PhonePe racks up $200 million from Walmart, Swiggy’s zero commission offer for new restaurants

By Daisy On Mar 17, 2023

Happy Friday. After its hive-off from Flipkart, digital payments firm PhonePe’s fundraising continues. Today, the company said it has added another $200 million from its parent Walmart as part of its ongoing funding round. This and more in today’s ETtech Top 5.

Also in this letter:
■ Transition at TCS won’t be dramatic: incoming CEO
■ ChatGPT Plus launched in India
■ ETtech Deals Digest: Lenskart, PhonePe funding rounds prop up funding

Walmart invests another $200 million in PhonePe

PhonePe racks up additional 200 million from Walmart in ongoing fundraise

PhonePe cofounders Sameer Nigam and Rahul Chari

Digital payments major PhonePe has racked up another $200 million from its parent Walmart. This is part of the fintech major’s ongoing financing round which values it at $12 billion.

Deal details: We reported on December 23 that PhonePe — after its separation from Flipkart — was looking to close a funding round of $1.5-2 billion, including secondary share sales, where existing investors were selling stakes. PhonePe first said it had raised $350 million from global private equity major General Atlantic in January.

Next month, the company announced topped it up with another $100 million a month later in primary capital from Ribbit Capital, TVS Capital Funds (TCF), and New York-based investment firm Tiger Global. With Walmart’s $200 million coming in, PhonePe has now raised $650 million since its separation.

PhonePes new shareholding structure_Graphic_ETTECH

Quote, Unquote: “We are excited about PhonePe’s future and have confidence in how it continues to expand its offerings and provide access to financial services for Indians at scale,” said Judith McKenna, president, and CEO of Walmart International.

Binny Bansal’s $100 million bet: We exclusively reported on March 10, citing sources, that existing investor and Flipkart cofounder Binny Bansal was expected to invest $100-$150 million, making it one of the largest personal investments in the new economy.

“The amount that he (Binny Bansal) is investing is yet to be finalised. The talks have been on and are likely to close soon,” said a person familiar with the discussions.

Transition at TCS will not be dramatic: incoming CEO

TCS expects the “transition to be smooth” as it implements a change in guard with the exit of current CEO & MD Rajesh Gopinathan. India’s largest IT services player announced on Thursday that Gopinathan will be stepping down from his role and that K Krithivasan would be his successor.

Gopinathan and Krithivasan spoke to the media early Friday morning about the firm’s future plans, challenges from an inflationary environment, and Gopinathan’s next move.

What’s the focus? “ Our focus is on core principles like a strategy which we will tweak as we go along. Our core principle is to work closely with customers to ensure we look out for their needs as proactively as possible. And work with our associates who have been the bedrock of our success so they perform very well. Do not expect a great strategic or organisational change,” the CEO designate said. Krithivasan said that Since BFSI is the largest business vertical, even folks who are not in BFSI at TCS have deep knowledge. “It’s early days but we will ensure there is a smooth transition,” he added.

Also read: All you need to know about the incoming TCS CEO K Krithivasan

What’s next for Gopinathan: After having served as the CEO of TCS for six years, 52-year-old Gopinathan said it was the right time to move on. “Till a week back, it was all-consuming and over the past 48 hours, it’s been completely liberating. I have no clue what I’m going to do. I’m just in a very different space and very happy. And looking forward to that, you know, to actually having a reset,” the outgoing CEO said.

Swiggy to waive commissions from new restaurants for a month

Swiggy to cut 380 jobs, CEO takes blame for overhiring in an internal note

Online food and grocery delivery company Swiggy said it will waive commissions from new restaurants for a month through its latest initiative called Swiggy Launchpad. This comes after rival Zomato approached several restaurant chains seeking a 2-6% increase in commissions, as we reported first on February 27.

What’s the offer? The offer includes the commission waiver and support in the form of a dedicated growth manager, free advertisements on the Swiggy app, extended delivery radius, apps to manage business performance and online menus, as well as data and insights through business intelligence dashboards for these restaurants.

Swiggy said restaurant partners can potentially save up to Rs 20,000 through the new initiative. As many as 250,000 restaurant partners are on board Swiggy’s marketplace platform and the company said it adds about 10,000 new restaurants every month.

To be sure, commissions from restaurants are the main source of revenue for online food-delivery players

What’s the significance? The move is significant because the SoftBank-backed company is cutting costs across the board to help improve profitability amid slow growth in the food-delivery sector and a tough funding environment. According to a research note by investment banking firm Jefferies, Swiggy lagged behind Zomato in terms of market share in the first half of 2022 despite offering higher discounts.

Tweet of the day

ChatGPT Plus subscriptions launched in India

OpenAI has launched ChatGPT Plus, a paid and improved version of the popular AI chatbot ChatGPT, in India to improve the artificial intelligence ( AI) experience for users during rush hours, the company said.

India launch: “Great news! ChatGPT Plus subscriptions are now available in India. Get early access to new features, including GPT-4 today: https://chat.openai.com,” the company tweeted on Friday, which was shared by Sam Altman, cofounder and CEO, OpenAI.

Details: Available at $20 per month (Rs 1,650) in India, ChatGPT Plus claims to have faster response rates. It will offer users priority access to new features and improvements. OpenAI said it is also exploring options for lower-cost plans, and data packs for wider availability.

OpenAI had earlier said it will continue offering free-to-use ChatGPT, and the new Plus variant is meant for those who want more from ChatGPT.

GPT-4, a step ahead: Two days ago, OpenAI launched GPT-4, the latest version of its hugely popular chatbot ChatGPT. Altman said GPT-4 is the most capable and aligned model from the company yet.

“Here is GPT-4, our most capable and aligned model yet. It is available today in our API (with a waitlist) and in ChatGPT+. It is still flawed, limited, and seems more impressive on first use than it does after spending more time with it,” said OpenAI’s Altman.