Also in this letter:
■ Politicians line up to woo Elon Musk’s Tesla
■ INDmoney raises $75 million, and other done deals
■ 50 Indian startups could become unicorns this year: report
Educational institutes told to cut ties with edtech firms or face action
The University Grants Commission (UGC) and the All India Council for Technical Education (AICTE) have warned that educational institutes that partner with edtech firms to offer online or conventional programmes face being derecognised.
Driving the news: In a red-letter notice on Sunday, both bodies asked institutes of higher education to annul their agreements with edtech companies. Officials said the move came after the higher education secretary flagged advertisements offering educational degrees through edtech firms.
The notice also cautioned students against getting into such arrangements and said they must check the recognition/entitlement status of a programme before enrolling in it.
“Some edtech companies are giving advertisements in newspapers/social media/TV, etc, that they are offering degree and diploma programmes in ODL/online modes in association with some universities/institutions. Such a franchise arrangement is not permissible and action will be taken against defaulting edtech companies as well as HEIs under applicable laws/rules,” said the notice.
What’s the issue? A senior official said some universities were outsourcing content creation to edtech firms and some edtech firms were awarding degrees. “Some universities and institutes are running programmes through edtech companies. Using a particular platform or a learning management system is one thing, but many higher education institutes in India are outsourcing the running of their online courses to edtech firms. That kind of outsourcing or franchising is definitely not permitted,” said an officer from AICTE.
A UGC officer said, “We don’t want edtech players advertising that they are offering MBA or BMS. They do not have the permission to do so. How do we keep a check on the quality?”
Self-regulation: Last week we reported that top edtech firms such as Byju’s, Unacademy, upGrad and others were joining forces to implement a self-regulatory code on how they do business in India. They are seeking to address two core issues: misleading advertisements and unscrupulous business practices.
Govt caution: The move came after the education ministry issued an advisory about edtech platforms in late December, saying some firms were targeting families by getting the electronic fund transfer (EFT) mandate signed or activating the auto-debit feature. It said the department of school education and literacy had received several complaints about this and advised parents to deactivate the auto-debit option for subscriptions in ‘freemium’ models.
“Given the pervasive impact of technology in education, many edtech companies have started offering courses, tutorials, coaching for competitive exams, etc. in an online mode. In this background, the parents, students and all stakeholders in school education have to be careful while deciding on opting for online content and coaching being offered by a host of edtech companies,” the ministry said.
ETtech Done Deals
■ Wealth management solutions provider INDmoney has raised roughly $75 million as part of its ongoing Series D round led by marquee global investors, the company said on Monday. The round saw participation from Steadview Capital, Tiger Global and Dragoneer Investment Group, which invested $25 million each, regulatory filings showed. After this round, INDmoney’s total fundraising stands at $133 million.
■ Short video application Chingari has raised $15 million in a funding round led by Republic Capital. Onmobile, JPIN Venture Catalysts, Hill Harbour, also participated in the round along with angel investors. This brings the total funds raised in the round to $28 million. Crypto exchange OKEx also made a strategic investment in the startup as part of which it will list Chingari’s native crypto token $GARI on the exchange, which was launched last year.
■ Student housing startup Your-Space has raised $10 million (around Rs 75 crore) from a clutch of investors for the expansion and growth of its business. The funding round was led by personal investment from Shantanu Rastogi (General Atlantic), Ajay Gupta’s (Capital Foods) family office AJAX Capital and Holy Basil Consultancy. The amount was raised through a combination of pure equity and convertible debentures, Your-Space said in a statement.
■ Goat Brand Labs, a Thrasio-style venture of former Flipkart executive Rishi Vasudev, has forayed into women’s fast fashion with the acquisition of The Label Life. It has acquired a 90% stake in The Label Life and will absorb its team and cofounders except Preeta Sukhtankar, who will be associated with the company as an advisor. The Mumbai-based firm was started by Sukhtankar, Yashika Punjabee and Sonam Shah in 2016. It partnered with Sussanne Khan, Malaika Arora and Bipasha Basu, who were its style editors.
