Mutual benefit

Good evening,

Groww is looking to buy the mutual funds arm of IndiaBulls’ asset management business, which would allow the fintech unicorn to create and manage its own mutual funds.

Also in this letter:

📱 WhatsApp WILL limit features over new policy
💉 Amazon to vaccinate India frontline workers
⚖️ Bytedance takes Tencent to court

---

Tiger Global and Sequoia-backed online investment firm Groww is foraying into the mutual funds business with the acquisition of Indiabulls Housing Finance's asset management company (AMC) for Rs 175 crore.

Details: Groww is buying only the mutual funds portion of Indiabulls’ AMC. Other verticals such as the alternate investment funds and portfolio management will remain under Indiabulls Housing Finance. The deal is subject to approvals from capital markets regulator Securities and Exchange Board of India (Sebi) and other regulators.

If approved, the recently minted startup unicorn will become one of the first fintechs to be a licensed AMC, allowing it to create and manage its own mutual funds. India's largest retail brokerage Zerodha and several other fintech startups have also applied for an AMC license.

• “With the ability to create products, we plan to make mutual funds even more accessible - by making them simpler, more transparent, and by lowering the cost further,” said Groww co-founder and chief executive Lalit Keshre.

Last month, Groww raised $83 million in a funding round led by Tiger Global, pushing its valuation to $1 billion.

---

Earlier this week, WhatsApp had said that it would not delete user accounts or limit any functionality of their app if users didn't agree to its upcoming privacy policy update. The new policy was originally set to take effect from February 8 but was postponed to May 15 following outrage from users. Then last week, WhatsApp said it would not enforce the policy from May 15, though it would continue to remind users to accept it.

“No accounts will be deleted on May 15 because of this update and no one in India will lose functionality of WhatsApp either. We will follow up with reminders to people over the next several weeks,” a spokesperson for the company had said in a statement.

But what happens if a user doesn’t click ‘accept’ when reminded about the policy update?

WhatsApp answered this question on its website:

• After several weeks of sending the follow-up reminder, it will eventually become a persistent notification.

• Once you get a persistent reminder, the app’s functionality will be severely limited. You won’t be able to access your chat list. If you have notifications enabled, you will be able to read or respond to a message. You will be able to answer incoming phone and video calls and return missed phone or video calls. WhatsApp notes that this will not happen to all users’ apps simultaneously.

• After a few weeks of limited functionality, users won't be able to receive incoming calls or notifications and WhatsApp will stop sending messages and calls to the user's phone.

• You will be able to export your chat history and download a report of your account.

• It’s also worth noting that WhatsApp accounts are deleted after 120 days of inactivity, which will also apply in this case.

CCI Probe: This development comes at a time when WhatsApp is facing an antitrust probe from the Competition Commission of India (CCI), after the regulator found that the update may have violated provisions of the Competition Act on abuse of dominance. While the firm and parent company Facebook challenged this decision in April, the Delhi High Court quashed their petition last month.

The Delhi High Court has now sought CCI's response after Facebook and WhatsApp lodged an appeal. CCI has until May 21 to reply.

---

Amazon said it would begin vaccinating frontline delivery workers in India through on-site vaccination camps at its buildings. The camps will first be held in Delhi and will be expanded to employees in other cities as more vaccines become available.

The company said it will host these on-site vaccination events in partnership with licensed healthcare providers. For employees who don’t have access to these events, Amazon is offering up to Rs 750 to frontline employees to get vaccinated off-site.

• Amazon had previously said it would cover the cost for vaccinations of 10 lakh individuals, including its employees, service partners, sellers and their dependents.

Meanwhile, Twitter chief executive Jack Dorsey is donating $15 million to three non-profits working in India, through his own philanthropic initiative #StartSmall, as the country fights a crippling second wave of Covid-19 cases.

CARE, an international humanitarian organization fighting global poverty and world hunger, has received $10 million, while charity firm Association for India’s Development (AID India) and a not-for-profit organisation Sewa International USA have received $2.5 million apiece.

---

Two Chinese tech giants -- ByteDance and Tencent -- are involved in a bitter court battle over what constitutes fair use in the country's hypercompetitive online entertainment industry

Tell me more: In April, Guangzhou Intellectual Property Court had directed Douyin, a Chinese version of ByteDance's popular short video app TikTok, to stop incentivising users from live streaming Tencent-owned gaming title Honour of Kings, reports South China Morning Post. It also ordered ByteDance to pay $1.2 million in damages to Tencent.

On Monday, ByteDance said it would appeal against this decision, asserting that Douyin doesn't infringe on any intellectual property rights and that users own the copyright of the content they create. "The live broadcast of online games constitutes a cooperative work stipulated by the Copyright Law of China, so players are entitled to live-stream a game on a third-party platform," said You Yunting, a senior partner at Shanghai Debund Law Offices.

• This court battle comes more than a month after ByteDance acquired video game maker Moonton for a reported $4 billion as well as game studio C4 Games to strengthen its gaming business and take on mobile gaming leader Tencent.

Diversifying beyond ads: ByteDance has been trying to diversify beyond advertising and to expand its footprint across the world. It has also set its sights on video commerce as its next big target, taking on e-commerce giant Alibaba, Bloomberg reported on Monday. Douyin sold about $26 billion worth of make-up, clothing and other merchandise in 2020.

Outside China, TikTok partnered with Shopify to test new social commerce features last October. It extended the partnership to 14 more countries in North America, Europe, the Middle East and Asia in February. TikTok also announced a video shopping pilot with US retail giant Walmart in December. It is also working with brands including streetwear label Hype to test in-app sales in Europe.

---

Video game company Roblox benefited from a surge in spending by children stuck at home because of the pandemic.

In its first quarter as a public company, Roblox more than doubled its revenues to $387 million from $161.6 million in the corresponding quarter last year. However, net loss also grew 82% to $134.2 million from $74.4 million a year ago.

• Roblox had raised $520 million at a $29.5 billion valuation in a financing round ahead of its direct listing on the New York Stock Exchange. The offering opened on March 10 at a valuation of $41.9 billion.

User growth: Roblox's average daily active users rose 79% year-on-year to 42.1 million, driven by 87% growth in users outside of the United States and Canada and a 111% increase in users over the age of 13. Average bookings per daily user, which represents the sale of virtual currency Robux and subscriptions, grew 46% to $15.48.

• Roblox generates most of its bookings from in-game purchases of Robux by children, who then buy profiles, outfits and upgrades with the credits.