The Tata Group is on a digital spending spree. After picking up majority stakes in BigBasket and 1mg, the conglomerate is now in talks to buy health and fitness start-up
Also in this letter:
- Government responds on
- K’taka allows all e-comm deliveries
- Robo-advisory becomes unviable
Tata picks up more ammo for battle with Reliance, Amazon
Hi, it’s Samidha. Today, Digbijay and I are breaking a big story. The Tata Group has held talks to acquire health and fitness startup Curefit, now branded as Cult.Fit.
The potential Tata-Curefit deal is significant, and not just because it would give the Tata Group a foothold in the health and fitness sector. If it goes through, there is a good chance Curefit founder Mukesh Bansal, who also co-founded Myntra (now owned by Walmart), will join Tata’s digital business and run not only Curefit. This will stir up a few things at the Mumbai-based conglomerate.
The RNT connection: Bansal and Curefit already have an association with the Tata Group. When the startup was just a year old,
Digital dreams: Tata has been making serious attempts to sharpen its digital side as it faces the Reliance Jio juggernaut and competition from Amazon and Flipkart.
While the group, under the leadership of N Chandrasekaran, has already snagged a majority stake in grocery e-commerce major BigBasket and online pharmacy 1mg, it will need people who are internet-first to make its Super App ambitions a reality.
The founders of BigBasket and 1mg will continue to run their businesses, but sources tell us that Bansal may take on a larger role within
Curefit’s future? The pandemic pummeled all offline businesses and Curefit, which got a large chunk of its revenues from gyms and fitness centres, was no exception.
Having acquired large chains such as Fitness First, the company has had a tumultuous year as it pivoted to a fully online model. The company was also restructured as Ankit Nagori exited Curefit to solely take care of the food business, Eat.Fit.
If the deal with the Tatas goes through, Curefit and 1mg could become a holistic health, fitness and pharmacy platform for the group.
This story is developing, so stay tuned to ETtech for more.
Report status of compliance at once, govt tells social media firms
Earlier in the day, the government issued a statement saying WhatsApp would be only required to disclose the origin of a specific message in case of very serious offences, and that the government had no intention of violating the privacy of individuals.
The new rules require “significant social media intermediaries” (those with more than 5 million registered users) such as WhatsApp to be able to trace the “originator” of any message the government deems problematic.
What’s at stake: Social media platforms such as
‘Ban’ fears echo on social media: Over the past two days, with developments such as the new intermediary guidelines deadline looming large, the Delhi Police officials visiting Twitter’s India offices, and WhatsApp taking the government to court, social media platforms have been flooded with posts and conversations about whether India will, or should, ban them.
TWEET OF THE DAY
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ETtech Done Deals
■ Business-to-business (B2B) logistics optimisation startup Locus is in talks with Singapore’s sovereign wealth fund GIC to lead a $60 million Series C funding round, three sources told us. After the funding, Locus will be valued at around $300 million, they said.
■ Homegrown blockchain technology firm Polygon has received a “sizeable investment” from US billionaire entrepreneur Mark Cuban in its tokens, co-founder Sandeep Nailwal told ET. Polygon’s token breached $13 billion in market cap earlier this year.
■ Smokescreen Technologies, a Mumbai-based cybersecurity company, has been acquired by San Jose, US-based cloud-security company Zscaler. The size of the deal was not revealed, and it is expected to be closed by July.
■ Rezo.ai, an AI startup that automates customer support, has raised an undisclosed amount in a seed funding round led by Modulor Capital. Dexter Angel Network, AI startup Veda Labs and angel investors— Delhivery co-founder Bhavesh Manglani and Fusion Microfinance founder Devesh Sachdev—participated.
Robo-advisory becomes unviable for fintech firms
Offering low-cost investment advice through automated platforms to retail investors is becoming unfeasible for fintech firms.
What’s happening? The Securities and Exchange Board of India (Sebi) is insisting on a physical agreement between financial advisors and investors, a move that increases the costs of acquiring clients. These new-age firms providing algorithm-driven investment advice—known as robo-advisory—are now reviewing the viability of such platforms.
The trigger: An informal guidance by the market regulator to Paytm Money on April 16 has disrupted their existing system. Sebi said that digital consent between an investment advisor and an investor could not be considered valid and insisted on a physical agreement. Until now, most fintech companies got prospective clients to agree to the terms online before bringing them on board.
It has been a rough 15 months for Curefit as its core business of offering fitness sessions through gyms has been hit hard by the pandemic.
Karnataka allows e-commerce for all goods
Karnataka is now allowing e-commerce firms to ship all goods. In a notification issued on Wednesday, the state government reversed its May 9 order restricting e-commerce operators from shipping non-essential goods.
E-commerce operations in several districts of the state had come to a halt after local authorities clamped down on the movement of people and vehicles. Third-party logistics operators – which e-commerce firms rely on in smaller cities – were forced to shut operations by district authorities.
No relief in other markets: The industry, however, continues to face issues in major markets such as Maharashtra, Delhi, Tamil Nadu, Telangana and other states, which still restrict them from shipping non-essential goods.
Smartphone brands boost offline-to-online play
Smartphone brands have strengthened their hybrid offline-to-online (O2O) strategy by leveraging WhatsApp and SMS to push sales with retail channels, mainly offline, amid massive disruption owing to Covid-19 restrictions.
- Xiaomi and Oppo have integrated their shopping catalogue with their Whatsapp Business accounts, through which customers can order a product from their nearest store and even contact them for repairs. Xiaomi has also started virtual product demonstration sessions to help consumers understand a product better before making a purchase decision.
According to Counterpoint, the pandemic has boosted the online-to-offline channel, which accounted for 8% of overall smartphone sales in Q1, as compared to zero a few quarters ago.
Top Stories We Are Covering
Jeff Bezos has picked a date to step down as Amazon CEO: Bezos, who grew Amazon.com from an online bookstore to an e-commerce behemoth, said Wednesday that AWS executive Andy Jassy will take over the CEO role on July 5.
Amazon snaps up James Bond owner MGM: Amazon is buying MGM, the fabled US movie studio home to the ‘James Bond’ franchise, for $8.45 billion, giving it a huge library of films and TV shows and ramping up competition with streaming rivals led by Netflix and Disney+.
Infosys CEO Salil Parekh’s compensation jumps: Infosys chief executive Salil Parekh’s compensation rose 44% in fiscal year 2020-21, and he took home Rs 49 crore, the Bengaluru-based IT services provider said in its annual report.
‘India can be the biggest market for Yalo’: Yalo, a conversational commerce firm that enables enterprises to connect directly with consumers through messaging apps like WhatsApp, will invest in expanding its presence in India, a top executive said.
Global Picks We Are Reading
■ Russia raises heat on Twitter, Google, Facebook in online crackdown (NYT)
■ Google strikes deal with hospital chain to develop healthcare algorithms (WSJ)
■ Uber set to recognise UK union while keeping worker model (Bloomberg)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant and Karan Dhar in Mumbai.