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Tata plans $2.5 billion e-commerce war chest
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You need deep pockets to take on the likes of Amazon, Reliance and Flipkart in India’s consumer internet space. Tata Sons, which has deeper pockets than most, is nonetheless looking to raise up to $2.5 billion from global investors to fund its e-commerce expansion ahead of the pilot of its ‘super app’ in September.
Also in this letter:
Hi, it’s Samidha. We at ETtech have been right on top of all the big moves being made by the Tata group as it pushes hard to prove its digital relevance.
Today my colleague Kala and I report on how Tata Digital is going into fundraising mode with its new, big hire Mukesh Bansal in tow.
We broke the big story on May 27 about Tata eyeing Curefit and more importantly Bansal for a plum, leadership role at Tata Digital. Now we’ll tell you what the plan is for Tata as it takes on tech giants such as Amazon and Walmart-backed Flipkart, not to mention the Reliance juggernaut.
Fundraising phase: Getting outside capital is now at centre stage for Tata Digital, after having announced a bunch of investments in the past few weeks ranging from BigBasket to 1mg to Curefit. We’ve been told Tata is in talks to mop up $2 billion or more to kick off the big project started by Tata Sons chairman N Chandrasekaran a few years ago. This $2-2.5 billion sum could become much larger depending on how the first installment closes. All of this comes on the back of its much-delayed super app launch, which we now know will come through by September.
What’s Mukesh Bansal’s role in this? The Tata group has brought in Bansal to not only gain from his fundraising prowess but also be able to hire top tech talent. Having built fashion e-commerce biggie Myntra, along with his stint at Flipkart and now Curefit, Bansal is among the most seasoned internet entrepreneurs in the country. Having set up teams across two well funded startups and also at Flipkart, he will be able to attract professionals who may not want to work with a legacy group but would be willing to work with him, betting on his background.
This is where Tata’s digital strategy is widely different from how Mukesh Ambani has gone about making acquisitions and investments in new-age startups. After Reliance Jio Platforms raised $15.2 billion last year, it didn’t really go on to plough that money into big digital assets that would help it snag top-notch founders. Instead, it only acquired companies that were in dire straits and thus inexpensive — think Urban Ladder, Milkbasket.
But things won’t be easy: While Tata has made a good call by bringing in the likes Bansal, BigBasket’s founder Hari Menon and 1mg’s Prashant Tandon to help its digital business, what will be interesting to see is how these new-age entrepreneurs blend with the group’s old guard. People problems aside, how will the super app integrate offline businesses like Westside and Croma with the online platform? Will the loyalty programme work in a massive group with so many different businesses? Much of this will unfold over the next few months.
On Monday, the Department of Consumer Affairs issued a note proposing major changes for e-commerce players. Based on initial reactions, Amazon India and Flipkart won't like these one bit if they become a reality.
Why? Among other major proposals, the government said e-commerce firms should not offer flash sales. That would be a big blow for any e-commerce company. The flash sales model works well for online platforms as it offers the full e-commerce shopping experience with big discounts, and lets users—with some luck—get their hands on the latest smartphones before anyone else.
Pushback: E-commerce firms are already preparing to oppose some of these changes in their feedback, the deadline for which is July 6.
Last night news flash: Late on Monday night, the government issued a statement saying ‘conventional’ e-commerce flash sales would not be banned. “Only specific flash sales or back-to-back sales which limit customer choice, increase prices and prevent a level playing field are not allowed,” it said, without specifying what it means by a ‘conventional’ flash sale.
Is that it? No, there's more. The department of consumer affairs has proposed a wide range of changes and tightening of rules around how e-commerce firms operate.
Follow @ETtech for all the breaking news, insights and smart analysis on the business of technology and startups from the newsroom of The Economic Times.
Battlegrounds Mobile India, the newly launched clone of the banned South Korean game PUBG, could be sending data from users of Android devices in India to servers in China, according to IGN.
Backstory: In September 2020, PUBG Mobile, which was earlier published by China’s Tencent in India, was banned along with other Chinese apps amid a prolonged border standoff between the two countries. Following the ban, PUBG Corp, a subsidiary of Krafton, severed ties with Tencent in the Indian market and said the privacy and security of player data was a top priority.
