Also in this letter:
■ Byju’s may rebrand WhiteHat Jr, fires another 300 at Toppr
■ MeitY flags Twitter’s lack of response to notices
■ Apple asks competition watchdog for access to probe papers
Banks rethink fintech partnerships after RBI’s new rule
Indian banks are rethinking partnerships with credit-card based fintech firms following recent directives by the Reserve Bank of India (RBI) with respect to the co-branded card segment.
Several banks have reached out to RBI to understand the regulator’s thinking after it issued orders for debit, credit and co-branded cards in April.
Halt: RBL Bank has told its co-branding card fintech partners that it would stop support services starting June 30, multiple people told us.
“RBL Bank has been going slow on its partnerships with KreditBee and Uni Cards, after the regulator started questioning the business model of some of these firms,” a person close to the development said.
“RBI was clearly unhappy that fintech firms were mimicking a credit card on a prepaid bin (bank identification number).”
“The RBI wanted to know: who do these cards belong to, the bank or the fintech? Since then, RBL indicated to its fintech partners that they may have to take a relook at these partnerships, depending on the policy announcements by the regulator,” the person added.
On June 23, we reported that digital lending startup Kissht was ending its partnership with RBL Bank for its co-branded product.
Other key bank partners for the segment include IDFC First Bank and State Bank of Mauritius (SBM) in India.
Long-term issue: The card guidelines and the RBI’s circular on PPIs came after multiple consultations with the industry.
A payment industry executive who was involved in the discussions said, “Everyone in the industry knew that RBI had a conservative view about the (co-branded card) segment. During the first meetings of fintech firms with the RBI, it seemed like somewhere these models were mimicking a credit card. RBI was quick to say earlier this year that the co-branded card also has to have the name of the bank partner, which certain fintech firms were flouting. That led to the issuance of the guidelines earlier this year.”
Byju’s may rebrand WhiteHat Jr, fires another 300 at Toppr
Edtech major Byju’s is in active discussions to rebrand its code-teaching unit WhiteHat Jr, which it acquired in a $300 million deal in 2020, multiple sources told us.
WhiteHat Jr, which teaches coding to children, has run into trouble in the past for allegedly misleading advertisements and promises on the outcomes of their courses. WhiteHat Jr challenged its critics in court but eventually withdrew its petition last year.
According to sources aware of the discussions, the rebranding exercise comes after the company assessed itself on various metrics, including branding.
Partial or complete brand? As per current discussions, Byju’s may add its name to WhiteHat Jr as a suffix, but is also considering renaming it completely and using the Byju’s name. A final call is yet to be taken.
“There is a high chance that a complete revamp, without the WhiteHat Jr name, may be chosen,” one of the sources said.
Last year the company introduced coding courses powered by WhiteHat Jr in new geographies such as Latin America under the brand name Byju’s Future School.
Toppr layoffs: Meanwhile, Byju’s has fired 300 people from its subsidiary Toppr, sources told us, a day after we reported that WhiteHat Jr had fired around 300 staff.
“Byju’s has completed the integration of Toppr and has absorbed almost 80% of its talented workforce into the Byju’s ecosystem. As the next step, we are optimising teams to recalibrate business priorities and accelerate our long-term growth,” a spokesperson said, confirming the layoffs.
Several edtech startups, including SoftBank-backed Unacademy, Vedantu and others have laid off employees in the past few months to increase their runway and conserve cash.
MeitY flags Twitter’s lack of response to notices
The government sent several notices to Twitter India over the last six to eight months but received “no or inadequate” response in at least five such cases, sources told us.
The Ministry of Electronics and Information Technology (MeitY) issued the notices to the social media platform under Section 69A of the Information Technology (IT) Act.
Catch up quick: We reported on Wednesday that the IT ministry sent a notice on June 27 giving Twitter India “one last opportunity” to comply with the IT rules by July 4 or risk losing its immunity as an intermediary.
One case, a senior IT ministry official said, was related to an incident of communal violence and Twitter removed the content more than 72 hours after the notice was issued.
Ministry officials did not, however, elaborate on which of the notices Twitter did not respond to or how many notices the IT ministry had sent under Section 69A.
Twitter India did not respond to our queries.
TWEET OF THE DAY
Apple asks competition watchdog for access to probe papers
US technology major Apple and its subsidiary Apple Distribution International (ADI) have written to India’s anti-trust regulator, seeking access to documents pertaining to an ongoing probe.
Apple and its associate company have asked the Competition Commission of India (CCI) to supply relevant case documents submitted by a Rajasthan-based informant against Apple and ADI, people aware of the developments told us.
Catch up quick: The CCI has opened a probe against Apple based on a complaint made by the not-for-profit group Together We Fight.
The competition watchdog ordered a probe in December 2021 after it found prima facie a case of abuse of dominant position in the market.
The complaint alleged that the technology company charges a 15-30% commission on in-app purchases. It also alleged that Apple had a monopoly in the relevant market.
Apple is justifying its position based on a US court judgement in a 2020 case by a US-based gaming company Epic Games. A single judge ruled in September 2021 that Apple was not a monopoly. But legal experts said a foreign court judgement may not have standing in India.
MPL forays into web3 gaming, in talks to raise $10-$15 mn
Mobile Premier League (MPL) is launching a new web3 gaming venture, GGX, multiple sources privy to the development said, as the gaming unicorn taps the play-to-earn (P2E) gaming sector.
GGX is expected to be an in-game non fungible token (NFT) marketplace that will offer a platform for owning and trading in-game assets, like an exchange.
MPL is in advanced talks to raise $10-$15 million through a simple agreement for future tokens (SAFTs) from investors including Spartan Capital, a digital asset management firm and Polygon, valuing the startup at about $200 – $250 million.
MPL will likely control 20% of the native token’s supply.
In P2E gaming, players are rewarded with cryptos, which they can exchange for real money.
Good Glamm’s Raymond brands acquisition in the dock
Direct-to-consumer beauty and personal care company Good Glamm Group’s (GGG) efforts to acquire the consumer care business of the Raymond Group, which houses the Park Avenue and Kamasutra brands, has hit a roadblock on valuation, said people in the know.
Existing investors of GGG have expressed their reservations about the Rs 3,000 crore cash-and-stock deal that both sides were negotiating. According to them, “economics and integration flywheel of the spate of past acquisitions still need to be tested,” said one of the people.
Raising debt for the acquisition in the backdrop of interest rate hikes, inflation and the meltdown in global technology valuations, is also proving to be a challenge, three people with direct knowledge of the development said.
Spokespersons for Raymond and Good Glamm declined to comment on what they called market speculation.
We were the first to report on the proposed GGG-Raymond deal on May 4.
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