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Sunday, May 27, 2018
ShareChat valuation may hit $400 million in new round

ShareChat valuation may hit $400 million in new round In what will be the most hotly contested investment deal in a startup, over half a dozen top global financial and strategic investors like We-Chat owner Tencent, South African media firm Naspers, investment firms DST Global, Hillhouse Capital and Morningside Ventures, US-based e-commerce giant Amazon and Chinese online media players Toutiao and Kwai, among others, are in talks to invest in regional language social platform ShareChat, according to three sources familiar with the matter. The deal is expected to increase the valuation of the startup 4-5 times to $400 million in less than six months after it raised funds from Chinese smartphone maker Xiaomi and venture capital firm Shunwei late last year, said these sources.

The three-year-old startup had raised the funds at $75 million valuation. The high investor interest in ShareChat underlines how digital media and social networks targeting the new internet users is becoming the next big theme as funding environment picks up again. “ShareChat is in talks to raise about $100 million in funding and existing investors like Xiaomi and Shunwei are also expected to invest in this round,” said one of the sources mentioned above.

The startup has still not finalised which investors will participate in the round, said the source, adding that a deal will take some time to finalise. ShareChat is likely to bring two new investors on board. ShareChat has been founded by IIT-Kanpur alumni Ankush Sachdeva, Farid Ahsan and Bhanu Singh in October 2015. The startup has raised about $24 million till now and its other investors include SAIF Partners, India Quotient and Lightspeed Venture Partners.

Its growth has been impressive over the last few months as cheap data has increased the time spent on the internet by users, especially those who are more comfortable in vernacular languages. “In the last two quarters the number of daily active users on the platform has increased from 1 million to 5 million with zero marketing,” said the second source mentioned above.

ShareChat co-founder Ahsan declined to comment when contacted by ET and did not reply to an email query. Tencent, Amazon, Toutiao, Kwai, Hillhouse, DST Global, Morningside and Naspers did not revert to an email query from ET.

STARTUP FUNDING UP

The company’s funding round comes close on the heels of ET reporting last month that capital deployed across series A, B and C funding into startups surged 73% year-onyear to $850 million in March quarter, and the number of deals rose 30% to 76, show data from Tracxn. This comes as funding at seed stage continues to be slow, but has started to pick up as overall number of startups increase in the market.

VC investors are moving aggressively to close the deals as they see interest from global strategic investors such as China’s Tencent and Alibaba and South Africa’s Naspers for follow-on investments. Some other companies which are raising capital in quick succession include food delivery application Swiggy.

Several digital media companies which have recently raised funding till now or are in talks to raise funding include Dailyhunt and Newsdog, which have seen interest from Alibaba and Tencent, respectively. Messaging application Hike already counts SoftBank, Tencent and Foxconn as investors.

ENTRY INTO MICRO-MARKETS

The startup is aiming to double its base of daily active users to 10 million and go deeper into micromarkets, including the Northeast region, before it begins working on monetising its service in 2019. The company will look at advertising, influencer marketing and in-app purchases next year. ShareChat has launched an anonymous chat option, direct messaging and other features to increase user activity.

Over 65% of the company’s user base is made up of people in the 14 to 22 age group, while the rest are older. At present, an average user spends about 17 sessions on the application per week. (Source: Economic Times)

Snapdeal posts Rs 4,647 crore net loss in 2016-17

Paytm Bank claims 100m e-Verified accounts; says everything falling into placeE-commerce firm Snapdeal saw its losses mounting to Rs 4,647 crore for the fiscal ending March 2017, impacted by a provision for "impairment of goodwill" of Rs 1,797 crore. According to regulatory filing to the Corporate Affairs Ministry by Jasper Infotech, which runs Snapdeal, had registered a net loss of Rs 3,340 crore in 2015-16. The company's total income also declined by 12.6 per cent to Rs 1,291.3 crore in FY2017 from Rs 1,478.2 crore in the previous year. When contacted, Snapdeal spokesperson said the financial statement for the year 2016-17 "reflects the first stage of Snapdeal's focus on unit economics and business efficiencies".

