GoMechanic announces 70% staff cut, co-founder Amit Bhasin apologises for revenue fudging
Automobile servicing and repairs startup GoMechanic has laid off 70 percent of its workforce, co-founder Amit Bhasin said in a blog post. After having sacked a large part of its workforce, the company has asked remaining staff to work without pay for three months, as per a report by The Morning Context.
The Sequoia India-backed startup has been struggling to raise funds amid serious concerns about accounting troubles. Earlier, due diligence conducted by EY (Ernst & Young) for prospective GoMechanic investors alleged that the Indian auto-services firm had inflated revenue, Bloomberg reported.
EY’s research alleged that about 60 out of the 1,000 GoMechanic service centres may have violated accounting norms to overstate revenue and divert funds. The investor group that hired EY has reportedly pulled out of talks to invest in GoMechanic and informed Sequoia about the lapses, as per the report.
Meanwhile, Sequoia Capital, GoMechanic’s single-biggest investor, is set to conduct a forensic audit of the start-up’s finances.
Admitting to serious errors in financial reporting, he wrote, “Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made grave errors in judgment as we followed growth at all costs, particularly in regard to financial reporting, which we deeply regret.” In his post, Bhasin wrote that the co-founders take 'full responsibility' for the current situation and have decided to restructure the business while seeking capital.
The move comes as GoMechanic struggled to raise funds for over a year despite advanced stages of discussions with several investors. Last year, the start-up was in talks to raise a round of funding led by Tiger Global at over $1 billion valuation, TechCrunch reported.
Microsoft to sack thousands of employees across divisions: Reports
Software giant Microsoft is likely to lay off thousands of employees across human resources and engineering divisions, according to multiple media reports. The latest layoffs shall come after Microsoft cut nearly 1,000 jobs in July 2022.
It had then said, "Today we had a small number of role eliminations. Like all companies, we evaluate our business priorities regularly and make structural adjustments accordingly," adding that it would continue to invest in the business and grow its headcount overall in the year ahead.
According to a few users of Blind, a community app for the workplace, the latest round of layoffs could begin on January 18. About 6,000 people could be impacted in this round, a user cited a source, adding that the firm went for another job cut round in October 2022.
However, UK broadcaster Sky News reported, citing sources, that Microsoft plans to cut about 5 percent of its workforce or about 11,000 roles. The company plans to cut jobs in several engineering divisions on Wednesday, Bloomberg News reported. In contrast, Insider reported that Microsoft could cut recruiting staff by as much as one-third.
As of June 30, 2022, Microsoft had 221,000 full-time employees, including 122,000 in the United States and 99,000 internationally.
Delhi HC asks Ashneer Grover to file undertaking in suit filed by BharatPe’s co-founder
The Delhi High Court told BharatPe‘s former Managing Director Ashneer Grover to file an undertaking in a week’s time in connection with a suit filed by the fintech company’s co-founder Bhavik Koladiya along with an interim application, restraining Grover from creating any third party rights in respect of the shares.
To that, Grover informed that subject to further directions from the court, he will not make any third party interest in the 16,110 shares that Koladiya transferred to him and in any rights that accrue to him as a consequence thereof.
A single-judge bench of Justice Prateek Jalan ordered that Grover will be bound by his statement and directed him to file the undertaking. The court also served summonses on Grover and the fintech company, giving the former four weeks to respond to the application for an ad interim injunction and two weeks for a rejoinder to the same.
The court listed the matter for hearing on March 16. The high court was hearing a suit filed by BharatPe co-founder Bhavik Koladiya which stated that he had sold to Mr Grover his 1,600 shares whose total value was around Rs 88 lakh but no money was paid to him.
OYO to refile IPO papers with updates to Sebi by mid-February
Hospitality giant Oyo has said it would refile its public listing application — Draft Red Herring Prospectus (DRHP) — with the Securities and Exchange Board of India (Sebi) by the middle of February 2023.
The company’s statement comes almost two weeks after the markets regulator asked the company to refile the draft initial public offering (IPO) papers with certain updates.
In September 2021, OYO filed preliminary documents with Sebi for an Rs 8,430 crore IPO. The launching of the IPO was delayed due to the then volatile market conditions making the company prepare to settle for a lower valuation of $7-8 billion instead of the $11 billion it was targeting initially.
“We are working on updating all key sections simultaneously. Responsibilities have been divided among different teams, with senior company leaders driving the collaboration with the Book Running Lead Managers, essentially the IPO bankers, the lawyers and the auditors. We are keen on refiling the DRHP by the middle of February, if not earlier,” an official OYO spokesperson said while sharing the progress on the IPO refiling exercise.
