One quick thing: Ixigo IPO gets green light; Oyo withdraws papers 

In today’s newsletter: 

• Paytm tweaks lending strategy, claims worst is over
• Lightbox gives up Dunzo board seat 
• Legal troubles mount for Byju's and family

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"We learnt a lot of lessons, shown resilience in the last three months. The worst is behind us," said Paytm founder Vijay Shekhar Sharma.

The last quarter was a test for Paytm, with the RBI's diktat on its banking unit impacting its operations.

However, the company's leadership remains optimistic.

Paytm is making changes to its lending strategy, moving away from collection services in consumer loans and completely doing away with high-risk postpaid loans.

• Currently, the company earns commissions on loan distribution and additional bonuses for successful collections 

• However, rising loan defaults have impacted efficiency and margins

In the new approach the company will prioritise a "distribution-only" model, targeting “prime” category customers.

• Additionally, Paytm is exploring secured loan options for merchants, such as loans against gold and property

The RBI's diktat on Paytm Payments Bank (PPBL) impacted the company's fourth quarter results as operating revenue dropped marginally to Rs 2,267 crore.

• Net loss widened to Rs 550 crore, including a hit of Rs 227 crore from the writedown of its investment in PPBL

Meanwhile, control over expenditure helped Paytm to reduce its net losses by 19% to Rs 1,422 crore in FY24, even though elevated ESOP cost hurt profitability.

Layoffs are expected to continue as Paytm strives for a leaner structure and improved cost efficiencies

• This is expected to generate annual savings of Rs 400-500 crore

Dunzo has delivered bad news, yet again.

Lightbox, a major investor with an 11.1% stake, has decided to give up its seat on the company's board.

• Lightbox is the third-largest single shareholder, following Reliance Retail (25.8%) and Google India (19.3%)

Earlier in March, Lightbox partner Siddharth Talwar, who represented the VC fund on the Dunzo board, left the firm.

• The venture firm is not keen on replacing Talwar and appointing another representative, sources told us

This isn't the first time Dunzo has seen a board member exit. Lightbox is simply the latest in a string of exits.

• Vaidehi Ravindran (Lightrock), Rajendra Kamath and Ashwin Khasgiwala (Reliance Retail) were other investor representatives who stepped down last year

• Co-founders Dalvir Suri and Mukund Jha also resigned from the board and left the company in 2023

At its peak in 2022, Dunzo boasted a board of eight members. This number has dwindled to just two (co-founder and CEO Kabeer Biswas and Hongjim Kim of STIC Investments).

Dig deeper

Byju's seems to be sinking under the weight of legal battles. 

• From missing millions in the US to non-payment of dues back home, the company is facing flak from all sides

A US court has penalised Riju Ravindran, a Byju's director and brother of founder Byju Raveendran, for defying its order to find $533 million in missing funds.

• The missing money is the reason for a fight between lenders, who are owed more than $1.2 billion, and Think & Learn, the parent company of Byju’s
  
  
• A hearing to determine Ravindran's potential fines is still pending in the Delaware court

The judge in the case, John Dorsey, has often expressed frustration over the company’s refusal to disclose where the money is being held.

• Earlier this year, Dorsey ordered the arrest of a hedge fund manager who helped Ravindran move the cash but refused an order to reveal what happened to it

A source close to Byju’s told us that the Delaware court's contempt order on Riju Ravindran is not enforceable, as he is an Indian citizen.

• According to the source, the reported "contempt" order on Ravindran is “purely symbolic and has no meaning or bearing.”

Meanwhile, Ravindran has managed to avoid an arrest warrant from the US court as he is currently living in the UAE which does not have an extradition treaty with the US.

 Meanwhile, back home the National Company Law Tribunal (NCLT) has issued three notices to Byju’s over non-payment of dues to vendors. 

• The hearing in all three cases, filed by McGraw Hill, Cogent E-services and AG Automation, is scheduled for July 3

This comes a day after we reported that a group of employees now plan to knock on the doors of NCLT to demand their dues from Byju’s.

Go deeper

• Wearable AI startup Humane is working with a financial advisor to explore a potential sale of the company for $750 million to $1 billion.

• Google will soon start testing search and shopping ads in its AI-powered search experience in the US

• Scale AI, a San Francisco-based data-labelling startup, doubled its valuation to $14 billion by raising $1 billion in a funding round led by Accel with participation from new investors like Amazon and Meta.

Forget your typical vacation reels—entrepreneur and pilot Gopichand Thotakura just upped the travel game!

On May 19, Thotakura blasted off into space on Blue Origin's NS-25 mission, becoming the first space tourist of Indian origin!

In a video posted on Blue Origin's official Instagram account, Thotakura can be seen proudly displaying a tiny Indian flag while in space.

Talk about out-of-this-world patriotism!

Watch the video

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