Startup Digest: Byju's offer over $1 billion to 2U: Report, Toppr lays off 300 employees, Twitter India gets government ultimatum, Entrepreneur First bags $158 million

Byju's has made an offer of more than $1 billion to acquire United States-based company 2U, Bloomberg News reported. The offer, which works out to around $15 per share, was made to 2U’s board by the edtech major last week.

The report added that the deal is not yet set and talks “could still fall apart”, adding that a deal may not materialise if 2U’s board rejects the offer. 2U’s market value is $717 million, and it has around $1 billion in debt and other liabilities.

It is one among the acquisitions being considered by Byju's, which has secured over $2.4 billion in funding for pursuing it deals. Also on the negotiating table are California-based Chegg and Lanham.

After White Hat Jr, Toppr has become the second Byju's -backed edtech startup to carry out layoffs with at least 300 employees asked to leave. The layoffs have taken place after Byju's, which acquired Toppr for $150 million last year, has completed the integration of the startup with at least 80 percent of its employees absorbed into the group's ecosystem.

"As the next step, we are optimizing teams to recalibrate business priorities and accelerate our long-term growth," Byju's spokesperson told CNBC-TV18. Toppr's layoffs come just a day after White Hat Jr, which was acquired by Byju's in 2020, fired over 300 employees as it sought 'to realign its business priorities'. "We are optimising our team to accelerate results and best position the business for long-term growth," the coding-focussed edtech startup said in a statement

The GST Council has deferred the proposal to levy a 28 percent tax on casinos, online gaming, casinos, and lottery, Karnataka chief minister Basavaraj Bommai said. The GoM, headed by Meghalaya Chief Minister Conrad Sangma, has been given 15 days to iron out the issue of the valuation mechanism and submit its report.

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The group of ministers (GoM) had recommended that in the case of online gaming, the activities will be taxed at 28 percent on the full value of the consideration, by whatever name such consideration may be called including contest entry fee, paid by the player for participation in such games without making a distinction such as games of skill or chance, among others.

The Ministry of Electronics and Information Technology (MeitY) has issued an ultimatum to Twitter India — comply with the country's Information Technology Rules by July 4 or face punitive action.

Sources have told CNBC-TV18 that the microblogging site has failed to act on various takedown orders that were issued to the company under the i-t act, i-t rules. Final notice has been sent to the company to act on government orders without any delay, sources added.

This is not the first time Twitter has had to sail in choppy waters in India. In July 2021, the Delhi High Court rapped the company, which had admitted that it was not in compliance with the IT rules and had yet to appoint a Grievance Officer, Compliance Officer, and Nodal Officer, as required by the government.

Entrepreneur First (EF), a scaleup investor, has raised $158 million in a Series C funding round led by a group of veteran technology founders, including Patrick and John Collison, Reid Hoffman, Taavet Hinrikus, and Matt Mullenweg.

The fresh capital will be used to make investments into new startups, launch new products aimed at up-ending the typical venture capital model, a statement said. EF will target a direct investment of $100 million over the next three years in hundreds of entrepreneurs. This comes as the aggregate value of companies created through EF now exceeds $10 billion, the firm added.

"We are entering a new era for venture funding, with a new generation of global founders needing support to build iconic companies from scratch,” said Reid Hoffman, co-founder of LinkedIn and Entrepreneur First board member.

Arzooo, a retail technology platform has raised $70 million in a new funding round led by SBI Investment, Japan, and Trifecta Leaders Fund. Tony Xu, the Founder of Doordash has also invested in the current round, making Arzooo his first India investment.

Existing investors including Celesta Capital and 3 Lines VC also participated in this round. The Company had previously raised a Series A round from Celesta and 3 lines, followed by an investment from Zoom founder Eric Yuan. DC advisory worked with Arzooo as advisor on managing the transaction process for this round.

The company said it will utilize its fresh capital to scale its technological might focused on scaling stores’ growth end to end and market expansion for the platform as Arzooo continues to deepen its vertical play in the $65 billion consumer electronics market in India.

SaaS startup for exporters Sourcewiz has secured Rs 20 crore in its Pre-Series A funding round led by Matrix Partners India. 100x Entrepreneur, Aniket Deb (Bizongo), Wami Capital (the family office of Transworld Group), Rohit Kapoor (Oyo), and Razorpay Founders’ fund Marsshot Ventures, also pitched in the funding round.

