Wipro sacks 300 for moonlighting; Pepperfry eyes 2023 IPO

Credit: Giphy

Also in this letter:
■ Pepperfry to file draft IPO papers next quarter for 2023 listing
■ No room for startups with ‘black box’ business models: Sebi chief
■ Investors sceptical about Zomato’s quick-commerce foray: Jefferies

Wipro sacks 300 employees for moonlighting with competitors

Wipro has sacked 300 employees after it found they were working for its competitors, the firm’s executive chairman Rishad Premji said on Wednesday.

“It is very simple. It is an act of integrity violation. We terminated the services of those people,” Premji said on the sidelines of the 49th All India Management Association convention.

Moonlighting controversy: Moonlighting – the practice of taking up more than one job at a time – has drawn mixed responses from IT companies over the past few weeks.

Also read | Moonlighting polarises IT industry opinion; experts say return to workplace may ease concerns

Tata Consultancy Services (TCS), Infosys, IBM and Wipro have said they are against it, while Tech Mahindra has signalled broad acceptance of the trend.

On Tuesday, Infosys cofounder Kris Gopalakrishnan weighed in on the controversy, saying employees should work for one organisation only to gain their employer’s trust and fully commit to the task assigned.

Last week, Infosys reminded employees in an email titled ‘No Double Lives’ that moonlighting violated its code of conduct and that employees could be sacked for doing so.

In August, Premji said moonlighting was “cheating – plain and simple”.

However, Tech Mahindra’s chief executive officer C P Gurnani said he had no objection to employees taking up second jobs.

Premji stands firm: On Wednesday, Premji said that though he has received criticism for his comments on moonlighting, he stands by them.

“There is no space for someone to work for Wipro and its competitor x, y or z. [Competitor companies] would feel exactly the same way if they discovered it. So, I stand by what I said – that it is a violation of integrity if any employee is moonlighting in any way, shape or form,” he added.

Pepperfry to file draft IPO papers next quarter for 2023 listing

Omnichannel furniture seller Pepperfry is looking to file its draft initial public offering (IPO) papers with the Securities and Exchange Board of India (Sebi) between October and December, and aims to list on the stock exchanges next year, a person aware of the matter told us.

Catch up quick: The Goldman Sachs-backed startup postponed its IPO plans earlier this year due to changes in market sentiment, which triggered high volatility. At the start of the year, ET reported that Pepperfry was in talks to raise $250-$300 million through its public issue.

Financials: Meanwhile, Pepperfry – which is among the last few standalone online furniture platforms – reported over 22% growth in revenue from operations at almost Rs 247 crore in FY22. The startup saw its revenue drop by 10% in FY21 because of Covid-19. It earns revenue from the commissions it charges for sales on its platform.

The company recorded a gross merchandise value of Rs 1,185 crore in the same period. Its losses increased by 83% to Rs 194 crore in FY22.

In an interaction with ET, Pepperfry cofounder and CEO Ambareesh Murty said the widening losses were due to expenses such as employee salaries and marketing spends.

The big shift: The founders have also been busy prepping for the IPO over the past year, relocating Pepperfry from the Cayman Islands to Mumbai. They had registered the company in the Cayman Islands as the earlier plan was to go public in the US.

Other IPOs on hold: Several tech companies have put their public listings on hold of late. Healthtech startup Pharmeasy decided to withdraw its IPO application after receiving Sebi’s clearance, citing market conditions, while SoftBank-backed Oyo Hotels and Homes and ecommerce company Snapdeal are yet to get the regulator’s nod to go public.

Tweet of the day

No room for startups with ‘black box’ business models: Sebi chief

The Securities and Exchange Board of India (Sebi) may have been late to the startup party, but Madhabi Puri Buch, its chairperson, said it is now planning to narrow the regulatory gap in the ecosystem.

Driving the news: Speaking at the Global Fintech Fest in Mumbai, Buch said that by definition, a regulatory gap is bound to exist.

“If startups are building something completely new, then it has not even entered the heads of those in the regulatory body. But, when we finally show up, what is it that fintech innovators should have kept in mind to avoid a crackdown?” she said.

No black boxes: Buch said that any business model that relies on a ‘black box’ – meaning its operations cannot be audited or validated — will not be allowed. She also said since data is public infrastructure, any attempt by a private firm to own it cannot be tolerated.

Doors are open, says RBI governor: Meanwhile, Reserve Bank of India (RBI) governor Shaktikanta Das said on Tuesday that the central bank’s doors are open to fintech startups that wish to discuss their grievances about its new digital lending rules, but added that the regulatory action was based on a thorough study of their operations. Das also said the RBI had no intention of stifling innovation or penalising any fintech player.

Investors sceptical about Zomato’s quick-commerce foray: Jefferies

Brokerage firm Jefferies has said that while investors are confident about Zomato’s competitive advantage in the food-delivery market they remain sceptical about its quick-commerce foray with the acquisition of Blinkit.

Quote: “We recently hosted Zomato founder and CEO Deepinder Goyal and CFO Akshant Goyal for investor meetings in the US.. Investors are generally convinced on the food delivery moat and the discussion was mainly around unit economics. However, scepticism is high on quick commerce, given there is no proof of concept yet in any large market in the world. Management, however, is bullish on the quick commerce business and sees Blinkit as a large driver of growth and profitability going forward,” the brokerage firm said.

It added that many investors questioned Blinkit’s existence, asking why someone would want groceries delivered in 10 minutes. “In the event of success, there is concern about competition from Amazon, Flipkart and Reliance Retail,” Jefferies wrote.

Response: Zomato’s management told investors that several dark stores are at contribution break-even and more are expected to achieve this over the next year.

ETtech Done Deals

Murf AI cofounders (from left) Divyanshu Pandey, Sneha Roy, Ankur Edkie

■ Speech technology startup Murf AI said it has raised $10 million in funding led by Matrix Partners India. Existing investor Elevation Capital, and prominent angel investors such as Ajay Arora, senior vice president, product, Disney Streaming; Ankit Bhati, cofounder of Ola; and Ashwini Asokan, cofounder of Mad Street Den also participated.

■ Audio streaming startup Kuku FM said it has raised $21.8 million in funding led by Nandan Nilekani’s venture fund Fundamentum Partnership. Paramark Ventures also joined as a new investor in this round, in which existing investors such as Krafton Inc – the South Korean gaming giant – 3one4 Capital, and Vertex Ventures also participated.

Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in New Delhi. Graphics and illustrations by Rahul Awasthi.