One quick thing: Leap Finance closes $65-million Series E round 

In today’s newsletter:

• IndiaAI prepares for DeepSeek challenge
• Startup employees eye bigger slice of ESOP pie
• Juspay vs payment gateway firms: Showdown ahead

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DeepSeek's cheap, open-source reasoning model, R1, had an immediate casualty in terms of the market: Nvidia and other tech companies.

However, global experts have been unanimous in their long-term views: Nvidia, and more broadly, compute/GPUs, will still be relevant and necessary. Instead, it is the model makers like OpenAI and Anthropic who may be in trouble.

(An NYU professor recently remarked that OpenAI may become the WeWork of the AI world.)

In the midst of these disruptions, India is preparing a bold move to position itself as a major player in the AI race. The Indian government is gearing up to unveil the portal through which startups and researchers can access graphics processing units (GPUs) procured under the IndiaAI mission.

• The government has earmarked around Rs 5,000 crore for procuring 10,000 GPUs under the IndiaAI mission over five years
  
  
• Through the portal, researchers can access these valuable GPUs at lower prices

Also read: Why India cannot create a DeepSeek

Last week, 10 firms, including Jio Platforms and Tata Communications, placed their financial bids for procuring the GPUs.

• The government is expected to announce the winning bidder by the end of this week

Also read: DeepSeek shows China playbook for even bigger US shock on chips

An official told us that the GPU compute pillar of the IndiaAI Mission was designed with flexibility and openness in mind.

The official also noted that DeepSeek's model was open-source and that researchers were free to leverage it.

• The ministry remains open to subsidising GPU usage for specific needs like research and innovation to support accessibility further

Also read: DeepSeek is 'fantastic' but not a 'miracle', says Bernstein, doubts $5 million price tag

Dig deeper

As 2025 kicks off, employees at several high-growth startups are in for a bumper year. 

• With companies ramping up their Employee Stock Ownership Plans (ESOPs), many employees stand to see a significant financial payoff

This month alone, major players like Swiggy, Paytm, and Mamaearth have expanded their ESOP plans, allotting additional shares to their employees. 

• In fact, ESOP buyback programmes saw a year-on-year increase in 2024, in number as well as quantum, according to data from equity management firm Qapita

ESOP liquidity has been bolstered by a recovering funding landscape, buoyant public markets, and an increase in secondary transactions, as per industry experts.

Initial public offerings (IPOs) present the "ultimate" liquidity opportunity for ESOP holders, and experts say the strong startup IPO pipeline this year is expected to boost payouts.

• Over 25 startups are looking to go public this year, significantly higher than the 13 IPOs seen in 2024
  
  
• This has also opened the door for more secondary deals via pre-IPO funding rounds, offering employees with further avenues to liquidate their ESOPs

Startups, especially in the growth-stage, are also using ESOPs to lure in and retain talent.

• Fast-growing startups with smaller valuations offer a better value proposition for employees working at larger rival companies, as ESOPs in these firms can grow exponentially over short periods, explained a founder at a large startup.

For instance, in rapidly growing sectors like quick commerce, companies like Swiggy, Blinkit and Zepto have been poaching executives from rivals Flipkart and Amazon, as competition gets fierce.

Dig deeper

Payment gateway (PG) firms are tightening their grip, aiming to cut out third-party payment orchestrators like Juspay. But for large merchants, making the switch isn’t simple.  

Razorpay, Cashfree, and PhonePe are pushing merchants to use only their in-house platforms, sidelining third-party orchestrators like Juspay.

• PGs are making this shift because they believe controlling the end-to-end experience will enable them to serve their merchant clients better

Additionally, Juspay recently received the regulator's license for payment aggregation, which changed its status from a neutral arbitrator to a more active participant in the payments ecosystem. This shift has raised concerns among PG firms that Juspay might have an unfair influence over the merchants. 

Juspay is deeply integrated into merchant payment flows, and isn't easy to replace.

• While small merchants remain unaffected, large merchants rely on multiple PGs for reliability, making an abrupt shift to a single PG challenging

Most merchants would need to invest time, effort and money to integrate with an existing PG’s POP product. This involves multiple tests, evaluations and legal agreements, creating a significant obstacle they prefer to avoid.

Despite Juspay’s deep integration with merchants, it is not indispensable. And that could be alarming for Juspay as POP and several allied features bring around 50% of revenues for the company.

• The payments battle is heating up and several fintech experts are now questioning if merchants will cave, or will PGs be forced to rethink

Go deeper

It is not Goa or Bali that is piquing the interest of GenZ travellers. Surprisingly, it is the Maha Kumbh that is driving travel demand among the youth. 

• Travellers between the ages of 20 and 25 outnumber those aged 46 and above at one of the largest spiritual gatherings

Spiritual travel continues to fly high with flight and train searches for Prayagraj growing 14 and 10 times, respectively. 

Go deeper 

• Microsoft and OpenAI are investigating whether data output from OpenAI’s technology was obtained in an unauthorised manner by a group linked to Chinese AI startup DeepSeek.  

• Chinese e-commerce giant Alibaba released a new version of its AI model which it claims surpasses DeepSeek’s AI model across various benchmarks.

On January 29, 2025, ISRO marked a historic moment in its space journey with the successful launch of its 100th mission. 

The GSLV-F15 rocket, carrying the NVS-02 navigation satellite, lifted off at 6:23AM from the Satish Dhawan Space Centre, kicking off ISRO's mission season under the leadership of new chairman V. Narayanan.

The NVS-02 satellite is set to revolutionise navigation systems, enabling applications in everything from precision agriculture and maritime navigation to mobile location services. 

• It's also the second of ISRO’s second-gen NAVIC satellites, following the successful NVS-01 launch in 2023

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