Also in this letter:
■ Details from Byju’s annual general meeting
■ FY23 financials for Euler Motors, Pilgrim
■ Voice deepfakes, the latest threat
As RBI lifts curbs, Razorpay, Cashfree eye lost market share
The digital payments ecosystem could see a new price war in the merchant payments space as venture-funded fintechs Razorpay and Cashfree get back into business. Industry insiders say new and existing players will battle it out for a share of the growing Indian e-commerce market, offering attractive pricing to lure clients.
What’s driving the news? With the PA licence in place, both Razorpay and Cashfree have set up “war rooms” with executives from across teams. The aim is to reach out to as many waitlisted merchants as possible and convert them into clients.
Cashfree has set up an eight-member team to chase around 8,000 merchants who had completed their KYC (know your customer) with the platform. Razorpay has constituted a team comprising executives from compliance, banking, product, and integration services to help merchants onboard seamlessly.
Pricing games: Cashfree is offering a standard payment gateway fee of 1.95% for payment processing. Razorpay charges 2% of the transactions for a similar service. PhonePe, trying to disrupt the online merchant payment space with its full-stack payment gateway, is offering services for free. Now that Google Pay is set to become an aggregator too, there might be a fresh war for market share between these players.
Focus on tech: Both Reeju Datta, cofounder of Cashfree, and Harshil Mathur, cofounder of Razorpay, pointed out that they will focus on working with merchants who value their solutions and services, not just pricing.
Also read | ETtech Explainer: The headlong rush for a payment aggregator licence
In third round of layoffs this year, ShareChat fires 200 staffers
Ankush Sachdeva, cofounder and CEO, ShareChat
In a bid to streamline costs and achieve profitability within 4-6 quarters, vernacular social media platform ShareChat on Wednesday said it has laid off 15% of its staff or about 200 employees. These cuts are linked to the company’s broader fundraising plans where it needs to meet certain financial targets to be able to secure new financing, said people aware of the discussions.
What’s driving the news? Sharechat’s largest job cut was in January with at least 500 people leaving the firm. Gradually, over the next few months, staffers left the company. The latest staff cull has impacted over 50 roles in the Bengaluru-based startup’s product functions, and more across other functions.
Quote, unquote: “In alignment with our strategic vision, the company undertook a comprehensive restructuring effort to streamline operations, enhance productivity, and position the company for sustainable growth,” a ShareChat spokesperson told ET, confirming the layoffs.
Losses swell: ET reported on November 21 that ShareChat’s parent, Mohalla Tech, clocked a 62% increase in revenue for FY23, at Rs 540 crore. However, its losses widened 38% to Rs 4,064 crore, hit by non-cash items such as increased financing costs and impairment of investments in subsidiaries.
Mohalla Tech CFO Manohar Charan had said the company was looking to cut its losses to below Rs 1,000 crore in the ongoing financial year as it rationalises costs across key businesses such as ShareChat and short-video platform Moj.
Need for cash: ShareChat is looking to close a financing round of at least $50 million with a steep cut in valuation. “Internally, the stakeholders agree that in current circumstances valuation has to be adjusted. It is likely to be closer to $1 billion. The talks are underway for funding at $1-1.5 billion valuation,” a person aware of the matter said. ShareChat has also considered raising new financing through convertible notes.
Under pressure: The Tiger Global and Temasek-backed company has completely halted marketing spend and had fired 500-600 employees at the start of the year, and more later. The company is in the middle of discussions to raise a bridge funding round, likely through convertible notes, according to sources. Details are yet to be finalised.
Also read | 28,000 and counting: That’s the 2023 layoff data from startup land
Byju’s board clears FY22 financial accounts, reappoints BDO as auditor at AGM
The board of troubled edtech Byju’s passed a set of resolutions during a three-hour-long virtual annual general meeting (AGM) late Wednesday, including its much-delayed FY22 financial results. BDO was also reappointed as the auditor of the company.
What’s the news? About 60 shareholders attended the meeting which was opened by founder Byju Raveendran, people present at the AGM told ET.
Nitin Golani, chief financial officer-India, briefed the shareholders on the audit, while India CEO Arjun Mohan provided business updates and plans.
“The auditor BDO answered all questions from shareholders before the company wrapped up the interactive three-hour-long meeting,” Byju’s said in a statement.
Delayed financials: The complete FY22 financials for Byju’s parent company, Think & Learn, are still to be filed with the Registrar of Companies (RoC). On November 4, Byju’s released its financials in parts for core India business showing a 2.3 times growth in revenue at Rs 3,569 crore in its standalone business. Ebitda loss of the core business — financials for which were reported—was down to Rs 2,253 crore in FY22, from Rs 2,406 crore in the previous year.
