Also in this letter:
- As curfews kick in, online food delivery spikes again
- Pine Labs to seek $500 million in US IPO
- Foxconn to reopen Chennai iPhone plant on Wednesday
MeitY preparing cabinet note on proposed Data Protection Bill
The Ministry of Electronics and IT is preparing a formal note for the Union Cabinet on the proposed Data Protection Bill, officials aware of the matter told us. It will then be discussed by the cabinet before being placed for discussion in the upcoming Budget Session of the Parliament.
Yes, but: The Budget Session, which typically begins in the last week of January, with the Union Budget presented on Feb. 1, could be postponed this year owing to the exponential rise in Covid-19 cases.
Final call: “The cabinet will decide on the final provisions,” said a senior official, adding that MeitY will work on drafting the final language of the bill once it receives cabinet approval.
“MeitY is preparing the note that is likely to come up any time over the next few weeks in the Cabinet” as the final bill “has to be presented in the budget session”, a source said.
JPC recommendations: After nearly two years of deliberations, a joint parliamentary committee (JCP) submitted its report in Parliament on December 16.
It recommended that the scope of the bill be expanded to include both personal and non-personal data, and be renamed the Data Protection Bill. It also called for a single regulatory authority to oversee both personal and non-personal data.
It recommended that the government, in consultation with regulators, prepare an extensive policy on data localisation—that is, storing certain types of data within India’s borders.
The JCP also has asked that social media platforms be treated as content publishers, while providing broad exemptions to the government from the bill.
Big differences: But industry groupings have said the JCP included certain provisions without proper consultation and that certain contentious aspects needed more deliberation.
The Internet and Mobile Association of India (IAMAI) spoke out against recommendations, including one in which social media intermediaries will be considered publishers in certain circumstances, and some parts of the data localisation norms. It also criticised the inclusion of non-personal data in the bill.
As curfews kick in, online food delivery spikes again
Restaurants and cloud kitchens are once again seeing an increase in demand for online food delivery as curfews kick in and people stay indoors amid the third wave of Covid-19 in India.
The restaurant industry, which has been hit hard by the pandemic, is staying afloat thanks to online delivery, several executives told us. They added that the current spike in online demand will be temporary and things will normalise once the restrictions end.
Who said what: Aseem Grover, who owns and operates Big Chill in Delhi NCR, said online volumes have doubled on weekdays since the authorities imposed a night curfew in Delhi.
“Online deliveries, of course, have gone up but it’s not a patch on what normal business would be like. With night curfews kicking in at 10:00 pm, our entire dinner business—which accounts for 60% of volumes—is getting killed. It is affecting us badly. Some of the restrictions don’t make sense,” Grover said.
Wow! Momo, which gets 80% of its orders through Swiggy and Zomato, told us that online order volumes have increased by 70% from December levels. Cofounder Sagar Daryani said they plan to scale the number of cloud kitchens from 19 to 65 by the end of the year.
Augustine Kurian, partner of speciality restaurant Kappa Chakka Kandhari in Bengaluru and Chennai, said his business from Zomato and Swiggy has doubled in the past two weeks. Kurian said the company has plans to aggressively advertise on aggregators and direct-ordering channels and revamp its online presence.
Direct ordering, cloud kitchens: Direct ordering platforms are also benefiting from the spike in online volumes. DotPe said it has seen a 100% increase in order volumes in the first week of January compared to the same period last month. New-age cloud-kitchen operators such as Curefoods, Ghost Kitchens and Box8 said they were seeing a sharp rise in orders as well.
Supply-side woes: A growing ecosystem for cloud kitchens and online food delivery is helping many restaurants survive the pandemic. That said, restaurant operators said if the restrictions extend beyond six weeks, the impact on the industry could be catastrophic.
“It’s going to be crucial how long the variant lasts. This wave is also as unexpected and as sudden as the first and second waves were. But what happened is that people who have been in business for a long time had savings and backups in the first wave. It considerably diminished in the second and is non-existent in the third. So, it is becoming that much more difficult to survive and see this through,” said Grover of BigChill.
Tweet of the day
Pine Labs to seek $500 million in US IPO
Pine Labs CEO Amrish Rau
Fintech startup Pine Labs has filed confidentially with the US Securities and Exchange Commission for an initial public offering in New York as early as in the first half of this year, sources told us.
The company is seeking to raise about $500 million (Rs 3,703 crore) from the offering, which would give it a valuation of $6-7 billion. Considerations are ongoing and details such as the size and timing could still change, the sources said.
Funding spree: India’s largest commercial bank, the State Bank of India, invested $20 million in Pine Labs earlier this month, we reported previously.
In July, it raised about $600 million from investors including Fidelity and BlackRock, at a valuation of $3 billion. The company said at the time that it was targeting an IPO within 18 months and that it had been operationally profitable for several years—a rarity among the new crop of Indian fintech firms.
This was followed by an additional $100 million infusion from Invesco Developing Markets Fund. Other investors include Temasek, PayPal and Actis Capital.
