One quick thing: Urban Company IPO gets fully subscribed within two hours on Day 1

In today’s newsletter: 

• E-commerce platform fees pad profit margins
• India stands firm on ban on Chinese apps
• Former IndiaAI mission advisor to unveil new AI fund

P.S.: Tune into Tech3 Podcast, your daily dose of tech and startup insights. Monday to Friday! Check it out on Spotify or Apple Podcasts

Was this newsletter forwarded to you? You can sign up for Tech3 here

Loose change is turning into e-commerce’s fattest margin cushion.

Small add-ons are feeding big appetites.

• Swiggy and Zomato’s Rs 15 and Rs 12 platform fees, respectively, are netting over Rs 1,000 crore each annually

With commissions capped and new rivals like Rapido offering zero-fee models, fees are one of the last levers, note analysts. 

• Far from pocket change, the fees have become a reliable boost to the topline

From Rs 5 to Rs 25, e-commerce is making the checkout count.

• Flipkart and Amazon’s modest Rs 5 charges translate into Rs 600–700 crore each a year

• Myntra and Ajio go further, pulling in Rs 450–640 crore and Rs 140–200 crore through heftier per-order fees at Rs 19-25

Executives admit these add-ons are now a quiet but crucial buffer against thin margins.

As charges creep up, so does scrutiny.

• Industry watchers warn that hikes beyond Rs 15–20 risk backlash in high-frequency categories

Regulators in the US and EU are cracking down on “junk fees,” forcing upfront disclosure.

• In India, consumer gripes are piling up, raising the risk that this small cushion could become a big flashpoint

Dig deeper

China isn’t done swiping left on India’s app bans.

Following China's renewed criticism of India’s ban on more than 300 Chinese apps at a WTO Council for Trade in Services meeting on June 13, India pushed back.

• The exchange was revealed in the derestricted minutes published on September 8, reviewed by us

China called India’s national security justification “unsubstantiated” and an abuse of security exceptions for protectionist purposes.

• It urged New Delhi to roll back “discriminatory restrictions” and provide a predictable environment for foreign digital service providers

India said its actions complied with WTO rules and were essential to protect privacy, data protection, and national security. 

• The bans, it argued, safeguard the democratic rights of its citizens

Earlier this week, Union IT Minister Ashwini Vaishnaw told us in an interview that the government has no plans to reinstate such apps.

Since June 2020, India has blocked apps like TikTok, WeChat and PUBG Mobile over data-harvesting and misuse concerns. The bans coincided with border clashes and a sharp dip in bilateral ties.

• This latest exchange comes just weeks after Prime Minister Narendra Modi’s first visit to China in seven years, where he and Chinese President Xi Jinping pitched a reset, calling India and China “development partners, not rivals”

Go deeper

When your past work stints include Jio Haptik and advising the IndiaAI Mission, launching an AI fund feels more like a sequel than a startup. 

Aakrit Vaish, co-founder and former CEO of Jio Haptik as well as a former advisor to MeitY’s IndiaAI mission, is set to launch Activate, a $75 million AI fund, sources told us.

• This will be an AI-only fund, among the first of its kind in the Indian startup ecosystem
  
  
• On average, it will write cheques in the $2-4 million range
  
  
• Vaish is teaming up with Pratyush Choudhury, former Principal at Together Fund, to run Activate 

While Vaish has run an AI company and helped shape AI policies in the past, Choudhury was an early believer in Composio, an agentic AI platform and Emergent, an agentic vibe coding platform.

Their combined experience has helped them attract a strong lineup of limited partners (LPs) from both India and Silicon Valley. 

• General Catalyst, Aravind Srinivas of Perplexity, Vijay Shekhar Sharma of Paytm, and Harsh Jain of Dream11 are among the most notable names backing the fund
  
  
• Others include 360 One, Sandeep Nailwal of Polygon, Ritesh Arora of Browserstack, Sharad Sanghi of Neysa, and Rajesh Jain of Netcore

Activate comes at a time when AI investment is surging. In the first seven months of this year, AI startups in India raised $665 million across 109 deals, a 46% jump from $455 million raised in 95 deals during the same period last year.

Along with Activate, there’s another VC fund in town, adding to the existing dry powder. 

• AJVC, a pre-seed fund founded by Aviral Bhatnagar, announced it has raised Rs 200 crore to back companies across AI and consumer tech

Dig deeper

• Microsoft will pay to use Anthropic's technology for some AI features in Office 365 apps, in a sign that the software firm is diversifying its artificial intelligence portfolio.
  
  
• The Competition Commission of India (CCI) is expected to release its Market Study on Artificial Intelligence (AI) and Competition this month, which would examine how AI is reshaping markets in India. 

Move over stock options, here come “scale options.” 

Chinese tech firm Insta360 is gamifying fitness with a million-yuan weight loss pool. 

• Employees get 500 yuan (around Rs 5,800) for every half-kilo shed; one staffer dropped 20 kg to pocket 20,000 yuan (about Rs 2.5 lakh) 

The catch? Gain it back, and you pay fines. Find out more 

Note: By subscribing to Tech3, you have already made the right choice. Top it up with a premium offering, the Moneycontrol Pro Panorama, a newsletter that gives you a sharp take on macros, markets, business and finance. Sign up for Pro from this link to get this newsletter in your inbox and also a host of content enjoyed by over a million subscribers.