Also Read: As BYJU’s consolidates, group companies White Hat Jr and Toppr lay off 600 employees

The company plans to expand its team to over 10 hubs across the sub-continent to continue to solidify its position as a market leader in factory enablement, it said in a statement.

With the fresh capital, it also plans to deepen its offering to customers by helping them access newer demand channels and automate other aspects of factory operations such as procurement and payments.

Despite a looming funding winter, the early-stage funding environment in India continues to be vibrant. Seed and Series A investments were up by 88% and 22% respectively in Q4FY22, according to a report by Venture Intelligence.

The data showed that 250 companies raised Series A investments during 2021 - up 75 percent from 142 companies in 2020. The report highlights how 2,863 companies raised Seed investments during the 2015-2021 period.

According to the report, between 2018 and 2021, Sequoia Capital (88 deals) was the most active Seed to Series A investor in terms of the number of deals, followed by Axilor Ventures (49), Accel India (48), 3one4 Capital (41) and Blume Ventures (39).

Even as funds are drying up in the Indian startup ecosystem, a report by Hurun Research Institute claims that the country will be home to 122 new unicorns in the next two to four years.

Logisticstech startups Shiprocket, Zepto, Turtlemint, Ather Energy and Vivriti Capital are expected to become unicorns in the next two years, according to a new report.

India currently has 82 unicorns, as per the ASK Private Wealth Hurun India Future Unicorn Index 2022. Interestingly, 15 companies that are featured in the Index have a woman co-founder. Fintech contributed the most startups, with 27, followed by E-commerce with 14 and SaaS with 11.

B2B payable management startup Volopay has partnered with State Bank of Mauritius India to offer corporate Visa and RuPay credit cards as it expands its offerings in the Indian market.

The card is an extension of its current offerings in the Indian market helping small and medium businesses to manage their expenses and automate their accounts on the platform. Besides India, Volopay already has a presence in Australia and Singapore and is foraying into Indonesia and the Philippines, the firm said in a statement.

Under the partnership, SBM Bank India will provide the issuance of licensed Visa and Rupay credit cards and Volopay will act as the originator, distributor, and servicing agent of the bank.

Payment gateway and B2B neobanking platform Razorpay said that the company's co-founder Shashank Kumar has moved on from his role as chief technology officer (CTO) and will now take on a larger role of managing director at the startup.

Former Amazon Web Services (AWB) executive Murali Brahmadesam will replace Kumar as the head of engineering and CTO as the company looks to strengthen its tech capabilities at a time when it is expanding its global footprint through acquisitions.

With Brahmadesam at the helm, the company aims to have an experienced hand focusing solely on driving the overall engineering strategy and development at Razorpay.

Brahmadesam has more than two decades of experience and has spent a major part of his career at Amazon and Microsoft, working in India as well as the US where he held several technology and leadership roles. Kumar's co-founder and CEO of Razorpay Harshil Mathur will continue in his current role.

UrbanPiper, a full-stack restaurant management platform has announced the appointment of Ashish Saxena, as general manager-India, to bolster the business in India.

Saxena will be managing the UrbanPiper business in India and scaling the teams for the next phase of growth. Prior to joining UrbanPiper, Ashish has worked in a host of key leadership positions at organisations like Ninjacart, CloudKitchens, Chili's, and Bunge.

The company has also appointed Gaurav Malik, as vice president, of International Launch and Expansion, to boost its international expansion in the Middle East, the United Kingdom, and Europe.

Malik will be building and expanding the brand’s presence in the UK & Europe regions as his immediate priority in the blitzscaling journey ahead. Previously, Gaurav worked in key management positions at Uber, Uber Eats, Agoda, and Stripe.

Swedish retailer Ikea is set to open its second small-format city store in India in R City Mall in Ghatkopar West, Mumbai, in a bid to continue its omnichannel expansion in the country.

"With our second city store, we strengthen our omnichannel presence in Maharashtra. The goal is always to be close to the customers, becoming more accessible and convenient and creating a great IKEA experience for our customers," said Susanne Pulverer, CEO and chief sustainability officer, Ikea India.