The claim: IGN's report stated that it found data was being sent to servers of state-owned China Mobile Communications Corporation located in Beijing. Further, the game pings the server of Chinese technology conglomerate Tencent while booting up, the site stated.
Krafton had claimed on June 3 that over 20 million users had pre-registered for the game within two weeks of its launch in India.
India’s crypto exchanges are in the final stages of joining IndiaTech to put pressure on the government to regulate cryptocurrency in India.
What is IndiaTech? IndiaTech.org, or Technology Services Industry Association, is an industry association representing India’s consumer internet startups, unicorns and investors. It serves as a “collaborative platform and voice” for Indian consumer internet startups and their investors to support positive business, conducive policy and regulations, according to its website.
Why it matters: A multi-pronged approach could help the crypto industry raise awareness and push regulators to quickly establish a framework for the sector.
Senior executives at many crypto exchanges said they were considering the proposal to join IndiaTech but added that their work with the Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI), would continue.
Crackdown continues in China: Meanwhile, China's central bank said it had summoned some banks and payment institutions, urging them to crack down harder on cryptocurrency trading. Bitcoin, the world’s biggest cryptocurrency, tumbled 10% on Monday.
Global private equity fund KKR said it is investing $625 million (Rs 4,600 crore) for a controlling stake in Vini Cosmetics. The investment is the largest PE-led buyout of a consumer goods company in India and ranks among the top M&A deals in the consumer sector.
■ Byju Raveendran-led edtech firm Byju's has raised $50 million in a Series F round led by IIFL's private equity fund and Maitri Edtech, according to the latest regulatory filings sourced through business intelligence platform Toefler. IIFL led the round with a $35 million investment, while Maitri Edtech put in $15 million.
■ Upside AI, a Sebi-registered investment management startup, has secured $1.2 million in a seed funding round led by Endiya Partners.
■ Progcap, a fintech startup focused on retail financing, has bagged $25 million in a Series B round led by Tiger Global and existing investor Sequoia India at an undisclosed valuation.
■ India Quotient, a seed-to-early-stage venture capital firm, has made its first close of its fourth fund at $64 million from domestic investors, including leading family offices. Top entrepreneurs such as Flipkart co-founder Binny Bansal, Paytm founder Vijay Shekhar Sharma and Makemytrip cofounder Deep Kalra are among the fund’s investors.
The Delhi High Court said yesterday that it would pass an order on appeals by WhatsApp and parent company Facebook, which are seeking a stay on a June 4 notice issued by India’s antitrust watchdog in an ongoing probe into WhatsApp’s updated privacy policy.
Backstory: The Competition Commission of India (CCI) had ordered the investigation in March, following which the US-based social media networks had appealed to a single judge bench of the Delhi High Court. The appeal was dismissed.
UP police sends fresh notice to Twitter India MD: The Ghaziabad police sent fresh notices to Twitter Inc's (interim) resident grievance officer for India Dharmendra Chatur and Twitter India managing director Manish Maheshwari, asking them to appear in person at Loni border station on June 24 in connection with the probe into the circulation of a communally sensitive video clip of an elderly Muslim man on the microblogging platform last week.
Rishad Premji says changes under Wipro CEO 'difficult but necessary': The changes that Wipro has made in the past six months under new CEO Thierry Delaporte were "difficult but necessary", but India's third-largest IT services firm is well-positioned to leverage as well as enable such transformations, chairman Rishad Premji wrote in the company’s annual report for FY21.
HCL plans to accelerate growth in Asia: HCL Technologies has made some key appointments to its leadership team in South Korea, Vietnam and Taiwan with the aim to accelerate its growth in Asia.
Sequoia-backed Zoomcar eyes US listing via SPAC: Zoomcar Inc. is considering a listing in the US within 12 months to tap markets beyond its home base of India, Bloomberg reported.
■ Facebook launches Clubhouse-like live audio rooms and podcasts (Reuters)
■ EU data watchdogs call for ban on facial recognition through AI (Bloomberg)
■ Google closes its dedicated London startup space (CNBC)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant and Karan Dhar in Mumbai.
Also in this letter:
- Govt proposes big changes for e-tailers
- Battlegrounds Mobile India sending data to China?
- Crypto exchanges unite to push for regulations
Tata Sons taps global investors for e-commerce push
Hi, it’s Samidha. We at ETtech have been right on top of all the big moves being made by the Tata group as it pushes hard to prove its digital relevance.
