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In today’s newsletter:

• 'Modi fanboy' Musk to bring Tesla, Starlink to India
• Indian startup layoffs cross 25,000-mark
• Fintechs take aim at transaction banking

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Prime Minister Narendra Modi has found "a fan" in Tesla and SpaceX CEO Elon Musk.

Musk met PM Modi during the latter’s state visit to the US and expressed that he is "a fan" of the prime minister. The Tesla CEO also plans to make an India visit sometime next year, following an invitation from PM Modi.

“I am confident that Tesla will be in India and will do so as soon as humanly possible. I would like to thank the prime minister for his support and hopefully we will be able to announce something in the not-so-distant future,” he said.

India has strong potential for a sustainable energy future including solar power, stationary battery packs and electric vehicles, he said.

Tesla shelved its India entry plans last year due to high import tax structures. 

However, in recent weeks, the company has renewed talks with government officials about setting up a manufacturing base in the country.

The tech billionaire said that PM Modi is pushing foreign business leaders to make significant investments in India. 

In the past year, several tech leaders such as Apple’s Tim Cook, Alphabet’s Sundar Pichai, OpenAI’s Sam Altman, and Microsoft’s Satya Nadella have visited India. 

"We just have to figure out the right timing. He wants to do the right thing for India. He wants to be open and supportive to the companies. And obviously, at the same time, make sure that it accrues to India's advantage," Musk said.

Musk, who also owns SpaceX, said he is looking forward to bringing Starlink satellite internet service to the country, which he believes will help internet penetration in rural India. 

• Starlink had run into trouble with the Indian authorities earlier this year, following which it had to refund all its pre-orders until the company received licences to operate in the country.

Also read: Social media platform has no choice but to follow the local laws of country or risk being shut down: Twitter chief Elon Musk

Meanwhile, American astrophysicist Neil deGrasse Tyson, who also met with PM Modi, said that the “sky is not the limit for the Indian prime minister.” 

• He praised the prime minister for his focus on science and technology to tackle modern-day challenges

As cost-cutting becomes a priority with funding taps running dry, layoffs by Indian startups have now surpassed the 25,000-mark. These layoffs, which began in early 2022, have affected startup employees across all sectors.

“If 2022 was a bad year, this is going to be much worse. We are already witnessing funding fall and I expect that there will be further correction,” India Quotient’s Anand Lunia told us.

In fact, the actual number of layoffs can be more as many startups are now resorting to silent layoffs.

Anshuman Das, co-founder and CEO of Careernet, also expects more startups to make such decisions as cost-cutting becomes a priority.

While a total of 50 startups laid off employees last year, 46 have already been added to the list in just the first six months of 2023.

“You will see a lot of smaller companies also making tough decisions. Earlier, late-stage companies with a huge workforce conducted layoffs. So earlier, while there was a larger pool with a smaller number of companies, now there will be a smaller pool with a larger number of companies,” Das said.

Byju's' name appears yet again on the list of companies laying off employees. Last week, the edtech giant began laying off over 1,000 staff across departments.

• This brings the total number of layoffs at Byju's since the beginning of 2022 to over 5,000

Go deeper

After disrupting customer payments through online payment gateways, fintechs are now looking to capture the B2B payments market, also known as transaction banking. 

• Their plug-and-play SaaS solutions will enable escrow account management, trade finance, remittances, cash management, disbursal, and tax payment

Payment gateways built a technology layer that allowed banks and companies to integrate and provide an online payment solution for collection.

• Previously, each company had to build and maintain its own payment solution and integrate with banks

Now, startups like Tazapay, TransBnk, Setu, Zeta, and Escrowpay are building this technology for B2B payments.

While this does seem like a large untapped opportunity with high volumes, payments themselves are commoditised and have low margins. 

Regulations mandate that banks should have more than one vendor for such high-volume businesses. This means that there is no pricing power for fintechs, as there are multiple vendors competing for the same business.

• Regulations could also require higher capital adequacy ratios for such startups, forcing them to seek more capital infusions

While it is still early days, strong business models need to emerge in this space in order to attract more venture capital backing.

Read more

On June 21, 2004, an important milestone was achieved in space exploration when SpaceShipOne became the first privately financed craft to venture beyond Earth's atmosphere and reach the edge of space. It accomplished this feat by being launched from a mothership named White Knight.

SpaceShipOne later won the $10 million Ansari X Prize for the first non-government organisation to launch a reusable manned spacecraft.

• A group of US enforcement agencies has announced the creation of the Darknet Marketplace and Digital Currency Crimes Task Force. The task force aims to target various types of crypto-enabled crimes, including drug trafficking, money laundering and theft of personal information.

• WisdomTree and Invesco, two US asset managers, have applied for Bitcoin exchange-traded funds (ETFs) following BlackRock's recent application. These ETFs allow investors to gain exposure to Bitcoin's price movements without needing to own or store the actual asset.

Have you ever seen a game of ice hockey and thought, "That looks like a lot of fun, but I wish I could play it without all the violence?" If so, then you might be interested in ice tennis.

Ice tennis combines the best of both ice skating and tennis. Players use their skates to glide across the ice, while they use tennis rackets to hit a ball back and forth. The result is a fast-paced and exciting game that is perfect during winter.

Check it out

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