Business

Turmoil at Byju’s highlights complications for India startup ecosystem

Even as India is being hailed as the next global growth story, a crucial building block for that success — its startup ecosystem — is getting pummeled.

Already stuck in a 15-month funding slump, India’s young companies are in danger of becoming collateral damage to the country’s highest-profile startup crisis in years. Byju’s, India’s most valuable upstart, is in turmoil after missing a deadline on financial statements, skipping payments on a $1.2 billion loan and losing its auditor and some of its board members.

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The imbroglio reveals some of the unique challenges faced by India’s entrepreneurs and may spook global investors. The
consumer market in India is characterized by more than a billion people with fast-growing but still relatively limited spending power, resulting in intense price competition that makes it harder for startups to reach profitability. And domestic venture capital is scarce, meaning founders need to attract foreign investors who can stomach the market’s risks.

It also highlights shortcomings in corporate governance, especially during a years-long startup boom that fizzled in early 2022. As venture funding was abundant and India was creating unicorns at an accelerating clip, Byju’s was among companies that enjoyed easy access to capital to spend on acquisitions and expansion, with their venture backers more focused on growth than earnings potential. After that funding dried up, attention has turned to laps-es in oversight at companies such as Byju’s, said Ronnie Screwvala, founder of rival UpGrad Education Pvt.

“Governance and diligence has been low from all points of view,” Screwvala said. “Of course, it reflects on the entire entrepreneurial and investment ecosystem in India.”

A Byju’s spokesperson declined to comment.

Other prominent startups that got entangled in recent scandals in-clude fintech firm BharatPe, which sued its co-founder and his wife for allegedly embezzling and misusing company money, and auto-services provider GoMechanic, which faced allegations of revenue inflation. The BharatPe case is pending and the people it sued have denied wrongdoing, while a GoMechanic founder has stated management “made errors in judgment as we followed growth at all costs.”
Sequoia Capital’s regional arm early this year started auditing its startup investments after such lapses rose, and this month, the US venture capital giant split off the unit into a separate firm.

Manufacturing growth

Meanwhile, Prime Minister Narendra Modi’s push to make India a tech powerhouse is gaining traction on many other fronts — global firms from Apple Inc. to Samsung Electronics Co. are moving manufacturing to the country, while internet leaders Meta Platforms Inc. and Google are after its hundreds of millions of online users.

There are few signs, however, that startups are yet benefiting from that trend. A sudden decline in tech valuations last year, coupled with rising interest rates and slowing economies, caused venture capital firms to push the brakes on new funding rounds, with emerging markets like India getting hit hard.

For Byju’s, adding to that challenge was a sudden slowdown in demand for online education services. While signups jumped during the pandemic, India’s cost-conscious consumers were quick to curb spending on its services once schools, universities, and offices reopened. Some moved to cheaper rivals.

Cut-throat competition in India’s consumer market is an all-too-familiar problem for Apoorva Mishra, founder of Dusminute, whose app connects apartment-complex residents and office tenants with electricians and plumbers and lets users order gro-ceries. After relentless discounting by rivals made it hard to retain customers, the company decided to shut down and lay off its 200 workers late last year — only to be saved at the last moment by a group of angel investors.

“The lack of loyalty is primarily because of the hyper-competitive space,” Mishra said. “There’s always five other people who are saying that I’ll do this job for 50 rupees less.”

The additional funding helped Dusminute survive. It has now increased its staff to 250 people and expects to break even an an adjusted basis in July, he said. His company has raised about 240 million rupees ($3 million) and is confident it can soon raise a further 120 million rupees as investors focus more on profitability and not just growth.
Disappointing high-profile market debuts, many of which were criticized as overpriced at the height of the boom, have also had an adverse impact on India’s startup ecosystem. Digital payments giant Paytm went public in one of the most disastrous IPOs of all time in 2021, and still languishes at 60 percent below its offer price as it struggles to reverse losses.

Two other prominent IPOs, delivery provider Zomato and online insurance marketplace Policybazaar — both contenders in India’s competitive consumer internet market — have fared better but are still down about 50 percent from their highs. Like Paytm, the firms are still working to reach break-even.

