Also in this letter:
■ Top four IT firms add fewer jobs on fears of US, Europe recession
■ Funding environment for digital push remains strong: TCS chief exec
■ By the Numbers: Will China lockdowns boost India iPhone manufacturing?
Byju’s raises another $250 million from existing investors
Byju’s said on Monday it has raised $250 million from its existing investors, including Qatar Investment Authority, in a fresh funding round as it eyes better unit economics and profitability amid layoffs and restructuring.
Best year ever? Founder Byju Raveendran said regardless of the adverse macroeconomic conditions, 2022-23 would be Byju’s best year in terms of revenue, growth and profitability.
He also said the company “was now at that sweet spot of its growth story where the unit economics and the economies of scale both are in its favour”.
Yes, but: India’s largest edtech firm has been facing turbulent times over the past six months, with questions being raised about the 18-month delay in announcing its audited results. In September, it finally released its audited FY21 results, showing losses swelled to Rs 4,588 crore after changes to its revenue recognition method.
On October 16, Lok Sabha MP Karti Chidambaram asked the Institute of Chartered Accountants of India (ICAI) to review Byju’s financials. In a letter to ICAI President Debashis Mitra, Chidambaram said there are various red flags in the company’s FY21 financials, PTI reported.
Also Read | ‘Red flags in Byju’s financials’: MP Karti Chidambaram seeks ICAI review
Last week, the company said it would fire 5% of its 50,000-strong workforce or about 2,500 employees. It said at the time it was aiming to become profitable at the group level by March 2023.
In June, the company sacked 600 people across its subsidiaries WhiteHate Jr and Toppr.
SPAC dreams over: Byju’s was earlier planning to go public through a special purpose acquisition company (SPAC) in 2022 at a valuation upwards of $40 billion but those plans came to nought as SPACs lost their sheen amid a sharp reversal in the global markets.
Top four IT firms add fewer jobs on fears of US, Europe recession
With Europe slowing and the possibility of a US recession rising, India’s top four IT services companies have sharply reduced their hiring, according to a Times of India report.
By the numbers: TCS, Infosys, Wipro and HCL together added just 28,836 people net in the September quarter of FY23, almost half of what they added in the preceding quarter, and in the year-ago quarter.
Wipro added the least – 605. Several CEOs said global macroeconomic uncertainties are growing, and companies need to be cautious.
Freshers excluded, but…: All four companies have said they will honour all offer letters to freshers. Some freshers are reported to have complained about delays in their onboarding. But the IT giants say they have onboarded thousands of freshers each quarter over the last few years in an attempt to rationalise the pyramid, and that has continued in the latest quarter as well.
HCL said it added 10,339 freshers, while TCS onboarded 20,000. In the first half of this financial year, Wipro added 14,000 freshers.
Bracing for a chilly winter: On Monday morning, ET reported that there is an underlying sense of unease at the top four IT services firms as the energy crisis in Europe and rising inflation in the US threaten to disrupt the macroeconomic situation.
This is despite the fact that the four companies registered record deal wins, better pricing, lower employee costs and margin growth in the second quarter.
Though there were no outright gloomy predictions during results week, the firms are keenly tracking macroeconomic factors that may affect global technology amid growing recession fears in the US and Europe, their two biggest markets.
Funding environment for digital push remains strong: TCS chief exec
Funding commitments for digital push remain intact despite a challenging macroeconomic environment, the chief executive of TCS Rajesh Gopinathan told Reuters on Monday.
Slowdown fears: TCS reported better-than-expected quarterly results last week, but flagged that long-term deal decision making remained soft due to macro-economic challenges. However, it added that it expects demand momentum to continue across all markets.
Other India’s IT service providers also indicated that companies that were splurging top dollar during the pandemic have turned cautious in regions such as Europe and the US.
In his words: “When you look forward, for the next 12 to 18 months, that excitement level (towards digital transformation) has died down, but the funding commitments have not gone away. What we are getting into is the second leg of these transformation journeys, which is very critical,” he said.
“We are equally interested in large and small deals. But as the environment turns more uncertain, deal sizes typically become smaller.”
By the Numbers
China’s zero-Covid policy could hasten the shift of iPhone manufacturing to India.
Read the full story here | China locks down almost one million people near iPhone factory
TWEET OF THE DAY
Flipkart launches metaverse shopping experience with Flipverse
Flipkart launched a metaverse experience on Monday called Flipverse, for which it has partnered with Web3 companies such as eDAO, Polygon and Guardian Link.
Details: In Flipverse, users can experience and buy products in three-dimensional virtual reality (VR) that can be accessed through any smartphone, without the need for a VR headset.
More than 15 brands have so far signed up with the company to launch and display around 100 products on Flipverse. This is the first such instance of a traditional ecommerce company launching a Web3 service.
Flipverse will be accessible to all Android users through the Flipkart app for a week, and will feature brands such as Puma, Noise, Nivea, Lavie, Tokyo Talkies, Campus, VIP, Ajmal Perfumes, Himalaya and Butterfly India in the first phase.
In its first iteration, the brands can display products and provide offers and collectibles to customers across categories such as sports apparel, wearable electronics, fashion, home appliances and cosmetics.
Today’s ETtech Top 5 newsletter was curated by Gaurab Dasgupta in New Delhi and Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.
