Foxconn may set up EV factory in India this year; ChrysCapital invests $100 million in Lenskart
Also in the letter:
■ Lightspeed’s Bejul Somaia on India’s VC opportunity
■ Experts discuss India’s role in building AI frameworks
■ Cloud still a priority for big corporations: TCS study
Foxconn may set up EV factory in India this year
Taiwanese electronics contract manufacturer Foxconn, best known for making the iPhone, is looking to enter the electric vehicle (EV) manufacturing space in India, and is in talks with some states regarding the same, sources told ET.
The dope: Sources also said that an Indian delegation is set to visit Taiwan soon and would meet with Foxconn executives to discuss the company’s plans in this space.
Operation India: Officials from Maharashtra, Telangana, Tamil Nadu, and Andhra Pradesh met top Foxconn executives during their visit to the country last year to discuss its EV plans, the sources added.
A person in the know of Foxconn’s thinking said that while the company is keen on Maharashtra as a base for EV manufacturing, “there were some challenges that cropped up. So they might consider Tamil Nadu as it has an auto manufacturing hub, and Foxconn already has a presence in the state”.
The company is also looking at Telangana as it is “the most active state in terms of outreach and incentive”.
One brand or many? “It is still unclear if Foxconn will do contract manufacturing for multiple brands or for a single brand through the JV (joint venture) route’’, one of the sources cited above said. “They have a tie-up with Ather (electric scooter maker), but it is likely that they will look for a different partner when they enter the space — possibly one of the (Indian) auto giants — like they did for semiconductors’’, the person added.
Also read | Vedanta-Foxconn chip factory set to get green light
Foxconn’s mobility push: Foxconn now has its eyes fixed on the mobility space. Currently, it has car projects running with the Yulon Group in Taiwan, with Fisker Inc. and Lordstown Motors in the US, and with state oil company PTT in Thailand, among others. In November 2022, it announced that it was teaming up with the Saudi Public Investment Fund to create an EV brand called Ceer.
ChrysCapital invests $100 million in eyewear retailer Lenskart
Omni-channel eyewear retailer Lenskart attracted new investors over the past year as it expanded into international markets. On Thursday, it announced a $100 million investment from private equity fund ChrysCapital through a mix of primary and secondary share sales.
Deal details: Of the $600 million ploughed into Lenskart shares, as much as $450 million was by way of secondary sales by existing investors. A secondary share sale is a transaction between two investors and the capital doesn’t come to the company.
The latest $100 million tranche from ChrysCapital includes $80 million in secondary share sales.
Secondary sales rising: Amid the ongoing funding drought, secondary share sales have gained prominence, with investors in top Internet firms looking to sell a part of their holdings to new investors. Logistics firm Xpressbees onboarded Malaysia’s Khazanah Nasional as Elevation Capital further diluted its stake in the firm. Ecommerce firms like Flipkart and FirstCry are in discussions for secondary deals for their investors, ET has reported.
Partial exits: Lenskart investors like SoftBank Vision Fund, Premji Invest, and Kedaara Capital have sold their stakes to ADIA and ChrysCapital in the current fundraising round.
Confirming ETtech newsbreak: ET was the first to report a potential investment by ChrysCapital’s in Lenskart in its February 23 edition. This is among the largest investments in a new-age entity by ChrysCapital, which has backed internet firms such as Dream11, FirstCry, and Xpressbees.
ADIA funding: In March, the sovereign wealth fund Abu Dhabi Investment Authority (ADIA) invested $500 million in Asia’s largest eyewear retailer, mostly through a secondary sale of shares along with a small primary round comprising growth equity at a $4.2 billion valuation. It resulted in ADIA becoming one of Lenskart’s largest shareholders with a 10% stake.
India not for the faint-hearted, but worth it: Lightspeed’s Bejul Somaia
In a note posted on Twitter after Sequoia Capital spun off its India partnership into an independent entity, Lightspeed Venture’s Bejul Somaia said India’s potential remains “incredibly compelling”, with its sizeable market, high-quality founders and adoption of technology.
Don’t underestimate: “India’s importance as the world’s third-largest digital market should not be under-estimated… significant value will be created in the transition to a digital economy, and a new generation of founders will be central actors in this value creation,” said Somaia in a lengthy message on Twitter.
Creative destruction: Hinting that a large number of private companies in India are overvalued, Somaia said, “Companies that don’t succeed contribute to a cycle of creative destruction that is essential to the development of an innovation economy”.
Chamath’s claims: On Wednesday, Silicon Valley investor Chamath Palihapitiya said venture capital firm Sequoia Capital’s decision to hive off its India partnership did not make sense considering it is one of the fastest growing economies in the world. He said that while the exit from China was understandable, the firm could have continued with its India operations.
Also read | Became too complex to run a global investment biz: Peak XV’s Shailendra Singh on Sequoia split
India’s position as a neutral jurisdiction key to AI framework
With regulation of artificial intelligence (AI) becoming a hot topic across the globe, experts at a round table conducted by ET spoke about India’s role in modelling regulatory frameworks around AI. The government said earlier this week that it will look at AI regulation only through the lens of user harm.
Tech agnostic: Industry leaders said India’s role as a technology agnostic country will be critical in the evolution of AI frameworks. Building AI development and learning ecosystems that prevent the propagation of biases is integral to creating responsible frameworks, they added.
Mandarins weigh in: “Cross-functional teams comprising technology, marketing, human resources, and legal experts, among others, have to come together to ensure that enterprises have the right strategy to deal with such a disruptive technology,” said Hasit Trivedi, Tech Mahindra’s chief tech officer, digital technologies and global head – AI.
Ashish Aggarwal, IT industry body Nasscom’s vice president and head of public policy, said that while biases within AI systems may not be intentional, they are a major threat to the efficacy of these systems.
“One of the important ways of addressing this issue during the development of AI solutions is to ensure that businesses work with diverse and inclusive teams that bring in multiple viewpoints and help call out such biases”, he explained.
Tejal Patil, General Counsel, Wipro, suggested including people with a strong background in humanities, in areas like sociology, philosophy, etc., in the development of AI solutions.
Quick recap: Nasscom had earlier this month released guidelines for responsible AI usage. For the development of generative AI solutions, the guidelines recommend cautious use, and risk assessment of potential harm throughout the lifecycle of the solutions.
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Cloud still a priority for big corporations, says report by TCS
Despite global cloud providers witnessing a slowdown amid a challenging macroeconomic environment, a recent study conducted by Tata Consultancy Services (TCS) showed that most companies are still prioritising cloud investments.
Details: The global survey of 972 senior executives reveals that innovation is a major driver of cloud investment, although 36% of respondents admitted to having over-invested in the space over the past three years. A fourth of the respondents said they have changed or are considering changing their cloud strategy due to insufficient ROI.
Around 75% of respondents had invested in AI and machine learning capabilities over the past two years, and 78% plan to do so over the coming 12-24 months. Both technologies are highly dependent on access to large amounts of data and scalability, leveraging the cloud.
Also read | The Indian cloud market evolves and takes many shapes
‘ROI anxieties’: Krishnan Ramanujam, president, Enterprise Growth Group, TCS, said, “Cloud is a frequent source of short-term ROI anxieties, but growth and transformation is a long game. Reconciling these two realities is a challenge and a necessity, but fully achievable with the right strategy and planning”.
Revenue driver: More than a third of respondents (37%) said they have made progress in their goals for cloud-enabled innovation in the form of new business models, underlining the growing power of the cloud to drive revenues. In addition, the study finds that a clear majority of respondents — 67% — are using cloud technologies to achieve sustainability goals.
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