Startup Digest: Amazon India to lay off 1,000+ employees, LEAD acquires Pearson's K-12 local learning biz & TikTok freezes hiring for US security deal

Edtech unicorn LEAD has entered into an agreement with leading learning company Pearson to acquire its local K-12 learning business in India for an undisclosed sum.

LEAD said it will expand its reach to over 9,000 schools and enhance its product portfolio to cater to more than 5 lakh private schools in India.

"School edtech is poised for sustained growth post-Covid and with the acquisition of the local K-12 learning business of Pearson India, we will be able to reach more schools and students in the service of our mission to provide excellent education to every child," said Sumeet Mehta, Co-Founder and CEO, LEAD.

The acquisition of Pearson's local K-12 learning business in the country is being funded through a combination of new fundraise and internal accruals, said the platform. The acquisition is subject to customary closing conditions and is expected to be completed by Q1 CY 2023.

Fintech platform KreditBee has raised another $100 million as a part of its ongoing Series D funding round from private equity firm Advent International, Mitsubishi UFJ Financial Group (MUFG) and existing investors. This is the first large primary funding round of 2023.

Last month, the startup raised $80 million in the first tranche of Series D from MUFG, Japan's largest bank, along with existing investors Premji Invest, Motilal Oswal Alternates, NewQuest Capital Partners, and Mirae Asset Venture Investments.

KreditBee said the additional capital raised will be deployed towards scaling the existing business and diversifying its product offering by venturing into digitally enabled financial products. The platform aims to cross-asset under management (AUM) of more than $1 billion over the next 6-9 months.

Quick commerce startup Dunzo is in talks to raise up to $100 million through convertible notes, according to a report by the Economic Times. The startup is primarily raising this capital to expand its quick commerce service, Dunzo Daily, the report added.

Dunzo was initially looking to raise at least $150 million by selling a stake. The round is in advanced stages of closure and could finally settle in the range of $70-100 million, the report said.

The Abu Dhabi Investment Authority is among new investors who are likely to join this round. As per the report, Dunzo had held talks also with Singapore’s Temasek as well, but those seem to have fallen through.

Hospitality giant OYO has written to the National Company Law Tribunal alleging that FHRAI members are fighting tooth and nail to "intimidate and harass" the hotel industry and urged it to take action against "erring" executive committee members of the hospitality industry body.

OYO, in its representation to NCLT, alleged that the present members of FHRAI are "fighting tooth and nail to harass, intimidate and harass the entire hotel industry in the country and the FHRAI is being run totally contrary to its aim and objectives as well as its intents".

It further claimed that if the present executive committee members of FHRAI are permitted to continue this behaviour, the Indian tourism and hospitality sector will be severely affected.

OYO, in the letter to NCLT, requested the tribunal to expedite the Ministry of Corporate Affairs' (MCA) investigation on the running of FHRAI.

The Department for Promotion of Industry and Internal Trade (DPIIT) is in the process of undertaking a third party assessment of Startup India Seed Fund Scheme to see its impact on the ground, a senior government official told PTI.

The Rs 945-crore scheme was launched in 2021. It aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization. The fund was divided into four years for providing seed funding to eligible startups through eligible incubators across India.

Joint Secretary in DPIIT Shruti Singh said though the department has received "good" feedback from incubators and startups on the scheme, "we are still doing a third party assessment so that somebody on ground can go and see".

Over 85,000 startups have been registered with DPIIT, she added.

Indian Space Research Organisation (ISRO) and Microsoft have signed a Memorandum of Understanding (MoU) to fuel the growth of space technology startups in India.

The MoU seeks to empower space tech start-ups across the country with technology tools and platforms, go-to-market support and mentoring to help them scale and become enterprise-ready.

The collaboration seeks to strengthen ISRO's vision of harnessing the market potential of the most promising space tech innovators and entrepreneurs in India, Microsoft said in a release. Through this tie-up, the space tech start-ups identified by ISRO will be onboarded onto the 'Microsoft for Start-ups Founders Hub platform', that supports start-ups at every stage of their journey-from idea to unicorn, it said.

Cryptocurrency firm Genesis has cut 30% of its workforce in a second round of layoffs in less than six months, sources told Reuters.

Several firms have suffered from waning investor appetite for crypto after major exchange FTX blew up in September. Earlier on Thursday, crypto-focused bank Silvergate Capital also said it was slashing headcount by 40%.

"As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally," a spokesperson for the company confirmed.

The layoffs were first reported by the Wall Street Journal, which also said Genesis is considering filing for Chapter 11 bankruptcy.

TikTok has stopped a hiring process for consultants that would help it implement a potential security agreement with the United States, Reuters reported, as opposition to such a deal among US officials grows.

President Joe Biden revoked an executive order in 2021 by his predecessor Donald Trump to ban TikTok in the United States, but negotiations between his administration and the social media company have continued over a potential deal that would spare ByteDance from being forced to divest TikTok.

As part of these negotiations, TikTok has been putting together a program to assure the US government that it would comply with their security agreement.

The program involves hiring a third-party monitor, a source-code inspector, and three auditors, including one dedicated to cyber security and one to ensure that US user data on existing TikTok servers will be deleted following migration to Oracle, the report added. These positions would be paid for by TikTok but report to US government officials.

But in a setback for the deal, TikTok informed the consultants vying for some of these roles late last month that the hiring process was on hold and that it would update them by the end of January on whether it will restart, the report said.

OpenAI, the artificial intelligence research lab behind chatbot ChatGPT, is in talks to sell existing shares in a tender offer that would value the company at about $29 billion, the Wall Street Journal reported.

The report added that the deal is structured in a way in which venture capital firms Thrive Capital and Founders Fund will buy shares from existing shareholders such as employees.

The deal would attract investment of at least $300 million in share sales, it added.

The firm expects business to surge as it pitched to investors saying the organization expects $200 million in revenue next year and $1 billion by 2024, Reuters reported in December.

Hackers stole the email addresses of more than 200 million Twitter users and posted them on an online hacking forum, a security researcher said.

The breach “will unfortunately lead to a lot of hacking, targeted phishing and doxxing,” Alon Gal, co-founder of Israeli cybersecurity-monitoring firm Hudson Rock, wrote on LinkedIn. He called it “one of the most significant leaks I've seen.”

Twitter has not commented on the report, which Gal first posted about on social media on December 24, nor responded to inquiries about the breach since that date. It was not clear what action, if any, Twitter has taken to investigate or remediate the issue.

Reuters could not independently verify the data on the forum was authentic and came from Twitter. Screenshots of the hacker forum, where the data appeared, have circulated online.

WhatsApp has said users of the messaging app will now be able to use proxy servers to access the service in countries where the app is blocked.

A proxy server is an intermediary between users and web services and acts as a web filter that allow netizens to circumvent restrictions and censorship.

WhatsApp said proxy support on the app is now officially available for users with the latest version. Users in countries such as Iran and Syria have used virtual private network (VPN) services to navigate around internet censorship.

The messaging service said, "in case these shutdowns continue, we hope this solution helps people wherever there is a need for secure and reliable communication."