Breaking: Paytm top execs pay Rs 3.3 crore to settle alleged SEBI norm violations

One quick thing: Tech and startup hub Bengaluru finally gets a US Consulate

In today’s newsletter:

• Zomato pumps Rs 500 cr in Blinkit
• Startup founders raise concerns over DPDP rules
• Wipro delivers, Tech M disappoints

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

Funding is plentiful for quick delivery players. However, while the market leader has raised a larger round, smaller players are settling for what they can get their hands on.

Zomato has funnelled in Rs 500 crore (around $58 million) into its quick commerce arm, Blinkit, in its second such fundraise within the last year.

• This brings Zomato’s total investment in Blinkit to around Rs 2,800 crore to date, after the firm’s Rs 300 crore infusion in June 2024

The new investment comes not long after Zomato’s Rs 8,500 crore fundraise via a qualified institutional placement (QIP) in late November.

• As much as Rs 2,137 crore of this was to be directed towards Blinkit’s expansion

Blinkit, like its rivals, is adopting an aggressive strategy for expansion.

• It has hired former Flipkart executive Vipin Kapooria as its chief financial officer, and plans to open a total of 2,000 dark stores by 2026, from 791 in Q2 FY25

Meanwhile, Swiggy Instamart has launched a separate app for quick commerce, and Zepto announced that its annualised gross order value (GOV) is at par with Blinkit.

Not just Blinkit, 10-minute food delivery startup Swish is also in talks to raise between $7-$8 million in a fresh round from UK-based Hara Global, said sources.

• Swish had raised $2 million in its seed round last November to compete with players like Swiggy’s Snacc and Bolt, Zomato, Zepto Cafe, Bistro by Blinkit.

The new funding round is, however, much lower than the $15-$20 million the company had initially planned to raise, sources said.

All is not right with the draft rules for the Digital Personal Data Protection (DPDP) Act.

After the public consultation meeting earlier this week, startup founders privately aired their concerns to the IT ministry on various provisions of the law in a closed-door meeting.

• The government addressed these concerns by assuring a separate consultation for startups

The meeting was chaired by IT Secretary S. Krishnan.

• It was held against the backdrop of a major startup industry event where startups such as Mobikwik, Razorpay, Oyo, Dream11, Ixigo, and others were in attendance

Several provisions in the DPDP Act, particularly those related to Significant Data Fiduciaries (SDF), were discussed 

• Restriction on cross-border data transfer
  
  
• Regular audits

The industry believes that, given the current thresholds and parameters defined by the government for designating an entity as an SDF, many Indian startups would fall into this category.

• The government reportedly assured that it would introduce some caveats, particularly regarding the cross-border data transfer restrictions

The government is expected to extend the timeline for receiving feedback on the draft rules from February 18

Go deeper

Two Indian IT majors presented their third-quarter earnings reports, and their performances were in opposite directions.

India’s fourth-largest IT services firm Wipro beat Street expectations on topline, bottomline, and met margin estimates.

• On the other hand, Wipro’s next-best rival Tech Mahindra missed expectations on all the above counts.

Nonetheless, both the companies’ headcount decreased, a metric often seen as an indicator of future demand.

Wipro’s management indicated that discretionary spending has returned in the US, but not in Europe, a key metric that drives the majority of growth for IT companies.

• Meanwhile, Tech Mahindra said that it will continue to lead in its core vertical of communications, while expanding into other verticals, with deal wins being broad-based

However, Wipro's comments contradict those of its larger rivals, who have stated that demand is back in both North America and Europe—regions that make up the lion’s share of their P&L statements.

The Bengaluru-based company’s (Wipro) net profit increased 4.5% sequentially to Rs 3,354 crore in Q3, surpassing analysts’ expectations. 

• Although the revenue remained flat at Rs 22,319 crore 

Meanwhile, Pune-based Tech Mahindra missed estimates for both net profit and revenue.

• Profit declined 21.36% sequentially to Rs 983 crore, while revenue was down 0.21% sequentially to Rs 13,285 crore
  
  
• Though ebit margins beat estimates, increasing 60 basis points sequentially to 11.2%

Tech Mahindra also saw an impact on reported numbers due to steep currency movement headwinds, the management said.

• Jonathan Lachman, the former head of special projects at OpenAI, has joined the new artificial intelligence research lab founded by former OpenAI executive Mira Murati.
  
  
• Apple has temporarily disabled its notification summarisation feature for apps in the News and Entertainment categories in the iOS 18.3 beta. The move comes after Apple had faced a lot of backlash over inaccurate facts were summaries by Apple Intelligence.

Looking for something gripping to binge this weekend?

• After a wait of over four years, Paatal Lok is back with its highly anticipated second season

Expect more high-stakes drama, intrigue, and dark secrets as the series delves deeper into the murky underworld. Watch it on Amazon Prime Video

For those craving something fresh and unique, Rifle Club is the perfect pick.

Directed by Aashiq Abu, this film marks Anurag Kashyap’s debut in Malayalam cinema and rapper Hanumankind’s acting debut. Watch it on Netflix

Note: By subscribing to Tech3 you have already made the right choice. Top it up with a premium offering, the Moneycontrol Pro Panorama, newsletter that gives you a sharp take on macros, markets, business and finance. Sign up for Pro from this link to get this newsletter in your inbox and also a host of content enjoyed by over a million subscribers.