Startup Digest: WhatsApp bats for pause in SC hearing, Indian startups witnessing reverse flipping: Economic Survey 2023 & more 

Meta-owned WhatsApp has claimed that the Draft Data Protection Bill is expected to be presented in the upcoming budget session in parliament. The company is advocating for a pause in the Supreme Court hearing of the petition challenging their 2016 and 2021 privacy policies. They argue that waiting to see if the final bill overlaps with the reliefs sought in the petition will not cause any harm.

The case is being heard by a five-judge constitution bench, and the Centre has opposed the debate over the Data Protection Bill before the top court. The Supreme Court has questioned the petitioners on why the court should not wait to see the final version of the bill that will be tabled in parliament.

However, the petitioner argues that WhatsApp is discriminating against Indian users and is calling for a ban on the company from sharing user information with parent company Meta. In conclusion, the Supreme Court hearing on the petition challenging WhatsApp's privacy policies continues, and the outcome of the case will have significant implications for data privacy and protection in India.

The Economic Survey has made a case for startups to shift domicile to India and has recommended regulatory action and "solution –focused strategies" that will discourage startups from moving abroad in the search of a conducive regulatory environment.

The Survey observed that many Indian firms are establishing headquarters abroad, particularly in locations with favorable legal and tax systems. The survey notes that the process of "Flipping" refers to transferring the full ownership of an Indian company to a foreign entity, along with the transfer of its IP and data. This effectively converts the Indian firm into a 100 percent subsidiary of the foreign entity, with its founders and investors retaining ownership through the foreign entity by exchanging all shares.

As per the survey, startups often "Flip" early on due to commercial, tax, and personal considerations of their founders and investors. While, some companies "Flip" because their main market is overseas, others do so due to investor preferences or to access capital markets for better valuations and funding opportunities. In the past, better IP protection, tax treatment of licensing revenue, and flexible corporate structures have also been reasons for "Flipping".

To accelerate the reverse flipping the Survey has suggested multiple steps to stakeholders and regulatory bodies. It has proposed a simplification of ESOP and other taxation. Additionally, it has also suggested making the capital flow easier and developing incubation programmes for better funding landscapes.

Auto tech startup ReadyAssist has acquired multi-brand two-wheeler workshop chain SpeedForce for $10 million in a cash plus stock deal.

With this acquisition, ReadyAssist will become India's largest chain of multi-brand two-wheeler workshops, the company said in a statement.

"ReadyAssist is very successful in operating a pan India roadside assistance and doorstep service to our 8,00,000 subscribed customers. This acquisition will help us extend the reach to our customers in their need for general periodic services and major repairs," ReadyAssist CEO Vimal Singh SV said.

Starting with 300 workshops, the idea is to scale to over 1,000 workshops in the next one year including four-wheeler multi-brand outlets, he added.

Edtech startup Moat School has raised an undisclosed capital in its Pre Series A funding round by a marquee investor Anurag Verma. The company will use fresh funds for business expansion and scalability plans.

The startup also plans to deploy the capital in scaling its state-of-the-art tech stack and foraying into new products and markets.

Moat School said it is aiming to cross Rs 5 crore-mark in revenue generation and a minimum 8X growth in the next 12-18 months. The firm also plans to onboard 2 lakhs+ students on the platform for Data Science and other new-gen tech courses. In addition, it has announced plans to onboard 100+ top corporates and entrepreneurs from top unicorns.

Edtech major BYJU’S has launched a one-on-one home tuition pilot programme to access a new target group in the K-12 market. The home tuition programme has around 100 teachers and already hosted nearly 650 classes, as per a report by the Economic Times.

The new offering called Byju’s Home Tuitions, is currently available across all pin codes in the city, the report added. Currently, Byju’s is taking registrations for home tuitions only for science and maths. It has been running advertisements on social media for at least a week.

The hourly demo class is priced at Rs 500, which gets adjusted with the monthly fee of about Rs 6,000, without discount, for five days-a-week hourly class, it added.

Barry M, UK's colour cosmetics brand marks its foray into India in association with fashion ecommerce giant Myntra. Starting at Rs 500, the brand will be launching some of its most sought-after products, which include on-trend make-up such as eye-brow essentials, clickable eye shadows, high vis neon, metallic eyeliners, dazzle dust, lip plumpers, lip paints, lip rehab mask, contour, lip and cheek tints, glitters and fixers, a statement said.

Barry M will also have a dedicated Online Brand Store on the Myntra app and will leverage the platform’s social commerce proposition, Myntra Studio, and is likely to hold one M-Live session every month. To mark its India foray, the brand will also be offering 30% off as part of the launch offer, with an additional 5% off for Myntra Insiders, members of Myntra’s Loyalty Program.

Conversational engagement startup Gupshup has appointed Vartika Verma as the senior director of global marketing. Verma will lead the company’s overall marketing strategy and help drive strategic growth, innovation, and value for shareholders and customers worldwide, the firm said in a statement.

