Every week day, Forbes India tech briefings will bring you essential tech news from around the world that has a bearing on India—covering everything from big tech to the subcontinent's growing tech startup ecosystem
Google should sell ad manager suite – US; Startup funding in India fell 38 pct in 2022; Indian SaaS projected at $35 bln in 2027
The US Justice Department yesterday accused Google of abusing its dominance in digital advertising, and said the internet giant should be forced to sell its ad manager suite, Reuters reports. Venture capital funding of startups fell more than 38 percent in 2022 versus 2021, GlobalData finds. Indian software-as-a-service companies, however, were a relative bright spot, according to a separate report, by Bain & Company, a consultancy, which estimates the sector is maturing and will continue to grow. And Pune startup Ecozen has raised $25 million in equity funding and loans.
The US Justice Department yesterday accused Google of abusing its dominance in digital advertising, and said the internet giant should be forced to sell its ad manager suite, Reuters reports.
That business generated about 12 percent of Google's revenues in 2021 but also plays a vital role in the search engine and cloud company's overall sales, according to Reuters.
"Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies," the antitrust complaint said. Google’s advertising business is responsible for about 80 percent of its revenue.
In the world of startups, as concerns about global economic slowdown took hold, venture capital investments in India fell 38.2 percent in 2022 versus 2021, according to GlobalData.
An analysis of GlobalData’s financial deals database reveals that a total of 1,726 VC funding deals worth $20.9 billion were announced in India in 2022. The number of deals in 2021 was about the same, at 1,715, but the amount of funding was much higher, at $33.8 billion.
Meanwhile, India’s Software as a Service (SaaS) ventures are a relatively bright spot, according to Bain & Company, a multinational consultancy. Indian SaaS companies are poised to command 8 percent of the global SaaS market, generating $35 billion in annual recurring revenue (ARR) by 2027, growing at 20–25 percent per annum, Bain concludes in a new report that was released yesterday.
“We are now seeing the emergence of a set of Indian SaaS companies who have a right to win not just in India, but globally, Arpan Sheth, a partner at Bain, and co-author of the report.
The outlook for Indian SaaS investment remains broadly positive over the next 12 months, with ~90 percent of Indian SaaS investors expecting to increase or maintain their capital allocation to SaaS.
Ecozen, a cold-chain tech startup, has raised $25 million in equity and debt funding, the Pune company said in a press release. The Series C equity portion was led by Nuveen and Dare Ventures, with participation from the Export-Import Bank of India, and existing investors Caspian and Hivos-Triodos Fonds.
Omnivore and IFA, early investors in Ecozen, took partial exits in this round. Ecozen was founded by three IIT Kharagpur alumni, Devendra Gupta, Prateek Singhal and Vivek Pandey. They sell solutions for motor controls, IoT, and energy storage focused on cold chains and irrigation for the agri sector.
Amazon launches air cargo service in India; Salesforce in Elliott’s crosshairs – report; Log9 raises $40 mln
Amazon has launched Amazon Air, its dedicated air cargo fleet in India, partnering with Quickjet, the ecommerce giant said in a press release yesterday. It will start with Delhi, Mumbai, Hyderabad and Bengaluru. Activist investor Elliott Management’s next target is Salesforce, Wall Street Journal reports. Also in this brief, Microsoft invests more money in OpenAI, and GPT3, the AI chatbot, just passed an MBA exam at the prestigious Wharton School, NBC News reports.
Amazon has launched Amazon Air, its dedicated air cargo fleet, in India the e-commerce giant said in a press release yesterday.
Amazon has partnered with Bengaluru-based cargo airline Quikjet to launch this service, which it said will speed up its deliveries. Amazon, using Boeing 737-800 for the service, will initially use Amazon Air to deliver goods in Delhi, Mumbai, Hyderabad and Bengaluru.
Microsoft yesterday announced in a post what it called the third phase of its long-term partnership with OpenAI through a multi-year, multi-billion-dollar investment.
This agreement follows Microsoft’s previous investments in 2019 and 2021, extending the ongoing collaboration in AI supercomputing and research. The two companies can independently commercialize the resulting advanced AI technologies, according to the post.
Microsoft didn’t say how much it was investing, but the figure could be $10 billion according to Semafor.
