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    Ola’s $500 million shuffle


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    Ride-hailing firm Ola has welcomed a new investor and seen an existing one increase its stake ahead of the company’s potential IPO. Ola did not disclose its latest valuation.

    Ola-GIF

    Also in this letter:

    • WhatsApp puts privacy policy on hold
    • SC refuses to halt HC cases on IT rules
    • TCS to step up campus hiring in India
    Tomorrow in ETtech Unwrapped, our weekly newsletter: Earlier this week, the Supreme Court said it was "shocking" that people were still being booked under Section 66A of the IT Act, a law it had scrapped six years ago. We take a closer look at this contentious law, and its misuse before and after 2015.

    Ola shuffles its cap table ahead of IPO

    Ola founder Bhavish Aggarwal
    Ola founder Bhavish Aggarwal

    Temasek Holdings and private equity major Warburg Pincus have bought shares worth $500 million in Ola from two of its existing investors ahead of the company’s planned initial public offering (IPO), sources told us.

    Deal details: Temasek Holdings, the Singapore government’s investment fund, Warburg Pincus bought the shares from early backers Tiger Global and Matrix Partners India, which together held 13-15% in the ride-hailing firm..

    • Bhavish Aggarwal, founder of Uber’s homegrown rival, also participated in the round.
    • Singapore-based Fort Canning Investments is also joining the company’s cap table.
    Temasek has been an investor in Ola since 2018 while Warburg Pincus is a new investor. The mobility firm’s other investors include SoftBank (22% stake) and China's Tencent (9% stake), according to Tracxn data.

    In one quote: “Over the last 12 months we’ve made our ride-hailing business more robust, resilient and efficient," Aggarwal said in a statement on Friday. "With strong recovery post lockdown and a shift in consumer preference away from public transportation, we are well-positioned to capitalise on the various urban mobility needs of our customers."

    New lines of business: With the taxi business battered by the pandemic (Ola’s revenue fell 95% in FY21), Aggarwal is focusing on personal mobility by way of his company’s electric vehicle (EV) division, Ola Electric. The Bengaluru-based company is set to launch its first electric scooter, challenging cross-city rival Ather Energy and legacy player Bajaj Auto.

    Also Read: Ola wants to be the Tesla of affordable EVs

    Meanwhile, another Indian startup is in talks to rake in half-a-billion dollars—Pharmeasy.

    Siddharth Shah, API Holdings
    Pharmeasy CEO Siddharth Shah

    The country’s largest online pharmacy is in talks with Japan’s SoftBank to lead its $500 million funding round at a valuation of at least $5.6 billion, Bloomberg reported. The Masayoshi Son-led company may pitch in $150-200 million.

    • Pharmeasy plans to reach out to other potential investors for funding.
    • The company is targeting a listing in the next 12 to 18 months.
    The move comes days after Pharmeasy sealed a deal to acquire diagnostics firm Thyrocare Technologies Ltd.—the first takeover of a listed Indian firm by an Indian unicorn—and then raised $300 million in a Series F round.

    Also Read: Pharmeasy’s Siddharth Shah welcomes competition from Tata, Reliance

    WhatsApp privacy policy on hold until India gets data laws

    WhatsApp Facebook

    The world’s largest messaging service will put on hold implementation of its updated privacy policy in India until the country’s data privacy laws come into effect.

    It’s a voluntary move, WhatsApp counsel Harish Salve told the Delhi High Court on Friday.

    • “In our case there is no statutory regulator, it’s the government who administers the rules. The government looked at this (privacy policy) and said ‘sorry, you can’t do this’, and we said ‘very well, we will wait for the private data (protection) bill’,” the senior advocate told the court.
    The case: Delhi High Court was hearing an appeal by WhatsApp and its parent Facebook against a single-judge order that refused to stay an ongoing investigation by the Competition Commission of India (CCI) into WhatsApp’s updated privacy policy. WhatsApp argued that CCI’s probe into the matter is moot since the Personal Data Protection Bill hasn’t been passed yet, and sought to quash it.

    • What makes the privacy policy so contentious is the fact that it gives Facebook, the world’s largest social media firm, increased access to WhatsApp users’ metadata and the business conversations they have on the platform.
    The other fight: WhatsApp has also sued the union government over the traceability clause in India’s new IT rules. The company claims the new regulations would break end-to-end encryption, and were thus a threat to users’ privacy.

