One quick thing: WestBridge Capital acquires majority stake in KPN Farm Fresh

In today’s newsletter:

• Sequoia is breaking up into three entities 
• Byju's sues TLB lender over 'predatory tactics'
• Surat goes gaga over SaaS

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Will venture capital return to being the cottage industry it once was?

Many are asking this question, as Sequoia has decided to split itself into three separate and independent entities. The China and India units will be spun off from the US arm.

• While the US parent will retain the Sequoia brand, the China arm will be called Hongshan, and the India and Southeast Asia (SEA) fund manager will be rebranded as Peak XV Partners

In a letter to its investors, Sequoia said that it was becoming increasingly difficult to run a decentralised venture capital firm in disparate geographies from a single headquarters.

• The storied venture capital firm, which was an early backer of Google and Apple, said that portfolio conflicts were emerging as a result of investee companies in different geographies competing in the same areas
  
  
• It is also worth noting that the India arm of Sequoia has been involved in controversies surrounding portfolio companies such as BharatPe, Zilingo, GoMechanic, and Trell in the past year and a half

In a blog post, Peak XV said that its engagement with investee companies will not change going forward. All of the firm's partners will also stay put.

• The India and SEA portfolio of Peak XV includes more than 400 companies and 50 unicorns
  
  
• It will also retain the $2.5 billion of cash that remains of the Sequoia corpus that had been raised to invest in this geography

Go deeper

Byju's and its creditors seem to have an unbreakable bond of animosity.

In the most recent twist in this saga, Byju's has decided to take legal action against one of its lenders, branding them as "predatory," after it skipped paying $40 million in interest, which was due yesterday.

Byju's has filed a complaint in the New York Supreme Court to challenge the acceleration of the $1.2 billion Term Loan B (TLB) it raised in November 2021. 

The company is also seeking to disqualify one of its lenders, Redwood.

• Byju's accused Redwood of predatory lending practices, saying the lender acquired a large stake in the TLB with the intent of making a profit

This development comes a few weeks after its US subsidiary, Byju's Alpha, was sued in Delaware by lenders who accused it of hiding $500 million from them. Byju's denied the claims.

Byju's said that due to ongoing court proceedings between the lenders and the company in the US, the entire Term Loan B remains in dispute. 

“As such, Byju's cannot be expected to and has elected not to make any further payment to the TLB lenders, including any interest, until the dispute is decided by the court,” the company said.

For now, Byju's has technically defaulted on the loan by not paying the due interest of $40 million. Watch this space to see how this unfolds.

Surat is a haven for many things, from diamond manufacturing to its massive textile industry to the tasty Surati locho and Khaman. 

Now, the city is adding a new soft(ware) feather to its cap: small-town SaaS startups building for the world!

Surat is gradually positioning itself to become the next big SaaS hub, with around 164 SaaS startups in the city.

Unlike Chennai's SaaS firms, which primarily focused on building and developing for the global market resulting in a surge of startups after the success of Zoho and Freshworks, Surat's SaaS businesses took a different approach. 

They not only chose to build solutions for the international market but also recognised the potential in traditional industries and decided to tap into them.

“Surat founders are very smart, they understand how a business works…So they don't understand VC business, they only know that okay, there is X amount of money which goes into investment and I have to make this profitable. That's the rule of thumb,” said SaaSBhoomi’s CEO Avinash Raghava. 

Founders attribute the success of SaaS companies in the city to the favourable ecosystem, which includes a community mindset, lower costs of building a business, a high-quality talent pool of engineers and developers, and support from the government.

Surat has made a decent beginning, but it still has a long way to go to match Chennai, which is the SaaS hub of India. Some of the challenges include:

• Lack of awareness among startups about government initiatives
  
  
• Shortage of managerial talent pool
  
  
• Lack of visibility among big investors

Go deeper

The recent incident of an abusive manager at HDFC Bank and similar cases in other companies highlight the deeper challenges of maintaining decency and decorum in the workplace, particularly during periods of high growth. These challenges arise when unrealistic targets are set and managers fail to prioritise a healthy work culture. 

To address this, it is crucial to hire leaders who prioritise culture, combine good intent with effective execution, make tough decisions, and continuously strengthen mechanisms to detect and address toxic elements, writes TN Hari, Co-founder, Artha School of Entrepreneurship in an opinion piece for us.

One of the greatest video games of all time turns 39 today!

Soviet software engineer Alexey Pajitnov created Tetris, a puzzle video game, on June 6, 1984. In 1987, it became the first entertainment software to be exported from the USSR to the US, where it was released for the IBM PC. Two years later, the game was distributed to PCs in North America and Europe. The rest, as they say, is history.

• The US Securities and Exchange Commission (SEC) has sued Coinbase for operating illegally without registering with the regulator. This comes a day after the SEC sued Binance, the world's largest cryptocurrency exchange, and its founder Changpeng Zhao.
  
  
• A US Bankruptcy Court extended the mediation period between crypto lender Genesis and its creditors due to ongoing disputes over the role of parent company Digital Currency Group in the lender's restructuring.

Apple has finally unveiled its highly anticipated Vision Pro, and it's not your ordinary VR/AR headset. Oh no, Apple prefers to call it the "spatial computer" – fancy, right? Of course, this fancy piece of tech comes with a fancier price tag. 

• The Vision Pro will set you back by $3,499 when it hits the shelves early next year. 

Now, let's talk tech. The Vision Pro boasts a display system that crams a whopping 23 million pixels into two micro OLED screens—each as tiny as a postage stamp. Who needs a TV when you can have this level of mind-blowing tech on your face?

But wait, there's more! Say goodbye to clunky controllers, because with the Vision Pro, your eyes, hands, and voice take charge. Want to browse through apps? Just look at 'em! Need to select something? Tap your fingers! Feeling like a pro? Flick your wrist to scroll! 

Now, we can't forget the other exciting announcements from Apple's WWDC 2023. They've got new Mac computers on the way and updates for iOS, iPadOS, and macOS. More on that here

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