Today my colleague Kala and I report on how Tata Digital is going into fundraising mode with its new, big hire Mukesh Bansal in tow.
We broke the big story on May 27 about Tata eyeing Curefit and more importantly Bansal for a plum, leadership role at Tata Digital. Now we’ll tell you what the plan is for Tata as it takes on tech giants such as Amazon and Walmart-backed Flipkart, not to mention the Reliance juggernaut.
Fundraising phase: Getting outside capital is now at centre stage for Tata Digital, after having announced a bunch of investments in the past few weeks ranging from BigBasket to 1mg to Curefit. We’ve been told Tata is in talks to mop up $2 billion or more to kick off the big project started by Tata Sons chairman N Chandrasekaran a few years ago. This $2-2.5 billion sum could become much larger depending on how the first installment closes. All of this comes on the back of its much-delayed super app launch, which we now know will come through by September.
What’s Mukesh Bansal’s role in this? The Tata group has brought in Bansal to not only gain from his fundraising prowess but also be able to hire top tech talent. Having built fashion e-commerce biggie Myntra, along with his stint at Flipkart and now Curefit, Bansal is among the most seasoned internet entrepreneurs in the country. Having set up teams across two well funded startups and also at Flipkart, he will be able to attract professionals who may not want to work with a legacy group but would be willing to work with him, betting on his background.
This is where Tata’s digital strategy is widely different from how Mukesh Ambani has gone about making acquisitions and investments in new-age startups. After Reliance Jio Platforms raised $15.2 billion last year, it didn’t really go on to plough that money into big digital assets that would help it snag top-notch founders. Instead, it only acquired companies that were in dire straits and thus inexpensive — think Urban Ladder, Milkbasket.
But things won’t be easy: While Tata has made a good call by bringing in the likes Bansal, BigBasket’s founder Hari Menon and 1mg’s Prashant Tandon to help its digital business, what will be interesting to see is how these new-age entrepreneurs blend with the group’s old guard. People problems aside, how will the super app integrate offline businesses like Westside and Croma with the online platform? Will the loyalty programme work in a massive group with so many different businesses? Much of this will unfold over the next few months.
No more flash sales? Govt proposes big changes for e-comm firms
On Monday, the Department of Consumer Affairs issued a note proposing major changes for e-commerce players. Based on initial reactions, Amazon India and Flipkart won't like these one bit if they become a reality.
Why? Among other major proposals, the government said e-commerce firms should not offer flash sales. That would be a big blow for any e-commerce company. The flash sales model works well for online platforms as it offers the full e-commerce shopping experience with big discounts, and lets users—with some luck—get their hands on the latest smartphones before anyone else.
Pushback: E-commerce firms are already preparing to oppose some of these changes in their feedback, the deadline for which is July 6.
Last night news flash: Late on Monday night, the government issued a statement saying ‘conventional’ e-commerce flash sales would not be banned. “Only specific flash sales or back-to-back sales which limit customer choice, increase prices and prevent a level playing field are not allowed,” it said, without specifying what it means by a ‘conventional’ flash sale.
Is that it? No, there's more. The department of consumer affairs has proposed a wide range of changes and tightening of rules around how e-commerce firms operate.
- The government’s note also said e-tailers must appoint grievance officers and chief compliance officers.
- It also sought changes related to data usage and competition in the sector.
Tweet of the day
Follow @ETtech for all the breaking news, insights and smart analysis on the business of technology and startups from the newsroom of The Economic Times.
Battlegrounds Mobile India could be sending data to China
Battlegrounds Mobile India, the newly launched clone of the banned South Korean game PUBG, could be sending data from users of Android devices in India to servers in China, according to IGN.
Backstory: In September 2020, PUBG Mobile, which was earlier published by China’s Tencent in India, was banned along with other Chinese apps amid a prolonged border standoff between the two countries. Following the ban, PUBG Corp, a subsidiary of Krafton, severed ties with Tencent in the Indian market and said the privacy and security of player data was a top priority.
The claim: IGN's report stated that it found data was being sent to servers of state-owned China Mobile Communications Corporation located in Beijing. Further, the game pings the server of Chinese technology conglomerate Tencent while booting up, the site stated.
Krafton had claimed on June 3 that over 20 million users had pre-registered for the game within two weeks of its launch in India.
