Startup Digest: M2P Fintech acquires BSG ITSOFT, Siddharth Menon & Nischal Shetty to step away from WazirX's daily ops, Udaan lifts one year ESOP cliff & Airbnb posts $55 mn 4Q profit

API infrastructure company M2P Fintech has signed a definitive agreement to acquire BSG ITSOFT, a core banking solutions provider. The deal size, however, remains undisclosed. The acquisition further bolsters M2P Fintech’s approach to providing a new generation cloud-native platform and positions M2P Fintech to offer a fully integrated banking and payments stack that is built on API-first infrastructure, the company said in a statement.

"The heightened action around Fintech over the past few years is anything to go by, it is likely to grow unabated over the next couple of decades. Globally we are witnessing new and relevant technologies disrupting every aspect of financial services and we realised the core banking system is the nucleus of all things Fintech.

Given that Central banks around the world are building out CBDC, besides all the work that’s happening around the broader applicability of Blockchain in financial services, we felt it was opportune to build a Core system that can act as a bridge between the legacy infrastructure and the future," said Madhusudanan R, co-founder and CEO of M2P Fintech.

WazirX co-founder and COO Siddharth Menon is launching his own venture Tegro – a Web3 ecosystem marketplace, along with game development firm SuperGaming. "Mobile games disrupted the games industry and Web3 games could be an even bigger disruption,” said Siddharth. “Web3 games will be the next paradigm shift in gaming, opening new economic and creative opportunities for players, and have the potential to unlock a 2 trillion-dollar market."

Tegro’s roadmap includes a marketplace, SDKs, and APIs crafted by a founding team with deep experience in making games and designing marketplaces with high liquidity, the company said in a statement.

Menon, meanwhile, will step away from the daily operations of WazirX to focus on his new project, sources told CNBC-TV18.

A WazirX spokesperson said “Siddharth sees this as a natural extension of his role in contributing to and furthering the crypto landscape. He will continue to be associated with WazirX in a passive capacity for now.”

Not just Menon, Nischal Shetty Founder, and CEO has also launched an open-sourced blockchain project, Shardeum, earlier this month.

“This decentralized project is Nischal's further foray into the blockchain sector, over and above his role of being at the helm of WazirX,” the spokesperson added.

Meanwhile, Shetty has refuted the speculations of him moving out from the company to focus on his new project. The WazirX CEO took to Twitter to say, “Getting queries if I’m transitioning out of WazirX. If I intend to, YOU will hear it from me first, and not from sources.”

WazirX is a cryptocurrency marketplace with over eight million users and billions in monthly volume. The firm was acquired by Binance in 2019.

Blockchain-based and NFT-based gaming firms are gaining traction in India and are becoming one of the key trends in the sector in 2022.

B2B e-commerce platform Udaan has removed the one-year cliff on employee stock option plans (ESOPs) that mandated people to wait for a year before vesting their stocks, allowing all future ESOP allocations to vest every quarter.

As a part of the revamp, the company also announced that, every employee at Udaan, regardless of their tenure or job profile will be allotted ESOPs under their Annual Performance cycle. Further, these ESOPs will vest at a quarterly frequency and be completely vested within a two-year period as compared to the usual industry norm of four years.

Following these changes, the overall number of ESOP holders in the company has grown by 400 percent and now covers its complete employee base. This announcement comes after Udaan raised $250 million through convertible notes and debt funding to further grow and capitalize on the growth opportunity that the Indian eCommerce market offers.

The company said it has invested more than Rs 4,000 crores in the past 12-18 months across different pillars of business - people, technology, supply chain, category, credit, compliance - to accelerate and strengthen capabilities.

Edtech unicorn Lead School has announced a $3 million Employee Stock Options Plan (ESOP) liquidation programme for its employees. The announcement comes after LEAD secured Series E funding of $100 million from WestBridge Capital. The company said that it has distributed ESOPs to approximately 20 percent of its employees.

"Our success would not have been possible without the relentless efforts of our teams. I'm delighted that we are in a position to offer significant wealth creation opportunities to those who have joined us on our mission to provide an excellent education to every child. We have also included our Alumni in the Liquidation Plan because they continue to remain ambassadors of LEAD,” said Sumeet Mehta, Co-founder and CEO, LEAD.

Edtech firm Hero Vired has launched a faculty ESOP programme to reward and retain talent. Under the program, all full-time faculty members and teaching assistants – who have completed six months with the startup, will be eligible for the buyback scheme, it said in a statement. The program will also be extended to new faculty members as and when they meet the stipulated requirements.

The total ESOP pool has been capped at 10% of the total valuation of the startup. A total of 10 full-time faculties have collectively been granted ESOPs worth around Rs 50 lakh. The startup expects this number to hit Rs 10 crore in the coming 3-4 years.

"Our ESOPs program is our dynamic approach to attracting, rewarding, and retaining top talent. The Hero Vired employee stocks will hit 20x valuation in three years, and as we prepare for our IPO in the next 5-6 years, their valuation will rise further,” said Akshay Munjal, Founder, and CEO, Hero Vired.

Intercity mobility startup, zingbus, has launched premium lounges across Indian cities including Delhi, Manali, and Ahmedabad. These premium lounges offer a clean and accessible place for people to rest comfortably while waiting for their buses.

They are different from the traditional methods where people used to wait in long lines and unsafe places for their rides. The new space offers them safe and comfortable seating and other amenities, the firm said in a statement. zingbus aims to launch 30 lounges across cities in India by the year 2022.

