Breaking: Tata Consultancy Services today extended its decade-long partnership with British retailer Marks and Spencer (M&S). The deal could be worth $1 billion, according to media reports.  

One important thing: India’s top 3 IT companies added 65% fewer employees in FY23 as compared to the last fiscal year, data showed. TCS, Infosys, and HCLTech cumulatively added 68k employees in FY23, as opposed to 1.97 lakh in FY22. 

• Their net additions also fell sharply to 884 employees in Q4FY23 compared to 68,257 in the same period the previous year 

In today’s newsletter:

• Govt discourages building new apps for ONDC
• Notion CEO Ivan Zhao eyes India for growth
• Down rounds are normal, says Silicon Valley investor

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The government wants e-commerce companies to integrate their main platforms with Online Network for Digital Commerce (ONDC), rather than building new apps for the purpose.

Union Minister Piyush Goyal, at an industry event today, advised ONDC Chief T Koshy that platforms developing new apps for the network must be excluded.

• Goyal believes that consumer tech platforms should join ONDC not only to gain a ready-made seller base, but also to give their large user bases the option to use the network.

Industry executives in attendance interpreted it as a subtle jab at Walmart-owned PhonePe, which recently launched an ONDC app called Pincode.

During the event, we had the chance to chat with a PhonePe executive and questioned the motive for introducing a new app for ONDC.

• The executive said that the decision was made because a narrative has to be created in the consumer's mind about an app

• Also, PhonePe wants shoppers to spend more time on the platform and explore products, unlike a payments app where users want to quickly get through a transaction and exit

The executive also said that Pincode was growing 100% day-on-day, albeit on a smaller base. He declined to disclose exact order volumes, but stated that order fulfilment rates exceeded 90%.

Productivity management platform Notion has had a tumultuous journey, experiencing both highs and lows. In the early 2010s, the platform almost faced closure, but later gained immense popularity after going viral on TikTok during the pandemic. Co-founder and CEO Ivan Zhao has been there for it all.

In an exclusive interview with Zhao, he outlines the future direction of the company, which was last valued at $10 billion.

Notion, which has 80% of its customers outside the United States, places a special emphasis on India.

• The company is now planning to expand its office in Hyderabad, which was established 1.5 years ago after it acquired automate.io
  
  
• Hyderabad is the only engineering office of Notion outside the US (The company also held a community meetup in Hyderabad during Zhao's visit. Here's how he felt about it.)

The company in February released Notion AI, an artificial intelligence-assisted writing tool for its users. However, the company doesn't want to stop there.

• To tackle increasing competition from players like Microsoft Loop and others, Zhao intends to incorporate AI in its product management and knowledge base use cases
  
  
• It is also aiming to onboard 100% of Fortune 500 companies in the future

With the growing call for AI algorithms to be safe, fair, and transparent, Zhao emphasised that Notion will not work with vendors who have lost customers' trust.

“All our enterprise customers use Notion because they can trust us. We have a lot of enterprise customers. So, we need to protect that trust,” he said. 

Read the full interview 

Startups in India and globally have been fretting about down rounds in their valuations before fundraising, but according to Hemant Taneja, CEO of General Catalyst, a Silicon Valley-based venture capital firm, this is a needless worry. 

• Taneja believes that down rounds are inevitable and not that big a deal

Down rounds occur when startups raise new capital at a lower valuation than their last round. Macroeconomic pressures, the public market crash of Big Tech companies, and rising interest rates prompted several investors to become cautious and reconsider startup valuations.

• In fact, General Catalyst-backed Stripe, which raised $6.5 billion last month, said that it was valued at $50 billion. But this figure is almost half of what it was in its last funding round.

Similarly, BlackRock cut Byju's ($22 billion) valuation to $11.5 billion, and Invesco reduced Swiggy's valuation from $10.7 billion to $8 billion. These companies were not raising funds, but this was after an internal valuation check by investors.  

"There's probably still more turbulence around it…I do think a lot of companies will end up taking down rounds, but that happens after every bubble. Google had a down round in its history. I think it's not a big deal, companies have to move on,” Taneja said.

General Catalyst, with over two decades of experience and an AUM of over $25 billion, is taking a long-term approach to India.

“It's not about this year or next year, it's got a 10-year basis...Companies that get started over the next couple of years, can have a major role in that transformation. Just like what happened in China. This is India's China movement. And we want to be a part of it,” Taneja said.

The VC firm has launched a new fund called Fund XI, which has a corpus of over $4.6 billion. It plans to invest around 10-20% of this fund in India, focusing on sectors such as Fintech, AI, Web3, Crypto, and Consumer.

Go deeper

On April 25, 1990, the Hubble Space Telescope was deployed from the cargo bay of space shuttle Discovery. The telescope has captured some of the most incredible deep-space photographs ever taken.

Quick trivia: It was later discovered that the primary mirror of the telescope had a flaw, and to achieve optimal focus, corrective components were installed in December 1993. (Picture credit: NASA)

• Coinbase has filed a lawsuit in a US federal court to compel the SEC to provide a definitive response to its petition for clearer regulatory guidelines for the US cryptocurrency industry, which has been pending since July 2022.
  
  
• Binance has launched Sensei, an AI chatbot powered by OpenAI's ChatGPT, for its Binance Academy. Sensei aims to improve user engagement by delivering relevant and easily understandable content.

Residents of Bengaluru were in for a celestial treat today as they witnessed a truly extraordinary occurrence: the temporary disappearance of their own shadows!

As the Sun reached its zenith directly overhead, the city was briefly bathed in a surreal and shadowless light. Here’s a timelapse video recorded by a resident.

This fascinating phenomenon, known as Zero Shadow Day, is set to grace the city once again on August 18.

Curious to know more about this peculiar spectacle? Find out more

(Picture credit: Twitter/@ujyant29)

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