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Spread across 72,000 sq ft of retail space, the store will be opened to the public in the coming months. The store will be located on the 3rd floor of the shopping mall. It will offer customers a range of 7000+ well-designed, affordable, sustainable, and functional products.

It will be connected to IKEA's restaurant with 130 seating capacity that will offer a wide range of Indian and Swedish delicacies including Vada Pao, Dhokla, Biryani, Dal Makhani with Rice among many others, a statement said.

Tesla has shuttered its office in San Mateo, California, and laid off roughly 200 employees working on its Autopilot driver-assistant system there, sources told Reuters, in a move seen as accelerating cost-cutting. Most of the laid-off people had been hourly workers, that person said.

Early this month, Tesla chief executive Elon Musk told top managers he had a "super bad feeling" about the economy and that the maker of electric cars needed to cut staff by about 10 percent.

The nosedive in cryptocurrency markets has wiped out millions of dollars in funds stolen by North Korean hackers, four digital investigators say, threatening a key source of funding for the sanctions-stricken country and its weapons programmes, Reuters reported.

North Korea has poured resources into stealing cryptocurrencies in recent years, making it a potent hacking threat and leading to one of the largest cryptocurrency heists on record in March, in which almost $615 million was stolen, according to the US Treasury.

It comes as North Korea tests a record number of missiles - which the Korea Institute for Defense Analyses in Seoul estimates have cost as much as $620 million so far this year - and prepares to resume nuclear testing amid an economic crisis.

Amazon has placed a temporary purchase limit of three units per week on emergency contraceptive pills, the company said. The move comes days after the US Supreme Court overturned the landmark 1973 Roe v. Wade ruling that recognized women's constitutional right to abortion.

The court's ruling led to a temporary spike in demand for over-the-counter emergency contraceptive pills, known as Plan B, which are taken within days of sexual intercourse.

Pinterest said long-time chief executive officer Ben Silbermann would step down, handing over the reins of the social media platform to Google commerce executive Bill Ready.

The news sent the company's shares 9 percent higher in extended trading on Tuesday and underscored a shift in focus at Pinterest to e-commerce initiatives from its advertising-based business model.

In Ready, 42, the company gets an executive who for the past two years ran commerce and payment operations at the Alphabet-owned search giant. Ready has also held senior leadership roles at PayPal.

Silbermann will take up the newly created role of executive chairman and keep his board seat, while Ready will also join the board, the company said.

China's JD.Com would issue shares worth $220 million to investor Tencent over a three-year period to access certain services on the latter's WeChat platform, Reuters reported.

The deal follows Tencent's sale of a $16.4 billion stake in JD.com to Walmart last year and extends an existing partnership with the WeChat owner. Tencent, which first invested in JD.com in 2014, owns 2.7 percent of outstanding Class A shares of the company as of March 25, according to a regulatory filing.

Snap has launched a paid version of the Snapchat app in the US, priced at $3.99 a month, and a few other markets, in a major step away from a revenue model-dependent mostly on advertising.

Snap, which had teased the subscription version, Snapchat+, earlier this month, said it would be available in Canada, the United Kingdom, France, Germany, Australia, New Zealand, Saudi Arabia, and the United Arab Emirates at launch.

Initial features in the paid version include the ability to change the app's icon, see who re-watched a story, and pin other users on chat history as a "BFF", Snap's senior vice president of product, Jacob Andreou, told tech news site The Verge.

A federal judge has said a former Uber security chief must face wire fraud charges over his alleged role in trying to cover up a 2016 hacking that exposed the personal information of 57 million passengers and drivers, as per a Reuters report.

The US Department of Justice had in December added the three charges against Joseph Sullivan to an earlier indictment, saying he arranged to pay money to two hackers in exchange for their silence while trying to conceal the hacking from passengers, drivers, and the US Federal Trade Commission.

US District Judge William Orrick in San Francisco rejected Sullivan's claim that prosecutors did not adequately allege he concealed the hacking to ensure that Uber drivers would not flee and would continue paying service fees. Prosecutors said Sullivan arranged to pay the hackers $100,000 in bitcoin and have them sign nondisclosure agreements that falsely stated they had not stolen data.