Outgoing Puma India chief racks up $52 million for new startup; Cred unit executes layoffs

Also in this letter
■ MeitY to lead fact-checking body
■ Poor connectivity affecting app usage
■ Foxconn to invest Rs 4,000 crore on Hyderabad plant

Outgoing Puma India head raises $52 million for his startup

Abhishek Ganguly, India and Southeast Asia managing director of Puma, who is leaving the German sports and apparel maker in August, has raised Rs 430 crore in his startup’s first round of funding.

Deal details: Of the Rs 430 crore that Ganguly has raised, Convergent Finance LLP, led by Harsha Raghavan, a former Fairfax India executive, has invested about Rs 400 crore. The rest has come from individual investors.

Ganguly’s colleagues at Puma India — Atul Bajaj, executive director – sales and operations, and Amit Prabhu, chief financial officer, who are also leaving the company — are cofounders in the new venture.

ET first reported last week that Ganguly was on his way out and that he planned to start up.

More on Agilitas Sports: Ganguly told us that his new venture will look to partner and invest across the sports ecosystem, from manufacturing to retail to technology. “We will focus on offering the right sportswear products with good quality, and an aspirational value.”

As much as 70% of the sportswear market is in footwear and that will be a big area of focus for the startup’s team, he added.

Puma stint: Ganguly is leaving Puma after spending more than 17 years at the firm. He joined the Indian unit of the company at its inception in 2005 and became its MD nearly a decade later, in 2014.

Under him, Puma’s sales rose five-fold, from Rs 600 crore in 2014 to nearly Rs 3,000 crore last calendar year. It is the largest sports brand in the country, outselling rivals Adidas, Nike and Reebok combined.

Cred lays off about 15% of staff at expense management unit Happay

Kunal Shah, founder, Cred

Cred-owned expense management solutions provider Happay is undertaking layoffs in an effort to cut costs, sources told us.

Driving the news: While the exact number of employees affected by the layoffs could not be ascertained, one of the sources said that 10-15% of the workforce is likely to be forced out.

“Over the last four to five months, Cred has been cutting costs while actively looking to reduce its overall cash burn… Now, this exercise has reached people centres, with the focus first on the headcount of acquired entities,” said one of the sources.

Happay had a headcount of about 450-500 before the layoffs.

Also read: Layoffs in 2023: Cred, Meesho, Dunzo among Indian startups & tech companies that have cut jobs

More about the startup: Founded in 2012, Happay provides travel and expense management software to corporates and a corporate credit card stack to businesses. It was acquired by Cred in 2021 for $180 million.

Revenues in focus: According to sources, five-year-old Cred is currently focussing on sustainable revenue lines. In FY21, before the acquisition, Happay had reported modest revenues of Rs 50 crore, with a loss of Rs 21 crore.

Cred itself had reported that its net loss widened to Rs 1,279 crore in FY22, from Rs 524 crore in the previous fiscal year.

Tiger Global and Ribbit Capital-backed Cred has raised over $800 million till date and was last valued at $6.4 billion, in June 2022.

MeitY poised to spearhead news fact-checking body

The Ministry of Electronics and Information Technology (MeitY) is likely to take the lead in establishing a dedicated body for fact-checking news on the government, a senior official told ET. The proposed body would be responsible for verifying information related to the government that is circulated on social media and internet platforms.

The details: The three-member body, which will consist of two IT ministry officials and one independent member with expertise in law, social media or public policy, will be required to publicly specify the reasoning behind any take-down orders that it issues. This marks a departure from the government’s earlier stance, where the Press Information Bureau (PIB) was identified as the preferred agency for such a fact-checking exercise.

The hurdles: In April, political satirist Kunal Kamra moved the Bombay High Court against the proposed regulations by the government. Kamra alleged that the rules, which empower the central government to set up the fact-checking unit, make it “a judge and prosecutor in its own cause, thus violating one of the most fundamental principles of natural justice”.

Labelling of posts: MeitY may require social media platforms to label “fake” or “misleading” posts based on the fact-checking authority’s assessment. In certain cases, where the expected virality of the post is high, it may also ask the intermediaries to limit visibility or take a post down.

Infographic Insight | Users spending less time on apps due to poor connectivity

Poor connectivity in India is causing a decrease in app usage among users, resulting in lower app retention rates, revenue impact, and decreased user satisfaction, according to an OpenSignal report for the January to March period.

Almost a third — 29% — of app sessions are disrupted by poor cellular signal, while 11% are disrupted by poor WiFi signals, the report said.

Video consumption is affected the most by poor connectivity, the report added, noting that app sessions during video consumption dropped 61% on a cellular network and 60% on Wifi.

App data transfers during disruptions were 20% shorter on cellular networks and 11% shorter on WiFi.

Tweet of the day

Foxconn breaks ground for Rs 4,000 crore manufacturing facility in Hyderabad

Taiwanese chip-making giant and Apple supplier Hon Hai Precision Industry Co., better known as Foxconn, will invest Rs 4,000 crore in a new manufacturing facility in Hyderabad.

The details: The manufacturing facility, for which the Telangana Government has allocated 200 acres of land in Kongara Kalan, a village on the outskirts of Hyderabad, is expected to create 25,000 jobs. The groundbreaking for the facility took place in the presence of Industries and Commerce Minister KT Rama Rao and Foxconn Interconnect Technology Chairman CEO Sidney Lu.

Foxconn’s India bet: The chipmaker intends to invest close to $1 billion in a plant on the outskirts of Bengaluru. Last week, ET had reported that the Taiwanese company has bought a 300 acre plot for the proposed plant in Devanahalli near the Bengaluru international airport. Its subsidiary Foxconn Hon Hai Technology India Mega Development paid Rs 300 crore ($37 million) for the site, the company told London Stock Exchange in a regulatory filing.

The company was planning to commence construction of the plant this month, ET had reported in April.

Today’s ETtech Top 5 newsletter was curated by Megha Mishra in Mumbai and Siddharth Sharma in Bangalore. Graphics and illustrations by Rahul Awasthi.