Also in this letter:
Some IT workers voluntarily return to the office
Crypto Paper Soon, But Law Will Take Time: Economic Matters Safe
Delhivery reported a loss of Rs 119.8 crore in the fourth quarter, doubling the revenue
CCI studies papers on alleged nexus between eCom firms and vendors
Sources told us that the investigation wing of the Competition Commission of India (CCI) is reviewing documents that suggest financial transactions between major e-commerce companies and their preferred sellers.
It has now sought more time from the commission to review these documents, which were found last month during raids on sellers by e-commerce majors Amazon and Flipkart following allegations of competition law violations.
Originally the Director General of CCI was to complete his investigation by the first week of June.
Citation: “Deep relaxation is a major antitrust issue that the CCI is probing. Documents relating to acquisition cost of goods will provide more information as to who is subsidizing these goods,” said the person. “Also, since some ecommerce companies themselves hold shares in online sellers, CCI is examining the terms and conditions of such equity investments.”
This is the first non-cartel case in which the antitrust regulator has exercised its powers of search and seizure.
case history: The Delhi Trade Federation (DVM), affiliated to the Confederation of All India Traders (CAIT), had approached CCI in 2020 alleging market dominance and competition law violations by Flipkart and Amazon.
The CCI had issued a prima facie order in January 2021 seeking an inquiry into these allegations.
Amazon and Flipkart appealed against the order in the Karnataka High Court, which refused to stay the investigation in July 2021. In August 2021, the Supreme Court upheld the Karnataka High Court order and allowed the investigation to continue.
CCI targets vendors: In late April, CCI discovered the offices of some of the country’s largest online sellers, including Amazon-owned Cloudtail and Appario Retail, a joint venture entity between the US online giant and the Putney Group. It also visited some alpha sellers of Flipkart and Meesho.
And last week we reported that CCI was turning up the heat on small and medium businesses that deal with large ecommerce platforms.
Lawyers privy to the developments told us that several online vendors had received information requests from the CCI over the past few months. Its queries were asked about the input cost and details of their business arrangement with the digital platform.
Some IT workers volunteered to return to the office
More employees are voluntarily reporting to work from the offices of IT service providers such as Infosys, HCL Technologies, Wipro and Tech Mahindra, though these companies are yet to make return to office mandatory.
yes but: More than 90% of the IT sector workforce continues to work remotely.
“We still have about 94% of our employees working remotely. However, we are seeing more employees who attend the office one or two days a week at our office locations and the number continues to grow, Richard Lobo, Executive Vice President, HR, Infosys.
The Bengaluru-based company is also witnessing a large number of project huddles and team-building programs, which result in increased attendance over a few days.
Similarly, HCL Technologies has seen an increase in the number of employees visiting its campuses, even as hybrid work continues.
The company said that since April, fully vaccinated Wipro employees have been voluntarily returning to work from their India premises thrice a week on Mondays, Wednesdays and Fridays.
Crypto Paper Soon, But Law Will Take Time: Economic Matters Safe
Economic Affairs Secretary Ajay Seth said that the central government is planning a new consultation paper on cryptocurrencies soon, although legislation on digital assets may take time.
“Our consultation paper is quite ready,” Seth told reporters on the sidelines of a finance ministry event. We’ve got a deep dive into it.” He didn’t say when it would be rolled out, but sources told us that it can be expected in August.
Law will take time: The Economic Affairs Secretary said a law on cryptocurrencies may take some more time as India awaits an international framework on it and is closely associated with the International Monetary Fund and the World Bank.
Last December, the government listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, during the winter session of Parliament. But the bill was not introduced.
Subsequently, in the 2022-23 budget, the government imposed a 30% tax on gains from virtual digital assets, as well as a 1% tax at source on all crypto transactions. However, the government later clarified that taxation does not mean legalisation.
tweet of the day
Delhi’s loss of Rs 119.8 crore in the fourth quarter of 2022, revenue doubled
New-age logistics company Delhivery reported a consolidated loss of Rs 119.8 crore in the fourth quarter of the fiscal, marginally higher than the same period last year.
Revenue from operations stood at Rs 2,071.7 crore in the January-March period, up from Rs 1,002.6 crore in the year-ago period. Total income more than doubled to Rs 2,127 crore from Rs 1,031.7 crore.
