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Here are the top headlines from the startup space.
Uber to cut costs, slow down hiring: CEO Dara Khosrowshahi tells staff
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Uber Technologies will scale back hiring and reduce expenditure on its marketing and incentive activities, CEO Dara Khosrowshahi told employees in a letter.
Khosrowshahi said Uber's change in strategy was a necessary response to the "seismic shift" in investor sentiment. To address the shift in economic sentiment, Uber will slash spending on marketing and incentives and treat hiring as a “privilege,” Khosrowshahi said.
"We have to make sure our unit economics work before we go big. The least efficient marketing and incentive spend will be pulled back,” he added. The company will now focus on achieving profitability on a free cash flow basis, rather than adjusted earnings before interest, taxes, depreciation, and amortization, Khosrowshahi stated in the letter.
He added in his letter that Uber's food delivery and freight businesses need to grow faster. The Uber CEO's letter comes shortly after the ride-hailing giant announced its Q1, 2022 results. It signals recovery from the #pandemic with revenue growing 136 percent to $6.9 billion (YoY). But, suffered a net loss of $5.9 billion due to equity investments in Grab, Aurora and Didi.
Oyo acquires European company Direct Booker
Travel and hospitality technology platform Oyo has concluded the acquisition of Europe-based company 'Direct Booker' with the transaction valuing the latter at around $5.5 million (over Rs 40 crore). Direct Booker has over 3,200 homes and serviced 20 lakh customers so far, Oyo said in a statement.
This acquisition will strengthen Oyo's presence in Europe broadly and Croatia specifically where it already has nearly 1,800 vacation homes on its Belvilla platform and over 7,000 homes on its Traum Ferienwohnungen platform, it added. The inventory of Direct Booker will be available on Belvilla.com (Belvilla by Oyo) and over-time on its other platforms, the company said.
Cryptocurrencies may soon attract 28% GST like betting and casinos in India
Goods and Service Tax (GST) Council is likely to consider levying 28 percent GST on cryptocurrencies. The government's view is to bring cryptocurrencies at par with lottery, casinos, race courses, and betting, sources told CNBC-TV18.
The GST Council has nominated a law committee to take up the proposal to levy 28 percent GST on services and all activities related to cryptocurrencies soon. The law committee's view will be tabled before the GST Council for a formal nod.
The proposal is likely to be tabled in the next GST Council meeting, but no decision has been taken on the date yet. "There are various aspects of cryptocurrencies – the transactions involving cryptos, cryptos being used to make purchases, cryptos being received as payments. All these aspects are under examination and will be discussed by the law committee," sources said.
The sources said that all crypto exchanges in India act as intermediaries. "They sell cryptos from foreign exchanges to people in India. So, this is a service, and currently, this is at 18 percent GST slab and classified as intermediary service. They will have to be classified separately under a new head, under the list of services," they said. "So, every transaction will be subject to 28 percent GST, if agreed upon by the GST Council," the sources added.
9Unicorns marks fifth close of its maiden fund at $100 million
Venture fund 9Unicorns has announced the fifth closure of its maiden $100 million funds. The fund has so far invested in over 110 startups including the likes of Vedantu, ShipRocket, ShopKirana, BluSmart, Instoried, among others.
The fund was launched in late 2020 with a total size of $50 million.
The positive sentiment in the Indian startup ecosystem and the fund’s portfolio performance at present has led 9Unicorns to double to $100 million. It has the option of extending up to $130 million, it said.
The firm now plans to invest $500,000 to $1 million in the idea stage and, up to $2 million in high-growth stage Series C and above startups this year. It will focus on areas such as DeepTech, Enterprise SaaS, Web 3.0, FinTech, Media, InsureTech, HealthTech, EduTech, and D2C.
"We invested in 101 deals in 2021 and plan to double that amount this year. We will finish deploying the fund by mid-next year, post which we plan to launch our second fund,” said Apoorva Ranjan Sharma, managing director and Founder, 9Unicorns.
Gemba Capital marks initial close of its first micro VC Fund at Rs 75 crore
Early-Stage investor Gemba Capital has marked the initial close of Rs 75 crore for its maiden fund which it announced last year with an inaugural corpus of $10 million. Adith Podhar, the founding partner said, "We have reached the target of Rs 75 crore and will announce the Final Close soon. We want to close all the ongoing discussions and we should get over-subscribed and touch Rs 100 crore."
Gemba Capital which invests in seed and pre-seed rounds in India said that it plans to broadly invest 50 percent of the fund in Fintech and SaaS companies. The balance will be opportunistically deployed in sectors such as Web 3.0, gaming, and deep tech, healthcare and B2B Commerce, the firm added.
"Now the focus has shifted completely on deployment and investing in great startups at pre-seed and seed stage. Our deal pipeline is strong, and we intend to make our first investment from May this year onwards. Our target remains to close 8 deals by December end”, Adith added.
The first cheque from Gemba Capital will be in the range of $100K-250K. It has set aside 35 percent of the fund's capital as reserve allocation for participation in follow-on rounds in portfolio winners, the firm stated.
20+ startups including Policy Bazaar & Lenskart partners with Newton School for tech hiring
Over 20 startups including Lenskart, Policy Bazaar and Yellow.ai have partnered with edtech startup Newton School. In just two years, the company claims to have completed 1900 placements with its graduates now working in over 500 of India's most prominent startups, including Shadi.com, Lenskart, Razorpay, Flipkart, Zomato, Meesho and Nykaa.
According to a survey by Talent500, 87 percent of all tech professionals will look for work in 2022, however, employability remains at 55 percent. Newton School intends to bridge this massive gap by providing companies with industry-ready resources. Through its program, the startup said it aims to break down the barriers of traditional campus recruiting practices while also reducing the cost of training recruits.
