One quick thing: India’s draft digital personal data protection bill has seen a few changes in its wordings, but its architecture remains intact, Union Minister Rajeev Chandrasekhar told us in an interview today.

In today’s newsletter:

• Mark delivers a Zuckerpunch
• Cashfree explores strategic sale 
• Are large IT deals making a comeback?

P.S. The most definitive startup summit of the year is here! The Moneycontrol Startup Conclave will feature a mix of keynote speeches, panel discussions, and inspiring talks from global and Indian experts in the fields of policy, venture capital, and entrepreneurship.

• Key sessions will include global fireside chats with marquee voices such as renowned investor Vinod Khosla, Coursera CEO Jeff Maggioncalda, Infosys founder NR Narayana Murthy, RBI Deputy Governor Rabi Sankar, and author Nir Eyal.

It's happening on July 7 in Bengaluru. Watch it live!

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Mark Zuckerberg has taken the first swing at Elon Musk (but not in the much-talked-about cage match)

Instagram has launched its Threads app, which is poised to pose the biggest challenge to the Elon Musk-owned social media platform yet. We were the first to report about Meta's plan to launch a text-based app, codenamed P92, in March of this year. 

• The much-anticipated app is already off to a flying start, with more than 10 million sign-ups within seven hours of its launch.  

Zuckerberg is billing Threads as an "open and friendly public space for conversation" at a time when Twitter is imposing reading limits on its users. Musk is also dramatically reshaping how the platform works with various product and policy decisions since taking it over in October 2022.

“Twitter has had the opportunity to (build a public conversation app) but hasn’t nailed it. Hopefully, we will,” Zuckerberg said.

Threads is deeply integrated with Instagram. One can log in using their Instagram account and follow the same accounts they already do on the platform with a single click. 

• Users will also have access to the service's existing suite of safety and user controls. That said, there are some privacy concerns.

These features will likely give Threads an edge over various services like Mastodon and Bluesky, which seek to capitalise on the trend of Twitter users seeking alternatives, especially as the latter grapples with the upheaval following its acquisition by Elon Musk. 

Threads has another feature in the pipeline: upcoming support for ActivityPub, making it compatible with other apps that already embrace the protocol, such as Mastodon and WordPress. 

• Meta said this will be the first app that will be compatible with rival services, enabling users to interact with a broader community beyond Instagram, as well as have the option to migrate their content to another service in the future.

P.S. Musk was not impressed with Threads. Zuckerberg, meanwhile, returned to Twitter after 11 years to post a jab against him.

As funding winter bites and regulations tighten for payment gateway firms, consolidation could happen sooner than later. 

Payment gateway firm Cashfree is exploring merger and acquisition opportunities, with offline point-of-sale (PoS) device player Pine Labs emerging as the frontrunner.

Negotiations with potential suitors are, however, stuck over its valuation. Cashfree is seeking a valuation of $1.2 billion, but suitors are only willing to offer up to $600 million. 

• Stripe and Razorpay had also previously discussed buying Cashfree, but have since dropped out

The increased scrutiny of payment gateway players by the Reserve Bank of India (RBI) and the Enforcement Directorate (ED) has also hurt many of them. They have been asked to reapply for their licences. 

• Several of these firms have been asked by the regulator to stop onboarding new customers.

Cashfree has raised $40 million to date and was last valued at $200 million in its last funding round in June 2021. 

However, a $600 million valuation seems like a fair price given the current funding squeeze and the constantly evolving regulatory landscape for fintech startups.

Find out more

Things have been gloomy for the Indian IT industry lately, but there have been some rays of sunshine recently, particularly in terms of large deal activity. 

• TCS and Infosys have both reported large and mega deal wins in the last few weeks

These large deals are materialising despite delays in deal conversions and subdued discretionary spending.  

The large deals are materialising in cost optimisation and efficiency areas, with little-to-no discretionary spending. 

While deals are taking longer, significant cost-saving opportunities will lead to larger deals — especially with cloud migration and repatriation, automation, and AI in focus, Ray Wang, CEO of Silicon Valley-based Constellation Research told us.

Some analysts expect a revival in demand in the second half of FY24, in line with the currently held belief, which is supported by guidance from SaaS companies and growing deal pipelines. 

They also expect more cost-saving deals in the BFSI (banking, financial services, and insurance) segment, a sector that has been severely dented recently.

• The deals will be a mix of both renewals and fresh deal wins

However, despite this, Indian IT’s Q1FY24 is expected to be subdued when they report their numbers from next week. 

Go deeper

On July 6, 1995, IBM acquired Lotus Development for $3.5 billion. Lotus was the producer of the once-dominant Lotus 1-2-3 spreadsheet software and the then-popular Lotus Notes groupware. 

IBM had hoped to leverage Lotus 1-2-3 to challenge the increasingly demanded Microsoft Excel software. However, Microsoft Excel was simply too popular, and Lotus 1-2-3 steadily lost market share. In 2013, IBM finally announced the end of support for Lotus 1-2-3.

• Tata Consultancy Services announced plans to scale up its Azure Open AI expertise and plans to get 25,000 associates trained in Azure Open AI to help clients accelerate their adoption of this technology.

• ChatGPT, the popular AI chatbot, saw its monthly traffic decline for the first time in June. Worldwide desktop and mobile traffic decreased by 9.7%, while unique visitors dropped 5.7%. The amount of time visitors spent on the website was also down 8.5%.
  
  

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