One important thing:  This festive season, you can shop on the metaverse. That’s right, for this week, Flipkart has unveiled a metaverse space called Flipverse. From electronics to bags, it has a lot in store. 

 In today's newsletter:

• Byju’s gets a flat top up 
• Fundraise party for venture capital, debt firms
• How Big 4 IT firms fared in Q2

If one has to go by the leader of the pack, the valuation curve for consumer-facing edtech companies in India seems to be flattening.

Byju’s, the world’s most-valued edtech startup, has raised $250 million in a fresh primary equity funding round from some of its existing investors including Qatar Investment Authority (QIA).

• This investment comes a week after Byju’s announced it will be laying off about 2,500 employees across departments to cut costs amid mounting losses.

While the company did not disclose the names of other existing investors or the valuation at which the money was raised, sources tell us that the valuation remains the same at $22 billion. 

(P.S. Remember how Byju Raveendran had said he can raise $300 million in a week? We wonder how long did he take to raise these funds)

A person directly familiar with Byju's fundraising plans told us that new investors offered the company a valuation of $11-12 billion, which Byju's apparently declined.

New investors were looking to halve the edtech giant’s valuation after it reported a drop in revenue for FY21, which was considered a banner year for edtech companies in India.

• The latest round also saw secondary share sales apart from the $250 million fundraise.
  
  
• Secondary sales, which typically happen at a discount, happened at a valuation of $16-17 billion.

Byju's raising a new round at the same valuation exemplifies the fundraising challenges faced by Indian edtech firms.

Edtech unicorn Unacademy has struggled to raise funds at a higher valuation because investors are demanding higher revenue, as we previously reported.

• We reported last week that Byju's disappointing FY21 results had already put pressure on the valuations of consumer-facing edtech companies in India.

A flat round for India's most-valued startup emphasises the pain. Investors are becoming wary of edtech startups' big-bang revenue and growth projections from last year.

This Monday was a fun(d)day since two startup investors  - Software-as-a-Service (SaaS)-focused fund house Avataar and top venture debt firm Alteria - raised significant funds.

• This announcement comes on the heels of Fireside Ventures announcing the final close of its third fund last week.

We all know venture debt came into the spotlight and became the best alternative asset class post-slowdown in venture capital funding this year.

• Proving this point further, venture debt firm Alteria Capital announced the first close of its Fund III (Scheme A) at Rs 1,000 crore, making it the largest venture debt fund to be raised in India to date. The total corpus of this fund is Rs 2,000 crore, including Rs 1,000 crore of greenshoe. 

The SaaS sector has emerged as a favourite and exciting beat for several investors, including global firms such as Sequoia.

• Avataar, a B2B tech and SaaS-focused fund house that has backed media software unicorn Amagi, has launched a new Fund II with a target size of up to $350 million.

A series of fundraising by fund houses proves that there is enough dry powder in India. While the focus has clearly shifted from the late and growth stages to the early and seed stages, investors remain wary of certain sectors. 

Alteria has stated unequivocally that they will avoid cryptocurrency and Web3. Furthermore, the deployment time is taking much longer, in some cases longer than the time it takes to drive from Bengaluru's Electronic City to Indiranagar (If you know, you know!).

• Also read: Indian startups stare at two years of funding winter even as investors sit on a $9 billion dry powder

The Q2 results for IT powerhouses TCS, Infosys, Wipro, and HCLTech are in. TCS and HCLTech outperformed, while others saw a mixed bag of numbers. The companies' top brass certainly anticipated the media's surprised expressions when they announced the numbers last week.

Despite inflationary pressures, recession, macro uncertainty, cross-currency headwinds, US H-1B visa delays, and a slew of issues in key markets such as the UK, Europe, and the US, they emerged with strong deal pipelines and improved operating margins, leaving Dalal Street perplexed.

Today, we examine how these companies performed overall in Q2FY23 and what this means for the coming quarters.

The top-tier IT firms remained upbeat about the prospects of deal wins in the coming quarters, though none of the four companies provided FY24 guidance. For the time being, they expect the strong Q2 demand trends to continue.

The leadership, however, issued a word of caution, stating that it will continue to monitor current global situations. 

• Subcontracting costs are currently declining, and utilisation rates across the employee base are increasing, lowering attrition.

Except for TCS, all of the other three companies have started to see their attrition rates go down. 

• Firms stuck to their hiring targets, though the rate is much slower than in CY 2021. Meanwhile, they are also dealing with employees moonlighting or working two jobs at the same time, often with rivals.

The merger of Larsen & Toubro Infotech (LTI) and Mindtree was announced in May, and Q2FY23 may be the last time Mindtree reports earnings as a separate entity. Today, we bring you interviews from both sides of the merger.

Mindtree CEO Debashis Chatterjee says the company hopes to complete the merger by the end of the calendar year and has a plan in place pending legal approvals. 

• He spoke to us about the demand environment, the merger timeline and plans for the combined entity, and moonlighting.

Meanwhile, LTI’s COO Nachiket Deshpande and President Sales Sudhir Chaturvedi also spoke to us, giving a glimpse of :

• Its strategy to fight sectorial headwinds
• Demand outlook for upcoming quarters
• Hiring plans

Read the interview

• This year, cybercriminals stole more than $3 billion in cryptocurrency in 125 hacks, according to blockchain analytics firm Chainalysis.  In a Twitter thread, a significant portion of the $3 billion was lost in October when 11 different hacks wiped out approximately $718 million.
  
  
• Binance Pool, a mining subsidiary of Binance, has started a $500 million lending project to help the cryptocurrency mining industry. It will give loans to private blue-chip Bitcoin crypto miners.
  
  
• According to a joint statement by the local police and the Financial Services Agency of Japan, the North Korean hacker group Lazarus attacked several Japanese crypto firms using phishing and social engineering.

Don't you think there are too many passwords to keep track of? Passwords are important, but they can be a pain to remember.

Google recently announced that passkey support will be added to both the Android operating system and the Google Chrome web browser.

You may be wondering, "What exactly are Passkeys?" Instead of using a password, you can use a passkey, which is a more secure alternative. You can use them in place of a traditional password to access your various online accounts.

There is no physical key that is provided. Instead, you'll need to use an unlocking mechanism, such as facial recognition, fingerprint scanning, or even just a PIN code, to prove your identity when logging in.

Check out how to use it

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