Sportzchain announces phygital sports NFT
Sportzchain, a blockchain-based fan-engagement platform has announced the launch of its phygital asset—a combination of physical item coupled with a digital twin (tradable NFTs).
As part of the phygital launch, Sportzchain will also offer additional rewards to collector. These rewards will be in the form of player meet and greet matchday tickets, and early access to Tamil Thalaivas fan tokens.
In addition, the company will also hand-deliver this phygital NFT and commemorate the remarkable moment with a true-blue Tamil Thalaiva fan, it added. The NFT will be available in the form of a phygital asset from May 10.
Medikabazaar conducts successful trial of medical supplies through Drone Delivery
B2B medical equipment company Medikabazaar has conducted the pilot drone project in collaboration with Redwing Labs to transport medical supplies. The first scheduled test drone delivery took place in Bengaluru.
With this pilot project for deliveries through drones in Bengaluru in the first phase, it will be extended to a few more geographies as a part of the second phase of trials after collating the learnings and implementing improvisations from the first phase of trials, the firm added.
The company intends to begin using drones to make deliveries of critical and emergency medical supplies, vaccines, and lifesaving drugs after getting prerequisite regulatory approvals.
Cloudtailor oversubscribed 379.14% after announcing CSOP
D2C fashion startup Cloudtailor said its Consumer Stock Option Plan (CSOP) with Tyke Invest was oversubscribed with 379.14 percent, with around 2,000 retail subscribers participating. The campaign was live on Tyke Invest for 20 days and one could subscribe to the CSOPs with a starting amount of Rs 5,000.
With the CSOP, the startup aims to create an alternate and disruptive way of raising funds. Cloudtailor plans to use the raised funds for Fulfillment Center and Stores expansion, Marketing, Technology Team building and adding more app features for their customers globally, the firm said in a statement.
Bitcoin falls to lowest since January, in line with tumbling stock markets
Bitcoin fell to its lowest level since January on Monday as slumping equity markets continued to hurt cryptocurrencies, which are currently trading in line with so-called riskier assets like tech stocks. Bitcoin dropped to as low as $33,266 in morning trade, testing the January low of $32,951.
A fall below that level would be its lowest since July last year. It then steadied to trade around $33,500, down 1.4 percent. Ether, the world's second-largest cryptocurrency, which underpins the Ethereum network, fell as low as $2,421 on Monday, its lowest since late February.
GLOBAL TECHNOLOGY & STARTUP NEWS
Musk aims to quintuple Twitter's revenue to $26.4 billion by 2028: NYT
Elon Musk is aiming to increase Twitter's annual revenue to $26.4 billion by 2028, up from $5 billion last year, the New York Times reported, citing a pitch deck presented by the world's richest man to investors. Advertising will fall to 45% of total revenue under Musk, down from about 90 percent in 2020, generating $12 billion in revenue in 2028, while subscriptions are expected to pull in another $10 billion, according to the report.
The head of electric-vehicle maker Tesla also aims to increase Twitter's cash flow to $3.2 billion in 2025 and $9.4 billion in 2028, the newspaper reported, citing the presentation. Musk clinched a deal last month to buy Twitter for $44 billion in cash, in a move that will shift control of the social media platform populated by millions of users and global leaders to the Tesla CEO.
If I die under mysterious circumstances: Elon Musk raises Twitter storm
Tesla boss Elon Musk created a storm on early Monday morning by posting about the chances of his death under mysterious circumstances on Twitter.
"If I die under mysterious circumstances, it's been nice knowin ya," tweeted Musk. This tweet was soon after Musk alleged former Russian Deputy PM and Roscosmos chief Dmitry Rogozin of sending false information to the Russian media about him.
According to the post shared by Musk, Rogozin alleged the Tesla boss of supporting fascism in Ukraine amid the ongoing war. The post alleged that Musk, through his company Starlink, delivered internet services to the Azov battalion and Ukrainian marines through the Pentagon. After his post on his death, the Tesla boss's mother Maye Musk took to Twitter and called his tweet "not funny". Musk apologised and said: "Sorry! I will do my best to stay alive."
Google is raising pay, revamping employee reviews: Report
Google is overhauling its performance evaluation process, implementing changes that will result in increased salaries, as the company tries to ease tension between employees and leadership on the issue of compensation.
Starting this week, Google is using a new process for performance reviews called GRAD, which stands for Google Reviews and Development. It’s part of an effort to streamline the evaluation process, limiting reviews to once a year, instead of twice, and putting more responsibility in the hands of managers rather than relying heavily on peer reviews, according to internal documents reviewed by CNBC.
"Under this new process, we expect the majority of Googlers will be modeled for higher pay than they would under the old Perf system and the overall amount paid will increase too,” one of the documents said.
The company is also ditching its long-held practice of lengthy promotion packets, which were long forms employees needed to fill out that included reviews from bosses and co-workers. Managers will make promotion decisions as a group instead of employees having to solicit them separately.
Jefferies says CEO Handler's Instagram account hacked
Investment bank Jefferies Financial Group said the Instagram account of its chief executive officer Rich Handler had been hacked, Reuters reported.
"Any stories related to discounted sales of shares, crypto donations or donations to Ukraine ... that appear on that hacked Instagram account are categorically false," Jefferies said.
Jefferies said it was working with Instagram-owner Meta Platforms to get back control of the social media account. Handler is a prolific user of the social media platform and has used his Instagram account to post updates on the bank's return to office policies in the past.
First Published: May 9, 2022 8:11 PM IST