Meanwhile, new research conducted by a professor at the University of Pennsylvania’s Wharton School found that the AI chatbot GPT3 was able to pass the final exam for the school's MBA program, NBC News reported earlier today.
Professor Christian Terwiesch, who authored the research paper "Would Chat GPT3 Get a Wharton MBA? A Prediction Based on Its Performance in the Operations Management Course," said that the bot scored between a B- and B on the exam, according to NBC News.
Activist investor Elliott Management Corp. has made a multi-billion-dollar investment in Salesforce, adding to the pressures facing the business-software provider that has just announced a 10 percent reduction of its workforce, Wall Street Journal reported yesterday, citing people familiar with the matter.
Back in India, in some computer hardware news, Rashi Peripherals, a Mumbai-based distributor of computers and computer peripherals, is seeking to raise Rs. 750 crore in an IPO, according to a press release.
Log9, a battery technologies startup in Bengaluru, has raised $40 million as a part of its Series B funding, the company said in a press release yesterday. The investment comprises equity funding and loans, led by Amara Raja Batteries and Petronas Ventures.
Several other investors also participated.
Founded in 2015 by Akshay Singhal, Kartik Hajela and Pankaj Sharma, Log9 says it has in-house competencies ranging from electrode materials to cell fabrication to battery packs.
The new investment will help Log9 raise its manufacturing capacity to 2 GWh by the end of 2024, and commission India's first fully integrated lithium-ion cell production line, Singhal said in the press release. The company will also invest about $12 million in developing its cell and battery technologies.
India’s Supreme Court rejects Google’s appeal to block Competition Commission order; PhonePe raises $350 mln
India’s Supreme Court yesterday rejected Google’s ask that an order by the Competition Commission imposing a fine and changes to its market practices with respect to Android software be stayed. Google had approached the top court after the National Company Law Appellate Tribunal, earlier this month, had refused to stay the Competition Commission’s order while it heard the matter. Also in this brief, TCS wins an order from Bombardier. And PhonePe is now privately valued at $12 billion, after a new investment from General Atlantic.
India’s Supreme Court yesterday rejected Google’s ask that an order by the Competition Commission imposing a fine and changes to its market practices be stayed.
Google had approached the top court after the National Company Law Appellate Tribunal, earlier this month, had refused to stay the Competition Commission’s order while it heard the matter.
The Competition Commission of India, on Oct. 20, imposed a penalty of Rs. 1337.76 crore ($162 million) on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem, apart from issuing a cease-and-desist order.
The value of the fine is provisional and based on data including Google’s revenue in the Indian market, the Competition Commission said in its statement. However, the fine is a landmark decision that puts India alongside the EU in finding that Google has consistently tried and succeeded in eliminating competition using its market dominance.
The Commission, which has been investigating Google’s market practices since 2019, also directed Google to modify its conduct within a defined timeline, according to a statement on the competition authority’s website.
The Commission found that Google enforced multiple restrictive agreements with mobile device manufacturers that “guaranteed that distribution channels for competing search services are altogether eliminated by prohibiting OEMs from offering devices based on Android forks.”
The Competition Commission had also ordered Google to comply with 10 different measures. Among them, Google must ensure that OEMs are not restricted from developing and selling their version of Android on their devices. And Google must ensure that consumers are easily able to uninstall its pre-installed proprietary app.
With respect to yesterday’s Supreme Court order, “This is a landmark decision in the history of competition law jurisprudence in India and globally,” Naval Chopra, a partner specialising in competition law practice at Shardul Amarchand Mangaldas, a prominent Indian law firm, said in an email.
The National Company Law Appellate Tribunal is set to hear arguments from Google and the CCI on February 13, before it makes a final decision on the Commission’s order.
Tata Consultancy Services has won an order from aircraft and defence manufacturer Bombardier, to upgrade its IT systems using SAP’s business operations management software. The company didn’t provide details on the value of the contract. TCS will modernize the aviation company’s systems that support its engineering, manufacturing, aftermarket services and defence activities.
PhonePe, a fintech company in Bengaluru owned by Walmart’s Flipkart, has raised $350 million in funding from private equity company General Atlantic.
