One quick thing: Kusha Kapila’s UnderNeat bags funding from Fireside Ventures, Ghazal Alagh

In today’s newsletter:

• Zomato cuts 600 jobs amid AI push 
• Prosus-Jar deal in a pickle
• Binny Bansal commits Rs 70 cr to AI institute

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Zomato has served a fresh round of job cuts as it increasingly leverages AI to automate its customer support functions.

Over the past few weeks, Zomato laid off around 600 of the more than 1,500 customer support associates it hired under its Zomato Associate Accelerator Program (ZAAP) last year.

Several affected employees whom we spoke to alleged that Zomato has been automating its customer support interactions to cut costs, leading to redundancies

• Notably, Zomato recently launched its own AI-powered customer support platform, Nugget, which currently handles over 15 million support interactions per month

Zomato's last major round of layoffs came in December 2022, when it sacked as many as 100 employees or roughly 4% of its workforce.

 While hiring, Zomato offered employees the chance to be elevated to senior roles within 12 months.

• However, a majority of them did not get renewals at the end of their tenure

Employees alleged that they were fired without clear explanations or notice periods.

• Workers were terminated based on sub-par performance, and lack of punctuality, among other reasons, employees claimed

This comes at a time when Zomato is facing a double whammy of slowing food delivery growth and mounting losses in its quick commerce arm, Blinkit.

• Zomato’s profits in Q3 FY25 declined 57% to Rs 59 crore, as Blinkit slipped further into the red, with analysts expecting another tough quarter in Q4

Dig Deeper

Picture credit: Google AI Studio

A disagreement over the company's valuation and whether founders should be allowed to sell their shares has put the deal on tenterhooks.

A fundraise where Jar, the fintech app, was set to raise $50 million in a round led by Prosus has hit a wall, sources tell us. 

• Prosus was co-investing along with Susquehanna International Group (SIG) and Arkam Ventures
  
  
• Jar wanted a valuation of $300-350 million but the investment consortium was only offering $200-250 million

Apart from a valuation mismatch, founders taking secondaries was another reason the deal fell apart. 

• Jar’s founders – Nishchay Ag and Misbah Ashraf – wanted to sell some of their shares as part of the round but the incoming investors were not too happy about it, sources said 

The reluctance is understandable, especially for Prosus. 

• Prosus has been bitten by founders of The Good Glamm Group and Byju’s taking secondary exits on multiple occasions 

While a deal is mostly off the table, Jar is simultaneously engaging with bankers to explore an initial public offering. 

Dig deeper

While AI breakthroughs dominate headlines, a quieter revolution is unfolding in academia.

Flipkart co-founder Binny Bansal has committed Rs 70 crore to establish an AI research institute at Mohali-based Plaksha University.

• The institute--Binny Bansal Institute for Inventing the Future (IIF)—named after the co-founder, will focus on AI, blockchain, and robotics
  
  
• It will also work on AI-driven applications in fields such as biotechnology, climate science, and financial technology 

Last year, the university partnered with Info Edge to establish a similar institute to foster mentorship, incubation, and student resources.

• IIF will also collaborate with the University of California, Berkeley, particularly its Berkeley Artificial Intelligence Research (BAIR) Lab, for joint research.

Established in 2021, Plaksha counts several tech and business leaders, including Neeraj Aggarwal (BCG), Rakesh Bharti Mittal (Bharti Enterprises), Hitesh Oberoi (Info Edge), Sujeet Kumar (Udaan) among its backers.

Find out more

• OpenAI has raised $40 billion in a new funding round led by SoftBank at a $300 billion valuation to advance AI research and expand computational infrastructure.

• Chinese AI startup Zhipu AI launched a free AI agent called AutoGLM Rumination, capable of deep research, web searches, travel planning, and research report writing, as competition intensifies in China's AI market. 

SpaceX’s latest mission is a cosmic first, funded by cryptocurrency mogul Chun Wang. 

The Fram2 crew, including Wang and astronauts Rabea Rogge, Eric Philip, and Jannicke Mikkelsen, launched from Kennedy Space Center, embarking on a journey that will take them over the North and South Poles. 

• Their mission? To explore the effects of microgravity on the human body through 20 experiments

Watch the launch

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