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This and more in today’s ETtech Morning Dispatch.
Also in this letter:
■ NFT collectors ask WazirX’s founder Nischal Shetty to transfer ownership
■ People have realised how much they miss traveling: Expedia CEO
■ Binny Bansal’s fund leads Rs 300 crore financing in Curefoods
Byju’s lenders seek $200 millon prepayment to restructure TLB
India’s most valuable startup may have to cough up to $200 million (about Rs 1,600 crore) in prepayment along with a higher rate of interest as a precondition to restructure its $1.2 billion (Rs 9,600 crore) term loan B (TLB), we have learnt.
What’s more: While Byju’s volunteered to raise the interest rate, it is yet to agree upon the prepayment clause put forth by the lenders, people aware of the matter said. We first reported on March 20 that the company’s founder, Byju Raveendran, has offered to increase the loan interest rate by 200-300 bps. A basis point is a hundredth of a percentage point.
The renegotiation was prompted by the delays in posting the company’s audited financials.
Amount may be lower: “The prepayment is becoming a sore point in negotiations, as a section of lenders is refusing to play ball. However, it is possible that the lenders may finally agree to reduce the quantum of prepayment,” said one of the persons.
Lenders have also asked Byju’s to provide fortnightly updates on its cash position.
Byju’s is also in the advanced stages of closing a $600-700 million funding through a mix of equity and convertible notes. A couple of new investors as well as existing backers are expected to invest in this financing round.
Catch-up quick: Byju’s had picked up this financing in November 2021 to finance its acquisitions and expansion in the North American market. However, the company has been under investor pressure to improve its financials and has put new investments on the back burner.
Government notifies rules for online gaming, to appoint multiple SROs
The Ministry of Electronics and Information Technology (MeitY) on Thursday notified the final rules for online gaming. Draft regulations had been issued in January.
The new rules create a framework for disallowing online betting and gambling while paving the way for online real money games that do not allow wagering on outcomes.
What do the new rules say? As per the final rules, the government will appoint multiple self-regulatory organisations (SROs) comprising industry representatives, educationists and other experts such as child experts, psychology experts, and so on.
To begin with, the government will notify three SROs. Further, the new rules define an ‘online game’ as “a game that is offered on the internet and is accessible by a user through a computer resource or an intermediary”.
SRO role: SROs will be responsible for declaring online games permissible on the basis of several factors including whether the games allow wagers, and if the game has the potential to cause addiction, user harm, financial loss, etc.
Quote, unquote: “These rules don’t deal with all the nuances of games of chance, games of skill. We bypassed that and laid out a basic principle that the moment an online gaming trespasses into involving betting and wagering, then it falls afoul of these rules,” MoS IT Rajeev Chandrasekhar said.
State government interpretations: Notwithstanding the new rules state governments will still be able to decide if they want to allow gambling, lottery in their jurisdictions.
Games of skill will now have a clear safe harbour being provided by the central government, which protects from any push and pull from the state so long as they are certified by an SRO but the lack of definition on wagering could mean that states could still potentially interpret skill-based games to be betting platforms.
Also read | ETtech Explainer: timeline of India’s draft online gaming rules
NFT collectors ask WazirX’s founder Nischal Shetty to transfer ownership
Nischal Shetty, founder and CEO, Wazir X
Frustrated by the sudden closure of the WazirX non-fungible tokens (NFT) marketplace coupled with multiple technical issues in listing and accessing NFTs, a group of collectors have asked WazirX founder Nischal Shetty to transfer the ownership to the wallet of a community-run decentralised autonomous organisation (DAO).
Jargon buster: A DAO is an emerging form of legal structure that has no central governing body and whose members share a common goal to act in the best interest of the entity. It has become popular with the rise of cryptocurrencies and their underlying blockchain technology.
An NFT is a digital certificate of ownership that represents the purchase of a digital asset, traceable on a blockchain.
