Also in this letter:
■ Swiggy names three independent board directors
■ Draft online gaming rules: a timeline
■ Paytm stock climbs over 7% after earnings
MeitY ban on loan apps includes non-Chinese players like PayU’s Lazypay
The 94 lending apps that were banned on February 5 by the central government included apps of Indian firms as well, a government official told ET. The Indian apps which were taken down following a notice from the Ministry of Electronics and Information Technology (Meity) include PayU’s buy-now-pay-later service LazyPay.
Which are the apps impacted? These include fintech major PayU’s buy-now-pay-later service LazyPay, Kissht, among others. LazyPay was taken down once earlier in January 2021 from the Google Play Store for violating RBI norms. The IT ministry typically issues ban orders to internet service providers and telecom companies on the basis of inputs received from the Ministry of Home Affairs, which acts on the basis of multiple sources of intelligence, including from local police cyber cell departments.
Background: Over the past few years, online lending platforms have come under the scanner of the government, law enforcement agencies and internet companies such as Google which hosts apps on its Play Store.
Dell to lay off 6,650 employees, cut 5% of global workforce: report
Dell Technologies will eliminate about 6,650 jobs, or about 5% of its global workforce, amid falling demand for personal computers, according to a Bloomberg report. The company is experiencing market conditions that “continue to erode with an uncertain future,” a memo from co-chief operating officer Jeff Clarke to employees said.
Earlier measures not enough: According to Clarke, the previously implemented cost-saving strategies, such as a hiring freeze and travel restrictions, have proven to be insufficient. Meanwhile, a company spokesperson said the restructuring of departments and job cuts will improve efficiency.
Impact on sales: Dell reported a 6% decrease in sales for the period ending October 28 and provided a lower-than-expected revenue projection for the current quarter. The company said customers reducing their IT purchases was the reason behind lower guidance.
Autodesk lays off 250 employees: Software company Autodesk is laying off 250 employees, less than 2% of its global workforce, amid the global economic meltdown. It said these layoffs are part of the plans for financial year 2024. The company wants to “focus on ensuring that our resources remain well-aligned to support our key priorities for the coming year.”
Layoffs in 2023: The layoff wave has swept across startups, mid-sized firms and big tech companies, including Amazon, Microsoft and Google parent Alphabet. So far in 2023, 256 tech companies have laid off 82,769 employees, according to tracking site Layoffs.fyi. Here is a list of major companies that have announced layoffs.
Also read: Layoffs in 2023: a list of Indian startups & tech companies that have cut jobs
Swiggy appoints three independent board directors
Food and grocery delivery startup Swiggy has appointed Delhivery CEO Sahil Barua, TAFE managing director Mallika Srinivasan, and renowned chartered accountant Shailesh Haribhakti as independent directors on company board.
Details: The move comes on the back of Swiggy’s plan to tap the public market, which was afoot till last year. However, with the tech rout hitting stocks globally and in India, the company may look to push its listing for now.
Quote, unquote: “They have very rich and diverse experiences in building sustainable businesses at scale. Getting these new and powerful perspectives and strengthening our governance will immensely benefit us as we march ahead in our mission to bring unparalleled convenience to consumers,” said Sriharsha Majety, CEO and cofounder, Swiggy.
Vedanta brings on board David Reed as CEO of semiconductor biz: Vedanta on Monday said it has appointed David Reed as the chief executive officer of its semiconductor business. The company said Reed will be responsible for setting up a state-of-the-art semiconductor fab unit and semiconductor assembling and testing unit.
Treebo cofounder Rahul Chaudhary joins Matrix Partners: Rahul Chaudhary, cofounder of budget hospitality chain, Treebo Hotels, has joined venture capital fund Matrix Partners India.
In his new role, Chaudhary will be looking at early-stage investments for the fund, focussing on seed to Series A startups. Matrix is an early investor in companies such as ride-hailing and electric vehicle venture, Ola, digital payments provider Razorpay, and short- video player Dailyhunt, among others.
ETtech Explainer: timeline of India’s draft online gaming rules
The Ministry of Electronics and Information Technology (Meity) on January 2 released draft amendments to the IT intermediary rules 2021.The changes in rules pertain to online gaming for public consultations.
In the draft amendments, the government has proposed a self-regulatory mechanism, age verification, and a know-your-customer (KYC) process for online gaming companies.
ETtech examines what the rules mean for online gaming while looking at the timeline of events relating to the draft online gaming rules.
First, some context: Differences have emerged between members of Internet and Mobile Association of India (IAMAI) over the draft gaming rules. Soon after the digital services industry body’s ‘Right-on-intent poor-on-scoping’ statement, four members have written to the Ministry of Electronics and Information Technology (MeitY) stating that the IAMAI view is not aligned with theirs. Dream11, Mobile Premier League (MPL), Zupee and Games24x– in the letter said IAMAI did not consult them before making the statement public.
What are the rules about? According to the draft rules, online gaming platforms are expected to comply with the laws of the land, including any such law that relates to gambling or betting or the age at which an individual is competent to enter into a contract.
The proposed rules state that an online gaming intermediary must follow the regulations and take “necessary steps to ensure that its users do not host, display, upload, publish, transmit, or share an online game that is not in compliance with Indian law, including any law on gambling or betting.”
The proposed regulations require further due diligence from online gaming firms, including the display of a registration mark on all online games registered with a self-regulatory authority and disclosure of their withdrawal and refund policies to users.
Balanced framework best suited: A light-touch balanced regulatory framework is best suited to enable Online Skill Gaming (OSG) to grow responsibly, promote innovation and protect consumers as well, a report said on Monday. A regulatory framework is required to meet the multiple challenges that the OSG industry is facing today, including perception, lack of proper definition, presence of fly-by-night operators and money laundering apprehensions, the report said.
Read our explainer on important developments around the draft online gaming rules
Paytm stock climbs over 7% as company turns profitable in Q3 EBITDA level
Shares of digital payments service provider Paytm rallied over 7% to Rs 564 in Monday’s trade after the company turned positive at the operating level in December quarter, three quarters ahead of its guidance.
Merchant subscriptions stood at 5.8 million compared to 3.8 million a year ago. The number of merchants paying subscriptions increased by 1 million sequentially. At 3.29 pm, the scrip closed at Rs 557, higher by 6% over its previous closing price of Rs 525. However, in the last one year, the stock has fallen about 43%.
Turns profitable: Paytm parent One 97 Communications recorded a 42% increase in revenue from operations to Rs 2,062 crore in the December quarter. The increase in operating revenue was mainly fuelled by a surge in loan disbursals. The company’s net loss narrowed to Rs 392.1 crore from Rs 778.5 crore last year. Paytm reported a positive EBITDA before ESOP cost (earnings before interest, taxes, depreciation, amortisation and employee stock option costs) Rs 31 crore. This metric was negative Rs 393 crore in December quarter last year.
Boosted by loan disbursals: The value of Paytm’s loan disbursals rose 357% on-year during the December quarter at Rs 9,958 crore. The Noida-based fintech company’s revenues from financial services also jumped more than three times to Rs 446 crore from Rs 125 crore last year.
Today’s ETtech Top 5 newsletter was curated by Siddharth Sharma in Bengaluru and Erick Massey in New Delhi. Graphics and illustrations by Rahul Awasthi.
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