Happy Monday! Tata Sons chairman N Chandrasekaran wants the salt-to-software conglomerate’s digital arm to focus on profitability as it looks to tap external funding. This and more in today’s ETtech Morning Dispatch.
Also in the letter:
■ Govt firm on net neutrality as telcos seek 5G leeway
■ EquityList raises $2.2 million in seed funding round
■ ‘Green shoots in IT industry but slowdown persists’
Tata Sons’ Chandra mandates profitable growth at digital arm
Hi, Digbijay here in Bengaluru! In the season of startups talking about profitability, the Tata group has mandated Tata Digital to prioritise getting into the black as it looks to infuse some ‘Neu’ zeal and energy into its ecommerce venture. Here are the details:
Chandra’s directive: Tata Sons chairman N Chandrasekaran, also known as ’Chandra’, has told top leaders at the group’s digital arm to urgently focus on profitable growth as the unit prepares to revisit plans for external funding, multiple sources told us. This also means Neu will have about 50% less capital to spend on customer acquisition and marketing after two editions of the IPL, the sources added. Tata was the title sponsor of the IPL for the last two years.
Not a startup anymore: People in the know said it has been made categorically clear by Chandrasekaran that Tata Digital’s large assets, such as egrocer BigBasket and epharmacy 1mg, need to keep profitability in mind while scaling up further.
Croma, Cliq for Neu: Neu’s operating team will have two key focus areas: Croma, the electronics and appliances business, and the fashion vertical of Cliq. The idea is to stabilise both businesses and increase their contribution to sales. Croma is among the largest verticals on Neu and Tata Digital has been working to integrate it online since it has largely been an offline business. As part of a bigger rejig at the company, Cliq finally got a new chief executive in Gopal Asthana, as reported by ETtech on June 23.
Neu ambitions: Last year, Neu had a gross merchandise value (GMV) of less than $1 billion. This does not include individual gross sales on apps such as 1mg or BigBasket. The group wants to expand this from hereon, but sans the aggressive capital burn. Its rivals include Walmart-owned Flipkart, Amazon India, and Reliance’s JioMart.
Zerodha cofounder Nikhil Kamath to join Ather’s cap table
Nikhil Kamath, co-founder of Zerodha, India’s largest stock brokerage firm, is set to join Tiger Global-backed Ather Energy’s cap table, sources have told us.
Tell me more: While it isn’t clear how much Kamath would invest in Ather, the transaction would be through a secondary share sale, the sources told us.
Why is this important? Kamath has been placing new bets at a time when growth- and late-stage funding has been hard to come by in the tech sector. Among other investments in recent times, he poured about $12 million into gaming firm Nazara Technologies.
What’s happening at Ather? Earlier this month, Ather said it secured about $108 million through a rights issue from two-wheeler maker Hero MotoCorp and Singapore’s sovereign wealth fund GIC. The company’s current focus includes expanding its product portfolio and sales footprint.
Centre unlikely to change stance on net neutrality
The government will not change its stance on net neutrality despite repeated calls from telecom companies to revise the rules ahead of the advent of 5G technology, government officials have told ET.
What’s the debate? In a recent submission to the Telecom Regulatory Authority of India (TRAI), telecom companies such as Bharti Airtel, Reliance Jio Infocomm and Vodafone India reiterated that they should be able to charge some internet-based intermediaries, such as Netflix, Amazon Prime and WhatsApp, more than others as the data consumption due to the use of these apps puts pressure on the networks.
They also sought the payment of a “fair share” for the development of telecom networks based on the number of users the over-the-top (OTT) service provider or app has, the volume of traffic that it sees, and the turnover threshold among other things.
Where’s the issue? The central government, however, is not willing to give in. As per the rules, a licensee providing internet access cannot engage in any discriminatory treatment of content based on the sender or receiver, the protocols being used, or user equipment.
