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Also in this letter:
■ Xiaomi names Alvin Tse as India head, Anuj Sharma as CMO
■ Need to cut 10% of Tesla jobs, says Elon Musk
■ ETtech Explainer: why are cloud kitchens catching on in India?
Sequoia tells portfolio firms it has cut ties with legal firm after probe
Sequoia Capital has told a select group of portfolio companies it has stopped working with law firm Algo Legal after an investigation at one of its investee firms, multiple people who received the email told us.
Details: In a mail sent out earlier this week, the VC fund told founders that it has found “concerning incidents” involving Algo Legal, a service provider associated with a former Sequoia India employee, and related parties.
A recent investigation at a portfolio company also brought “concerning details” to light about the legal firm, the mail said.
Sequoia told founders that if they’ve had dealings with Algo Legal or its related entities, they should inform AZB & Partners.
Sequoia alumnus: Algo Legal was founded by former Sequoia Capital general counsel Sandeep Kapoor. He worked at Sequoia for nearly nine years and left the VC fund in 2018, according to his LinkedIn profile. His name was not mentioned in Sequoia’s mail.
He told us he wasn’t aware of any email sent by Sequoia Capital India and SEA on Algo Legal to their portfolio companies. “In fact, we are not even aware of any probe that you refer to in your question. Sequoia has not formally or informally informed us of any probe of any sort,” Kapoor wrote in an emailed response.
Zilingo CEO sacked: Sequoia’s letter comes soon after portfolio company Zilingo fired its chief executive Ankiti Bose last month, following a probe on alleged financial irregularities at the firm. Bose told us in an interview afterwards that her termination was not the end of the saga.
Sequoia has also postponed the closing of its $2.8 billion India and Southeast Asia Fund due to an ongoing investigation at one of its portfolio firms, as we reported on May 18.
Xiaomi names Alvin Tse as India head, Anuj Sharma as CMO
Xiaomi has appointed Alvin Tse as general manager for its operations in India, the company announced on Friday. Tse replaces Manu Jain, who was elevated to group vice president at Xiaomi last year.
The company also announced that Anuj Sharma, who moved to now-independent Xiaomi sub-brand Poco over two years ago, will join Xiaomi India again as chief marketing officer.
Who is Tse? A Stanford-educated British national, Alvin Tse was in charge of Xiaomi’s Indonesia business as general manager. He is one of the founding members of Poco.
The company is currently being led jointly by Muralikrishnan B, chief operating officer, Raghu Reddy, chief business officer, and Sameer BS Rao, chief financial officer, in the absence of Jain, who stepped down as an employee last October, and as director in February. They will continue in their present roles after the restructuring.
Xiaomi’s India troubles: In mid-April, the Enforcement Directorate (ED) summoned Jain in an investigation on whether the company violated India’s foreign exchange laws.
The ED later seized $725 million (Rs 5,500 crore) from the company’s local bank accounts, accusing it of violating rules by remitting money out of the country under the guise of royalties. But the Karnataka High Court stayed the ED order until the next hearing on June 8.
The company has also filed a writ petition against the ED, accusing it of threatening its senior executives with physical violence during its probe.
Xiaomi’s India offices and manufacturing units were also raided in December 2021 in a separate, ongoing investigation over alleged income tax evasion.
And in January, India’s Revenue Intelligence wing asked Xiaomi to pay $84.5 million for allegedly evading import taxes.
Need to cut 10% of Tesla jobs, says Elon Musk
Tesla CEO Elon Musk has a “super bad feeling” about the economy and needs to cut about 10% of jobs at the electric carmaker, he said in an email to executives seen by Reuters.
Back-to-work call: The message, sent on Thursday and titled “pause all hiring worldwide”, came two days after the billionaire told staff to return to the workplace or leave, and adds to a growing chorus of warnings from business leaders about the risks of recession.
Almost 100,000 people were employed at Tesla and its subsidiaries at the end of 2021, its annual SEC filing showed.
Recession fears: Musk has warned in recent weeks about the risks of recession, but his email ordering a hiring freeze and staff cuts was the most direct and high-profile message of its kind from the head of an automaker.
Musk’s gloomy outlook echoes recent comments from executives including JPMorgan Chase & Co CEO Jamie Dimon and Goldman Sachs President John Waldron.
A “hurricane is right out there down the road coming our way,” Dimon said this week.
Inflation in the United States is hovering at 40-year highs and has caused a jump in the cost of living for Americans, while the Federal Reserve faces the difficult task of dampening demand enough to curb inflation while not causing a recession.
Coinbase cancels accepted job offers: Meanwhile, crypto exchange Coinbase said in a blog post it will extend its hiring freeze for the foreseeable future and rescind a number of accepted offers to deal with current macroeconomic conditions.
The company earlier froze hiring for two weeks as fears of rising interest rates rocked the cryptocurrency market. Now, the crypto exchange says it will pause hiring “for as long as this macro environment requires.”
Shares of Coinbase were flat following the news in after-hours trading. The company’s stock is down more than 75% since its market debut last year through a direct listing.
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ETtech Explainer: why are cloud kitchens catching on in India?
The food industry has seen many technological innovations over the past few years, the biggest of which is online food delivery. But the rise of Zomato and Swiggy has also sparked unprecedented growth in a related segment – cloud kitchens.
The number of cloud kitchens in India has shot up since the pandemic. A Redseer report estimated the size of the market would touch $3 billion by 2024, from just $400 million in 2019.
The number of cloud kitchens operating on Swiggy trebled between FY19 and F21 and doubled on Zomato from January 2020, we reported in November 2021.
The industry also attracted a record amount in venture money in 2021, with cloud kitchen startup Rebel Foods, the owner of Faasos, Behrouz Biryani and OverStory, becoming a unicorn.
But what are cloud kitchens, and what are their benefits, and which are the big players in India?
Click here to read the ETtech Explainer.
ETtech Deals Digest
Software-as-a-service (SaaS) startup MoEngage, Math tutoring startup Cuemath, and card-based lending and payment solutions provider Slice were the other startups that landed big bucks. Here’s a look at the top funding deals of the week.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant and Aishwarya Dabhade in Mumbai. Graphics and illustrations by Rahul Awasthi.
