Breaking: Byju's calls for AGM amid troubles (For more on the edtech sector read on)

One quick thing: Spotify to cut about 1,500 jobs or 17% of its global workforce

In today’s newsletter: 

• More skeletons tumble out of SphitiCap
• Eruditus’ next play; relief for Byju’s employees 
• Paytm goes all in on ONDC

P.S. A Bollywood superstar is making his debut in one of India’s top revenue-grossing games. Scroll below for more deets!

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One would think that promising funds but not transferring any of it is as bad as it gets for a VC firm. 

However, SphitiCap has outdone itself.

From conflicts of interest to unusual deal terms and outstanding personal loans, the web of investment complexities gets more tangled for the Noida-based investor.

PayVeda, a startup in SphitiCap's portfolio, was founded by Prateek Vohra, who is a cousin of Mayank Mehra, the managing partner of SphitiCap. Mehra runs the company, while Vohra is the public face of it, sources told us.

• Mehra has denied that he is related to Vohra

• PayVeda has yet to generate revenues, but was still valued at $58 million

When asked about the valuation, PayVeda founder asked us to calculate it based on the stake sale because his "math is weak."

• PayVeda's auditor, Geeta & Co, is the same firm that audits the books of accounts for Mehra's two other companies: Ultiwise Ventures and Corpzo

While all VC firms receive equity in a company in exchange for providing capital, SphitiCap demanded more.

• SphitiCap asked its portfolio company founders to transfer an additional 2% stake on a post-investment basis, according to a term sheet we reviewed

• It told the founders that it requires the additional stake because there is nothing left for SphitiCap after distributing shares to limited partners 

SphitiCap has been awaiting approval from the Securities and Exchange Board of India (SEBI) to operate as a category II alternative investment fund (AIF).

Dig deeper

Sit back and get ready for a fresh batch of edtech updates today.

One company is actively seeking new revenue streams to fuel its growth, while another, which missed out on a golden opportunity years back, is now accepting a fraction of the deal just to stay afloat. 

And then there's one that seems to be perpetually plagued by problems.

SoftBank-backed Eruditus, which already operates in a booming upskilling sector, is planning to venture into the study abroad market in 2024, founder Ashwin Damera told us.

• He further said that while many companies partner with tier-two, tier-three, and tier-four institutions, Eruditus will likely send students to the top 100 or 150 colleges in the country of focus

This move comes at a time when the study abroad segment is experiencing rapid growth, with an increasing number of Indian students seeking higher education opportunities overseas.

In other news, Allen Career Institute has acquired Peak XV-backed Doubtnut, years after the latter's potential acquisition deal with Byju's fell through.

While an acquisition by Byju's would have initially earned Doubtnut founders $125 million, the current deal nets the founder only $10 million.

• Other edtech companies, including Unacademy, were also in talks with Doubtnut for an acquisition earlier

Amidst the ongoing financial turmoil, Byju's troubles with the Board of Control for Cricket in India (BCCI) continue to escalate.

• The BCCI has accused Byju's of defaulting on a payment of Rs 158 crore, months after the edtech company decided to terminate its branding partnership with the cricket body

Despite these mounting financial woes, there was a glimmer of hope for Byju's employees as the company managed to clear pending November salaries for 1,000 staff members.

• Byju Raveendran, the company's founder, meanwhile, has reportedly pledged his personal properties and those owned by his family to ensure continued salary payments

It's always wiser to swim with the tide than against it, and Paytm seems to have learned this lesson the hard way after missing out on the early wave of UPI.

The fintech major is diving headfirst into the Open Network for Digital Commerce (ONDC), which is being hailed as the "UPI of e-commerce."

• Paytm founder Vijay Shekhar Sharma said that the company will onboard 10 million of its merchants onto ONDC by the end of 2025

• The fintech app is currently one of the largest consumer-facing platforms on ONDC

Addressing an audience of developers, entrepreneurs, and venture capitalists, Sharma said, "ONDC may be the third front of e-commerce, but sarkaar hum hi banayenge (but we will come out as winners)... Together we will be more powerful than any single e-commerce platform".

In a move signalling a renewed focus on e-commerce, Paytm has been testing a feature that positions shopping via ONDC alongside the QR code scanning option for payments on its homepage. 

• Sharma said that 11.8 million out of 50 million Indian e-commerce users had already made purchases on ONDC through Paytm

Meanwhile, ONDC chief T Koshy aims for the network to grow tenfold over the next year.

"We did about 5 million transactions in November. I don’t see why we can't be 10x that number a year down the line," he said.

Go deeper

• India is creating resources in local languages to make AI-powered services and tools more accessible to non-English speakers.
  
  
• Meta's chief scientist Yann LeCun believes that current AI systems are decades away from achieving a semblance of sentience and common sense, contrary to Nvidia CEO Jensen Huang's assertion that AI will be "fairly competitive" with humans in less than five years.

You can soon play as Bollywood superstar Ranveer Singh...

...In Battlegrounds Mobile India, more famously known as BGMI. 

South Korean gaming giant Krafton, which signed Singh as a brand ambassador in September, has now made the actor a playable character in the popular battle royale game.

How do you ask? Read the story

(P.S. There is a lot in store if you are a fan of Ranveer Singh)

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