Also in this letter:
- Infra.Market’s valuation soars to $2.5 billion
- Tamil Nadu’s ban on
online gamingstruck down
- RBI’s new rules for payment system operators
Delivery workers claim ‘exploitation’ by Swiggy, Zomato on Twitter
What’s happening? Over the past week or so, several new Twitter handles run by delivery partners have been highlighting the various issues they and their colleagues face.
Posts by Twitter users SwiggyDE and Delivery Bhoy, who say they work Swiggy and Zomato respectively, say they get insufficient compensation for skyrocketing petrol prices, no first-mile
“Many workers are afraid of losing their jobs if they raise their voices. This motivated me to start the Twitter account,” said the person behind SwiggyDE. He said he has been a delivery partner for Swiggy in Hyderabad since 2018.
He and other delivery partners we spoke to said their pay has been slashed by up to 60% since the start of the pandemic and they receive on average Rs 15-20 per order.
A 30-year-old delivery partner in Mumbai, who has worked with Zomato for more than three years, said that the company has slashed pay by up to 50% since the pandemic started. He said he earns about Rs 15,000 a month after working up to 12 hours a day, six days a week.
Swiggy and Zomato respond: Swiggy and Zomato claimed that on average, earnings of delivery partners have gone up in the past year, not down.
Zomato said that the average amount it pays delivery partners per order has increased by around 20% over the past year. “This is based on additional variable components we have incorporated and continue to add,” the firm said.
Swiggy said that it introduced a permanent petrol component for delivery partners in July, and that this is revised monthly. Zomato said it revised its fuel rate card in February, and that it automatically increases every month based on the increase in fuel prices.
But the person behind SwiggyDE said that while the number of orders has increased since the peak of the second wave, they still get less in hand than before the pandemic, and that incentives have been cut, too.
What about ecommerce delivery staff? The situation is slightly different when it comes to delivery workers with ecommerce firms such as Flipkart, Amazon and BigBasket. These jobs are more permanent as these workers are usually on the rolls of third-party firms that have contracts with etailers. Their delivery schedules are also more predictable due to the nature of the business, industry experts said.
Where’s social security? Earlier this year, finance minister Nirmala Sitharaman proposed a social security scheme for gig workers but there has been little or no progress on implementing it, said Shaik Salauddin, founder state president, Telangana Gig And Platform Workers Union, and national general secretary, Indian Federation of App-based Transport Workers (IFAT).
Infra.Market’s valuation soars to $2.5 billion
Infra.Market, a business-to-business (B2B) commerce platform for construction materials, has raised $125 million from existing investor Tiger Global at a post-money valuation of $2.5 billion, founder Souvik Sengupta told us.
The fundraising comes five months after it became a unicorn — a private firm valued at $1 billion or more.
What’s the plan? The company plans to use the funds to acquire mid-sized brands in the construction market to expand its offerings and offer end-to-end solutions to its customers over the lifecycle of a construction project, Sengupta said.
In May, the company acquired a majority stake in Equiphunt, a construction equipment rental service based in Hyderabad.
In other deal news…
■ Pallet pooling firm Leap has raised $34 million in a secondary round from investors led by Schroder Adveq and IIFL fund, giving early backers Mayfield Fund, IndiaNivesh and Six Sense Ventures a partial exit. The company had raised $25 million from Morgan Stanley in a primary round in February.
■ Titan, the professional email startup founded by serial entrepreneur Bhavin Turakhia, has picked up $30 million from Automattic, the parent company of WordPress.com, valuing it at $300 million. This is the first external funding round for the company. “We are not looking at raising any more capital immediately,” said Turakhia, founder and CEO, Titan.
■ Engineering-focused edtech startup Skill-Lync has raised $17.5 million in a Series A funding round led by Iron Pillar. The round also saw participation from xto10x cofounders Binny Bansal and Saikiran Krishnamurthy and Sixteenth Street Capital founder Rashmi Kwatra.