The deal was struck at a pre-money valuation of $12 billion, PhonePe said yesterday in a press release
GoMechanic, Sequoia-backed venture, to cut 70% staff, after SoftBank walks away over irregularities
GoMechanic, a car service startup backed by VC investors including Sequoia Capital, Tiger Global Management and Chiratae, will cut 70 percent of its staff and undergo an independent audit of its books, the company’s co-founder Amit Bhasin said in a post on LinkedIn yesterday. Also in this brief, Microsoft yesterday confirmed the 10,000 job cuts that had previously been reported in the news, and a TIME investigation reveals how OpenAI used lowly paid workers in Kenya to remove toxic content from ChatGPT.
GoMechanic, a car service startup backed by VC investors including Sequoia Capital, Tiger Global Management and Chiratae, will cut 70 percent of its staff and undergo an independent audit of its books, the company’s co-founder Amit Bhasin said in a post on LinkedIn yesterday.
Due diligence conducted by accounting firm EY for prospective GoMechanic investors, SoftBank Group and Malaysian sovereign fund Khazanah Nasional, alleged that the Gurugram-based venture had inflated revenue, Bloomberg reported yesterday, citing people familiar with the matter.
EY’s research alleged that about 60 of the more than 1,000 GoMechanic service centres may have violated accounting rules to overstate revenue and divert funds, according to Bloomberg.
GoMechanic was in talks to raise $100 million in a funding round led by Khazanah, Bloomberg had previously reported. SoftBank and Khazanah called off the talks and informed Sequoia, according to Bloomberg.
“We got carried away … we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret,” Bhasin said in his LinkedIn post. The company will be restructured while the founders look for more funding, he added.
Microsoft, yesterday, confirmed it was cutting about 5 percent of its workforce, affecting 10,000 people around the world. Sky News had reported the news previously.
“We are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than 5 percent of our total employee base, with some notifications happening today,” CEO Satya Nadella said in a note that was posted on the company’s website.
ChatGPT is being hailed as revolutionary in the world of AI for its ability to turn out human-like creative content. However, in its quest to make ChatGPT less toxic, its maker, OpenAI, used outsourced Kenyan labourers earning less than $2 per hour, a TIME magazine investigation has found.
OpenAI’s outsourcing partner in Kenya was Sama, a San Francisco-based firm that employs workers in Kenya, Uganda and India to label data for Silicon Valley clients like Google, Meta and Microsoft, TIME says in its report that was published yesterday.
Sama markets itself as an “ethical AI” company and claims to have helped lift more than 50,000 people out of poverty, according to TIME.
The data labellers employed by Sama on behalf of OpenAI were paid a take-home wage of between around $1.32 and $2 per hour depending on seniority and performance. For this story, TIME reviewed hundreds of pages of internal Sama and OpenAI documents, including workers’ payslips, and interviewed four Sama employees who worked on the project. All the employees spoke on condition of anonymity out of concern for their livelihoods, according to TIME.
Microsoft may cut 5% workforce, announce 10,000 layoffs – reports; Mad Street Den raises $30 mln
Microsoft will likely announce thousands of job cuts soon resulting from a decision to cut 5 percent of its global workforce, Sky News reported yesterday. With more than 220,000 employees at Microsoft, that could mean more than 10,000 layoffs, The Verge pointed out. Also in this brief, Apple’s new MacBook Pro laptops with the M2 chips, Google’s plan for an Airtag-like tracker, and investors take IBM to court for alleged misleading information on its cloud and AI revenue.
Microsoft will likely announce thousands of job cuts soon resulting from a decision to cut 5 percent of its global workforce, Sky News reported yesterday. With more than 220,000 employees at Microsoft, that could mean more than 10,000 layoffs, The Verge pointed out.
While Sky News doesn’t give an exact date for the expected cuts, The Verge reports that the company could make the announcement as early as today, ahead of its quarterly earnings results next week, citing a source familiar with the plans.
Apple yesterday announced new 14-inch and 16-inch MacBook Pro running on its M2 Pro and M2 Max processors, which as the names suggest, are aimed at professional users requiring serious juice. Apple says tasks like effects rendering can be up to six times faster than the fastest Intel-based MacBook Pro, and colour grading, up to 2x faster.
The 14-inch Macbook Pro starts at just under 2.5 lakh rupees in India. The 16-inch version will set you back by about Rs. 3,10,000.
Apple also unveiled a new Mac Mini with the M2 processors.
