One important thing: Swiggy has witnessed another key exit in its top management. CTO Dale Vaz has resigned after a nearly five-year stint. Madhusudhan Rao, who is currently serving as Senior Vice President of ConsumerTech and FinTech (Engg and Product) at Swiggy, will be taking over his role.  

• The move comes days after Swiggy's Instamart head Karthik Gurumurthy stepped aside to take a sabbatical, with Phani Kishan Addepalli assuming his responsibilities. Addepalli was elevated as co-founder of Swiggy in July 2021.

In today’s newsletter:

• Startup funding plunges 60% in Q1 of 2023 
• Zoho CEO Sridhar Vembu calls for strong AI policy 
• Eruditus revenue > upGrad + Unacademy + Vedantu + PW

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Startup founders are feeling the heat as the first three months of 2023 come to a close. With slowing demand, they are taking difficult measures to ensure profitable growth. 

Adding to the pressures, the everlasting funding winter is raging on.

Funding for India’s startups plunged to about a third in the first quarter of 2023.

• Private equity and venture capital funding fell 60.5% to $6.64 billion from January to March from $16.8 billion a year earlier, according to data by Tracxn
  
  
• Funding rounds fell to 405 in this period, against 1,095 in the first three months of 2022

Startups raised approximately $3.6 billion in funding through 122 rounds in March, compared to $5.69 billion invested in 406 deals during the same period last year.

• Compared to February, however, when the ecosystem saw only 91 deals worth $1.32 billion, there appears to be some improvement

Meanwhile, the biggies continued to avoid investing in India with Tiger Global Management only participating in one round of investment during this period, compared to 14 rounds in the previous year.

Sequoia Capital's participation also decreased, with only three rounds this year compared to 12 last year. SoftBank did not invest in any deals during this period.

“I view this as a rationalisation. The big daddies of tech investing have all tightened their spigots after shouldering investing big in 2021 and having seen valuations decline in 2022. While they may have hit the pause button, I do feel that this is a recovery period, and some investors are waiting for market conditions to stabilise,” said Ankur Pahwa, managing partner of PeerCapital.

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Artificial intelligence (AI) becoming mainstream has become a source of both excitement and concern. While the latest advances in AI promise to revolutionise the way we live and work, there are growing worries it could also pose a significant threat to jobs. 

Zoho co-founder and CEO Sridhar Vembu is among those concerned about the impact of this nascent technology on the workforce, particularly programmers.

“I had been internally saying this for the past 4-5 years that ChatGPT, GPT4 and other AI being developed today will first impact the jobs of many programmers," he said.

The depth and complexities of AI present a significant concern for the workforce, said Vembu. Automation in software development and the rise of low-code platforms are early indicators of the potential risk, he said.

• About 300 million jobs worldwide are at risk, Vembu said citing a Goldman Sachs report 

To address the potential risks of AI, Vembu, along with Rajiv Kumar, former Niti Aayog vice chairman, and Sharad Sharma, co-founder of iSPIRT Foundation,  has submitted a proposal for an AI policy to the Indian government that promotes transparency and openness in AI development. 

"Today three of us have submitted an open letter calling out the Indian government to start AI research so we can catch up on this booming tech and we do not allow monopolies to develop here," he said.

Also Read | 'Risks to society': Elon Musk, experts, in an open letter urge pause on AI systems

Meanwhile, the SaaS major has also doubled down on rural development after first establishing a technology hub in Tenkasi in 2011. The company now plans to launch additional tech hubs in the rural areas of Tirunelveli and Madurai in Tamil Nadu, as well as in Uttar Pradesh. 

• Zoho plans to hire 1,300 people in its Madurai office, boosting rural growth

It is also expanding its rural education initiative through Kalaivani Kalvi Maiyam across Tenkasi.

SoftBank-backed Eruditus has a valuation that is slightly less than that of Unacademy, which is also backed by the Japanese conglomerate. Nevertheless, Eruditus has an operating revenue that is 2.5 times larger than that of Gaurav Munjal-led Unacademy.

In fact, Eruditus' operating revenue is more than the combined operating revenue of the other four edtech unicorns that have filed FY22 results—Unacademy, upGrad, PhysicsWallah, and Vedantu.

It's fascinating how the revenue multiples of edtech unicorns can differ so much from one another.

Eruditus clocked an operating revenue of nearly $250 million (or Rs 1,850 crore) during the July-June 2021-22 period.

• This makes Eruditus the second-highest revenue-grossing Indian edtech startup.

However, its losses widened during the year as a result of a more than 100% increase in marketing and promotional expenses.

• Eruditus clocked a loss of $66 million in FY22, compared to $30 million on a cash basis in FY21, excluding exceptional expenses.

Including ESOP costs and one time-impairment charge, the upskilling platform's net loss was at $383 million, the largest by an edtech unicorn so far in FY22.

In a recent interview, Eruditus founders Ashwin Damera and Chaitanya Kalipatnapu said that the company would be profitable on a bookings basis in FY24 (July-June 2023-24).

• Bookings revenue is the total sales generated by the company during a fiscal year that also includes deferred revenue

The founders also said that the company broke even in January-March 2023 and would achieve profitability in the current quarter (April-June), which will be Eruditus' last quarter in the current fiscal on a bookings basis.

The company also anticipates strong growth in FY24. The founders believe Eruditus' operating revenue will exceed $430 million in the coming fiscal year.

If you smell petrichor (the earthy scent that everyone loves), you know it's time for rain. But if you're in Bengaluru and you catch a whiff of tar, you know that election season is just around the corner.

• Over the course of 2014 to 2021, there were 269 officially reported pothole-related deaths in Karnataka, with Bengaluru accounting for the highest number of casualties.

Besides the poor quality of roads, the lack of coordination among multiple agencies also contributes to the shortened lifespan of roads. There are at least 13 departments involved in the task of digging the city's roads.

Ahead of the Karnataka elections on May 10th, our special series "Karnataka Elections: Eye on Bengaluru" will analyse the critical issues that continue to affect India's tech and startup capital.

Find out more

Fifty years ago, on April 3, 1973, Martin Cooper, an engineer at Motorola, made the first-ever cellphone call. He stood in midtown Manhattan and used a handheld portable cellphone to call Joel Engel, a rival from the research department at Bell Labs. 

Quick trivia: The phone was 9 inches tall, weighed 1.1 kilos, and had a battery life of 35 minutes.

• A $1 billion lawsuit was filed against Binance, its CEO Changpeng Zhao (CZ), and three crypto influencers for promoting unregistered securities days after the US Commodity Futures Trading Commission (CFTC) sued the exchange and CZ for trading violations.
  
  
• UK crypto companies are having trouble getting banking services. The few banks still working with crypto firms are asking for more documentation and information about client transaction monitoring.

In today's world where cities are increasingly becoming concrete jungles, the traditional method of planting trees to combat carbon emissions might not always be practical. 

But worry not, as a team of Serbian scientists has come up with a groundbreaking solution: introducing the world to Liquid Tree or Liquid 3. 

Composed of a unique blend of microalgae and six hundred litres of water, Liquid 3 functions by absorbing carbon dioxide from the surrounding air and producing oxygen through the process of photosynthesis. The exceptional efficiency of the microalgae makes this liquid tree up to 50 times more effective than traditional trees in reducing CO2 in the environment. 

While this innovative invention cannot replace the beauty and benefits of a natural green cover, it presents a promising solution for urban areas where space is scarce, and pollution is rampant.

Find out more

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