One quick thing: General Atlantic, Prosus ask SC to hear their concerns in Byju's insolvency 

In today’s newsletter: 

• Funding is back, with a catch
• GCCs outpay IT firms for tech talent
• Space incentives linked to state policies

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

From Meesho to Lenskart and Purplle to Rebel Foods—what do all these companies have in common? 

• Over $100 million funding rounds each. But there’s another trend that unites them

Gone are the days when fundraising rounds were predominantly primary in nature. All of these startups, along with others raising huge capital, are also seeing significant secondary transactions, which has led to increased total round sizes.

• This new trend of combining primary and secondary components signals a shift in fundraising style compared to 2021

Since secondaries happen at a steep discount in valuation, the entry price for investors is now more attractive.

“In 2021, deals were mostly fully primary in nature but now the default is…a portion of primary capital infusion…but also a secondaries component. This creates exit opportunities for early backers and delivers a better blended price for the incoming investor,” Rahul Taneja, Partner, Lightspeed, told us. 

For instance, take Rebel Foods. 

• It had a valuation of $1.3 billion in the primary market but was valued at $700-800 million during secondary transactions, sources told us. That meant Rebel had a blended valuation of $1 billion 

Secondaries are also happening because investors need to return capital to their limited partners, the ones that sponsor venture funds. The market is really hot right now!

While investors say the quality of companies has improved, they believe more needs to be done. 

“We’re still looking for the next Harsha (Swiggy chief Sriharsha Majety), the next Sahil (Delhivery chief Sahil Barua)...we’re looking hard, but have not found them and that’s why we haven’t started reinvesting yet…we need a lot of that (founder) pipeline to come through,” Sumer Juneja at SoftBank Investment Advisers had said earlier.

Dig deeper

Global Capability Centers (GCCs) of foreign conglomerates are on a hiring spree amid rapid expansion in India, which is great news for Indian techies! 

• Why? GCCs are paying 12-20% more than IT companies to hire tech talent

800 new GCCs are set to enter India in the next five-six years driving demand for tech talent, according to a TeamLease Digital report. 

• For software developer roles, IT products and services companies are paying around Rs 5.7 lakh per annum (LPA) for entry-level positions and about Rs 17.9 LPA for those with over eight years of experience
  
  
• In comparison, GCCs are offering Rs 9.7 LPA for entry-level roles and Rs 43 LPA for senior-level employees

Despite these promising developments, a concerning trend persists. The gender pay gap in the tech sector remains significant. 

• According to the report, women continue to earn 22-30% less than their male counterparts, even in 2024

Find out more

A new scheme currently under consideration by the Central government could potentially further unlock the space manufacturing ecosystem.

The Centre's plan to provide incentives to space startups will be tied to the individual states' space tech policies.

• Previously, the Centre had announced that it was working with states to offer fiscal and non-fiscal incentives to promote space sector manufacturing

Telangana, which already has a space policy in place, has extended its policy's incentives to startups such as Skyroot Aerospace and Dhruva Space.

"The incentives announced by IN-SPACe is part of the same structure,” Jayesh Ranjan, the State’s IT and Industries secretary said.

Telangana's policy offers support through grants, subsidies, and tax incentives. 

• Startups are also exempt from stamp duty and other taxes, while investors enjoy tax breaks

Meanwhile, other states are set to introduce their own space tech policies. 

• Tamil Nadu has released a draft space policy aimed at establishing space parks near Kulasekarapattinam and attracting global investments

• Karnataka is also in the process of formulating its own policy

Go deeper

Bengaluru's infrastructure is creaking like an overworked server, yet Deputy CM and Bengaluru development minister DK Shivakumar seems to have a different playbook.

• Shivakumar is  pitching tunnel roads, skydecks, double-decker flyovers, Metro lines to the outskirts, and—wait for it—an amusement park near the KRS dam in Mandya

Go deeper

• Tesla chief Elon Musk advocated for California to pass an AI bill requiring tech companies and AI developers to conduct safety testing on their models.
  
  
• Amazon is extending its AI shopping assistant Rufus to select customers in India on the Amazon.in app from today, with a wider rollout planned in the coming weeks.

YouTube has hiked the prices of its Premium subscription plans in India. 

• The family plan has seen the biggest jump, becoming a whopping 58% more expensive

• YouTube earlier offered individual and student plans for Rs 129 and Rs 79 a month which has increased to Rs 149 and Rs 89

Some may question the value of the premium subscription given the rising costs.

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 700,000+ subscribers.