STARTUP DIGEST: PayU to buy BillDesk for $4.7 bn, IPO-bound Oyo to launch 'self sign-up' service for hotels

There were several important developments in the startup space during the day on Tuesday. Here’s a wrap of the top startup headlines.

In a major consolidation in the payments sector, Prosus-backed PayU will acquire payments company BillDesk for $4.7 billion.

The deal will bring Prosus’ cumulative investment in Indian tech to more than $10 billion.

Prosus said that the acquisition of BillDesk will see PayU becoming one of the leading online payment providers globally, handling a total payment volume (TPV) of $147 billion.

PayU India and BillDesk run complementary businesses within India’s digital payment industry. Together, the two expect to create a financial ecosystem handling four billion transactions annually - four times PayU’s current level in India, as per the company.

GlobalBees, an aggregator of digital brands has acquired The Better Home, a home care products company, as it builds its portfolio of digital-first brands and helps them scale. The deal amount was not disclosed.

This is the first acquisition for GlobalBees. As part of the deal, the 15-member core team of The Better Home will join GlobalBees, the company said in a statement.

The acquisition comes after GlobalBees raised $150 million in a mix of equity and debt in a Series-A funding round led by FirstCry in July. The Thrasio-model based company invests in, acquires, and grows seller businesses across Amazon, Flipkart, and other marketplaces.

GlobalBees is also planning to take The Better Home to international markets.

“The Better Home demonstrated the right mix of these, along with remarkable achievements. We at GlobalBees are excited to announce The Better Home as our first acquisition and are committed to catapult it into an international brand," Nitin Agarwal, CEO, GlobalBees.

“The Better Home was the first among this, and we will continue to build massively impactful businesses focused on our community’s needs and direct insights that will scale quickly owing to the brand love and goodwill we’ve garnered over the years by staying true to our ethos,” said Dhimant Parekh, founders of TBI & TBH.

The Better Home brand was launched by digital content platform The Better India (TBI). The company retails sustainable household products such as dishwash liquid, home cleaners, air fresheners, laundry cleaners etc. The Better Home products are sold on the brand website as well as Amazon and are available in 600 cities and services 70,000 shoppers, as per the company statement.

Healthcare solutions provider Indegene has acquired US-based Medical Marketing Economics (MME) for $10 million in a bid to strengthen its pricing, reimbursement and market access capabilities.

"Their 40+ strong team will strengthen our emerging Biotech and Medical offerings. They bring proven PRMA capabilities that complement our Co-Commercialization solution," Indegene Cofounder and CEO Manish Gupta said.

Pricing, reimbursement and market access is a strategic area of interest for Indegene. It augments company's reach both with the big pharma companies and emerging biotech companies, and complements its digital first commercialization practice, Gupta added.

As per the company, the current size of the market access solutions market is $1.7 billion and expected to increase to $2.24 billion over the next five years.

“This signals a great headroom opportunity for us in the US market. Acquiring MME is a step in this direction. The size of this deal is approximately $10 million," Gupta said.

Newly-minted fintech unicorn BharatPe has announced a strategic partnership with Axis Bank under which the private lender will act as the acquiring bank for BharatPe’s point of sale (PoS) business BharatSwipe.

This association will help BharatPe enhance the merchant experience by leveraging best-in-class technology platform offered by Axis Bank, the company said in a statement.

Axis Bank claims to be the third largest PoS acquiring bank in the payments acceptance business in India, with an installed base of over 652,026 PoS terminals spread across India. The bank currently processes about ₹19,000 crore of payments per month.

BharatPe launched its PoS machine, BharatSwipe, last year as India’s first zero rental and zero merchant discount rate (MDR) PoS machine.

According to the fintech, BharatSwipe business has scaled up rapidly, and now contributes 20 percent to the overall payments Transaction Processed Value (TPV) of the company. BharatPe has an installed base of over 100,000 PoS machines across 16 cities in the country and facilitates transactions of over Rs 1,400 crore every month.

BharatPe clocked annualized transaction value of $2 billion on the PoS terminals at the end of FY21 and has set a target of $6 billion in annualized TPV by the end of FY22, the company added.