Skill-based gaming platform Dangal Games announces a strategic partnership with technology services group Gridlogic. The partnership brings together Dangal Games’ high-on-feasibility gaming portfolio and Gridlogic’s best-in-class technology solutions, which include its most advanced game hosting platform, the firm said in a statement.

With player liquidity under control, Dangal Games users will now be able to play online rummy in a seamless fashion. "As part of the partnership, Dangal Games aims to propel its presence in the gaming world by making the launch of online rummy on our multi-gaming app a success. Gridlogic’s years of experience in developing state-of-the-art game hosting platforms will certainly play a crucial role in building a strong rummy brand under our banner," said Varun Mahna, founder and chief executive officer of Dangal Games.

Battery-swapping network for electric two and three-wheelers, Battery Smart has achieved the milestone of 1 million paid battery swaps on its energy infra network. In addition, the company said it has expanded its services to 10 cities in India, including Noida, Gurugram, Faridabad, and Panipat.

Battery Smart aims to make EV adoption simple, economical, and accessible in the country. According to the company, its data-driven methodology and battery telematics have enabled it to grow exponentially. With over 4000 registered drivers on its platform and over 200 operational swap stations, the company claims to have powered 30 million emission-free kms till date.

Twitter has tied up with digital payments and financial services firm Paytm to boost its tipping feature in India. Individuals will be able to link their Paytm account to their Twitter handle, enabling users to directly send money to them through the tipping feature, as per reports.

Users can enable this feature by editing their profile and then turning on the tips option, following which a tips icon starts appearing on their profile. People who intend to send money can tap this icon and select their preferred payment option to complete the transaction. The company does not take any cut from these payments.

Facebook has agreed to pay $90 million to settle a decade-old privacy lawsuit accusing it of tracking users' internet activity even after they logged out of the social media website, Reuters reported. A proposed preliminary settlement was filed on Monday night with the US District Court in San Jose, California, and requires a judge's approval. The accord also requires Facebook to delete data it collected improperly.

Users accused the Meta Platforms unit of violating federal and state privacy and wiretapping laws by using plug-ins to store cookies that tracked when they visited outside websites containing Facebook "like" buttons. The settlement covers Facebook users in the United States who between April 22, 2010, and September 26, 2011, visited non-Facebook websites that displayed Facebook's "like" button.

Zuckerberg says Nick Clegg to take a new role as president of Global Affairs

Meta Platforms boss Mark Zuckerberg said in a post on Wednesday that Nick Clegg will take over as president of Global Affairs. Clegg has previously worked on the Facebook-parent's content policy, elections and the establishment of the Oversight Board.

SoftBank is asking banks vying to be part of a potential listing of Arm Ltd to underwrite a margin loan of about $8 billion, Bloomberg News reported. Earlier this month, SoftBank sought to list Arm after scrapping plans to sell the company to US chipmaker Nvidia in a deal valued at up to $80 billion.

Britain's Arm, which named a new chief executive last week, said it would go public before March 2023 and SoftBank CEO Masayoshi Son indicated that would be in the United States, most likely the Nasdaq. The margin loan financing will be linked to Arm's initial public offering (IPO) stock and is one option under consideration, according to the report. For Arm, banks are planning to pitch IPO valuations of more than $50 billion.

Canada's Shopify forecast a slowing pace of revenue growth in the first half of the year and said it was ramping up spending on a network of fulfillment centers, sending its shares tumbling 18%. As per Reuters, the company's forecast indicated the e-commerce boom seen during the peak of the COVID-19 pandemic was cooling as more shoppers return to stores, prompting retailers to shift their focus to brick-and-mortar operations from online.

In their quest to make the online-shopping experience more rewarding during the pandemic, small and medium retailers splurged on spiffy websites, robust networks and faster delivery using software tools and payment services provided by companies such as Shopify. But as that growth softens, Shopify is trying to create an integrated e-commerce model that focuses on logistics and warehouses to support its main businesses.

Shopify said it was estimating capital expenditure of $200 million in 2022 as it ramps up operations and was likely to spend about $1 billion on warehouse hubs in the following two years. For the fourth quarter ended Dec. 31, revenue rose 41% to $1.38 billion, compared with analysts' estimates of $1.33 billion, according to Refinitiv data. Excluding items, it earned $1.36 per share, 9 cents above estimates.

Airbnb reported a $55 million profit for the fourth quarter, reversing a huge loss a year earlier, as its revenue soared above pre-pandemic levels. The San Francisco-based short-term-stay company said bookings surged in small and towns and rural areas, and improved even in urban areas, which were hit hardest earlier in the pandemic.

Airbnb hosts were also able to raise prices. The average daily rate in late 2021 was $154, a 20% jump from a year earlier and 36% higher than the same quarter in 2019. The company cited strong demand for rentals in North America and an ongoing shift toward customers booking entire homes and vacation destinations where prices are usually higher.

Airbnb said the omicron variant of COVID-19 had less effect on bookings and cancellations than last year’s delta variant. Virus cases are still at high levels in the United States, but the San Francisco-based company said summer bookings made by the end of January were running 25% ahead of the same time in 2019, before the pandemic.

The fourth quarter marked Airbnb's second straight profitable quarter and compared with a loss of $3.9 billion in late 2020. Earnings equaled 8 cents per share. Revenue rose 78% over a year ago and 38% over the same quarter in 2019 to $1.53 billion.