said.
With this, the Mumbai police have so far arrested four people in the case. Shweta Singh (18) and Mayank Rawal (21) were arrested from Uttarakhand, while engineering student Vishal Kumar Jha (21) was held from Bengaluru.
Neeraj Bishnoi, allegedly one of the alleged main conspirators, had been arrested by the Delhi police from Assam.
Today’s ETtech Top 5 newsletter was curated by Aditya Rangroo in New Delhi and Zaheer Merchant in Mumbai.
