Byju’s seeks arbitration in BCCI case; Nazara raises Rs 250 crore

Beleaguered edtech firm Byju’s has sought arbitration to settle its dispute with the Board of Control for Cricket in India over non-payment of dues. This and more in today’s ETtech Top 5. Also in this letter:
■ SoftBank fully exits Policybazaar parent
■ AI takes centrestage at Davos
■ Indian startups’ sprint to unicorn status gets shorter


Byju’s vs BCCI: Edtech seeks arbitration in sponsorship case

Embattled edtech startup Byju’s on Wednesday told the National Company Law Tribunal (NCLT) that it has referred its dispute with the BCCI to an arbitrator and was trying to settle the matter.

Details from the hearing: The company noted that the case contained both law and fact, which could only be settled via arbitration. Counsel for the BCCI, however, denied any negotiations and sought more time to consult with the Board.

Holding that the arbitration application would have no bearing on the insolvency proceedings, the bench deferred the hearing to February 7, allowing the BCCI to file a reply to Byju’s objections.

The BCCI has dragged Byju’s to the insolvency tribunal for non-payment of Rs 158 crore, excluding tax.

Quote unquote: “We have filed an application under the Arbitration Act for reference of the dispute to arbitration. The case filed by BCCI entails many disputed questions of law and facts, and those disputes need to be decided by an arbitral tribunal,” said Pramod Nair, a senior advocate representing Byju’s.

Case details: The edtech firm initially signed a jersey sponsorship agreement with the BCCI in March 2019 for three years, which was later extended by one year. In November 2022, Byju’s requested the termination of their association, but was told by the BCCI to continue the partnership until at least March 31, 2023.

The company has made payments till September 2022, and the dispute pertains to pending dues from October 2022 till March 2023.

Mounting troubles: The Byju Raveendran-led firm has been battling trouble on many fronts over the past few years, including an ongoing cash crunch, delayed financial results, alleged forex violations, multiple lawsuits, and a shutdown of some parts of its business.

Most recently, BlackRock, the world’s largest asset manager, slashed its implied valuation to about $1 billion, an over 95% drop from the $22 billion it commanded in October 2022.

Byju investor markdowns

Earlier in November, Prosus had marked down Byju’s valuation to below $3 billion compared to the $5.1 billion valuation it had ascribed to the company in March last year.


Nazara Technologies raises Rs 250 crore from Nikhil Kamath, ICICI Prudential

Nazara Technologies funding

Nitish Mittersain, CEO, Nazara Technologies

Listed gaming and media firm Nazara Technologies on Wednesday said it had raised Rs 250 crore from existing investors ICICI Prudential and Zerodha cofounder Nikhil Kamath, among others.

Deal details: The firm will issue over 28 lakh equity shares at Rs 872.15 per share as part of the latest fundraise.

Entities related to Nikhil Kamath invested a total of Rs 100 crore, while entities related to ICICI Prudential put in Rs 75 crore. The remainder came from investment firms Plutus Wealth Management and Chartered Finance and Leasing Ltd.

Shareholding pattern: Following the latest investment, Kamath holds just under 5% in Nazara, while ICICI Prudential has over 5%, founder and chief executive Nitish Mittersain told ET.

Nazara also picked up a minority stake of 10.77% in influencer marketing firm Kofluence Tech through a share-swap agreement.

Upswing

Upswing Financial Technologies founders (L-R) Nihar Gupta and Anupam Bagchi

Upswing raises $4.2 million: Upswing Financial Technologies, a fintech-focussed software suite provider for consumer businesses, said it has raised $4.2 million in a pre-series-A funding round led by Quona Capital. This brings the total funding raised by the company since its inception in 2021 to $8.2 million.

Fetcch raises $1.5 million: Fetcch, a Web3 payments and digital rewards infrastructure platform, said it has raised $1.5 million in a pre-seed funding round led by AppWorks Venture and Hashkey Capital.