Different viewpoints: “WazirX always wanted this marketplace to be decentralised. In the present situation, it makes sense to give it back to the community and let them form a DAO,” they wrote in the email on March 30, which we have seen. It was not clear if the group intends to set up a fresh DAO or would use one that already exists.
A WazirX spokesperson told us,“The team will need time to think about it. Benefits and risk analysis will need to be done in order to take a decision in this regard.”
Collectors’ challenges: In the email, the collectors had cited five major challenges — such as the present Wazirx NFT contracts not being verified — which could lead to the NFTs getting delisted by marketplaces. Further, video and image files of the NFTs were not discoverable on OpenSea — one of the most used and trusted NFT marketplaces in the world.
The OpenSea issue was resolved on Thursday morning.
ET Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
People have realised how much they miss traveling: Expedia CEO
Peter Kern, vice chairman and CEO Expedia Group
Global travel and booking platform Expedia Group is focused on driving further value for its customers through flexible loyalty programmes and improving service through artificial intelligence (AI), vice chairman and chief executive officer (CEO), Peter Kern told us in an exclusive chat.
Here are some key takeaways:
Travel immune to inflation: “Until we had the bank issues, we had the question of inflation. How would inflation impact travel and other things? The good news we’ve seen is that travel appears to be relatively immune to inflation concerns. Now other categories of consumption have seen impact. But travel has not. Broadly, prices have held up and they inflated a lot during covid and demand is held up quite strongly,” Kern said.
One Key for all: Commenting on the firm’s loyalty strategy, he said, “I think we’re still in the early days relatively in our journey on loyalty. Later this year, we will be combining all our member programs to one which is going to be called One Key. And that’s going to give vast flexibility to consumers.”
Big Tech dependency: “Travel world is governed by the funnel from Google and different potential ideas will rebalance the market, which will be good. We all like to have less dependencies on one big tech player and spread it out to other big tech players. I think ultimately we want people to be direct consumers and have the app,” he said.
Tweet of the day
Binny Bansal’s Three State Ventures leads Rs 300 crore funding in Curefoods
Binny Bansal, cofounder, Flipkart
Cloud kitchen startup Curefoods, owner of brands like EatFit and Sharief Bhai, said it has raised Rs 300 crore in funding, in a round led by Flipkart cofounder Binny Bansal’s Three State Ventures.
Bansal’s second time: Bansal had invested in the cloud kitchen firm back in 2021, when he was a part of a $13 million round in Curefoods led by Iron Pillar. Curefoods was hived off in October 2020 from Cultfit, which was founded by Mukesh Bansal and Ankit Nagori in 2016. Nagori is a former Flipkart executive.
Three State Ventures has invested Rs 240 crore in this round along with existing investors IronPillar, Chiratae Ventures, ASK Finance and Winter Capital. This will increase Bansal’s stake in the company to over 12% from the current 5%. ET had reported on the development last month.
Going hybrid: Curefoods, according to a company statement, plans to use the new capital to expand its geographical reach and diversify its brands into offline formats from the current online-only cloud kitchen model. The Bengaluru-based startup is aiming to expand to tier 1 and tier 2 cities in the North and West of India.
Other Top Stories By Our Reporters
Cognizant wins £74-million deal from UK govt: Cognizant on Thursday announced it has won the UK’s Department for the Environment, Food and Rural Affairs’ (Defra) contract to enhance the government organisation’s supply chain model and add new digital capabilities worth £74 million (approx $92 million).
Indian esports industry to grow to $140 million by 2027: The Indian esports industry is expected to grow from $40 million in 2022 to $140 million by 2027 according to the State of India Gaming Report 2022 from AWS and Lumikai. The report found the number of esports players in India grew four-fold — 150,000 in 2021 to 600,000 in 2022.
Global Picks We Are Reading
■ What does it mean to be a boy online in 2023? (FT)
■ AI Videos Are Freaky and Weird Now. But Where Are They Headed? (Wired)
■ My week with ChatGPT: can it make me a healthier, happier, more productive person? (Guardian)
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