WhatsApp Pay gets UPI boost; tough times for roll-up ecommerce : Rashtra News
#WhatsApp #Pay #UPI #boost #tough #times #rollup #ecommerce
Also in this letter:
■ After a crazy 2021, roll-up ecommerce is in for a shakeup
■ PhonePe Indus OS deal: S’pore court dismisses Affle case
■ Two-wheeler EV sales surge in India’s small towns
WhatsApp Pay can now have up to 100 million UPI users
The National Payments Corporation of India (NPCI) has allowed messaging platform WhatsApp to increase its user limit for digital payments through the Unified Payments Interface (UPI) to from 40 million to 100 million, sources told us.
Last November, NPCI had allowed WhatsApp Pay to double its user base from 20 million to 40 million.
Significance: The development is likely to disrupt the current market share of leading UPI apps such as PhonePe and Google Pay. It also comes at a time when Tata Digital has made its debut on UPI and is expected to emerge as a significant player.
But while the Tatas and others are expected to make a dent in the UPI market, industry executives believe WhatsApp – which has nearly 400 million monthly active users in India – has the best chance of shaking up the sector.
Test for market share cap: With the increased limit, the NPCI’s much-debated UPI market share cap will be put to test.
Last year, NPCI mandated that no single player could process more than 30% of UPI transactions over any three-month period. However, existing players such as PhonePe and Google Pay, which dominate the market, were given until the end of 2022 to comply with the order.
PhonePe’s Sameer Nigam told us last September that he wasn’t worried about the market share cap as he was complying with all the rules and there was little he could do to reduce his own market share.
After a crazy 2021, roll-up ecommerce is in for a shakeup
After a year of frenetic fundraising, ecommerce rollup firms are facing their first big test.
What’s going on? Last year, these firms – which buy up small online brands and scale them – raised more than $700 million from investors.
But the exuberance is waning rapidly, making way for consolidation. Some players are even exploring a full sale as they struggle to raise fresh capital.
The food chain: Well-funded ‘houses of brands’ such as Mensa, led by former Myntra CEO Ananth Narayanan, and Firstcry-backed Globalbees have cornered a substantial chunk of the funds and acquired a plethora of brands, leaving behind smaller players such as Upscalio, Goat, 10Club, Powerhouse91, Evenflow and Bzaar, several industry trackers told us.
Meanwhile, sources told us 10Club, which raised $40 million in a seed round almost a year ago, has approached bigger firms for a potential takeover.
There’s a similar story for Upscalio, which recently raised $15 million in debt and equity from a bunch of investors
“They are finding it difficult to sustain their business… Some of their senior management executives are already on their way out. Funding is critical. Unless you have deep pockets, you won’t be able to carry on,” said an industry insider with knowledge of the development.
10Club and Upscalio denied they were looking at the possibility of a sale.
Building India’s Thrasio: Ecommcerce roll-up companies have acquired close to 75 brands in the Indian market in a short period.
For context, Thrasio, the US company that pioneered this business model in 2018, had within three years of launch acquired, consolidated and scaled about 100 brands on Amazon.
Thrasio entered the Indian market last December last year with its acquisition of consumer durables brand Lifelong.
PhonePe Indus OS deal: S’pore court dismisses Affle case on EGM’s validity
A senior judge of the Singapore High Court has dismissed at least two appeals filed by Affle, a shareholder of Indus OS, which challenged the acquisition of the Bengaluru-based startup by Walmart and Flipkart-owned PhonePe after a term sheet for the acquisition was signed.
Catch up quick: We first reported on the dispute last May, following the news that PhonePe was in the final stages of acquiring Indus OS. Since then, Indus OS – whose parent firm is domiciled in Singapore – PhonePe and Affle have taken the matter to court with cases against each other, as we previously reported.
Details: In its order, passed last month and reviewed by ET, the court said it dismissed Affle’s case, which said that the extraordinary general meeting (EGM) held on July 15, 2021 was “not properly convened and held, thereby resulting in the resolutions passed thereat being invalid”.
Additionally, the order also said Affle’s contention that vendor shareholders of Indus OS could not vote in the said EGM on the acquisition was “blowing hot and cold” and was “unmeritorious”.
As per the shareholders agreement of Indus OS in 2020, if a deal or investment results in ‘transfer of control’, then consent is needed from investors who collectively own and hold at least 60% of the total share capital of the company on a fully diluted basis.
“Since PhonePe sought to purchase almost all of the shares in OS Labs (Singapore parent of Indus OS), the proposed transaction amounted to an ‘exit event’,” the order read.
For context, even as the acquisition ran into trouble, PhonePe acquired around 26% from select shareholders of Indus OS and these investors are referred to as vendor shareholders in the company for PhonePe. Omidyar Network, JSW Ventures and Micromax had sold their shares to PhonePe based on the term sheet.
What’s next? Sources said that the above-mentioned stakeholders in Indus OS have held informal settlement talks and continue to be in talks to resolve the nearly year-long legal battle in Singapore.
(Full disclosure: Bennett, Coleman and Company Ltd (BCCL), which publishes ETtech, is an investor in Affle Holdings Pte Ltd, which owns Affle Global.)
Two-wheeler EV sales surge in India’s small towns
Sales of electric two-wheelers are surging in upcountry markets amid a rapid rise in fuel costs. This has given semi-urban India a disproportionate share in the EV market, which logged its best performance to date in FY22.
