Leave OTT apps out of telecom bill: Meta’s Nick Clegg; funding for e-marketplace firms to remain scarce

By Daisy On Dec 1, 2022

Earlier this month, companies such as Meta, Google and Twitter told the government the draft Telecom Bill, 2022 must exclude “broadcasting services as well as all content including digital content” from its purview.

On Wednesday, Meta’s president for global affairs Nick Clegg reiterated this stance, saying WhatsApp and other OTT apps should be governed by IT laws and not the draft telecom bill.

Also in this letter:
■ Indian e-marketplaces to see funding shortage in near term: report
■ Temasek unit picks up 1.14% stake in Zomato
■ Indian smartwatch sales surge on festive push, health consciousness

Don’t use same rules for telecom, messaging apps: Meta’s Nick Clegg

Including communication apps such as WhatsApp in the same regulatory framework as telecom service providers is like comparing apples to pears, Nick Clegg, president, global affairs at Meta told us in an interview.

Telecom bill concerns: Talking about the draft telecom bill, which has proposed bringing over-the-top (OTT) apps under the same licensing conditions as telecom services firms, he also said internet platforms like Facebook, which function as intermediaries, should be governed by existing IT legislations.

Discussions: Clegg said this issue came up during his discussions with Indian policymakers this week and that Meta – the parent company of Facebook, Instagram and WhatsApp – will continue to “make the case” with the Indian government.

Regulations galore: Over the past year, India has seen a number of policies aimed at regulating the digital ecosystem.

The draft telecom bill was released earlier this year, and the government also notified changes to the IT Intermediary Rules under the IT Act, 2000.

Earlier this month, it published a draft of the revised Data Bill after junking the Personal Data Protection Bill, which was five years in the making, in August.

The government is also working on revising the 22-year-old IT Act, which will be replaced by the Digital India Act.

Indian e-marketplaces to see funding shortage in near term: report

Venture funding is expected to remain scarce in the near term for all major marketplaces across categories such as ecommerce, fintech, ride-hailing, and food delivery, according to a new report.

Driving the news: “Going forward, investors are likely to focus more on proven models and experienced founders, potentially entering into more late-stage deals with higher round sizes,” according to a report on Indian marketplaces by research firm Bain & Company in partnership with venture capital firm Accel.

Dealmaking is likely to be more measured, and valuation multiples will see some degree of rationalisation, it said.

Microcosm: This is similar to what is happening across the startup ecosystem in India and globally as macroeconomic conditions have worsened over the past several months.

In the first 10 months of 2022, marketplaces raised about $4.5 billion combined, just one-third of the $14 billion the industry raised during January-October 2021, the report said.

Going global: The report said existing marketplace-based tech companies and new ones will primarily see growth by expanding into new territories beyond tier-3 towns and by launching overseas.

Lately, companies such as Captain Fresh and Urban Company have expanded into markets outside India.

Future opportunities: Opportunities for building marketplaces also exist in gaming, caregiver services, and Web3 projects in India, as similar initiatives have worked out well in markets like the US and China, the report said.

India’s total gross merchandise value (GMV) from online marketplaces will touch $350 billion by 2027 from the current $100 billion, it said.

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Temasek unit picks up 1.14% stake in Zomato

Camas Investments Pte Ltd, an arm of Singapore’s state-owned fund Temasek Holdings, bought 98 million shares of Zomato on Wednesday at Rs 62 apiece, bulk deals data from National Stock Exchange showed. In all, the Temasek unit picked up a 1.14% stake in the food-delivery company for Rs 607.60 crore.

Alibaba sells: On Wednesday, Alibaba group affiliate Alipay Singapore Holding Pte Ltd offloaded 262.87 million shares of Zomato for Rs 62.06 per share, the data showed. This represented 3.07% stake in the company.

Shuffle: After the changing of hands of Zomato shares, Temasek now holds a combined 4% stake in the Gurugram-based company. It bought a 2.86% stake in Zomato in 2020 through its arm Macritchie Investments Pte Ltd.

Alibaba, meanwhile, will own about 10% in Zomato through its units Alipay Singapore Holding and Antfin Singapore Holding Pte Ltd.

ET Ecommerce Index

We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.

Indian smartwatch sales surge on festive push, health consciousness

Smartwatches have become the new favourite among young Indian consumers thanks to increased health consciousness and a recent push from brands during online festive season sales, industry executives told us.

These devices have emerged as a ‘lifestyle asset’ for consumers aged between 18-24, who drive the majority of sales in the segment.

Driving the news: A report by market research firm Counterpoint on Tuesday said ecommerce festive season sales made India the largest smartwatch market in the world by volume in Q3, surpassing the US.

The Indian smartwatch market grew 171% year-on-year in the third quarter, it said.

The main drivers of the record sales in Q3, apart from festive season sales, were bigger product portfolios at affordable prices, and an emphasis on local manufacturing, according to Counterpoint.

Too much demand: Arnav Kishore, cofounder and CEO of Fire-Boltt, the second-largest smartwatch brand in India, told us it was difficult to keep up with the demand for smartwatches this festive season and that his company lost out at least 40% more sales because of this.

Noise and Boat are the other two key firms in the segment that are expanding aggressively.

ETtech Done Deals

Former Flipkart executive Ranjith Boyanapalli’s early-stage startup Flash, which aims to build unified digital identities for frequent shoppers, has raised $5.8 million in seed funding led by global funds such as Global Founders Capital (GFC), White Venture Capital, Zinal Growth, Soma Capital, Emphasis Ventures and Peer Capital.
Contract manufacturing unicorn Zetwerk on Wednesday said that it has made its fourth acquisition this year, this time through US-based manufacturing services company Unimacts, for $39 million. The transaction is a mix of cash and equity, people aware of the discussion told us.
Agritech startup MoooFarm, which offers a dairy-as-a-service platform to farmers, has raised $13 million in a Series A funding round led by Aavishkaar Capital. Other investors that participated in the round include Aditya Birla Ventures, the venture capital arm of Aditya Birla Group, and Accel Partners. Existing investors Rockstart AgriFood, Navus Ventures and Alteria Capital also participated, according to a statement.
Tech-enabled pet care startup Vetic said it has raised $3.7 million in a seed funding round led by investor Lachy Groom. The round also saw participation by renowned angel investors, including Utsav Somani (partner, AngelList India), Nitin Saluja (founder Chaayos), Shiva Singh Sangwan (founder, 1947 Rise), Revant Bhate (CEO, Mosaic Wellness), and Manu Gupta (founder, Blue Lion VC).
Burmese vegan restaurant chain Burma Burma Restaurant and Tea Room said it has raised upwards of $2 million in a seed round led by Negen Capital. The funding round also saw participation from Bbigplas Poly Private Ltd and others.