Breaking: Zerodha may soon have to abandon its pioneering zero brokerage structure. Why? Read more

One quick thing: Karnataka HC sets aside NCLT stay on Byju's second rights issue

• Unacademy cuts another 250 jobs.

In today's newsletter:

• Zepto's purple patch 
• Zomato's mega ESOP pool gets the greenlight
• Stock gaming apps hit hard by Sebi

P.S. Imagine motor racing, but with auto rickshaws. Scroll below for more deets!

Was this newsletter forwarded to you? You can sign up for Tech3 here

Quick commerce startup Zepto is appearing sizzling hot to investors even as the overall funding landscape remains frosty in the country.

On the heels of raising a mega $665 million financing, Zepto is gearing up to raise another $400 million, sources told us.

• Of the planned $400 million, the quick commerce player has already received commitments worth $250 million, we have learnt.

General Catalyst is most likely to join the captable while private equity giants such as KKR, Abu Dhabi Investment Authority (ADIA), Singapore’s GIC have expressed interest, too. 

The fresh financing is also happening at a heftier valuation than the previous round

• Zepto is being valued at $4.6 billion, about 30% higher than its current valuation of $3.6 billion.

• Zepto’s valuation has jumped 3.3X since August 2023 when it raised $231 million at $1.4 billion valuation

Once the round closes, Zepto would have cumulatively raised over $1 billion in a short span, a rarity in such times.

• It would surpass Flipkart’s $950 million fundraise which closed in May. 

Such heightened funding activity was last seen during 2020-2021 when companies like Byju’s and others mopped up large funding rounds of over $1 billion in a quick period.

Go deeper

It’s another occasion for Zomato employees to rejoice — as the food delivery major’s plan to create a fresh employee stock option (ESOP) pool has been approved by shareholders.

At the current share price, the new ESOP pool of 18.2 crore stock options are worth around Rs 3,800 crore.

According to regulatory filings, investors holding 25% of the company’s shares voted against the resolution to create the new pool.

• Zomato’s stock price was earlier struggling to climb up till the time it remained loss-making, largely on account of its high ESOP costs

• The foodtech giant’s ESOP cost almost doubled to Rs 161 crore in the March quarter, compared to Rs 84 crore in the year-ago period.

Zomato expects the charge to increase in FY25 on account of grant of ESOPs to the Blinkit leadership team and senior employees, CFO Akshant Goyal recently said.

Zomato has also brought back two senior executives, who had left the company last year, and asked them to incubate new ideas for its going-out business.

• Sources said that Rahul Ganjoo, a former head of new businesses, and Pradyot Ghate, who was a vice-president, are back in the fold.

• Going-out is the vertical where Paytm's movie ticketing and events business may eventually reside if deal talks between the two Indian unicorns fructify

Also read: Loyalty, discoverability, frequency — Decoding Zomato’s bid to acquire Paytm Insider 

Meanwhile, Zomato is no longer pursuing lending ambitions on its own. The firm withdrew its application for a non-banking financial company (NBFC) licence today.

• The move comes on heels of Zomato surrendering its online payment aggregator and prepaid payment instrument licences to the Reserve Bank of India.

The Gurugram-based firm is currently engaging with multiple NBFCs to give out working capital loans to its partner restaurants, we reported in May.

Once comfortably cruising in the grey zone, stock gaming startups are now seeing red as they dodge SEBI's crackdown.

Nearly half a dozen gaming and virtual trading startups are shutting down, pausing operations, or pivoting a week after SEBI's new ruling kicked in.

• Restricted to use “live” data for gamification, virtual trading or simulation, the apps are left redundant.

Among the latest casualties of the ruling are Accel-backed Trinkerr and Dream Sports-backed Investro, both of which have taken a pause or discontinued their services.

• Several stock gaming apps, including Kalaari-backed Threedots, Ztocks, Bysos, and Stocktry have already shut shops.

• Apps such as StockPe and TradingLeagues have pivoted towards US market and crypto

The market regulator aims to curb illegal data use and gamification of stock trading, which they fear encourages risky behaviour.

• Concerns about these apps include potential creation of a parallel space outside SEBI's regulatory oversight
• Apps may not provide the same investor protections as traditional securities markets

Meanwhile, founders have raised concerns that “live” data ban could limit educational resources. 

Read full story

Machine learning and Python have emerged as top skills for gaining a job in the IT industry for Generative Artificial Intelligence (Gen AI) roles. This latest hiring trend is in contrast to the overall declining trend of hiring in the IT industry.

• About 42% of Gen AI jobs in India mention “machine learning”, while 40% ask for “Python” as the most wanted skill for AI jobs, according to hiring platform Indeed.

• Companies such as IBM, Coforge, L&T Technology Services, and Happiest Minds are actively seeking professionals skilled in machine learning, data science, and cloud engineering.

Find out more

• India ranks tenth in terms of private investment into artificial intelligence with a $1.4-billion inflow, according to data from Bond Capital.

• Anthropic is launching a new initiative to fund the development of new types of benchmarks developed by third-party organisations that can effectively measure advanced capabilities in AI models.

• Meta is changing its ‘Made with AI’ label to ‘AI info’ across its apps, to indicate the use of AI in photos.
  

Imagine dirt bike racing, but with auto rickshaws. That's tuk-tuk racing for you.

Primarily seen in Sri Lanka, tuk-tuk racing involves drivers manoeuvring modified auto rickshaws over a rough and gruelling terrain.

• They do this with the help of their teammates, who shift their weight around or even hop out to help steer the vehicle while maintaining its balance and speed.

Over the years, the competition has even attracted sponsors such as Red Bull and Castrol.

Here's one of the races in action