However, the company refused to offer any estimation of the time it expects Sebi to take for approval once the DRHP is filed. A source close to the matter opined that the company hopes to get the approval by April 2023.
ITC to acquire Yoga Bar; strengthen presence in healthy foods space
Diversified conglomerate ITC has announced the acquisition of Sproutlife Foods (SFPL) which owns D2C brand Yoga Bar. ITC has signed a binding term sheet to acquire 100 per cent shares of SFPL over a period of three to four years, said a statement.
It will initially acquire a 47.5 percent stake in SFPL in tranches, by March 31, 2025 and the balance stake will be acquired, basis pre-defined valuation criteria, subject to other conditions agreed to in the binding documents, it added.
An "initial investment of Rs 175 crore will be made through primary subscription and secondary purchases for the acquisition of 39.4 per cent of the paid-up share capital, which is expected to be completed by February 15 2023," said ITC in a regulatory filing. Further, a cash infusion of Rs 80 crore will be made through primary subscription, in one or more tranches, by March 31, 2025, it added.
According to ITC, it is "fortifying its presence in the Rs 45,000-crore, fast-growing, nutrition-led healthy foods space" with the proposed strategic investment in SFPL.
360 ONE acquires controlling stake in Mumbai Angels; launches two new funds
360 ONE (earlier known as IIFL Wealth & Asset Management) has completed the acquisition of controlling stake in early-stage venture investments platform Mumbai Angels.
Mumbai Angels will now be looking at deals with a deeper penetration in the early-stage startup pool, a statement said.
The company, however, did not disclose the financial details of the transaction. Through its filtration criteria, it will be able to offer a wider array of deals to its investors.
Dedicated to supporting and nurturing early-stage startups, and helping its investors to grow their wealth, Mumbai Angels also announced the launch of two new venture capital funds - ‘Category 1 Venture Capital Fund- Angel Fund’ and ‘Category 1 Venture Capital Fund’ (VCF).
Nandini Mansinghka, CEO, Mumbai Angels, said the launch of two new funds will open a plethora of opportunities for new-age companies looking at capital and investors keen to ride the startup wave.
India considers banning news identified as 'fake' by govt on social media
Central government will not permit social media platforms to host any information that it identifies as false, according to a draft proposal of the country's IT rules released this week.
This is the latest in a slew of measures by the government that are being seen as efforts to rein in big tech firms.
As per a Reuters report, any information identified as "fake or false" by the Press Information Bureau (PIB), or by any other agency authorised for fact-checking by the government or "by its department in which such business is transacted", would be prohibited under the draft.
Once information was identified as such, social media platforms or other "online intermediaries" would have to "make reasonable efforts" to ensure users do not "host, display, upload, modify, publish, transmit, store, update or share" such information, it added.
In October, the government announced a panel would be set up to hear complaints from users regarding content moderation decisions of social media firms, which are already required to appoint in-house grievance redressal officers and executives to co-ordinate with law enforcement officials.
Gupshup launches chatbot builder powered by OpenAI's GPT-3
Conversational messaging platform Gupshup has announced the launch of Auto Bot Builder, a new artificial intelligence-powered tool which uses OpenAI's GPT-3 to build advanced enterprise chatbots.
The new tool will use the GPT-3 LLM, a large language model that currently powers ChatGPT and fine tune it using its proprietary enterprise knowledge base and domain expertise. With the Auto Bot Builder tool, a user can instantly build a chatbot using content from their website, documents, message logs, product catalogs, database, and other corporate systems of record, a statement said.
“Gupshup is always among the first to bring the latest technology to enterprises, and we’re glad to launch the Auto Bot Builder. This is just the beginning of a new wave of innovation, and we expect to rapidly roll out more advanced capabilities,” said Beerud Sheth, CEO, Gupshup.
Chatbots built using Auto Bot Builder already come pre-integrated with Gupshup’s comprehensive conversational engagement product stack.
Dream11 revenue grows 50%, profits fall by 54%: Tofler
Fantasy sports unicorn Dream11 has reported a 50 percent increase in operational revenue to Rs 3,841 crore in FY22 from Rs 2,554 crore in FY21, but its profit fell to less than half as expenses rose 70 percent, as per filings sourced from Tofler.
