One wild thing: Leopard spotted on Infosys campus in Mysuru. Trainees get a day off, rest work from home

In today’s newsletter:

• NPCI’s New Year gift for PhonePe, Google Pay, WhatsApp
• The 2024 startup IPO party 
• GCC outpaces IT in hiring

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It's a Happy New Year 2025 for Big Tech firms because the UPI party isn’t stopping anytime soon.

The National Payments Corporation of India (NPCI) has extended the 30% UPI market share cap deadline, yet again, by two years.

• The extension comes as a relief for dominant players such as PhonePe and Google Pay which hold 85% of UPI market share. 

NPCI chief Dilip Asbe had previously acknowledged that market share won't shift quickly, but remained optimistic about the growing "network effect”.

“It will take longer than we initially envisaged, but the market will balance out eventually," Asbe told us.

The past six months have seen some strategic shifts that are expected to change payment dynamics.

• NPCI spun off its homegrown Bhim app, to make it more competitive in the crowded market.
• New contenders are coming and growing. Apps like Navi, super.money, and Fampay have snuck into the top 10.
• Paytm made a comeback after a clampdown

In 2024 alone, 20 companies got TPAP approval, but scaling up remains a challenge.

Pushing the "network effect" further, WhatsApp Pay was released from its 100 million user cap.

• The app currently has over 500 million monthly active users in India.

With this, the Meta-operated app can become a much more serious competitor in the UPI payments space, joining the ranks of the big players.

• It remains to be seen if these shifts can break the duopoly that Walmart-owned PhonePe and Google Pay currently have in the booming digital payments ecosystem in India 

Dig deeper

A string of successful IPOs ushered in better days for the Indian startup world in 2024, amid a recovering funding landscape.

This year saw as many as 13 startups go public, including Swiggy, Mobikwik, and Ola Electric, which together raised over Rs 29,000 crore ($3.4 billion).

• This was a significant improvement with five such public listings in 2023 and just two in 2022.

Startup IPOs picked up after companies tempered valuations and recalibrated business models from 'burn and grow' to focus on generating cashflows - a direct consequence of 2022-23's funding winter.

Buoyant public markets also catalyzed investments among startups in 2024.

• Funding increased 14 percent year-on-year to $10.94 billion during the year. 

In fact, a big chunk of this funding increase came from late-stage deals in IPO-bound firms such as Zepto, PhysicWallah, Eruditus, and Purpelle.

As the IPO frenzy continues into 2025, investors expect a record 20 or more startups to go public next year.

• Pre-IPO funding is likely to rise in parallel, unlocking newer pools of capital for startups across the board, investors said.

Investors, however, note that there is a growing concern about inflated valuations and unsustainable business models sneaking into the mix.

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"The old order changeth!"

In 2024, Global Capability Centres (GCCs) stole IT’s thunder, claiming the crown in job creation and market domination.

• Adding over 3 lakh employees and nearly $20 billion in market capitalisation in 2024.

This far outshines the traditional IT sector, which managed less than a lakh in headcount addition and just $6 billion in market value.

The shift came amid several quarters of demand pressures for IT companies, triggered by a macroeconomic slowdown in North America and Europe.

• The above two regions together contribute 50-65% of their revenue.

Meanwhile, India has solidified its status as the “GCC Capital of the World,” supported by favorable government policies and unmatched talent.

GCCs, once back offices, are now strategic hubs driving innovation and digital transformation as they gear up for 2025.

• Experts predict around 3.5 lakh new jobs in the sector next year.

After sops and policies from Karnataka and Tamil Nadu, more states are expected to roll out GCC-friendly policies.

Dig deeper

From bike-taxis to billion-dollar dreams, Rapido hit top gear in 2024. Diversifying into cabs, autos, and deliveries amid strong rivals like Namma Yatri, Ola, and Uber with tech-savvy upgrades, EV adoption, and a bold SaaS pivot.

• Slashing losses and accelerating growth will be key for Rapido’s ride through India’s crowded mobility race in 2025 

Dig Deeper

Deepseek-V3, a Chinese AI model has reportedly surpassed OpenAI's GPT-4o and Meta’s Llama 3.1 despite being trained at a fraction of the cost using NVIDIA H800s. However, speculations of training on ChatGPT outputs raise concerns about OpenAI’s competitive edge, suggesting the absence of a sustainable moat in frontier AI development.

Nvidia has finalized its $700 million acquisition of Israeli AI firm Run:ai after receiving antitrust clearance from the European Commission. Despite Nvidia's dominant position in the AI GPU market, the Commission concluded that the acquisition would not raise competition issues.

As we get ready to welcome 2025, here are some suggestions for a New Year binge-watch. If you are not heading out, then get cozy at home with your favourite things to munch on and enjoy the binge-picks.

• Don't Die: The Man Who Wants to Live Forever on Netflix. 
• From Manjummel Boys to Chamkila, the best movies and series that 2024 had to offer. 

Book recco: The Nvidia Way: Jensen Huang and the Making of a Tech Giant.

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