Also in this letter:
■ Foreign investors pare stakes in IT firms on US recession fears
■ EarlySalary raises $110 million funding led by TPG and Norwest
■ Startup founders buy super-luxury homes to save tax
Meesho building logistics SaaS platform to widen its network
Meesho is building a logistics-focused enterprise software solution that small and medium companies will be able to use, people aware of the matter told us.
Why? The software solution, which will be available to Meesho’s delivery partners, will widen the company’s logistics network, and over time reduce its dependence on large third-party logistics firms such as Ecom Express, Xpressbees and Delhivery.
It will also let Meesho work more closely with local and regional players that may not have access to software solutions to service large volumes of ecommerce deliveries.
Key goal: Meesho has tasked former Myntra executive Sourabh Pandey, who currently heads the fulfilment and experience for Meesho, with developing the product. Internally, it is being called logistics-as-a-platform, said a source quoted above.
“Getting this product up and running is one of the key goals for the company this year,” said a person in the know of the matter. “It will address a lot of inefficiencies that exist in supply chains in tier 2 and tier 3 towns,” one of the sources said.
Quote: “Currently, end-to-end logistics capabilities have been built by a few players in the industry and many small logistics businesses and individuals are not able to participate in the ecosystem. In line with our vision to make 100 million small businesses successful online, we are building a platform that will provide them the operational know-how, network design capabilities, access to tools and technology to be a part of this network,” the company said in a statement.
Foreign investors pare stakes in IT firms on US recession fears
Foreign investors have been reducing their stakes in top Indian IT companies such as Tech Mahindra, HCL Tech and Tata Consultancy Services amid global weakness in technology stocks in the face of fears of an impending recession in the US, a market that contributes 40% of the sector’s revenue.
Details: Four of the top five IT companies have seen this downward trend for some time now. HCL Tech and Tech Mahindra saw the sharpest falls on a yearly basis, according to data sourced from Capitaline.
- At the end of June, foreign portfolio investors (FPIs) held 13.5% in TCS, down from 15.4% a year ago and 14.2% in the January-March period, according to Capitaline.
- Similarly, FPIs held 6.95% in Bengaluru-based Wipro at the end of June, a level last seen in June 2016. A year ago, their holding was 9.83%.
- HCL Tech also saw a fall for the sixth consecutive quarter, at 17.9% – a level last seen during the 2008 financial crisis. The number was down from 23.2% in the same quarter last year.
- Tech Mahindra witnessed the largest exit by FPIs. Their holding fell to 30.4% in the June quarter from 36.2% in the same period last year.
Yes, but: Experts said that this does not reflect any structural issues, and has more to do with investors preferring consumer-facing companies, among others, amidst high valuations.
Multiple tailwinds such as digitisation and large contracts coming up for rebidding could well see Indian IT services firms regain favour among foreign investors.
EarlySalary raises $110 million funding led by TPG and Norwest
Digital lending fintech EarlySalary said it has raised $110 million (about Rs 878.8 crore) in a funding round co-led by private equity major TPG’s Rise Fund and Norwest Venture Partners.
EarlySalary’s existing investor Piramal Capital & Housing Finance Ltd. also participated in the round.
We reported on August 12 that EarlySalary was closing a $100-million fundraise from TPG and Norwest. The round values EarlySalary at about $300 million, as we had reported then, citing people familiar with the deal’s details.
RBI crackdown: The funding comes close on the heels of the Reserve Bank of India’s (RBI’s) new guidelines on digital lending, which put the focus back on regulated entities, giving fintechs with an active NBFC (non-banking financial company) licence an advantage over others. EarlySalary runs an NBFC through which it lends along with its partners.
ET Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
Startup founders buy super-luxury homes to save tax
Startup founders and company promoters looking to save on taxes have emerged as the main buyers of super-luxury real estate properties after selling shares or stakes in their companies, representatives of international brokerage firms told us.
Tax break: Long-term capital gains from the transfer of equity shares (listed and non-listed) or from stake sales in a startup can be avoided under section 54F of the Income Tax Act, 1961, if the gains are invested in residential property.
High-net-worth individuals (HNI) across the spectrum have bought properties in the recent past. The list includes promoters such as Shekhar Bajaj of Bajaj Electricals and his family; Bharti Enterprises vice chairman Rajan Bharti Mittal; Siddharth Jain of Inox; Pooja Dhoot, wife of Videocon Group director Anirudh Dhoot; Shailesh Dalmia and his wife Natasha; and KEI Industries promoter Anil Gupta.
Reliance and Meta announce grocery shopping on WhatsApp
Meta and Reliance Industries subsidiary Jio Platforms announced the launch of an end-to-end shopping experience on WhatsApp.
Details: The first-of-its-kind initiative will allow users in India to browse JioMart’s grocery catalogue, add items to their cart, and complete the purchase without leaving WhatsApp, they said. The announcement was made at Reliance’s annual general meeting.
Launching an end-to-end shopping experience within WhatsApp has been a long-term goal of Meta founder and CEO Mark Zuckerberg.
In April 2020, Meta (then Facebook) picked up a 9.99% stake in Jio Platforms in an all-cash deal worth Rs 43,574 crore to strengthen its presence in India.
TWEET OF THE DAY
No plans to rebrand Zomato app to ‘Eternal’: Deepinder Goyal
Deepinder Goyal, cofounder and CEO of Zomato, said the firm has adopted Eternal as its internal identity but there are no plans to rebrand the Zomato app to Eternal.
He also said he has no intention of stepping back from the day-to-day functioning of the food-delivery company.
Catch up quick: We reported on August 1 that Zomato was internally rebranding itself to ‘Eternal’ – a larger organisation that will house multiple businesses, each with its own CEOs. This raised questions about Goyal’s role and title at the firm.
In his words: “We didn’t want the Blinkit team to feel like a stepchild once we completed the transaction. We needed to make sure that both Zomato and Blinkit were placed at par within the importance hierarchy of our daily work lives,” Goyal explained in a disclosure made to the BSE on Monday.
Other Top Stories By Our Reporters
Noida demolition becomes internet event: Indians closely followed the Noida twin-tower demolition on the internet on Sunday. Soon after an implosion triggered with 3,700 kilograms of explosives brought the towers to ground in the afternoon, feeds on WhatsApp, Twitter, Facebook and other platforms were flooded with photos, videos and memes. This was probably the first time an event of such magnitude was shot, consumed and circulated on social media across India.
‘No proposal to ban foreign phones under Rs 12k’: The government and the MeitY will always intervene in market situations where there is “crowding out of Indian brands due to unfair trade practices”, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Monday. On reports that the government plans to ban sub-Rs 12,000 smartphones of foreign brands, he said that though the ministry had no such proposal, it would make sure through policy initiatives and interventions that Indian brands also survived and thrived.
Karnataka aerospace & defence policy: The Karnataka government will develop Bengaluru, Belagavi, Mysuru, Tumakuru and Chamarajanagar as aerospace and defence manufacturing hubs with the aim of attracting $6 billion in investments and adding about 60,000 jobs over the next five years. This is part of the new aerospace & defence policy the government has notified.
Global Picks We Are Reading
■ WhatsApp grocery shopping is already huge in Brazil. One startup wants to take it over. (Rest of World)
■ The Telegram-powered news outlet waging guerrilla war on Russia (Wired)
■ Online creators are de facto therapists for millions. It’s complicated. (The Washington Post)
