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In today’s newsletter:

• Indian market was overestimated: Rajeev Misra
• Byju's promoters net $408M in secondary deals
• When Apptio's Sunny Gupta almost gave up

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The biggest backer of Indian startups spoke to us about getting the market size wrong, falling valuations, and corporate governance lapses.

SoftBank's Rajeev Misra said that venture investors overestimated the size of the Indian market for consumer tech amid the funding frenzy of the last few years.

• India has only 60-100 million ‘affluent households’ that can pay for consumer tech services rendered by the burgeoning startup ecosystem, according to him

• SoftBank has invested around $15 billion in Indian tech startups over the last decade, while the likes of Prosus and Sequoia have invested over $9 billion each

Misra, who steered both the SoftBank Vision Funds until last year, has set up an investment platform with $7 billion in capital commitments from Middle Eastern backers.

• One Investment Management has made an early investment in Shapoorji Pallonji through high-yielding debt, marking its initial foray into the Indian market

The veteran financier told us in an interview that the startup failures that were bound to happen due to the funding winter have already occurred. 

• Startups need to appreciate the new reality of the end of cheap money and be ready to revisit the lofty valuations they received during the boom of yesteryears, he said
  
  
• Misra, however, brushed aside corporate governance lapses at Indian startups, saying that the percentage of such issues in the West and in legacy businesses are much higher 

Interestingly, he also remarked that the Indian market was the best-performing among all geographies for SoftBank.

On meeting Misra in his sprawling residence in a tony South Delhi locality, we learned about the other sides of his persona. He deejays at parties, designs jewellery, and is quite spiritual.

Read the full interview here

Byju Raveendran, Divya Gokulnath, and Riju Ravindran, the three promoters of India's most troubled edtech company, have made $408.53 million from the sale of their stake in Byju’s since 2015.

Riju, Raveendran's brother, sold 337,911 shares worth $375.83 million since 2015, while Gokulnath, who is a co-founder and the wife of Raveendran, sold 64,565 shares worth $29.40 million, as shared by PrivateCircle Research.

• Raveendran himself sold 29,306 shares worth $3.28 million since 2015

However, in a recent mail to employees, he claimed to have reinvested all the money received from the secondary sale of shares.

The shareholding of the promoters of the edtech company has been declining gradually since 2016.

• The first significant drop occurred between 2015 and 2016, when the promoters' stake fell from 71.6% to 54.7%. It further declined to 34.7% in 2019, and now stands at 21.2%, according to PrivateCircle

Byju's is unlikely to renew its endorsement contract with actor Shah Rukh Khan as the edtech startup continues with its cost-cutting measures. 

• The contract expires in September

Entrepreneur Sunny Gupta made headlines last week when IBM acquired his SaaS startup Apptio for a whopping $4.6 billion, more than double its previous valuation in 2019.

But what seemed like an overnight success was actually the result of several hits and misses, as well as struggles to find its market. 

• In fact, Gupta had thought of resigning from the startup at least four to five times in the initial years.

Founded in 2007, Apptio encountered numerous challenges along the way. Initially, the company faced difficulties in securing customers and funding. However, despite these obstacles, Apptio persisted and eventually achieved remarkable milestones. 

• In 2016, the company successfully went public. But the journey didn't end there, as Apptio experienced a subsequent delisting before being acquired not once, but twice

Apptio offers SaaS solutions that help client companies analyse, plan, and forecast their technology spending. It also provides insights into how rival firms are allocating their tech spending and helps in decision-making in the current environment, where large enterprises are increasingly looking to cut down their tech budgets. 

• Its software manages tech budgets worth $450 billion
  
  
• Apptio has a team of over 1,300, with more than 25% of them in India

Gupta met IBM CEO Arvind Krishna two years ago. IBM was a long-standing client of Apptio, and during their meetings, they discussed natural synergies that could offer a better digital transformation portfolio. In the last few months, the acquisition plan was finalised.

• As things stand, Apptio will be an independent business unit under IBM Software
  
  
• Gupta and his leadership team will continue to run the business
  
  
• The startup also plans to expand its team across geographies

Find out more

On July 4, 1956, a significant milestone was achieved in the world of computing when MIT released Whirlwind, which marked the first-ever usage of a keyboard for data input into a computer. 

Prior to this, programmers had been relying on punch cards, dials, and switches to enter commands. 

• The UN Security Council will hold its first-ever meeting on the threats of AI to international peace and security. The UK, recognising both the immense potential and significant risks associated with AI, is organising the meeting.
  
  
• Stability AI founder and CEO Emad Mostaque believes that AI will have such a profound impact on the world of programming that there will be no human programmers within five years.

In a spectacular display of wealth accumulation, the world's 500 richest individuals experienced unprecedented growth in the first half of 2023, adding a staggering $852 billion to their combined fortunes.

While notable figures such as Elon Musk and Mark Zuckerberg toyed with the idea of a "cage match," it was Tesla CEO who emerged as the unrivalled victor in terms of monetary gains. 

• Musk, already the world's wealthiest person, bolstered his net worth by an astounding $96.6 billion in the first half of the year 
  
  
• Meanwhile, Meta’s Mark Zuckerberg significantly boosted his fortune by $58.9 billion over the same period

However, not all billionaires fared equally in this wealth-laden period. Gautam Adani, the chairman of Adani Group, experienced a sharp decline in his net worth, losing a significant $60.2 billion. Find out more

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