IPO-bound hospitality unicorn Oyo is piloting a self sign-up service that will allow hotels to list properties on the platform in just 30 minutes, according to Moneycontrol.

Any hotel owner can open the website and select from the options of home, hotel or life. The person will be shown the estimated revenue it can earn by joining Oyo, based on local competition and demand patterns including the location of the property, the report claims.

Oyo will likely charge a base rate of around 20 percent, besides service fee and GST, among other costs. It will also take control of 100 percent of room inventory at the property and the pricing of the rooms.

The move is expected to shore up the number of hotels on the platform which saw a massive decline because of the pandemic.

Social commerce unicorn Meesho has announced a companywide break from November 4 to 14 for all its employees implementing its ‘Reset and Recharge’ policy. The work break will be after the festive season sale offered by the platform.

The startup which helps small businesses and individuals become sellers on social platforms such as WhatsApp, Facebook and Instagram, made the announcement on Twitter and Linkedin.

“We are going to completely unplug from work — right after our busy and frenetic festive sale season, so that we are back to doing what we love — relaxed and rejuvenated,” the company said in a Twitter post.

“Between 2020-2021, we know how hard the pandemic has been on our mental health & productivity. Meesho being a people-centric workplace understands this. We will always put our employees' wellbeing as top priority and the Reset and Recharge policy is one step towards that,” it added.

E-commerce major Amazon India is revamping its global delivery service partner (DSP) programme in India, as it looks to bring more entrepreneurs into its fold to strengthen its last-mile delivery network in the country.

Under the revamped programme, Amazon India will be offering newer services, including allocating an account manager to delivery service partners, along with providing key technology and value-added tools for hiring, legal and technological support.

It also looks to negotiate competitive rates for its partners to provide asset insurance, compliance support and group corporate insurance for delivery partners, the company said in a statement.

The US-based e-commerce major has already worked with close to 340 DSPs in India, which currently operate a delivery network across 750 cities and 1,500 DSP stations.

The programme has helped Amazon to also gain access to remotest corners of the subcontinent, including Ladakh, Nagaland and the Andaman and Nicobar Islands, the company added.

According to the company, each delivery service partner employs between 40 and 100 delivery agents on average.

Globally, Amazon has invested close to $1 billion till date for the programme and has close to 2,500 partners across 11 countries of the US, Canada, UK, Germany, France, Italy, and Spain, the company said.

Edtech startup ImaginXP has joined enterprise automation software company UiPath’s Academic Alliance programme.

As part of the teaching programme, UiPath will equip ImaginXP educators with knowledge, skills and abilities required to adopt Robotic Process Automation (RPA). UiPath will also provide educators with curriculum, course content, learning materials, and the software required to train students, the company said.

ImaginXP will work with its partner universities to explore opportunities of incorporating RPA as part of various technical and non-technical programs. On successful completion of these courses, all students will receive a course completion certificate jointly issued by UiPath and ImaginXP under UiPath’s Academic Alliance program.

The edu-tech enterprise recently raised $1.5 million, led by Venture Catalysts along with co-investors Shashank Deshpande, Krish Kupathil, Samyakth Capital, among others.

GLOBAL TECHNOLOGY & STARTUP NEWS

China has forbidden under-18s from playing video games for more than three hours a week, a stringent social intervention that it said was needed to pull the plug on a growing addiction to what it once described as "spiritual opium".

The new rules, published on Monday by China’s National Press and Publication Administration (NPPA) are part of a major shift by Beijing to strengthen control over its society and key sectors of its economy, including tech, education and property, after years of runaway growth.

According to a translated notice about the new rules, people under 18 will be allowed to play video games one hour a day between 8 p.m. and 9 p.m. weekends and legal holidays. Gaming companies will be barred from providing services to minors in any form outside the stipulated hours and must ensure they have put real-name verification systems in place, said the regulator, which oversees the country's video games market.

The rules from NPPA regulator coincide with a broader clampdown by Beijing against China's tech giants, such as Alibaba and Tencent.

South Korea’s parliament on Tuesday approved a bill that bans major app store operators such as Google and Apple from forcing software developers to use their payment systems, effectively stopping them from charging commissions on in-app purchases.

