India on route to becoming digital superpower: Meta’s Nick Clegg; Sequoia responds as Algo dumps defamation suit

Also in this letter:
■ Algo Legal’s withdrawal of defamation suit vindicates our stand: Sequoia
■ IT firms face US staff shortages amid high attrition, visa issues
■ DeHaat raises $60 million funding co-led by Sofina, Temasek

India on its way to becoming ‘digital superpower’: Meta’s Nick Clegg

Nick Clegg, president for global policy affairs, Meta (Photo by Ashwani Nagpal)

The Indian government is looking to carve out specific tech regulations and not take off-the-shelf versions from elsewhere, Nick Clegg, president for global policy affairs at Meta, told us in an exclusive interview.

Clegg, the former UK deputy prime minister who is on a week-long visit to India, also said there is increasing awareness that India plays a unique role in the digital ecosystem and that the country is on its way to becoming a “digital superpower”.

Here are some edited excerpts from the interview:

On India’s role in regulating the internet: India’s take on digital issues is refreshingly straightforward. Given how much new regulation is being introduced in India and the pivotal role it plays in the global digital ecosystem, I think it occupies an unusually interesting position at an unusually interesting time.

On India’s new regulations: As far as I can make out, the Indian government is seeking to carve out regulations for India and not just taking off-the-shelf versions from Europe, the UK, Canada or the US. I do think there is a real awareness that India plays a unique role in the digital ecosystem. India’s ambition in pursuing this ‘techade’ is a totally legitimate one. It is really on route to becoming a digital superpower. It already is, in many respects.

On the global tech meltdown: The common theme, which almost sounds naive in hindsight, is that there was an assumption that the atypical trends during the pandemic would become typical. We hired huge numbers of people. Unfortunately, if you hire like this because you think a trend is going to continue, and it does not, you have to cut your cloth differently, which is why we, unfortunately, had to announce these layoffs.

On Twitter under Elon Musk: Well, it’s certainly quite a spectacle! Amid the media attention on Twitter, I was reminded of how very different it is from Facebook. Twitter is an elite app. It is actually very small – smaller than Snap in terms of users. But it is used very, very heavily by politicians and journalists, by the cultural elites. Facebook is a genuine mass-market app.

Also Read | Meta to take a call on reinstating Donald Trump in early 2023: Nick Clegg

Algo Legal’s withdrawal of defamation suit vindicates our stand: Sequoia

After law firm Algo Legal and its founder Sandeep Kapoor withdrew their Rs 1 crore defamation suit from a Bengaluru court against Sequoia Capital India and a set of media outlets, the venture capital firm issued a statement on Thursday, calling the defamation claim “incorrect” and the suit’s withdrawal a “‘vindication of its stand”.

It said the case was withdrawn “just prior to Sequoia India filing its reply to the suit”.

Responding to an ET query, Sequoia India denied having made an out-of-court settlement with Kapoor and Algo Legal.

The defamation suit also named Bennett Coleman and Company Ltd, which publishes ET.

Algo Legal responds: A spokesperson for Algo Legal said, “The fact that these allegations have not been proved, or resulted in any action – well over six months after they surfaced – clearly shows the falsity of these accusations and the malicious intent with which they were made.”

“However, instead of being dragged through endless legal proceedings… we have decided to move forward and do what we do best – which is to service our clients to the best of our ability,” the firm added.

Catch up quick: We reported on June 3 that Sequoia Capital had shot off a note to its portfolio companies, saying it had stopped working with Algo Legal after an investigation at one of its investee firms revealed “concerning incidents”. Kapoor and Algo Legal filed the defamation suit after the report was published.

Kapoor, a former Sequoia Capital general counsel, worked at the fund for nearly nine years till he left in 2018.

IT firms face US staff shortages amid high attrition, visa issues

Indian software exporters are battling reduced onsite strength in the US due to higher attrition and visa restrictions. This is putting pressure on revenues and margins of firms such as Cognizant even as their clients increasingly turn to offshoring.

Attrition spikes: Onsite attrition has become a trend across the board in the IT sector, data from staffing firm TeamLease shows. The onsite attrition rate in the IT industry surged to 25% in 2022 from 6% in 2020, Siva Prasad Nanduri, chief business officer of TeamLease, told us.

Higher onsite attrition has a ripple effect on companies’ profits as it forces them to hire subcontractors to meet skill demands, leading to higher costs and pressure on margins.

Cognizant hit hardest: In an earnings call in early November, the IT services major said fewer “billable” resources in the US over recent quarters have been hurting its revenue. CEO Brian Humphries said the effect would continue through Q4 (Cognizant follows the calendar year) before “clear progress” by the first quarter next year.

DeHaat raises $60 million funding co-led by Sofina, Temasek

DeHaat founders (L-R) Adarsh Srivastav, Shashank Kumar, Amrendra Singh, Shyam Sundar Singh, Abhishek Dokania

Agricultural services provider DeHaat has raised $60 million in a Series E funding round led by Sofina Ventures and Temasek.

The investment round also saw participation from other investors, including RTP Global Partners, Prosus Ventures and Lightrock India, the startup said.

DeHaat last raised funds in October 2021, when it received $115 million in a round led by Sofina and Lightrock India. Temasek also participated in the round.

What it does: DeHaat uses AI-enabled technologies to improve supply-chain and production efficiencies in the farming sector. The Patna and Gurugram-based startup has built a last-mile supply chain in more than 110,000 villages across more than 150 districts through a digitised network of over 10,000 micro entrepreneurs, called ‘DeHaat Centers’.

Infographic Insight: Investments in technology startups in the agriculture and food sectors more than doubled to $4.6 billion in FY22, according to a new report by AgFunder and Omnivore. Farmtech startups raised $1.5 billion across 140 deals, a 185% increase year-on-year.

Tweet of the day

Musk meets Cook, says Apple didn’t consider dropping Twitter

Elon Musk tweeted on Thursday that a misunderstanding about Twitter potentially being removed from Apple’s App Store was resolved following his meeting with the iPhone maker’s chief executive Tim Cook.

Twitter’s new boss posted a video of Apple’s headquarters and thanked Cook, adding, “Good conversation. Among other things, we resolved the misunderstanding about Twitter potentially being removed from the App Store. Tim was clear that Apple never considered doing so.”

Catch up quick: Musk lashed out at the world’s most valuable company in a series of tweets this week, one of which was a meme suggesting he was ready to “go to war” with Apple over its 30% commission for App Store purchases, its advertising pullback on Twitter, and rumours that it was considering dropping the social media app from the App Store “without saying why”.

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