Under strain: Raveendran has been under pressure from investors to step aside from day-to-day operations but this was not discussed during Wednesday’s AGM. ET had reported that the investors had sought the company’s audited FY23 financials before infusing any fresh capital into the firm.
Euler Motors net loss spikes five-fold in FY23
Saurav Kumar, founder & CEO, Euler Motors
Euler Motors, which manufactures and sells electric three-wheeler commercial vehicles, saw its net loss widen almost five-fold in FY23 to Rs 175.44 crore, from Rs 36.33 crore in FY22, according to its financial statements filed with the Registrar of Companies.
What’s significant?
- The company reported a 250% on-year jump in revenue from operations to Rs 61.53 crore
- It spent nearly Rs 4 to earn a rupee in operating revenue.
- The biggest expense head—cost of materials consumed—ballooned to Rs 67.71 crore in FY23, from Rs 9.04 crore in FY22.
- In April, Euler Motors laid off around 250 people, mostly in the sales and research functions.
(L-R) Pilgrim cofounders Gagandeep Makker and Anurag Kedia
Pilgrim FY23 revenues see near four-fold jump: Direct-to-consumer (D2C) personal care brand Pilgrim’s operating revenue for 2022-23 jumped over four times to Rs 76.46 crore from Rs 16.89 crore in FY22. However, its loss more than tripled in the same period.
Key numbers: Pilgrim’s net loss more than tripled to Rs 23.06 crore from Rs 7.53 crore in FY23 as expenses ballooned to Rs 99.95 crore in the fiscal from Rs 24.72 crore in FY22, the Fireside Ventures-backed company said in its statutory filing with the Registrar of Companies (RoC). In FY23, the company incurred Rs 52.50 crore of marketing expenses, up from Rs 11.83 crore in FY22.
How voice deepfakes are emerging as a new threat
Three seconds of audio is all it takes to create a voice clone that is virtually indistinguishable from the real voice, a technological advancement that is as worrying as it is thrilling because it can be put to malicious use to defraud people, experts said.
Latest tool to defraud people: Voice clones or deepfakes have emerged as the latest tool for cyber scammers, they said, as artificial intelligence (AI)-related scams are being increasingly reported from different parts of the country.
How scammers are using the tech: Voice deepfaking started as an entertainment gig to mimic songs for Instagram reels on websites such as Covers.ai, Voicify.ai and VoiceFlip.ai but has spiralled into a larger problem with genuine AI startups such as ElevenLabs, Speechify, Respeecher, Narakeet, Murf.ai, Lovo.ai and Play.ht being weaponised in the hands of scammers.
ET Explainer: Should Indian IT companies be concerned about Accenture’s Q2 guidance?
Does Accenture’s first quarter performance and guidance for the second quarter announced Tuesday bode well for Indian IT companies? Not really. Going by the management’s commentary, green shoots are visible but timelines will vary much like the visibility on its deal pipelines.
What do the numbers say? It’s not that Accenture missed its Q1 guidance. According to Jefferies, revenue of the quarter ended November 2023 at $16 billion, up 1% on-year in constant currency terms, was pretty much within the guided range of -2 to 2% growth, but was still the lowest reported growth in 13 quarters.
The street is, however, concerned about Accenture’s Q2 guidance of negative 2% to 2% in local currency terms, which indicated no positive impact of the US Federal Reserve commentary about interest rate cuts.
What does this mean for India IT companies? Read our explainer to find out.
Other Top Stories By Our Reporters
HCLTech investigating ransomware attack on isolated cloud project: HCLTech said on Wednesday one of its isolated cloud environments was subject to a ransomware attack and the company is investigating the matter. “There has been no impact observed due to this incident on the overall HCLTech network,” the Noida-based company said in an exchange filing on Wednesday.
Unicommerce adds former SoftBank India head Manoj Kohli, others to board: Gurugram-based ecommerce enablement platform Unicommerce has expanded its board of directors. The company has onboarded former SoftBank India head Manoj Kohli, FMCG sector veteran Ullas Kamath and Sheroes founder Sairee Chahal. Kamath and Chahal are independent directors.
SoftBank India operating partner Vikas Agnihotri leaves fund: Vikas Agnihotri, an operating partner at SoftBank India, who worked closely with Paytm ahead of its public listing, has exited the technology-focused investment fund. Agnihotri formally left SoftBank in September but his departure has come to light only now.
Global Picks We Are Reading
■ End of an era for electronics giant Toshiba (BBC)
■ Anxious and online, Chinese youth embrace spirituality apps (Rest of World)
■ 2023 in smartphones: it was the little things (The Verge)