IT industry sees green shoots but slowdown persists
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Rajesh Nambiar, the recently appointed chairperson of IT industry body Nasscom, has noted positive developments in the $245-billion Indian IT sector. While global macroeconomic challenges continue to impact technology spending, the industry is witnessing some green shoots.
Jargon buster: ‘Green shoots’ is a term used to describe signs of a recovery during an economic downturn.
Boost from AI: A robust deal pipeline in the first fiscal quarter and increasing investments in Generative Artificial Intelligence (GenAI) are some of the positive developments in the IT sector, according to Nambiar, who is also the MD of Cognizant. However, these factors may not entirely offset the broader slowdown in the tech sector. According to Nambiar, it might take several more quarters before the industry fully enters a “renewed growth phase”.
Need for ‘balanced’ governance: Nambiar stressed on the need for ‘balanced’ governance around AI, by addressing issues such as user privacy, disinformation and data protection without interrupting the ongoing innovation in the field of AI. The Digital Personal Data Protection Act is a necessary step in this direction, but more understanding is needed before regulating AI further, said Nambiar.
EquityList raises $2.2 million in seed funding round
EquityList, a shareholder management platform, has successfully raised $2.2 million in seed funding. The company had been spun off from the Naval Ravikant-founded AngelList’s India entity in January.
The investors: The seed funding round saw participation by investors and angel backers such as AngelList India, Hustle Fund, Unpopular Ventures, Republic, and others. The round also drew investments from Ramakant Sharma (Cofounder, Livspace), Gajendra Jangid (Cofounder, Cars24), Sairee Chahal (Sheroes), and Rangarajan Krishnan (CEO, Five Star Finance).
What’s the funding for? With the fresh funding, the company aims to expand the size of its team, now 11 strong, to better serve its customers. Furthermore, it is exploring opportunities to venture into new markets, with a focus on regions such as West Asia and North Africa, according to CEO Kashish Sharma.
EquityList competes with the likes of Accel-backed Trica, and Singapore-based Qapita, which has raised over $22.5 million from investors such as Vulcan Capital, East Ventures and Endiya Partners.
Generative AI is a huge opportunity for data centres. Here’s why
Data centres are what power the world wide web — from critical banking transactions to songs you stream, from Instagram reels that you shared with your friends to reading this article online — all the billions and zillions of gigabytes of data are stored and processed through these huge data centres.
Now add generative artificial intelligence (AI) to the mix and the computing power required grows multifold. And that’s a huge opportunity for data centre companies in India and globally.
Also read | The new kid on the artificial intelligence block
GenAI twist: Generative AI can help users do everything from writing complex software code, personalising marketing content, and creating realms of documentation to writing résumés, poems or even helping out with school homework. But in order to analyse and process millions of data points in seconds, they require advanced computing capacity and power management. The question we need to ask is, are data centres (DCs) ready for this shift?
Other Top Stories By Our Reporters
Top automakers readying cleantech to power up future vehicles: Maruti Suzuki, Bajaj Auto, TVS Motor Company and Eicher Motors are among the Indian automakers working on a range of eco-friendly technologies, including biogas, flex-fuel and ethanol, to achieve the government’s goal of clean mobility, in line with the goals of the Global Biofuels Alliance (GBA), announced at the G20 Summit.
Ola resumes bike-taxi service in Bengaluru with electric S1 scooters: The firm intends to expand its electric scooter-led ride hailing services across the country after the pilot in Bengaluru, people in the know told ET, without giving a timeline.
Peter Thiel’s Valar Ventures-backed startup Velocity lays off about 14% of staff: Revenue-based financing startup Velocity has laid off around 14% of its workforce, the Bengaluru-based company’s cofounder and chief executive Abhiroop Medhekar wrote in a blogpost on Friday.
Global Picks We Are Reading
■ DeepMind’s cofounder: Generative AI is just a phase. What’s next is interactive AI (MIT Technology Review)
■ People are streaming pirated movies on TikTok, one short clip at a time (The Wall Street Journal)
■ The AI detection arms race is on (Wired)
