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One quick thing: Pine Labs weighs $1 billion IPO in India 

In today’s newsletter: 

• Zepto's $665 million haul
• Paytm staff move Labour Ministry over layoffs 
• SoftBank seeks indemnity in Unicommerce IPO

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Investors just delivered Zepto the largest funding round seen by an Indian startup so far this year.

Zepto has raised a whopping $665 million at a $3.6 billion valuation, co-founder and CEO Aadit Palicha told us. 

• Existing investors like Nexus, StepStone and Glade Brook co-led the round

• New investors like Avenir Growth, Lightspeed, and Avra also participated in the round 

Sources also told us that DST Global, an early investor in rival Swiggy, is putting in the biggest cheque among first-time investors in the company.

• We had exclusively reported on Zepto raising this massive round last week

With this, Zepto’s round is the largest startup fundraise in about two years. 

• PhonePe raised $850 million (part of a $1 billion round) in 2023 (round began in 2022)
   
• Swiggy raised $700 million in 2022
  
  
• VerSe Innovation, parent company of Dailyhunt and Josh, raised $805 million in 2022 

However, Flipkart's mammoth $950 million round from Walmart and Google last month is the biggest funding round in India's tech ecosystem this year.

Zepto has raised the money to build a war chest ahead of a potential IPO and to ward off competitors like Zomato-owned Blinkit, Swiggy Instamart, Tata’s BigBasket 

• The money will also be used to enter new markets like Jaipur, Chandigarh, Ahmedabad and others
  
  
• It will also double its dark store count to 700 by March 2025 from 350 currently 

The company, domiciled in Singapore, will also flip its base back to India in the next 2-3 months.

Find out more

Paytm finds itself in hot water yet again, this time due to disgruntled employees.

Several Paytm employees have filed complaints with the Ministry of Labour and Employment, alleging unlawful termination by the firm.

• The employees claim they were forced to resign without compensation and are seeking reinstatement
  
  
• They have submitted supporting documents to substantiate their claims

The exact number of complaints remains unclear, but the employees estimate there are up to 50.

While employees wait patiently for the ministry's response, they have begun gearing up for a court battle.

• A contractual clause mandates arbitration for disputes with Paytm before legal action can be pursued

The layoffs at Paytm follow its massive restructuring, a move aimed at saving the firm Rs 400-500 crore annually in employee costs.

• The fintech major's assertion of offering outplacement support to resigned employees is disputed by many

Meanwhile, All India Professionals' Congress (AIPC) has extended support to aggrieved employees, offering legal support.

• An anonymous form was released on June 19 seeking details on forced resignations

Dig deeper

You may not be able to have your cake and eat it too. Unless you are SoftBank.

Tagged as a promoter of Snapdeal-backed Unicommerce, the Japanese investor has entered into an indemnity contract with Snapdeal's founders — Kunal Bahl and Rohit Bansal.

Unicommerce, a SaaS company, filed its draft papers for an initial public offer (IPO) with SEBI in January this year.

• In the document, it listed Snapdeal — which owns a 35% stake in the company — as the sole promoter entity
  
  
• However, the capital markets regulator has designated SoftBank — which holds a 29% stake in Unicommerce — as a promoter as well

The IPO-bound company said that it has indemnified the Japanese promoter as it is just a ‘financial investor’ whereas Bahl and Bansal are key operators.

SEBI has increased scrutiny of IPO-bound companies over the past few months, resulting in several instances where it has asked companies to reclassify investors holding large stakes as promoters.

• The ‘promoter’ tag carries more regulatory responsibilities and liabilities than that of the ‘promoter group’

• Hence, foreign shareholders holding significant minority stakes in companies are not comfortable to be called promoters

Experts added that given SEBI’s increased scrutiny, more investors could thus follow SoftBank's cue and enter into similar indemnity agreements with founders or other promoters.

Go deeper

• SoftBank Group CEO Masayoshi Son said that the group's mission was to help in humanity's progress by realising artificial super intelligence, which he said would exceed human capabilities by a factor of 10,000.
  
  
• Anthropic, backed by Google and Amazon, released an improved AI model named Claude 3.5 Sonnet just three months after launching the Claude 3 family.

The weekend is upon us, and escaping into a good show (or two...) is the perfect plan.

Still recovering from the emotional rollercoaster of Panchayat and Gullak? Well, fret no more! 

• Your weekend plans just got a whole lot more binge-worthy.  The OG Kota Factory crew is back for season 3. Watch it on Netflix

The Targaryen civil war heats up in the second season of House of the Dragon. 

• Witness the clash between King Aegon and Queen Rhaenyra as they battle for the Iron Throne. Watch it on Jio Cinema

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