Prior to this, Verma was the vice president at Yellow.ai where she led their global marketing initiatives including entry to new markets, annual run rate (ARR) growth, and expansion. She has over 15 years of experience in areas such as technology, product, and growth marketing.

"With her deep experience in the conversational messaging space, I look forward to new ideas and opportunities she will bring into marketing at Gupshup," said Beerud Sheth, CEO and Co-founder, Gupshup.

Groyyo, a B2B supply chain enablement startup has partnered with UAE-based Seed Group to transform B2B manufacturing and sourcing processes with cutting-edge and innovative technologies.

The startup is aiming to empowering 20 million micro-manufacturers and giving them an opportunity to take their business global. The firm is also looking to expand its footprint to the UAE and the Middle East region, a statement said.

With this deal, Groyyo aims to clock $50 million in revenue from the Middle East in the next 12 months. Seed Group will provide Groyyo with a wider range of clients, access to top decision-makers in the Government and the private sectors.

StanPlus, a medical emergency response platform, has announced four new business verticals to create, build and offer a holistic emergency care network in the country. The firm will build these businesses under under a new identity — Red.Health.

To expand its current offerings, the company is also establishing a technology center within, called RED Edge, that will strengthen the existing technical support and work on new product development for all the new business verticals.

"The biggest challenge for EMS has been infrastructure and manpower. With the launch of our new verticals, we are embarking on a new endeavour to build India’s largest emergency network. Our mission is to build this through partnerships and training to deliver expert care with speed, empathy, and reliability," said Prabhdeep Singh, Founder and CEO, RED.Health.

Twitter has made its first interest payment under Elon Musk after the billionaire took the social media company private last year using about $12.5 billion of debt, Bloomberg News reported.

Twitter paid a group of seven banks, led by Morgan Stanley, which became stuck with the debt after they were unable to sell it to outside investors, the report added.

Apart from the funds borrowed from a syndicate of banks including Morgan Stanley and Bank of America Corp, the Tesla boss has also offloaded shares in the electric-vehicle maker to fund his $44 billion takeover of Twitter.

Spotify has reported fourth-quarter results that beat expectations for both active users and subscribers, and forecast the number of listeners would reach 500 million next quarter.

The number of monthly active users rose to 489 million in the quarter, beating Spotify's guidance and analysts' forecasts of 477.9 million.

Premium subscribers, who account for most of the company's revenue, rose 14% to 205 million, topping estimates of 202.3 million, according to IBES data from Refinitiv. Last week Spotify announced plans to layoff 600 employees as it sought to control its operating expenditure that grew at twice the speed of its revenue last year.

TikTok Chief Executive Shou Zi Chew will appear before the US Energy and Commerce Committee in March, as lawmakers scrutinize the Chinese-owned video-sharing app.

Chew will testify before the committee on March 23, which will be his first appearance before a congressional committee, said Representative Cathy McMorris Rodgers, the Republican chair of the panel, in a statement on Monday.

The news comes as the House Foreign Affairs Committee plans to hold a vote next month on a bill aimed at blocking the use of TikTok in the United States over national security concerns.

Bankrupt crypto exchange FTX sued crypto lender Voyager Digital, seeking to claw back $445.8 million in loan repayments that FTX made before collapsing into bankruptcy in November 2022.

FTX and Voyager both filed for bankruptcy amid a 2022 collapse in cryptocurrency markets, but Voyager’s bankruptcy preceded FTX’s filing by four months. After Voyager filed in July, it demanded repayment of all outstanding loans to FTX and its affiliate hedge fund Alameda Research.

FTX said in a court filing that on Alameda’s behalf, it paid Voyager $248.8 million in September and $193.9 million in October. FTX also made a $3.2 million interest payment in August, according to its court filings. Because those loan payments were made so close to FTX’s own bankruptcy filing, they are eligible to be clawed back and potentially used to repay other FTX creditors, according to FTX’s complaint.

A Russian court has fined streaming service Twitch 4 million roubles ($57,000) for failing to remove what it said were "fakes" about Russia's military campaign in Ukraine, the Interfax news agency reported.

Moscow has long objected to foreign tech platforms' distribution of content that falls foul of its restrictions, with Russian courts regularly imposing penalties.

Facebook has asked a London tribunal to block a collective lawsuit valued at up to 3 billion pounds ($3.7 billion) over allegations the social media giant abused its dominant position to monetise users’ personal data.

Meta is facing a mass action brought on behalf of around 45 million Facebook users in Britain. Legal academic Liza Lovdahl Gormsen, who is bringing the case, said Facebook users were not properly compensated for the value of personal data that they had to provide to use the platform.

Her lawyers said users should get compensation for the economic value they would have received if Facebook was not in a dominant position in the market for social networks.

But Meta said the lawsuit was “entirely without merit” and should not be allowed to proceed. Its lawyers said the claimed losses ignore the “economic value” Facebook provides.

Lovdahl Gormsen’s lawyers asked the Competition Appeal Tribunal to certify the case under the UK’s collective proceedings regime – which is roughly equivalent to the class action regime in the United States.