PhonePe raises $100 million in fresh funding; Deepinder Goyal dismisses talks of attrition at Zomato

Also in this letter:
■ Zomato CEO Deepinder Goyal plays down attrition problem
■ Google not complying with CCI ruling, alleges Epic Games
■ Microsoft’s LinkedIn joins layoffs drive

PhonePe raises $100 million funding at $12 billion valuation

PhonePe founders Sameer Nigam (left) and Rahul Chari

Digital payments major PhonePe has raised another $100 million in primary funding after raising $350 million last month.

Who has pumped in funds? Ribbit Capital, TVS Capital Funds and Flipkart’s early backer Tiger Global are three investors which have put in funds at a pre-money valuation of $12 billion.

With this second tranche, the fintech startup has raised $450 million in the first two months of this year.

Founder’s speak: “We are privileged to have a great set of leading global investors, both existing and new, who believe in our mission of building massive technology platforms to bring at-scale financial and digital inclusion in India,” said Sameer Nigam, co-founder and chief executive officer (CEO) of PhonePe.

Most valuable fintech: PhonePe had raised $350 million in funding from global private equity firm General Atlantic at a pre-money valuation of $12 billion, making it the most valuable privately held Indian fintech firm.

PhonePe, owned by Walmart, was previously valued at $5.5 billion after raising $700 million from the US retail major in December 2020.

Domicile shift: The fundraise follows PhonePe’s recent change of domicile to India and full separation from the Flipkart group. Flipkart doesn’t own any stake in PhonePe now and its valuation will be readjusted to about $33 billion as part of the separation.

CEO Sameer Nigam in January said that PhonePe investors paid about Rs 8,000 crore in taxes to the India government to shift domicile to India.

Also read | ETtech Explainer: why PhonePe investors paid Rs 8,000 crore to shift base to India?

Epic Games joins India developers in Google vs CCI battle

US firm Epic Games on February 9 submitted a filing with the appeal tribunal in New Delhi alleging that Google has not complied with a part of the CCI directive, as per a Reuters report.

Not a fair game? Epic Games has alleged that the tech giant is not hosting the gaming company’s app store on Google’s Play Store app.

According to Epic’s submissions, Google has not complied with a part of the CCI directive that directed the tech giant to host third-party app stores on Play Store and allow apps to be downloaded freely, without using Play Store, a practice called “sideloading”.

Also read | Facing the Googly: Google announced changes to its app store policies but will these benefit users?

The company claims in the filing it is “exploring launching” the Games Store app on Google Play Store and has been “adversely affected” by Google not complying with the CCI order.

Quote unquote: “We are seeking to join Indian developers in court to support the CCI’s order that requires Google to allow competing third-party app stores,” Bakari Middleton, director of global public policy at Epic Games, told Reuters.

Catch up quick: Google announced several key changes to its Google Play Store policy and flagship Android operating system in India just ahead of the deadline given by Supreme Court.

On October 20, the Competition Commission of India fined Google Rs 1,337.76 crore and a week later in a different order, the CCI again fined Google Rs 936.44 crore for abuse of its dominant position.

Deepinder Goyal plays down attrition problem at Zomato

Reacting to discussions about the recent top-level exits at Zomato, its chief executive Deepinder Goyal took to social media to say that more than 50% of the top 50 people have been with the firm for over seven years and that “many of these folks are on their second (and third) stint”.

Quote, unquote: “There’s been a lot of chatter about the culture at Zomato after a series of exits over the last few months. Well, here’s a fact — there are more than 200 people at Zomato who have spent more than seven years at the company,” Goyal tweeted in a post headlined, ‘attrition problem at Zomato!!!’

Top-level exits: The senior-level exits at Zomato include that of cofounders Mohit Gupta and Gunjan Patidar, who was also the chief technology officer. Head of new initiatives Rahul Ganjoo and Siddharth Jhawar, who was heading intercity delivery, had quit the firm late last year.

‘We’re good for now’: Goyal, during the analysts call recently, had said that Zomato CFO Akshant Goyal and himself had taken over some of the responsibilities of those who had exited, with the remaining assignments being handed over to other team members. “I’m doing a bunch of things, Akshant ( Goyal) has taken up a couple of things…we also have a strong bench. So, with a combination of these three, we’re good for now,” he said.

TWEET OF THE DAY

Layoffs at LinkedIn as Microsoft continues downsizing

Microsoft’s LinkedIn is the latest company to be hit with layoffs, with employees in the recruiting department impacted, according to a report by news website The Information. The company laid off workers in its recruiting department Monday, the report said.

How many pink slips? It’s unclear so far how many employees were handed pink slips by the company.

Microsoft’s layoff wave: Besides LinkedIn, Microsoft reportedly announced job cuts in its hardware divisions, including HoloLens, Surface and Xbox teams. The tech firm sacked 617 of its employees working in the Seattle office, according to a Bloomberg report.

Last week, GitHub, a software collaboration platform owned by Microsoft, announced it is laying off up to 10% of its workforce and closing all of its offices, including its headquarters in San Francisco.

Background: In January, Microsoft said it would lay off 10,000 employees or about 5% of its global workforce to “align cost structure” with declining revenue. CEO Satya Nadella had said the decision was difficult but necessary.

Also read | Layoffs in 2023: Ebay, Zoom among latest firms to cut jobs amid economic turmoil

Several companies including Amazon, Google parent Alphabet, among others, have announced layoffs in the past few months. So far, 344 tech companies have laid off around 103,767 employees in 2023, according to tracking site Layoffs.fyi.

Also read | Layoffs in 2023: a list of Indian startups & tech companies that have cut jobs

Apple’s India manufacturing dreams have a problem

The government in recent years has stepped up efforts to convince international companies that India is a credible and robust alternative to China for fulfilling their manufacturing requirements. Meanwhile, iPhone maker Apple has shown interest in shifting some of its production from China to India to reduce its reliance on Beijing.

However, this seems a tough task for Apple in view of several challenges it faces in India, including weak infrastructure, logistics, and poor yield, according to a Financial Times report.

Cook on India: Apple’s CEO Tim Cook at a recent earnings call said that the company is bullish on India, with the company building out production in the country to reduce its reliance on China, where US trade restrictions and Covid-related disruptions have made manufacturing riskier.

Bullish, but…: Apple’s India output has thus far been largely limited to the iPhone, making AirPods the second Apple product now partially manufactured in the country. Moreover, Apple’s process of expanding in India has been slow owing to issues with logistics, tariffs and infrastructure.

Low yield: A Financial Times report says that Tata, one of Apple’s suppliers, has seen only a 50% yield in their production line at a casings factory in Hosur.

Miles to go: Apple has a long way to go to diversify out of China, which makes nearly 98% of iPhones. The iPhone maker wants India to account for up to 25% of its production, from about 5%-7% now.

Today’s ETtech Top 5 newsletter was curated by Megha Mishra in Mumbai and Erick Massey in New Delhi. Graphics and illustrations by Rahul Awasthi.