"Key highlights in this regard are the reduction in fulfilment cost by more than 20 per cent (as a percentage of operating revenue) and reduction in operational losses by nearly 25 per cent (excluding non-recurring cost on account of impairment of assets)," the spokesperson said.

He added that the company continues to make "rapid progress in driving profitable growth, which will be reflected in the results for the financial year 2017-18".

Snapdeal has seen its business being impacted severely by the intense competition in the e-commerce segment. While players, including the likes of Amazon and Flipkart, have pumped in billions of dollars in investments, they continue to operate in losses. Analysts are of the view that it will be a couple of years before these players can hit profitability. Last year, Snapdeal dumped the USD 950-million takeover offer from Flipkart with Snapdeal founders Kunal Bahl and Rohit Bansal saying the company will pursue a fresh strategy in the Indian market.

Last year, Snapdeal sold its payment services unit, Freecharge to Axis Bank for Rs 385 crore, almost 90 per cent lower than what it had paid for the firm in 2015. In January this year, its logistics arm -- Vulcan Express -- was acquired by Kishore Biyani's Future Supply Chain Solutions in an all-cash deal valued at Rs 35 crore. Snapdeal has also significantly reduced its headcount to rein in costs. (Source: Economic Times)

Paytm Bank claims 100m e-Verified accounts; says everything falling into place

Paytm Bank claims 100m e-Verified accounts; says everything falling into placePaytm Payments Bank claims that it now has over 100 million KYC-registered wallets — which includes both complete and minimum KYC (know your customer). This development comes even as there have been indications in the digital payments industry of a sharp fall in mobile-wallet users as customer authentication did not take off.

Paytm Payments Bank, where flagship company One97 Communications holds 49% and Vijay Shekhar Sharma directly owns the other 51%, claims that of over 100 million KYC completed, 76 million have been done through biometrics. "We will continue to invest further to strengthen the payments infrastructure in our country. We have not witnessed any decline in the number of users or any hindrance faced by users in the transactions done through the platform and have invested in creating a nationwide distribution network for completing KYC of customers," said Renu Satti, CEO of Paytm Payments Bank.

The RBI said last year that mobile wallet companies need to collect full authentication documents for customers and verify them physically to continue operating such accounts. However, the central bank is yet to release transaction data of digital wallets after February 28, the deadline for KYC compliance. According to data available on the UIDAI website, eKYC transactions for Paytm Payments Bank for the current month add up to 7.8 million.

Experts tracking the digital payments space believe that crossing 100 million is an important milestone because the KYC mandate had led to a drop in customers. "From the perspective of digital payment adoption, this is a significant milestone because the KYC mandate was leading customers to revert to cash," said Vivek Belgavi, partner for financial technology at PwC. "However, there have also been instances of scams and other cybersecurity issues, which have to be handled by wallet companies."

Amazon India’s payment wallet Amazon Pay, which is used to route refunds and handle ecommerce transactions for the platform, has seen a sharp reduction in customers loading their wallet. The requirement for full KYC was deterring customers from using the wallet and switching to cash on delivery, an Amazon spokesperson had told ET.

Standalone mobile wallet firms have also not witnessed a pick-up among mobile wallet consumers to complete the KYC formalities, as ET recently reported. (Source: Economic Times)

Ahead of merger with Vodafone, Idea's 100% FDI proposal under consideration

Ahead of merger with Vodafone, Idea's 100% FDI proposal under considerationPresent foreign direct investment policy allows an overseas firm to buy up to 49% stake in an Indian telecom company under automatic approval route but govt's approval is required for stake above 49%. Idea Cellular Ltd's proposal to allow up to 100 per cent foreign direct investment (FDI) in the company is under consideration of the Department of Industrial Policy and Promotion (DIPP), an official said.

The proposal assumes significance against the backdrop of pending merger of Idea Cellular Ltd and Vodafone India to form the country's largest telecom operator. The present foreign direct investment policy allows an overseas firm to buy up to 49 per cent stake in an Indian telecommunication company under automatic approval route. But government's approval is required for stake above 49 per cent. Idea and Vodafone in 2017 announced that they would combine their operations to create the country's largest telecom operator worth over $23 billion, with a 35 per cent market share.

