This and more in today’s ETtech Top 5.
Also in this letter:
■ Zoho’s strategy helping tide over the current SaaS disruption: Sridhar Vembu
■ No more freebies for Googlers
■ Bike taxis to return to Delhi roads
Swiggy CTO Dale Vaz resigns, to be replaced by senior VP Madhusudan Rao
Food delivery platform Swiggy’s chief technology officer Dale Vaz has resigned from his position, effective next month, the company said in a statement. Vaz will be replaced by Swiggy’s senior vice-president of Consumertech and Fintech (engineering and product), Madhusudan Rao.
Second exit within a week: Vaz’s resignation is the second big blow to Swiggy’s leadership as last week Karthik Gurumurthy, head of the company’s quick-commerce vertical Instamart, had also announced that he was stepping aside from his responsibilities and proceeding on a sabbatical. In a LinkedIn post, Gurumurthy said that building Instamart had taken a toll on him and that the journey was full of “compromises on physical and mental wellbeing”.
Also Read | Exclusive: Swiggy Instamart head Karthik Gurumurthy to step aside; cofounder Phani Kishan to take over
Marking down valuation: ET reported on Friday that one of Swiggy’s US-based investors, Invesco, had cut the value of its investments in the company by 23% to around $8.1 billion, from the $10.7 billion valuation ascribed during its last fundraise in January 2022.
Vaz’s rise: Vaz, who had joined Swiggy as its head of engineering and data science, was promoted to the CTO post in 2020 after Rahul Jaimini, who cofounded Swiggy with chief executive Sriharsha Majety and Nandan Reddy in 2014, exited the company.
Swiggy’s challenges: The changes in Swiggy’s leadership come at a time when the company is facing challenges, such as losing market share to its rival Zomato after that company relaunched its loyalty programme, Zomato Gold.
Eruditus FY22 revenue up 87%; losses excluding exceptional items at $66 million
SoftBank-backed higher-learning edtech company Eruditus saw its consolidated revenue surge 87% year-on-year to $245.26 million in the 12-month period to June 2022. The company’s net losses adjusted for exceptional items expanded to around $66 million.
Jargon buster: An exceptional item is an item in a company’s financial statement that is not expected to recur or occur regularly.
The numbers: The Mumbai-based edtech’s total loss swelled 46% to $386.82 million, including exceptional items. Of the total revenues during FY22, Eruditus’ operations in the US accounted for $119.61 million — almost half of the total amount — followed by Asia and the Asia Pacific region with $54.18 million.
The company, which counts CPPIB and Accel on its captable, burned significantly more cash on marketing, technology and consultancy expenses, spending $141.61 million as against $67.09 million in the year-ago period. Eruditus’ salary bill also grew three-fold to $107.07 million during the year, against $32.42 million in the year-ended June 2021.
Last fundraise: In August 2021, the company had raised $650 million in a round led by SoftBank and Accel. The equity fundraise, which also included a secondary component, valued the company at $3.2 billion, marking its entry into the unicorn club.
Bike taxis set to make a comeback on Delhi roads
Bike taxis are expected to make a comeback on Delhi’s roads soon as the Arvind Kejriwal-led AAP government is all set to pass an aggregator policy in a couple of months. Ola, Uber and Rapido ply petrol and electric motorcycles in the National Capital Region.
Details: In February, the transport department stopped bike-taxi services in Delhi and violations attracted penal action against the drivers. The law department had cleared the aggregator policy, which would have provisions for bike taxis as well. The policy was likely to see the light of day in a couple of months, Transport minister Kailash Gahlot told The Times of India.
Penalties: The authorities imposed a fine of Rs 5,000 for the first offence by invoking the provisions of the Motor Vehicles Act. A subsequent offence could result in a Rs 10,000-fine and imprisonment of up to a year.
What’s in the new policy? Under the new policy, preference will be given to electric bikes and aggregators who have electric fleets will be allowed to run these bike taxis, a senior official said. He added that a driver would need to acquire a commercial service badge after having his/her antecedents verified by the police.
“Their two-wheelers will then be issued yellow commercial number plates,” the official said. “But these things will be implemented only after the policy is approved by the competent authority. In the current form, it is illegal to operate bike taxis,” he said.
Also read | Bike taxi ban delivers a blow to Delhi ecommerce
TWEET OF THE DAY
Zoho’s ‘transnational localism’ helping tide through the current SaaS disruption: Sridhar Vembu
Zoho CEO Sridhar Vembu has compared the current SaaS ecosystem to the dotcom bubble bust at the turn of the millennium. The Chennai-based SaaS firm’s cofounder made these statements at a press briefing in Tenkasi, Tamil Nadu.
He also drew a parallel with Yahoo’s revenue model, where a major chunk of its revenue came from selling advertising to other dotcoms that were struggling to make a profit.
Zoho’s play: According to Vembu, Zoho has set itself apart by spending only about 20% of its budget on marketing compared to other companies, which allocate 40-60% on marketing and sales. This strategy has allowed Zoho to appeal to a diverse global customer base. Unlike many leading SaaS companies that primarily target the US market for their revenue, Zoho generates a relatively smaller proportion of its revenue from the US market, at around 38%.
Focus off G7: Vembu said the company’s approach of focusing on countries outside the G7 has paid off as countries such as Jordan, Nigeria, Columbia, Brazil and increasingly Mexico have embraced Zoho’s suite of products.
Google employees won’t get massages and other freebies anymore
Tech giant Google is planning to reduce its expenses by cutting down on the perks offered to employees, such as free snacks, laundry, massages and workout sessions. This comes after its parent Alphabet announced in January that it would lay off 12,000 employees.
Details: “We’re adjusting our office services to the new hybrid workweek. Cafes, MicroKitchens and other facilities will be tailored to better match how and when they are being used. Decisions will be based on data. For example, where a cafe is seeing a significantly lower volume of use on certain days, we’ll close it on those days and put more focus instead on popular options that are close by,” Google CFO Ruth Porat said in a memo.
More cuts: The memo also mentioned that the company would stop spending on employees’ personal equipment, such as laptops. It added that funds will be utilised on work that is of a higher priority. The memo noted the company would reduce its hiring pace and reallocate teams. Google also recently told employees that some workers would have to share desk space, amid plans to downsize some of its offices.
Not the first time: “We’ve been here before. Back in 2008, our expenses were growing faster than our revenue. We improved machine utilisation, narrowed our real estate investments, tightened our belt on T&E budgets, cafes, MicroKitchens and mobile phone usage, and removed the hybrid vehicle subsidy,” the memo said.
Today’s ETtech Top 5 newsletter was curated by Erick Massey in New Delhi and Siddharth Sharma in Bengaluru. Graphics and illustrations by Rahul Awasthi.
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