Foxconn to reopen its iPhone plant in Chennai on Wednesday
Foxconn will reopen its plant in Sriperumbudur on the outskirts of Chennai after it assured Apple and the Tamil Nadu government that it has taken corrective actions in its hostels. The Taiwanese company will see around 400 workers and 2,000 technical staff begin work from January 12 and is set to resume production in phases, people familiar with the development said.
What happened: On January 8, we reported that Foxconn was set to resume production but was only granted permission to house workers in two of the 17 hostels it operates. Foxconn confirmed that they were waiting for approvals for their offsite hostels.
The plant, which makes Apple iPhones, was shut down last month after a food poisoning incident affected 156 women workers. Apple had placed the plant on probation and Foxconn apologised for the incident. Apple issued a statement on Monday saying ‘corrective actions’ were being implemented at the site.
Quote: “For the past several weeks’ teams from Apple, along with independent auditors, have been working with Foxconn to ensure a comprehensive set of corrective actions are implemented in the offsite accommodations and dining rooms at Sriperumbudur. Workers will start to return gradually as soon as we are certain our standards are being met in every dormitory and dining area,” an Apple spokesperson said.
The spokesperson also said that the plant remains on probation. Foxconn on their part said that they have been working to improve conditions at the plant.
Infographic Insight
ETtech Done Deals
■ SaaS management platform Zluri has raised $10 million in a Series A funding round led by MassMutual Ventures with participation from existing investors, Endiya Partners and Kalaari Capital. The company will use the funding to further strengthen its product’s capabilities and beef up its teams in core markets in Asia and North America.
■ The ePlane Company has raised $5 million in a funding round led by deep-tech venture capitalist Speciale Invest and EV/climate-focused fund Micelio.
■ Power Gummies, a direct-to-consumer (D2C) nutraceutical products maker, has raised $6 million in Series A funding round led by 9Unicorns, with participation of DSG Consumer Partners, Wipro Consumers, Sharp Ventures (Marico Family office) and NB Ventures.
■ The Michael & Susan Dell Foundation has led a $2.5 million equity investment in Mumbai-based fintech startup Arthan Finance, which offers loans to tiny entrepreneurs. The Dell Foundation has put in $1.5 million, while the balance came from existing angel investors including economist Ajit Ranade and veteran finance professional Sunil Gulati.
■ Lahori, a direct-to-consumer beverage maker, has raised $15 million from Verlinvest as part of its Series A funding round. The Belgium-based, consumer-focused investor has picked an undisclosed minority stake in the company.
Five rules for building a winning D2C brand
Baby- and mother-care brand Mamaearth’s latest fundraise of $52 million has catapulted it into the coveted ‘unicorn club’. With unicorns emerging in the country at a rapid pace over the past few months, one feels compelled to step back and ask: what is so special about this? In my humble view: nothing.
For Mamaearth, it is business as usual, as they are possibly focussing their attention and energies on achieving their next milestone. For us as investors, this is the time to reflect on our initial investment thesis and unpack the factors that led to the company’s success.
What contributed to Mamaearth’s exponential growth in a mere five years? Read on as I put forth some of the key takeaways that make for a model that’s sustainable from day one.
Walk the talk: There is no doubt that personal-care and beauty products typically perform well, given their inherently high-frequency usage. However, in a crowded marketplace, brands that keep a keen eye on the smallest changes in consumer interest—and leverage that early on—tend to outperform their competitors. Developing bold and strong messaging along with strategic influencer partnerships helps brands establish a deep emotional connect with customers, enabling them to acquire and retain a critical customer base, which results in ‘brand stickiness’ and impressive margins.
Furthermore, we live in times where customers, especially millennials, are deeply invested in brands that espouse values that align with theirs. They are even willing to pay a premium for sustainable, cruelty-free, eco-friendly brands—so long as they walk the talk! Setting the tone for a brand on these aspects right off the bat can go a long way towards developing loyalty, turning happy customers into brand evangelists.
Click here for the full column by Rahul Chowdhri, founder of Stellaris Venture Partners.
Other Top Stories By Our Reporters
Union Minister Piyush Goyal
Let’s target 75 startup unicorns this year, says Piyush Goyal: The union commerce and industry minister said on Monday that after a record-breaking 2021, in which 40-odd startups became unicorns, India’s startup ecosystem should look to create another 75 billion-dollar companies in 2022. (read more)
No sign of headwinds abating for Paytm, says Macquarie: The brokerage firm has slashed its target price on Paytm parent One97 Communications from Rs 1,200 to Rs 900, a 58% downside from the issue price of Rs 2,150. (read more)
Infosys likely to pip TCS, Wipro in sequential profit growth in Q3: Revenue of the three companies in rupee terms is likely to grow by 4-5% in the December quarter compared with a 2.5-4% expected increase in the dollar revenues. (read more)
Global Picks We Are Reading
■ Tech antitrust bills’ make or break moment (Axios)
■ Tencent nears deal for phonemaker in major Metaverse push (Bloomberg)
■ Jeff Bezos’ New Year’s disco style hits a nerve (WSJ)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.