The firm’s net profit fell by over 54 percent to Rs 142.86 crore from Rs 327.59 crore in fiscal 2021, of which a major chunk was due to advertising and promotional expenses, which rose almost 73 percent from the year before to Rs 2,158.29 crore in FY22, the filings showed.
In November 2021, Dream11 received $840 million from Alpha Wave, DST Global, D1 Capital, Redbird Capital, Tiger Global, TPG, and Footpath Ventures.
ReshaMandi clocks 3x revenue growth in FY23, turns EBITDA profitable
ReshaMandi, a business-to-business marketplace for silk products said it has recorded a 3x increase in revenue so far in FY 2022-23 at Rs 1,248.3 crores.
While they aim to close FY23 at 5x revenue growth from last year, the company said it has reached EBITDA profitability in Q3 of FY 2022-23 and plans to become net profit positive in the next two quarters.
The company’s revenue increased by 1,909 percent between FY21 and FY22 to Rs 413.8 crores, and by 302 percent so far in the three quarters of FY 2022-23 to Rs 1,248.3 crores.
Going forward, ReshaMandi anticipates that 55 percent of future revenues (based on the revenue projections for the next 5 years) will come from weaves, while 25 percent will be from farms, and 20 percent from yarns, the firm said in a statement. It also intends to grow internationally by entering the US and Europe.
GLOBAL TECHNOLOGY & STARTUP NEWS
Teladoc Health cuts 6% of workforce
Teladoc Health has removed redundant roles and cut about 6 percent or 300 jobs from its non-clinician global workforce.
These job cuts resulted from the combined implementation of the telehealth company's restructuring plans and previously announced cost-saving measures, some of which were implemented in the fourth quarter of 2022.
The restructuring has also resulted in a reduction of office spaces in certain markets, but the company does not expect the quarterly cost-saving actions to have a material impact on its annual financial results.
Over 500 advertisers have paused spending on Twitter: Report
More than 500 of Twitter's advertisers have paused spending on the micro blogging site since Elon Musk's takeover last year, The Information reported, citing a person familiar with its ad business.
The social media company's daily revenue on Jan. 17 was 40 percent lower than the same day a year ago, the report added.
The drop in the company's revenue was first reported by technology newsletter Platformer.
Since Musk took over Twitter last October, corporate advertisers have fled in response to the billionaire laying off thousands of employees and rushing a paid verification feature that resulted in scammers impersonating companies on Twitter.
FTX reports $415 mln in hacked crypto, Bankman-Fried says FTX US is solvent
Bankrupt crypto exchange FTX said in a report to creditors that about $415 million in cryptocurrency had been stolen in hacks.
FTX has said it had recovered over $5 billion in crypto, cash and liquid securities, but that significant shortfalls remained at both its international and US crypto exchanges. FTX attributed some of the shortfall to hacks, saying that $323 million in crypto had been hacked from FTX's international exchange and $90 million had been hacked from its US exchange since it filed for bankruptcy on November 11.
Indicted founder Sam Bankman-Fried later challenged aspects of the company's report in a blog post.
Bankman-Fried, who has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, Alameda Research, pushed back against FTX's calculations late Tuesday, saying that the company's lawyers at Sullivan & Cromwell had presented an "extremely misleading" picture of the company's finances.
Crypto exchange Coinbase says it will halt Japan operations
Cryptocurrency exchange Coinbase Global said it will halt operations in Japan due to volatile market conditions.
All Coinbase Japan customers will have until February 16 to withdraw their fiat and crypto holdings, the company said in a blog post. Coinbase's decision to exit comes only a few weeks after rival exchange Kraken said it, too, would cease its operations in Japan this month.
Coinbase, Crypto.com and Huobi have all announced plans to lay off about 20% of their respective staff, while a source told Reuters earlier this month that Genesis, too, had cut jobs, equating to 30 percent of its workforce.
Apple indefinitely postpones launch of AR glasses: Report
Apple has postponed the launch of its lightweight augmented-reality glasses indefinitely due to technical challenges, but is still planning to unveil its first mixed-reality headset this year, Bloomberg News reported.
The iPhone maker's mixed-reality headset - which combines both augmented and virtual reality - is set to launch in this year's spring event, Bloomberg said, adding that the device will cost around $3,000.
Apple's mixed-reality device would compete with the likes of Meta’s Quest Pro virtual and mixed-reality headset, which it launched late last year for $1,500, half of the Apple device's reported price.
The Cupertino, California-based company now plans to focus on lowering the price of the follow-up version of its mixed-reality device, expected as soon as 2024 or early 2025, instead of working on the AR glasses, according to the report.