Medial App secures $120,000: Social media platform Medial App has raised $120,000 in a pre-seed funding round led by FirstCheque VC. With a beta-stage user base of over 5,000, Medial is set to launch officially by the end of this month.


SoftBank fully exits PB Fintech with $650 million in returns

SoftBank CEO Masayoshi Son

SoftBank CEO Masayoshi Son

Japanese technology investor SoftBank has completely exited PB Fintech, the parent of insurance marketplace Policybazaar, according to people aware of the matter.

Big win: The investor had infused close to $200 million in PB Fintech and sold its remaining stake in a mid-December transaction for about Rs 914 crore (or $109 million).

In total, SoftBank has made around $650 million in returns on its investment in the Gurgaon-based insurance aggregator.

As of September 30, 2023, SoftBank held a 4.39% stake in the company.

Zomato exit: SoftBank also exited Zomato in December. It had picked up a stake in the company when the food-delivery platform acquired Blinkit (formerly Grofers) in 2022 in an all-stock deal.

Catch up quick: ET reported on January 2 that SoftBank sold stakes worth $1.8-1.9 billion during public offerings and through post-listing sales in four Indian startups — Paytm, Zomato, PB Fintech and Delhivery — that went public in 2021 and 2022. It had invested a total of $2.3-2.4 billion in these four new-age companies.

Consumer deals

Deals in consumer, retail fell by a third in 2023: Deal activity in the ecommerce and consumer sectors fell by a third by volume in 2023 as investors turned cautious amid high inflation and intense competition, a Grant Thornton Bharat report has said.

Consumer deals

By the numbers: The number of deals through mergers and acquisitions and private equity funding in the consumer sector dropped to 331 last year from 514 in 2022.

The total value of the deals stood at $8.6 billion (about Rs 71,380 crore) in 2023, down 9% on year from $9.3 billion (about Rs 77,190 crore), said the report shared exclusively with us.


World Economic Forum 2024: AI pips crypto to take centrestage in Davos

AI world economic forum

Artificial intelligence (AI) has been dominating the main strip in Davos, with the world’s biggest companies pushing their AI products and services at the World Economic Forum meeting.

Sam Altman vs Mark Benioff: Salesforce CEO Marc Benioff, who also owns Time magazine, said AI companies ripped off intellectual property to build their technology. “All the training data has been stolen,” Benioff said, adding that content from media outlets including Time and the New York Times surfaces in results from AI companies.

Altman, on the other hand, said AI doesn’t need vast quantities of training data from publishers. “There is this belief held by some people that you need all my training data and my training data is so valuable,” Altman said at Bloomberg House in Davos. “Actually, that is generally not the case. We do not want to train on the New York Times data, for example.”

The ChatGPT maker is in the midst of a major push to secure access to news content after the New York Times sued the startup and Microsoft for allegedly causing billions of dollars in damage over copyright infringement.

Satya Nadella bats for stability at OpenAI: Microsoft CEO Satya Nadella said he wants good governance and steadiness at OpenAI, but he’s not worried about the company’s non-profit structure and doesn’t want greater control over his partner.

Read other important developments from the WEF:


Infographic Insight: Indian startups shave years off the unicorn journey

Startup unicorn

The average number of years required for an India startup to turn a unicorn (valuation of $1 billion) dropped from 8.4 years in 2022 to 5.5 years in 2023, according to a report by Orios Venture Partners.

The findings: As per the report, titled Indian Tech Unicorn and Exits Report 2023, there were a total of 123 exits by startups during the year, including the likes of Mamaearth and Ideaforge – both of which went public – versus 229 in 2022.

Startups unicorn

A year of challenges: Amid a shift in funding dynamics Indian startups collectively secured $8.2 billion in funding in 2023, reflecting a 72% fall compared to the substantial $25 billion raised in 2022.

Byju’s and PharmEasy were among startups which saw maximum erosion in valuation.

Top valuation markdowns

Today’s ETtech Top 5 newsletter was curated by Megha Mishra in Mumbai.


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