    Tweet of the day


    SC refuses to halt cases against IT rules in high courts

    supreme court

    Earlier today, the Supreme Court refused to stop various high courts from hearing challenges to the government’s new IT rules. The court said it would hear the union government’s plea seeking to transfer all such cases to the top court next Friday (July 16).

    Clubbed with OTT hearing: A bench of Justices AM Khanwilkar and Sanjiv Khanna tagged the government’s plea with a pending special leave petition (SLP) from March, in which the Supreme Court had stayed proceedings related to the regulation of over-the-top (OTT) platforms in several high courts.

    What the govt said: Solicitor General Tushar Mehta urged the bench to stay the proceedings in various high courts on pleas challenging the validity of the new IT rules.

    Kerala HC protects petitioners: Social media firms, news publishers and individuals have challenged the IT rules in several high courts. The Kerala High Court, which is hearing one of these petitions, filed by the News Broadcasters Association (NBA), said that the union government may not take any coercive action against members of the NBA for not complying with the IT rules. The association represents various news channels.

    Justice PB Suresh Kumar also issued a notice to the union seeking its response to the NBA’s petition, which says that the new IT rules give government authorities "excessive powers" to "unreasonably and impermissibly restrict" the media’s freedom of expression.

    Other challenges to IT rules: On July 7, the Press Trust Of India (PTI) approached the Delhi High Court, challenging IT Rules. The argued that the rules would “usher in an era of surveillance and fear, thereby resulting in self-censorship, which results in violation of Fundamental Rights as enshrined under Part III of the Constitution of India.”

    • On July 2, journalist Nikhil Wagle filed a petition in the Bombay High Court, terming the new IT Rules arbitrary, illegal and contrary to the fundamental rights of Indians under Articles 14 (equality before law), 19 (freedom of speech and expression) and 21 (protection of life and personal liberty) of the Constitution, and beyond the scope of the IT Act.
    • On June 23, former editor of The Hindu Mukund Padmanabhan, and the Digital News Publishers Association (DNPA) filed a petition challenging the new IT rules in the Madras High Court. DNPA comprises 13 media outlets including the ABP Network, Express Network, NDTV Convergence, TV Today Network, Malayala Manorama and Times Internet (the digital arm of the Times Group, which also publishes The Economic Times).
    • On June 10, Carnatic singer TM Krishna challenged the constitutional validity of the new IT rules in the Madras high court, saying they impose “arbitrary, vague, disproportionate and unreasonable” restrictions.
    • On May 25, a day before the IT rules came into effect, WhatsApp filed a lawsuit against the Government of India in the Delhi High Court seeking to block the regulations. The company said the new rules would “break end-to-end encryption and fundamentally undermine people's right to privacy”.

    TCS to step up campus hiring in India

    TCS-1---BCCL

    Over half-a-million employees aren’t enough for India’s largest IT services firm—and that’s a good thing.

    Tata Consultancy Services Ltd. (TCS) plans to hire more than 40,000 fresh graduates in India this year, stepping up campus hiring in a country that it says has no dearth of talent.

    • "There is no depth of supply, as far as India is concerned. There's nowhere else in the world that you will get such phenomenal talent and the scale that it will get in India," TCS COO NG Subramanian said. "If somebody says that the Indian talent is becoming more expensive and salaries are higher than Poland and Eastern Europe because that's available at lower cost, I will be very surprised because we are into this globally."
    The company also plans to hire 2,000 more people from campuses in the US and Latin America, replicating its successful model in India. The hiring is aimed at handling the influx of digital deals that TCS is witnessing globally.

    509,058: That’s how many people TCS employed at the end of the June quarter, becoming the first Indian IT company to breach the 500,000 mark.

    The company added a total of 20,409 new employees in April-June—its highest ever quarterly net headcount addition—according to its earnings statement released on Thursday.

    • The company also reported low attrition levels of 8.6%.
    • Over 478,000 employees have been trained in ‘Agile’ methods.
    • Over 407,000 employees have been upskilled to handle new tech.

    ETtech Deals Digest

    Startups raised smaller funding rounds this week than they did last week.

    For the full deals list, click here.

    Today’s ETtech Top 5 newsletter was curated by Tushar Deep Singh and Zaheer Merchant in Mumbai.

    Updated On Jul 09, 2021, 08:14 PM IST

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    The Economic Times