Foreign share holding in Idea as on March 31, 2018, stood at around 34 per cent, including 7.49 per cent in promoter group and the rest as public shareholders. While British telecom multinational Vodafone Group plc is a majority shareholder in Vodafone India.
Foreign shareholding in the combined Idea-Vodafone entity, thus, would breach the automatic approval limit of 49 per cent.According to the Idea-Vodafone merger announcement in March, Vodafone would own 45.1 per cent of the combined company after transferring a 4.9 per cent stake to Aditya Birla Group for Rs 39 billion (Rs 3,900 crore) in cash, concurrent with completion of the merger.

"We have received the proposal from the Department of Telecommunications. As the department has added a condition in the proposal, the matter has been referred to the DIPP. It is under consideration of the department," a government official said. The telecommunications department is awaiting the views of the DIPP on raising foreign direct investment limit in Idea Cellular Ltd to 100 per cent before approving its merger with Vodafone India. "Only FDI clearance for Idea is pending before the proposed merger with Vodafone (India) can go through," another government official said.

After the abolition of the foreign investment promotion board, respective departments and ministries of 11 sectors, including telecommunications and print media, are competent authorities for approval of FDI proposals unless they want to add some condition or reject the proposal.In such circumstances, they have to seek the views of the DIPP. The merged Idea-Vodafone entity will have the highest subscriber base at 410 million (41 crore) accounting for over 35 per cent market share and second largest spectrum holding of 1,850 megahertz in the country.

The merger is expected to replace Bharti Airtel from its numero uno position in terms of the number of subscriber base, as per reports of the Telecom Regulatory Authority of India. (Source: Business Standard)

Paytm logs in to Forex, to start offering foreign exchange services soon

Paytm logs in to Forex, to start offering foreign exchange services soonAfter introducing savings, wealth management and a host of other services, Paytm is all set to foray into foreign exchange and cross-border payments as well under its payments bank entity, having already received the authorised dealership (AD Category II) licence from the Reserve Bank of India. Besides Paytm, other payments banks like Airtel Payments Bank and Jio Payments Bank have also received the licence, as mentioned by the central bank on its website among the list of licence holders. Even Fino Payments Bank is said to have joined the list recently. These licences help them take a step closer towards becoming full-service financial entities.

Though Paytm Payments Bank did not comment on the story, sources have told ET that the newly-formed bank is all set to start offering foreign exchange services, and going forward, could also enter into cross-border remittance services for its customers. “Having started with payments, Paytm is slowly diversifying into other financial services and foreign exchange conversion will be a starting point and eventually it could also try to venture into cross-border payments both outward and inward,” said a top executive of a payments company on condition of anonymity.

Foreign currency dealings are heavily regulated activities and entities have to be licenced by the RBI. While banks are classified under the authorised dealer (AD) I category, all others are licenced under the AD II category.

According to the central bank, authorised money changers can offer services of foreign exchange to foreigners travelling in India as well as Indians looking for foreign exchange before embarking on a trip abroad.

“With AD II licence, we will enable cross-border remittances at our branches and also offer foreign exchange services which we will look at in the next three months,” said Rishi Gupta, chief executive of Fino Payments Bank.

Gupta added that while the Mumbai-headquartered bank will offer outward cross-border remittances, for inward remittance, they have also applied for the MTSS licence.

Way back in 2016, Paytm had spoken about its plans to open up payments for Uber rides outside India for its Indian consumers in collaboration with Chinese payment giant Alipay but it had to withdraw such a product. Now with the bank slowly taking shape and armed with these multiple regulatory clearances and subsequent licences, it could open up various such features for its customers, according to industry insiders.

“The opportunity in cross-border payments is huge. So far, mainly banks have been dealing in cross-border payments, so there has been zero disruption, which gives a big opportunity for fintech players,”said Prajit Nanu, chief executive of Singapore-based InstaRem which offers cross-border remittance and recently launched its product in India. He put the market size at $6-7 billion annually for India. (Source: Economic Times)

Flipkart sets up new campus to consolidate offices in Bengaluru

Flipkart sets up new campus to consolidate offices in BengaluruE-commerce major Flipkart today said it has set up a new campus in Embassy Tech Village in Bengaluru, consolidating its other offices in the tech city as part of its 'Better.together' theme. "We had taken this decision to consolidate our many offices across Benagluru to one location. This was largely aimed at improving operational efficiency and to also benefit from the resulting synergy between various teams and functions," Flipkart Head of Marketplace Anil Goteti told . He added that the teams have already moved to the new location and started operating out of the campus. Goteti, however, declined to comment on the investment made for the facility.