■ Onsurity, an employee health benefits platform, has secured $16 million in a Series A funding round led by Quona Capital and existing investors Nexus Venture Partners and Whiteboard Capital. Entrepreneur Vivek Garipalli, founder and chief executive officer of Clover Healthcare, also participated in the fundraising.
■ Higher education firm upGrad has acquired KnowledgeHut to enter the short-duration upskilling and reskilling segment. KnowledgeHut will operate as a wholly-owned subsidiary of upGrad and is expected to clock a revenue of Rs 300 crore next year. Last month, upGrad had earmarked $250 million for mergers and acquisitions over the next 7-9 months.
■ Digital business card and contact manager app HiHello has raised $7.5 million in a Series A round led by Foundry Group, with participation from Lux Capital and August Capital. HiHello cofounder Manu Kumar also participated in the round, along with cofounders of Lyft, Everlaw, Auth0, Path/June and Military.com, and product leaders from LinkedIn and Facebook.
Tweet of the day
HC strikes down Tamil Nadu’s ban on online gaming
The Madras High Court on Tuesday struck down Tamil Nadu’s ban on online gaming, providing relief to gaming companies that had challenged the legislation.
What the law said: The Gaming & Police Laws (Amendment) Act, 2021, banned online games of skill if played for money.
What happened? The court struck down the amendment, calling it unconstitutional. A bench of Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy said that the amendment was also ‘capricious, irrational, excessive and disproportionate.’
It added, however, that nothing in its order prevents the government from introducing appropriate legislation on the issue that conforms to Constitutional principles.
Payment system operators cannot outsource core functions, says RBI
The Reserve Bank of India (RBI) has formalised new rules under which licensed non-bank payment system operators (PSOs) cannot outsource core management functions, including internal audits and KYC compliance, to third-party service providers.
Core management functions, as defined by the central bank, include:
- management of payment system operations such as netting and settlement,
- transaction management including reconciliation,
- reporting and item processing,
- managing customer data,
- risk management,
- information technology, and
- information security management
The central bank also said that the boards of payment companies must “carefully evaluate” the need for outsourcing responsibilities after assessing the risks. The new rules also state that liability for third-party losses will fall on the relevant board members and senior management of licensed payment operators.
Now, Nykaa files for IPO
Driving the news: Nykaa has filed a draft red herring prospectus (DRHP) with the markets regulator, the Securities and Exchange Board of India (Sebi), for an initial public offering.
The firm will seek to raise about Rs 525 crore through a fresh issue of shares. In addition, existing shareholders will sell as many as 4.31 crore shares through this offering.
“Primarily, it will be an offer for sale (OFS) by initial investors and about 10-15% of the offered size is a fresh issue,” a source told us.
Who is selling? According to Nykaa’s DRHP, Sanjay Nayar Family Trust will sell 48 lakh shares in the OFS. Other shareholders that will sell include TPG, Lighthouse India Fund, JM Financial, Yogesh Agencies & Investments, Sunil Kant Munjal, Harindarpal Singh Banga and Indra Banga, and Narotam Sekhsaria.
Nykaa founder Falguni Nayyar and her family will continue to own a majority stake in the firm even after the IPO.
Financials: Nykaa is among the few profitable etailers in India. It reported a net profit of Rs 61.96 crore in FY21, compared to a net loss of Rs 16.34 crore in FY20. Total revenue grew by 38% to Rs 2,452.6 crore in FY21 from Rs 1,777.8 crore in FY20.
UST looks to hire 10,000
Digital transformation solutions firm UST said it is looking to hire over 10,000 new employees globally in 2021.
By the numbers
- This would mean an almost 40% increase over its current workforce of 26,000.
- UST currently has 16,000 employees in India
- The company said this includes 2,000 entry-level engineering positions with skills in cybersecurity, app development and modernisation and automation, among others.
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New lawsuit challenges slow green card adjudication process: A group of 125 Indian and Chinese nationals have filed a lawsuit in the US challenging the slowdown in adjudicating green card approvals in a bid to save the annual quota of green cards lapsing at the end of the fiscal year.
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