If you missed our must-read stories this week, here are the top reads to get you up to speed. Coming from the most plugged reporters covering the tech and startup ecosystem, the ETtech team helps you understand the significance of these developments.

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1. Building India’s Shein: why investors are backing a new wave of fashion ecommerce startups | A clutch of online fashion retailers targeting young shoppers has emerged backed by venture investors. Fashion startup Newme, which sells clothes to Gen-Z women, is in the final stages of closing a funding deal with investors led by early-stage venture fund Fireside Ventures.

Virgio, founded by former Myntra chief executive Amar Nagaram, just months after starting the business, snagged $35 million at a valuation of close to $160 million. Read our in-depth on how fashion ecommerce startups are trying to fill the gap left by Shein.

2. If correction in stock markets continues, Zerodha’s revenue may drop 30-40% in FY24: CEO Nithin Kamath | India’s largest stock broker Zerodha expects its revenue and profit to have expanded by a fifth in the fiscal year ending March 2023. But there is a major correction ahead for the stock broking firm in the current fiscal, according to its founder and chief executive officer Nithin Kamath. Kamath cautioned that if this trend continues, the overall revenues for Zerodha can be down by almost 40% in FY24. Read the full story here

3. Law in the works to curb Big Tech’s digital dominance | The government is working on regulations to restrain big tech companies from achieving, or misusing, market dominance, in light of the competition watchdog’s recent rulings against Google, officials in the know told ET. Legislation may either be brought independently or in the upcoming Digital India Act, likely to be presented before Parliament this calendar year, officials said. The decision has been taken following learnings from the Competition Commission of India’s rulings that Google had abused its dominance in the Android Play Store market as well as the Play Store billing space.4. PhonePe bags another $100 million from General Atlantic, more expected: General Atlantic (GA) infused an additional $100 million in PhonePe on Wednesday as a part of the payments company’s $1-billion primary funding plan and may pump in another $100-200 million, said three people with knowledge of the matter. The new infusion from the private equity firm is expected in the coming weeks and is subject to conditions and milestones being met, said one of them. Read the full story here

5. SoftBank may part sell stake in FirstCry valuing the retailer at $3 billion: Omnichannel retailer FirstCry is in discussions with a set of sovereign funds to facilitate some of its shareholders to sell a stake in the company at a valuation of nearly $3 billion, three people in the know told ET. This started after deal talks with private equity firm Kedaara Capital fell through a few months ago, people in the know said. While discussions are still in the early stages, the funding is being primed as a pre-IPO round for the Pune-based startup, they said.

6. Amazon JV seller Appario starts shipping inventory to new merchants: Appario Retail, the joint venture between Amazon and the Patni group, is transferring its existing inventory to a new set of sellers on the online marketplace, people directly aware of the development said. This is aimed at delisting Appario from the Amazon India site amid increasing regulatory scrutiny of online sellers with investment from the marketplace.
Read the full story here

7. Wary VCs go slow on startup deals, step up diligence | Risk capital investors are being more stringent in their analysis of business models and are taking longer to close deals as venture capital inflow to India’s startup industry dropped by nearly a fifth in the first quarter of 2023. This sharp decline is delaying the closure of both late-stage as well as early-stage deals according to investors, founders and those involved with funding talks. In the boom years, investors were engaged in quick-fix deal-making to prevent losing out on good assets. This year, with VC firms taking their foot off the gas pedal, some funds are asking for more data and negotiations are also taking more time.

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