He explained that by co-locating all its business units into one new, agile work environment, the company aims to create a unified office that "supports cooperation, collaboration and flexibility".

"We believe centralisation will promote increased productivity and engagement through efficient ways of working," he added. The campus, spread over 8.3 lakh sq ft, has a seating capacity of over 7,300 people.

Flipkart has around 7,600 employees, including those in functions like warehouse, logistics. About 6,800 employees would operate out of the new campus in Bengaluru.

"This is a state-of-the-art campus and includes facilities like indoor recreation rooms with VR games, simulators and a golf simulator as well as outdoor recreation space. We have also included mothers' rooms and daycare facility to ensure worry-free work environment for our women employees," he said.

Goteti said the company also took into consideration the views and ideas given by employees during the planning process of the campus. SR BAL BAL (Source: Times of India)

Sistema JSFC reluctant to buy RCom’s subsea cable arm GCX
Sistema JSFC reluctant to buy RCom’s subsea cable arm GCX

Reliance Communications’ plans to sell its remaining telecom assets worth $1.5 billion to Sistema JSFC could hit a hurdle, people aware of the development told, saying the Russian conglomerate is now reluctant to buy Global Cloud Exchange (GCX), RCom’s overseas arm that holds subsea cables, on the grounds that the cable systems are old with a limited residual life. Sistema JSFC is now keen to buy only RCom’s enterprise business and the nine data centres, which are collectively valued at about $600 million, said one of the persons, who did not wish to be identified.

“The negotiations are on but Sistema has pointed out that the subsea cables under GCX go back to year 2004 (when the Anil Ambani-led company acquired them by buying Flag Telecom),” the person said. Another person said that GCX is putting in place a new subsea cable system, Eagle, which will stretch westward from Mumbai to Italy and eastward to Hong Kong.

Valued at more than $900 million, GCX, which owns more than 68,600 route km of subsea cables and dominates the emerging markets corridor, is said to be the most expensive piece of RCom’s remaining telecom assets.

Late last month, Sistema JSFC had put in a $1.2 billion initial bid to buy all the remaining telecom assets of RCom – undersea cables, data centres and the domestic enterprise business. “It was a non-binding offer, and post due-diligence, Sistema could submit a lower, $600 million bid for just the data centres and the enterprise business,” an executive said. In that event, Sistema JSFC’s net payout would be only $300 million since RCom owes it about $300 million (?2,000 crore) for spectrum contiguity charges — owed to the government — which was agreed to as part of the broader deal which saw RCom buy Sistema JSFC’s mobile telephony business in return for 10% stake in itself.

But another person close to the talks said it may “be impossible for Sistema to selectively target RCom’s telecom assets since the data centres are in the process of being transferred to GCX”. Accordingly, he said, “Sistema would either have to buy all of RCom’s remaining telecom assets or nothing at all.” RCom and Sistema JSFC did not respond to ET’s queries till late evening on Sunday.

Experts said Sistema JSFC did not appear keen on big-ticket investments in India’s telecom market, having already burnt its fingers.

“With a present market cap of under $2 billion, Sistema is unlikely to be very comfortable financially, pitching for telecom assets valued at $1.5 billion, and that too in a fiercely competitive market like India, where it remained a fringe player in the mobile services space and was forced to exit,” said an analyst, who did not wish to be named.

Last year, RCom bought Sistema JSFC’s Indian telecom arm — Sistema Shyam Teleservices — in a deal that saw the Russian firm getting a 10% stake in the Anil Ambani-led telco. Sistema JSFC’s stake in RCom has dropped to 4.9% after some minority SSTL shareholders recently swapped their shares with those of RCom, following which Sistema JSFC also sold off some RCom shares in the open market.