According to Reuters, it is the first such curb by a major economy on the likes of Apple and Google, which face global criticism for requiring the use of proprietary payment systems that charge commissions of up to 30 percent.

The final vote was 180 in favour out of 188 attending to pass the amendment to the Telecommunications Business Act, dubbed the “Anti-Google law.”

“We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks,” a Google spokesperson said in a statement to Reuters.

Google added Google Play provides far more than payment processing, and its service fee helps keep Android free, giving developers the tools and global platform to access billions of consumers around the world.

“We believe user trust in App Store purchases will decrease as a result of this proposal - leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple,” Apple said in a statement.

Apple on Thursday agreed to loosen App Store restrictions for small developers, allowing developers to promote payment options outside Apple’s payment system.

Based on South Korean parliament records, the amendment bans app store operators with dominant market positions from forcing payment systems on content providers and “inappropriately” delaying the review of, or deleting, mobile content from app markets.

It also allows the South Korean government to require an app market operator to “prevent damage to users and protect the rights and interests of users”, probe app market operators, and mediate disputes regarding payment, cancellations or refunds in the app market.

“Today’s historic action and bold leadership by South Korean lawmakers mark a monumental step in the fight for a fair app ecosystem. The legislation passed today by the Assembly will put an end to mandatory in-app purchase in South Korea, which will allow innovation, consumer choice, and competition to thrive in this market,” a spokesperson at Match Group, which owns the popular dating app Tinder, said in a statement.

Zoom posted its first billion-dollar revenue quarter but signaled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom, sending its shares tumbling 11%.

The company on Monday forecast third-quarter revenue between $1.015 billion and $1.020 billion, compared with the analysts' average estimate of $1.013 billion, according to Refinitiv data.

That indicates a rise of just about 31.2% from a year earlier, compared with multiple-fold growth rates in 2020 when the COVID-19 crisis had turned Zoom into a household name due to the rise of remote working and schooling, according to Reuters.

Zoom said it expects a decline in revenue from customers with 10 or fewer employees. This group consists mainly of small and medium businesses which pay bills monthly.

It forecast third-quarter adjusted earnings between $1.07 and $1.08 per share, compared with expectations of $1.09 a share.

Zoom recently announced the buyout of call-center software maker Five9 for $14.7 billion in its largest deal, and Kites GmbH, a firm that helps in real-time language translation.

It posted a profit of $1.04 per share in the second quarter on revenue of $1.02 billion, both of which were higher than estimates.

Russian internet giant Yandex will buy Uber's stakes in their joint foodtech, delivery and self-driving businesses, and increase its stake in their ride-hailing joint venture as part of a $1 billion deal.

According to Reuters, the restructuring of the MLU ride-hailing and car-sharing joint venture, which includes Yandex.Taxi, will see Yandex own 71 percent while Uber's stake falls to 29 percent from 33.5 percent, Yandex said, adding it had taken out a $2 billion call option to buy out the rest if it chooses to do so.

Under the agreement with Uber, Yandex will take over Uber's 33.5 percent indirect interest in Yandex.Eats, Yandex.Lavka and Yandex.Delivery as well as its 18.2 percent interest in Yandex Self-Driving Group (SDG), giving Yandex 100 percent ownership in all businesses.

The restructuring, which Yandex said had already been approved by the boards of directors of Yandex and Uber, will be implemented in two stages, and completed by the end of the year. The deal will be financed from the company's own funds, Yandex spokesperson Asya Panoyan told Reuters.

Yandex said it will also extend its licence for the exclusive rights to use the Uber brand in Russia and several other countries until August 2030, assuming the exercise of the option.

Shares of PayPal jumped on Monday after a report that it is exploring ways to let its US customers trade individual stocks on its platform.

The payments company also hired brokerage industry veteran Rich Hagen, CNBC reported. Hagen is the chief executive officer of Invest at PayPal, as well as the co-founder and former president of brokerage Ally Invest, according his LinkedIn page.

PayPal has 400 million accounts and launched cryptocurrency trading in the US earlier in the year. In a February presentation, PayPal said its total addressable market, including bill payment, government payments and asset trading was $110 trillion.

PayPal's shares spiked higher and closed up nearly 4 percent.