Crypto exchanges unite to push for regulations
India’s crypto exchanges are in the final stages of joining IndiaTech to put pressure on the government to regulate cryptocurrency in India.
What is IndiaTech? IndiaTech.org, or Technology Services Industry Association, is an industry association representing India’s consumer internet startups, unicorns and investors. It serves as a “collaborative platform and voice” for Indian consumer internet startups and their investors to support positive business, conducive policy and regulations, according to its website.
Why it matters: A multi-pronged approach could help the crypto industry raise awareness and push regulators to quickly establish a framework for the sector.
Senior executives at many crypto exchanges said they were considering the proposal to join IndiaTech but added that their work with the Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI), would continue.
Crackdown continues in China: Meanwhile, China's central bank said it had summoned some banks and payment institutions, urging them to crack down harder on cryptocurrency trading. Bitcoin, the world’s biggest cryptocurrency, tumbled 10% on Monday.
Infographic Insight
Global private equity fund KKR said it is investing $625 million (Rs 4,600 crore) for a controlling stake in Vini Cosmetics. The investment is the largest PE-led buyout of a consumer goods company in India and ranks among the top M&A deals in the consumer sector.
ETtech Done Deals
■ Byju Raveendran-led edtech firm Byju's has raised $50 million in a Series F round led by IIFL's private equity fund and Maitri Edtech, according to the latest regulatory filings sourced through business intelligence platform Toefler. IIFL led the round with a $35 million investment, while Maitri Edtech put in $15 million.
■ Upside AI, a Sebi-registered investment management startup, has secured $1.2 million in a seed funding round led by Endiya Partners.
■ Progcap, a fintech startup focused on retail financing, has bagged $25 million in a Series B round led by Tiger Global and existing investor Sequoia India at an undisclosed valuation.
■ India Quotient, a seed-to-early-stage venture capital firm, has made its first close of its fourth fund at $64 million from domestic investors, including leading family offices. Top entrepreneurs such as Flipkart co-founder Binny Bansal, Paytm founder Vijay Shekhar Sharma and Makemytrip cofounder Deep Kalra are among the fund’s investors.
High court to take a call on WhatsApp, FB pleas in privacy policy case
The Delhi High Court said yesterday that it would pass an order on appeals by WhatsApp and parent company Facebook, which are seeking a stay on a June 4 notice issued by India’s antitrust watchdog in an ongoing probe into WhatsApp’s updated privacy policy.
Backstory: The Competition Commission of India (CCI) had ordered the investigation in March, following which the US-based social media networks had appealed to a single judge bench of the Delhi High Court. The appeal was dismissed.
- Appearing on behalf of WhatsApp, senior advocate Harish Salve said the company’s privacy policy had already been challenged in separate cases before the Supreme Court and the Delhi High Court, and was also being looked into by the government.
- Senior advocate Mukul Rohatgi, appearing for Facebook, said: “When the highest court of the land is examining the issue, can an administrative authority get into it?”
Top Stories We Are Covering
UP police sends fresh notice to Twitter India MD: The Ghaziabad police sent fresh notices to Twitter Inc's (interim) resident grievance officer for India Dharmendra Chatur and Twitter India managing director Manish Maheshwari, asking them to appear in person at Loni border station on June 24 in connection with the probe into the circulation of a communally sensitive video clip of an elderly Muslim man on the microblogging platform last week.
Rishad Premji says changes under Wipro CEO 'difficult but necessary': The changes that Wipro has made in the past six months under new CEO Thierry Delaporte were "difficult but necessary", but India's third-largest IT services firm is well-positioned to leverage as well as enable such transformations, chairman Rishad Premji wrote in the company’s annual report for FY21.
HCL plans to accelerate growth in Asia: HCL Technologies has made some key appointments to its leadership team in South Korea, Vietnam and Taiwan with the aim to accelerate its growth in Asia.
Sequoia-backed Zoomcar eyes US listing via SPAC: Zoomcar Inc. is considering a listing in the US within 12 months to tap markets beyond its home base of India, Bloomberg reported.
Global Picks We Are Reading
■ Facebook launches Clubhouse-like live audio rooms and podcasts (Reuters)
■ EU data watchdogs call for ban on facial recognition through AI (Bloomberg)
■ Google closes its dedicated London startup space (CNBC)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant and Karan Dhar in Mumbai.
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