RCom had in November last year shut its wireless business. In December, it inked a pact to sell its wireless assets to Reliance Jio Infocomm in an all-cash deal, pegged at Rs 24,000 crore by market circles. This would help pare its debt, which stands at about Rs 45,000 crore. (Source: Economic Times)

An Apple, Samsung search for 'competition' to now throw up Google
An Apple, Samsung search for 'competition' to now throw up GoogleGoogle has for the first time formalised a sharp India-focused strategy to roll out consumer products, which may include a mid-range smartphone, and market them aggressively to take on rivals such as Apple, Samsung and Amazon, four senior industry executives said. California-based Alphabet, the parent company of Google, will launch its smart speakers, premium laptop Pixelbook, and intelligent home automation products, and is even planning a mid-range smartphone especially for markets such as India, the executives said. The company will also expand distribution into general trade and spend big on marketing like Apple and Samsung have been doing in India, they said.

Google’s top brass shared details of its consumer products expansion plans in trade meets held in Malaysia, the UK and the US last month. Select Indian retailers took part in some of the meets. “Google is excited about expansion of the consumer products business in India with the advent of cheap 4G internet led by Reliance Jio and other operators which it says will help to realise maximum potential of these products,” said a leading retailer who had participated in the meet.

An email sent to Google remained unanswered as of press time Sunday. The company’s PR agency in India said it has nothing to share at the moment. According to the executives cited earlier, Google plans to roll out its smart speakers Google Home and Google Home Mini, which compete against Amazon’s Echo speakers, in India by the end of this month. It will undertake a big advertising campaign for this, they said.

Google plans to launch a mid-range Pixel smartphone focused on price-sensitive markets such as India around July-August, and its next flagship Pixel smartphone may hit the market around Diwali, they said. The $110-billion technology giant is also exploring launch of its premium laptop Google Pixelbook, intelligent home automation products such as doorbell, camera, alarm system, and smoke detector, sold under the Nest brand, and its Wi-fi system Google WiFi in the Indian market over the next one year, the executives said. One of the retailers who attended Google trade meet said the internet giant does not plan to become over-aggressive to chase market share in the consumer products space; instead, it first wants to have a sizeable retail presence in the country and build the brand.

The company is expected to price Google Home and Google Home Mini smart speakers at Rs.9,999 and Rs.4,499, pitching them at par with Amazon’s Echo range, the executives said. However, the Google product will support Hindi and ten other regional languages in the country, they said. Currently, Google sells its Pixel 2 and Pixel smartphones, priced at around Rs.40,000 to Rs.70,999, streaming devices Chromecast and Chromecast Audio, and virtual reality device Google Daydream View in the country.

Industry executives said regular availability of these products in India has been a challenge, which the company has assured will be corrected. “Their hardware distributor Redington will expand brick-and-mortar distribution reach,” one of the executives said. “Google will also do in-store branding and signage in selected stores, and set up exclusive zones with speciallydesigned fixtures like Apple,” the person said.

Google’s expansion into neighbourhood mobile phone stores was decided after it found that these stores account for 36% of Pixel sales in India, next only to ecommerce that accounts for 38% of sales. Large retail chains account for 26% of sales, the executives said. However, company executives were largely mum when retailers had asked about plans to open either company-owned or franchised exclusive stores in the country.

“They said no decision has been taken regarding this,” said a retailer who attended one of the trade meets. “But they certainly want to expand their offline presence since most of the upcoming products require consumer experience.” (Source: Economic Times)

LIC trims stake in Sterlite Technologies by 2%

LIC trims stake in Sterlite Technologies by 2%LIC sold the stake between November 21, 2007 and March 27, 2018.
State-owned Life Insurance Corporation (LIC) has reduced its stake in telecom products manufacturer Sterlite Technologies by 2 per cent after selling 80.28 lakh shares in the open market.

As per a BSE filing, LIC, which had 5.30 per cent stake in Sterlite Technologies earlier, brought down the shareholding in the company to 3.30 per cent.

LIC sold the stake between November 21, 2007 and March 27, 2018. (Source: ETTelecom)

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