The boards of many newly listed companies did a poor job pricing their IPOs, and investors have been disappointed by their slow progress toward profitability since their debuts, said Pranav Pai, the founding partner at Bangalore-based venture firm 3One4 Capital. Many companies have only recently turned their attention to earnings to convince investors of their future prospects, he said.

“An IPO is not the end of the road — it’s the start of a very different journey where a company begins delivering results for its shareholders in public markets,” Pai said. “They’ve all learned this truth now.”

What’s followed is a significant decline in the size of Indian market debuts. Indian IPOs have raised just over $2 billion this year, a drop of 61 percent from the same period last year, even as the number of IPOs increased.

That’s prompted venture capital firms and other major investors to reduce the estimated values of their startup holdings. Softbank Group Corp.-backed delivery firm Swiggy and ride-hailing provider Ola have seen their valuations reduced. Oyo Hotels, once touted as a revolutionary force in the hotel industry, has dropped by almost 80 percent. Just this week, Prosus NV cut its view on Byju’s valuation by 15 percent, pegging it at just $5.1 billion.
To be sure, there are many aspiring startups still seeking to break through in India. Dozens of unicorns are working to survive through the downturn and emerge as successes in the future. Several of them are close to an IPO, according to Pai at 3One4 Capital.

To win over investors, those upstarts need to have more realistic IPO valuations than the companies that listed a year or two ago, Pai said. They should have clearer paths toward profitability and avoid overpaying for acquisitions, he said.

“Startups will now hesitate to overprice because the stock will be punished post listing,” Pai said. “There’ll be a lot more respect for capital in the process.”

Even with the recent venture turmoil, the long-term opportunity in India remains attractive, Bejul Somaia, a partner at Lightspeed Venture Partners, said in an essay posted on Twitter this month.

It’s already the world’s largest digital market after the US and China, and more value will be created as the country’s services go online, he said. But to seize the opportunity, founders and investors need to be disciplined, patient, and prepared to play the long game, said Somaia, whose firm holds $3.4 billion in Indian assets.

“India is not for the faint hearted,” Somaia said. “But India is worth it.”

Business

Almarai signs multiple agreements to localize jobs through training and recruitment programs

Almarai signed a cooperation memorandum with the Food Industries Polytechnic, the
Transport General Authority, and the Saudi Logistics Academy to localize jobs in the
food and beverages sector through training and rehabilitation programs ending in
employment. This came within the first international conference on the labor market,
organized by the Ministry of Human Resources and Social Development on 13 – 14
December 2023 at the King Abdulaziz Convention Center in Riyadh.

‘These agreements are part of Almarai’s corporate program for the social responsibility
to achieve localization in the food industry sector, which is one of the top priorities of the
comprehensive strategic plans in Almarai, especially since the company is one of the
largest working environments in the kingdom, with more than 9,000 Saudi employees,
including more than 900 Saudi female employees.”Fahad Aldrees, Chief Human
Resources Officer of Almarai, said.

He added that the agreements signed to train and qualify young people are part of the
integrated initiatives and training and rehabilitation programs for national human
resources in Almarai. He pointed out that the company provided about half a million
employee training hours during 2022, raising its retention rate to 90% during 2022.

It is worth mentioning that Almarai is the world’s largest vertically integrated dairy
company, and the largest food and beverage producer and distributor in the Middle
East. Almarai was ranked among LinkedIn’s top 15 Saudi companies for professional
career development for 2022.