Tweet of the day
Politicians line up to woo Elon Musk’s Tesla
Tesla CEO Elon Musk
Leaders from non-BJP-governed states of Maharashtra, Punjab and West Bengal have joined Telangana in inviting Elon Musk’s Tesla to set up its electric car manufacturing facility in their states after the tech mogul recently tweeted about facing challenges in launching operations in India.
Also Read:Stop-and-go traffic: the story of Tesla in India
Who said what: “Maharashtra is one of the most progressive states in India. We will provide you all the necessary help from Maharashtra for you to get established in India,” state water resources minister Jayant Patil said on Twitter in response to Musk’s tweet.
Punjab MLA and state Congress committee president Navjot Singh Sidhu tweeted, “Punjab model will create Ludhiana as a hub for electric vehicles & battery industry with time-bound single-window clearance for investment that brings new technology to Punjab, create green jobs, walking path of environment preservation & sustainable development.”
West Bengal minister-in-charge of minority affairs and Madrasah education Md Ghulam Rabbani also replied to Musk’s tweet, saying the state had the best infrastructure and chief minister Mamata Banerjee had “the vision”.
On Friday, Telangana industry and commerce minister KT Rama Rao made a pitch to Tesla to set up shop there.
Speed bumps for Tesla: The Tesla boss had on Thursday tweeted about ongoing challenges in India, in the latest of numerous such tweets over the past few years.
Taxing issue: India charges 60% duty on vehicles with a net CIF (cost, insurance, freight) value of up to $40,000 and 100% duty on vehicles that cost more. All of Tesla’s vehicles will be subject to the higher duty, given their pricing. Tesla has sought 40% duty.
50 more startups waiting in wings to be unicorns: report
India has 50 startups with the potential to achieve the coveted unicorn status in 2022, and by the end of the year, at least 100 the new-age companies will be valued at over $1 billion, a report by consultancy firm PwC India said.
Also Read: Karnataka tops in national startup awards, walks away with 14 of 46 honours
Year of the unicorn: In 2021, which witnessed a huge spike in company valuations in the listed and unlisted space driven by ample liquidity, India added 43 startups to the unicorn club and the total number shot up to 68 by the end of the year.
Over $10 billion was invested in the Indian startup ecosystem in the October-December quarter alone, the report said.
Quote: “We can see that the base of the companies in the growth stage and late-stage deals have improved significantly in CY21, depicting a stronger base of companies having the potential to reach unicorn status,” the firm’s partner for deals and startups Amit Nawka said.
Tell me more: The PwC report said $35 billion was raised by Indian startups in over 1,000 rounds of funding in 2021, which was 1.5 times higher than the previous year. Edtech, software as a service and fintech saw the most activity.
Also Read: Indian startups bag record $36 billion funds in 2021
Growth and late-stage deals comprised 85% of the total funding attracted by the startups in 2021,the report said.
Bitcoin’s dominance of crypto payments starting to erode
Consumers and businesses are increasingly starting to use digital tokens other than Bitcoin for purchases, according to crypto payments processor BitPay.
Losing sheen: Last year, Bitcoin’s use at merchants that use BitPay dropped to about 65% of processed payments, down from 92% in 2020, the company told Bloomberg. Ether purchases accounted for 15% of the total, stablecoins were 13% and new coins added to BitPay in 2021 — Dogecoin, Shiba Inu and Litecoin — accounted for 3%.
The use of alternative coins has surged in part because more businesses have begun using stablecoins for cross-border payments. Consumers also tend to move to stablecoins — so called because their value is pegged to assets such gold and the US dollar — when crypto prices drop, and they’ve been falling since early November.
Also Read: Dogecoin mania reaches Indian crypto exchanges
With Bitcoin’s price rising 60% last year, despite the fourth-quarter volatility, many investors may also have chosen to hold onto the world’s biggest cryptocurrency instead of spending it.
What did people buy? When they did spend their crypto, BitPay said, many bought luxury goods such as jewellery, watches, cars, boats and even gold, which Bitcoin — touted as digital gold — is supposed to replace. BitPay’s transaction volumes related to luxury goods surged 31% last year from 9% in 2020, said chief executive Stephen Pair. The company’s overall payment volumes saw a 57% rise year over year in 2021.
Today’s ETtech Top 5 newsletter was curated by Arun Padmanabhan in New Delhi and Zaheer Merchant in Mumbai.
