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Also in this letter:
■ Google launches Street View in India
■ Cloud and search contribute most to Alphabet’s growth
■ ETtech Done Deals
Green Signal: Zomato shareholders approve Blinkit buy
The investors of food delivery platform Zomato voted in favour of the company’s acquisition of quick commerce company Blinkit (formerly Grofers), according to filings available on the BSE.
Among all the voters, about 97% voted in favour of Zomato to acquire Blinkit for Rs 4,447 crore ($570 million) in an all-stock deal which was announced on June 24. While 14.6% of the public institutions voted against the deal, 99% of the public non-institutions voted in favour.
The transaction value of the deal was 40% lower than Blinkit’s last valuation of just over $1 billion. As per discussions held earlier, the deal was pegged at $700-750 million.
Stock reverses trend: After the approval was notified to the stock exchange on Wednesday morning, Zomato’s stock traded in the green and ended the session up 5.52% at Rs 43.95 a piece.
Credit: Yahoo Finance
The stock price had nosedived over the past two trading sessions as it almost fell 11% on Monday and 14% on Tuesday in intraday trading after the mandatory lock-in period for pre-IPO shareholders expired on Saturday.
Tapping the Esop pool: The food delivery player allotted 4,65,51,600 equity shares from its Esop (employee stock option plan) pool at an exercise price of Re 1, according to stock exchange filings.
Even at its lifetime lows of Rs 40.55, the allotment is worth Rs 188.75 crore. Given the face value of Re 1 each, it accounted for close to Rs 4.66 crore and is about a 98% discount from the latest stock lows.
Downtrend not over yet? After the Gurugram-based company had a blockbuster listing on the Indian stock exchanges last year in July, its shares more than doubled to hit an all-time high of Rs 169.10 on November 16, 2021.
Since then its stock price has fallen more than 70%. While a majority of stock market experts and brokerage firms have pointed to a bleak future for the stock, investment banking firm Jefferies is bullish on the stock.
Jefferies believes Zomato’s management has accelerated its journey towards better unit economics and has set a target price of Rs 100 on the stock, indicating an upside of 125%.
“Blinkit acquisition elongates the path to profitability and despite management guidance on a break-even in food delivery, investors are not giving much benefit of a doubt,” Jefferies wrote in a report. “Night is darkest just before dawn,” it added.
India finally gets Google Street View; Alphabet’s Q2 numbers miss estimates
Google Street View – a technology featured in Google Maps and Google Earth for interactive panoramas along many streets in the world and present in more than 100 countries – was launched in India on Wednesday.
Google has tied up with local firms Genesys International and Tech Mahindra to bring the feature across 10 Indian cities. This will enable better and more reliable navigation for consumers in India. Google will also be publishing Street View APIs to local partners, which have been available to other global partners for a while.
Verbatim: “This is the first time that Google Street View is being completely brought to life by local partners. After extensive on-ground work, Street View will be available on Google Maps with fresh imagery of ten cities in India. They (the partners) have covered 150,000 kilometers in India. We plan to expand to 50 cities soon,” Miriam Daniel, vice-president, maps’ experiences, told us in an exclusive interaction.
Local collaboration: Genesys International’s partnership with Google aims to increase the offer of Street View to one million kilometers by the year-end. Tech Mahindra will be the logistics service provider for Google.
What’s on offer: The features in the offing are speed limits (Bengaluru and Chandigarh), information on road closures within 30 minutes, green light projection to reduce carbon emissions (Bengaluru, Kolkata, and Hyderabad), and environmental insights explorer (Aurangabad, Bengaluru, Pune, and Chennai).
Meanwhile, Alphabet, the parent company of Google, reported weaker-than-expected earnings and revenue for the April-June period (Q2). Despite solid growth in its search business, revenue growth slowed to 13% from 62% in the same quarter last year.
ETtech Done Deals
■ Threado, a Bengaluru-based community management startup, raised $3.1 million in funding led by Vertex Ventures Southeast Asia and India. Gemba Capital and PointOne Capital were the other participants, along with other angel investors. Started in 2020 by Pramod Rao and Abhishek Nalin, Threado provides a dashboard for businesses and creators to manage their online communities on Slack, Discord, Discourse, Twitter, or GitHub. It plans to use the capital to strengthen its team and expand in North America.
■ Technology-enabled construction and home improvement platform Wify raised $2 million in funding led by Blume Founders Fund and Unitus Ventures. Founded in 2019 by Vikram Sharma and Deepanshu Goel, Wify is in the business of on-site installation and post-purchase services to businesses and brands. It operates in 60 cities, earning a monthly revenue of Rs 2 crore. The startup will use the capital raised for developing its tech.
■ Equity management platform Qapita acquired a 100% stake in Pune-based equity compensation company ESOP Direct in an all-cash deal. Post the acquisition, Qapita will cater to more than 1,200 companies from India and Southeast Asia, managing employee stock option plans (Esops) worth over $12 billion.
Microsoft earnings fall short of already-lowered expectations
Tech giant Microsoft reported Q2 sales of $51.9 billion, a 12% increase from the previous year but lower than its own and Wall Street’s expectations as poor macroeconomic conditions and the rising US dollar continued to hammer companies worldwide.
Tell me more: The company’s computing business grew 2% to $14.4 billion, with sales of its Windows operating system witnessing a 2% slump owing to weakening PC demand and supply chain problems in China.
Its flagship cloud platform Azure grew 40% compared with 46% in the previous quarter, showcasing the impact of the strong US dollar.
Revenue from Xbox content and other services was down 6% as consumers spent less time playing video games.
Quote: “We are not immune to what is happening in the macro broadly,” said CEO Satya Nadella in a call with analysts.
Going forward, Nadella and Microsoft’s finance chief Amy Hood believe challenges like a strong dollar, reduced demand for personal computers, and low demand from small and medium-sized businesses will continue to persist. Earlier this year, it had become the first big tech to lay off employees amidst rising economic uncertainty.
Tweet of the day
The average cost of data breach rose 6.6% in India: report
According to an IBM security study, the average cost of a data breach in India rose 6.6% to Rs 17.6 crore in 2022, compared with Rs 16.5 crore last year. It marked a jump of 25% from the 2020 level, as cyberattacks continue to become a common phenomenon worldwide.
Expert take:“Today, we have reached a point where cyberattacks are evolving into market stressors, hurting the economy. 60% of global businesses have raised their prices as a result of the data breach, contributing to inflation, and inadvertently passing the cost on to customers. This has led to the creation of a “cyber tax” – where businesses can pass some of the costs of a breach on to the consumer,” said Viswanath Ramaswamy, vice-president, technology, IBM Technology Sales, IBM India, and South Asia.
Further, a data breach’s average per-record cost was Rs 6,100. Industrial, services, and technology were the top three sectors per record cost, with about 29,500 average records breached this year.
On the other hand, the global average data breach cost touched an all-time high of $4.35 million for the surveyed organisations.
Today’s ETtech Top 5 newsletter was curated by Gaurab Dasgupta and Ruchir Vyas in New Delhi. Graphics and illustrations by Rahul Awasthi.