Business

SEBA Bank rebrands to AMINA Bank and continues to write its success story

a fully licensed Swiss crypto bank, announced today its new brand identity: AMINA Bank AG. The group operates
globally from its regulated hubs in Zug, Abu Dhabi and Hong Kong, offering its clients traditional and crypto banking services.
SEBA Bank made history in 2019 by becoming one of the first FINMA-regulated institutions to provide crypto banking services. This rebrand marks a new chapter for the company, which has proudly been in operation for more than four years. AMINA Bank is inspired by the same trailblazing ambition to lead the way for its clients and to write its own future as a Swiss-
regulated crypto bank offering services to its traditional and crypto savvy clients around the globe. The name ‘AMINA’ stems from the term ‘transAMINAtion’, meaning transference of one compound to another. AMINA is a brand driven by perpetual change, bringing together the various ‘compounds’ of traditional, digital, and crypto banking to unlock new potential and
growth for our clients. This vision of change represents the transformation of our clients’ financial future. Franz Bergmueller, CEO of AMINA, said: “We are delighted to introduce the world to our new brand identity. While we say goodbye to the SEBA name, we remain forever proud of the achievements made by the group under the former brand. “Our brand signifies a new era in the company’s growth and strategy; we are a key player in crypto banking and are here to define the future of finance. With our client-focused approach, our years of traversing traditional and crypto finance, we offer a platform for investors to build
wealth safely and under the highest regulatory standards.” “We are grateful to be encouraged by our supportive and committed investors who have been very helpful, supporting the growth of the company. We thank our employees in all the regions
for their dedication and client focus. As we look forward to 2024, our ambition is to accelerate the growth of our strategic hubs in Switzerland, Hong Kong, and Abu Dhabi, and to continue our global expansion, building on all the successes we have laid down over the past years.” Current clients of AMINA Bank (formerly SEBA Bank) will be unaffected by the rebrand other than encountering the new name; all operations will be business as usual across the board. The branch office based in Abu Dhabi and the subsidiaries in Hong Kong and Singapore will subsequently apply for a name change to align with the head office in Zug.

Business

Uptime Appoints Mustapha Louni Chief Business Officer

Uptime Institute is pleased to announce the appointment of Mustapha Louni to the position of Chief Business Officer, a role specifically created to drive strategic leadership and client success. In this new role, Mr. Louni will assume responsibility for the global Uptime sales and marketing organizations and drive overall business value for all Uptime clients. He will retain his existing responsibilities overseeing operations in the Middle East, India, Africa, and the Asia Pacific regions. In this elevated capacity, Mr. Louni is poised to play a pivotal role in driving Uptime’s next phase of global expansion through strategic initiatives to enhance market awareness of the dramatically expanding global service lines and delivery capabilities of Uptime that uniquely support the global data center industry in its pursuit of ever higher performance through elevated availability, resiliency, sustainability, and cyber-security of digital infrastructure. Louni’s appointment renews and expands Uptime

Institute 39;s 30-year commitment to advancing excellence in the data center sector on a global scale. “Today we are experiencing the next phase of the one-time, planetary transformation from analog to digital. This unprecedented, once-in-a-generation growth in data center demand is primarily driven by continuing cloud adoption, the new promise of AI, and the demonstrable fact
that hybrid digital infrastructure is here to stay for the foreseeable future,” said Martin McCarthy, CEO, Uptime Institute. “These complex and nuanced market demands require a visionary talent like Mustapha Louni. He is someone who cannot only deftly manage specific aspects of the business but also remain ahead of accelerating changes and trends. He continues to earn client
trust and respect by timely delivery on demanding commitments while he also inspires and energizes colleagues and clients alike. I am delighted to announce Mr. Louni’s new position and know that he will continue to expand the impact that he has already brought to Uptime since his arrival.” In 2014, Mr. Louni joined the Uptime organization in the United Arab Emirates, leveraging his extensive experience from roles at Panduit and Schneider Electric in Paris and Dubai. As the company’s first commercial resource in the Middle East and Africa region, Mr. Louni played a pivotal role in expanding Uptime’s presence. Within a year, he successfully established what became and remains Uptime’s fastest growing regional office. Under his leadership, Uptime has
extended his impressive trajectory of growth in MEA to the Asia-Pacific regions, augmenting the Uptime workforce with dedicated team members spanning more than a dozen countries across these regions. A new Uptime office has been inaugurated in Riyadh, Kingdom of Saudi Arabia (KSA) this year, further fortifying the company’s ability to meet its commitment to sustained
growth and excellence and serve clients in critical, accelerating markets for digital infrastructure.

Uptime Institute began development of its proprietary and now globally recognized Tier Standards and its Tier Certifications 30 years ago to ensure that the mission critical computing needs of all organizations could be met with confidence and understood by executive management. Since that time, Uptime Tier Certification as well as other Uptime offerings including assessments and awards in digital infrastructure for ensuring business performance in areas of management and operations, risk and resilience, sustainability, and more recently cyber- security have gained global adoption. Uptime’s expanding success is based on delivering a
unique business service that is based upon unparalleled engineering excellence and technical mastery, while remaining vendor independent and technology agnostic.