Towns such as Bikaner, Shillong, Meerut, Bareilly and Siliguri are seeing higher EV sales despite the challenges of accessing a charging network. Although they are still far behind conventional 100-cc motorcycles in terms of raw numbers, electric scooters are the new rage in these towns.
Changing tack: Companies such as Hero Electric, Ather, Pure EV and Revolt have proposed bigger investments to expand their footprint in these markets.
‘We began retailing in tier-1 markets, but as of now, we have expanded to tier 2 and 3 towns. The excitement and demand we’ve seen in these towns has been phenomenal. When we index e-scooter sales to population i.e, e-scooters sold per lakh population in a town, 8 of the top 10 are tier-2 and 3 towns,” said Ravneet Phokela, chief business officer, Ather Energy.
In FY22, 231,000 e-two wheelers were sold, up nearly six-fold from the previous year.
TWEET OF THE DAY
Infosys net profit rises 12% year-on-year to Rs 5,686 crore in March quarter
Infosys’s consolidated net profit rose 12% year-on-year to Rs 5,686 crore for the quarter ended March. The company reported a 29.8% on-year rise in consolidated revenues at Rs 32,276 crore.
Details: This was higher than street estimates as year-on-year revenue growth was seen in the range of 22.5-25%. But profit growth fell short of the expected 15-19.5% year-on-year.
- On a sequential basis, net profit was down 2.1% while revenue grew 1.3%.
- For the financial year ended March, the company’s consolidated revenue rose 21.1% to Rs. 121,641 crore and net profit clocked Rs 22,110 crore, up 14.3%.
- The company also met revenue growth of 19.5-20% in constant currency projected for FY21. Operating margin for the quarter stood at 21.5%.
Attrition rises: Attrition rate for the quarter rose to 27.7% compared to 25.5% in the December quarter. Employee headcount grew by 21,948 to reach 314,015. The company hired 85,000 freshers in the last fiscal and expects to hire over 50,000 in the next fiscal.
Guidance: The Bengaluru-based company also guided for 13-15% sales growth in constant currency terms in 2022-23 and an operating margin band of 21-23%. This is an increase from the previous year’s initial sales growth guidance range of 12-14%.
Larger rival TCS reported its fourth quarter results on Monday.
Global outsourcing contracts ‘grew 31% Jan-Mar’: Meanwhile, the top Indian IT service providers – Tata Consultancy Services (TCS), Wipro, Infosys, Cognizant, HCL Technologies and Tech Mahindra — won 31% of the total $33 billion managed service deals in 2021, data from global advisory firm ISG showed.
This is likely to increase in the coming quarters, ISG said.
Pine Labs picks up majority stake in Mosambee, to bolster payments play
Digital payments and financial services provider Pine Labs has picked a majority stake in Mosambee, a payment solutions provider. With this, Mosambee is valued at more than $100 million, the company said.
As a part of the deal, Mosambee’s leadership team will continue to operate independently, with Pine Labs leveraging its proprietary tech platform.
The merchant-focussed fintech firm has been looking for fintech software and infrastructure providers to bolster its offerings for small and medium enterprises (SMEs), and to launch new offerings. Founded in 2008, Mosambee offers payment solutions for online and offline merchants and has clients in India and six other countries.
IPO plans: The acquisition comes as Pine Labs has been raising funds, gearing up for an initial public offering (IPO) in the US.
Other Done Deals
■ Travel and expense management software-as-a-service (Saas) platform Itilite has raised $29 million in a funding round led by New York-based Tiger Global and Dharana Capital, with participation from existing investors Matrix Partners India and Tenacity Ventures.
■ Performance management startup Mesh has raised $11 million in a fresh round of funding led by existing investor RTP Global. The company said it plans to use the funds to expand its presence across the US and Asia-Pacific (APAC) regions.
■ IT security startup Securden has raised $10.5-million in a funding round led by US-based private equity investor Tiger Global, its chief executive officer, Bala Venkatramani, told us. Accel and Together Fund also participated in the round.
■ Zipy, a self-serve software as a service (SaaS)-based debugging platform, has raised $2.8 million in a seed round led by Blume Ventures and founder-focused venture capital fund Together. The round also saw participation from seed funds BoldCap and FirstCheque, besides investments from a clutch of industry veterans.
■ HCL Technologies has expanded its global partnership with digital banking solutions provider Avaloq. With this partnership, HCL said it would develop a lifecycle management centre for Avaloq clients and invest in ongoing training and development for HCL teams working with Avaloq products.
Other Top Stories By Our Reporters
LazyPay partners with Zepto: PayU’s ‘buy now, pay later’ (BNPL) solution LazyPay has expanded into the quick commerce market through a partnership with Zepto, a 10-minute grocery delivery platform. It said the partnership would help expedite Zepto’s client adoption by using LazyPay’s large customer base.
PhonePe says it clocked 100M transactions in a day: Digital payments major PhonePe has processed more than 100 million transactions in a single day for the first time, the company said in a statement on Wednesday. PhonePe said it processes more than 2.5 billion transactions a month with an annual total payment value (TPV) run rate of $780 billion.
Global Picks We Are Reading
■ Wildlife trafficking thrives on Facebook despite pledge to fight illegal trade (The Guardian)
■ TikTok created an alternate universe just for Russia (The Washington Post)
■ How facial recognition is identifying the dead in Ukraine (BBC)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.
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( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a economictimes.indiatimes.com feed.)
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