On a sequential basis, the loss narrowed 5.5% to Rs 119.8 crore in the third quarter from a loss of Rs 126.5 crore. Revenue from operations grew 3% sequentially to Rs 1,995 crore.
For FY 2022 (FY22), the consolidated deficit stood at Rs 1,011 crore, as against Rs 415.7 crore in FY21. Total consolidated revenue more than doubled to Rs 7,038.4 crore in FY12 from Rs 3,838.2 crore in FY11.
Delhivery made its public market debut on May 24, with the company raising Rs 5,235 crore.
ETtech Concluded Deals
Direct-to-consumer (D2C) beauty and personal care brand Sugar Cosmetics has raised $50 million led by L Catterton, with participation from existing investors A91 Partners, Elevation Capital and India Quotient.
Alternative data insights start-up Synaptic said it has closed a $20 million Series B funding round led by Valor Equity Partners. It will use the funds to continue investing in product innovations, doubling its data science capabilities and partnering with data vendors, and expanding its go-to-market teams in major global financial centers.
Vendekin Technologies, a maker of unattended retail technology solutions, said it has raised Rs 8.5 crore in a funding round led by Better Capital with participation from existing investors CP Gurnani’s Family Office and Vineet Nayar’s Family Office.
Frontero lays off 145 employees, MPL will sack 100
The two startups announced layoffs on Monday.
Running news: Edtech firm Frontero has laid off about 145 full-time and contract workers, about 30% of its workforce, as funding dries up amid a market downturn.
Meanwhile, esports app Mobile Premier League (MPL) is laying off 100 people, or about 10% of its workforce, and exiting Indonesia.
the front row: The company confirmed the layoffs to us, saying they were done to increase capacity and lengthen the company’s runway. It said most of the layoffs were from sales and business development teams.
MPL: In an email to employees, the company wrote, “The past few months have been crazy. The philosophy of growth at all costs has now reversed. The market is now rewarding profitable growth at growth at all costs,” said MPL’s co- Founders Sai Srinivas and Shubh Malhotra said in an email to employees.
Edtech firms lead startup layoffs After years of high growth, edtech firms are facing a slowdown in funding and some, including Unacademy and Vedantu, have laid off staff in recent months to cut costs and increase efficiency. But edtech firms aren’t the only ones in a tight spot.
Other startups that have laid off employees in the past few months include social commerce platforms Trail and Meesho, used car platform Cars24 and digital health platform mFine.
Funding freeze: We reported Monday morning that big-ticket tours have taken a huge hit in the past two months. From April to May 16, there were only nine funding rounds of over $100 million, bringing the total to a little over $2 billion. According to data sourced from New York-based analytics platform CB Insights, there were 27 such deals in January-March.
Flipkart Promotes Two Executives To Senior VPs In Reshuffle
Homegrown ecommerce firm Flipkart has promoted several executives, including two key executives, to senior vice presidents (SVPs), according to an internal memo that we reviewed.
Bharat Ram and Guddetti Bharat Reddy have been promoted as SVPs, while Sharon Paes, who was transferred to Myntra as its chief business officer, has been made VP.
Ram joined Flipkart in March 2020 and led user acquisition and retention across Flipkart’s entire technology and product team, known internally as One Tech.
Paes was also given the responsibility of P&L for its social commerce platform Shopee in February last year.
Reddy is a veteran of Flipkart and is leading One Tech’s operations.
Other top stories by our reporter
HRW Alert on EdTech Apps: Human Rights Watch (HRW) said in a report that educational apps and websites run by government and private entities in the 49 most populous countries are involved in practices that endanger the privacy and safety of children.
Stock reward for FreshWorks CEO: According to an SEC filing in April, FreshWorks has offered CEO Girish Mathrubootham a multi-year stock award, in which he will own nine million shares in phases.
global choice we’re reading
Netflix bans password sharing, but initial efforts in Peru are a mess (rest of the world)
Robots take more work in busy factories (WSJ)
A Face Search Engine Anyone Can Use Is Dangerously Accurate (NYT)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai. Graphics and illustration by Rahul Awasthi.