Google will be the latest Big-Tech company to make a Bluetooth tracker, following in the footsteps of Tile, Apple, and Samsung, Ars Technica reports. Android researcher Kuba Wojciechowski has spotted code for a Google first-party Bluetooth tracker codenamed—just in time for The Mandalorian season 3—"Grogu," according to Ars Technica.
IBM, along with 13 of its current and former executives, has been sued by investors who claim the IT giant used mainframe sales to fraudulently prop up newer, more trendy parts of its business, like cloud and Watson, the AI solution, The Register reported yesterday.
In effect, IBM deceived the market about its progress in developing Watson, cloud technologies, and other new sources of revenue, by deliberately misclassifying the money it was making from mainframe deals, assigning that money instead to other products, it is alleged, according to The Register.
The accusations emerged in a lawsuit filed late last week against IBM in New York on behalf of the June E Adams Irrevocable Trust, according to The Register.
Mad Street Den, an enterprise AI software provider, has raised $30 million in series C funding, led by Avatar Growth Capital, with participation from existing investors Sequoia Capital and Alpha Wave Global. The money will help Mad Street Den – known for its solutions for the retail industry – to expand its products to several other verticals.
Founded in 2016 by Ashwini Asokan and Anand Chandrasekaran, Mad Street Den, a Silicon Valley and Chennai company, has seen strong demand for its AI platform in the last two years, as businesses around the world have stepped up their cloud and digital tech initiatives after the Covid pandemic.
ShareChat latest unicorn to lay off staff with 20 pct cut; Amazon’s open software jobs plummet – report
ShareChat, yesterday, joined a growing list of Indian startup unicorns that have laid off employees amid a funding winter. The company has laid off 20 percent of its workforce to conserve cash, as the current global economic slowdown has made it harder to raise funding, according to multiple reports. The desi social media venture is among the most funded startups in India. Also in this brief, a Swiss entrepreneur is launching a privacy-first smartphone operating system based on a version of Android, and a Chinese company has built the world’s biggest wind turbine.
ShareChat, yesterday, joined the growing list of Indian startup unicorns that have laid off employees amid a funding winter. The company has laid off 20 percent of its workforce to conserve cash, and as the current global economic slowdown has made it harder to raise funding, The Hindu reported on Jan. 16, citing the company.
As many as 500-600 people may have been laid off, according to a report from Mint on Jan. 16. In December, ShareChat shut its fantasy gaming platform Jeet11, resulting in about 100 employees being laid off, according to Mint.
Mohalla Tech, ShareChat’s parent company, announced $520 million in funding led by Google, in June 2022, which privately valued the desi social media venture at $5 billion.
ShareChat will provide employees total salary for notice periods, and two weeks’ pay for every year served while allowing employees to retain their work assets.
Employees will also receive health coverage until June 2023, with the ability to encash their leave balances of up to 45 days as per their gross salary. Employees’ stock options will also continue to vest up till April 2023.
The tech job scene continues to worsen globally as we head into 2023. For example, “the hiring party is over at Amazon,” Slashdot reported yesterday, citing the low number of open jobs in the Software Development category at Amazon.
The number has declined to 299 in January 2023 from 32,692 in May 2022, according to Amazon's Jobs site, Slashdot reports.
Apostrophy AG, a Swiss software startup, is set to unveil a smartphone operating system that puts privacy first, according to a Bloomberg report that appeared in SwissInfo on Jan. 16.
Founder Petter Neby, who already has one company selling high-design, low-tech mobile phones, has put together more than 50 employees globally and is raising 10 million euros ($11 million) this year, according to the report.
The company’s software, named AphyOS, is built on an open-source version of Android called GrapheneOS.
China’s MingYang is launching its latest wind turbine with blades that span 140 meters, or about as tall as a 70-storey building, NewAtlas reports. The MySE 18X-28X will be the largest wind turbine ever built, and it is meant to be deployed in offshore wind farms, according to the report.
The number of science and technology research papers published has soared over the past few decades, but the ‘disruptiveness’ of those papers has dropped, according to an analysis of how radically papers depart from the previous literature, Nature reports.
The researchers, Michael Park and Russell J Funk, from the University of Minnesota, and Erin Leahy from the University of Arizona, looked at data from millions of manuscripts. They published their findings in Nature on Jan. 4.