A compilation of important news from the startup world:
Do students of India’s elite colleges want all the benefits of startups without taking
India’s elite engineering and management schools want to create a safety net for their students to hedge the risks of joining startups—which are, somewhat ironically, supposed to be all about taking risks. Last week, the Indian Institute of Management, Ahmedabad (IIM-A), one of the country’s top-ranked business schools, sent out a strongly worded letter to Flipkart after the e-commerce major decided to postpone the joining of campus recruits due to organisational restructuring. IIM-A said that its students felt “cheated” that Flipkart would onboard freshers in December, instead of June, and the compensation of Rs150,000 each that it offered was “utterly unacceptable.” Startups may be made to disclose their financial statements and source of funding if they wish to hire from IITs. And they may be allowed to visit campuses only after other large companies are through with recruitment.
Google Tax will vex Indian startups more
The equalisation levy , or the so-called ‘Google tax’, could well end up increasing compliance costs and accounting hassles for Indian companies , especially startups, at a time when the government is pushing the envelope on ease of doing business in the country. While the levy is aimed at indirectly taxing internet giants such as Google and Facebook for the money they make from Indian advertisers, as per the rules announced on Monday, the onus of deducting and depositing the levy will lie with the advertiser. Industry insiders said this will not only increase the accounting hassles for Indian companies but may prove an added burden on them as they will have to pay the levy from their own pockets, though Google has made it clear the internet giant will pay all applicable taxes. The government has decided to make equalisation levy applicable from June 1 despite many representations from industry bodies against it.
LinkedIn bets big on India, ‘open’ to buying Indian start-ups
LinkedIn, the U.S.-based networking site, is “open” to buying technology start-ups in India, its second-biggest market after the U.S. The company recently moved to a new, 2,50,000-sq. ft office in Bengaluru (Bangalore), taken on lease early this year, to seat about 800 employees. The company’s India head also expressed confidence of growth opportunities The company’s Bengaluru office performs many key functions for its global operations. The company launched LinkedIn Placements in November last year to target about 5 million Indians graduating out of colleges and are first-time job seekers.
Former Dentsu India head Sandeep Goyal to back digital media startups with $15 mn kitty
Sandeep Goyal, chairman of Mogae Media and former chairman of Japanese advertising major
Dentsu in India, is planning to invest Rs100 crore (around $15 million) in digital media
and mobile innovation startups in India. Goyal is scouting for digital startups in India that have built brands, but are now struggling to raise funds for re-engineering or re-launch. In January 2011, Japanese advertising major Dentsu Inc. took complete control of its India joint ventures – Dentsu Communications Pvt. Ltd., Dentsu Marcom Pvt. Ltd and Dentsu Creative Impact Pvt Ltd – by buying the 26% stake held by partner Sandeep Goyal through an entity called Mogae Consultants Pvt Ltd. Goyal then resigned from his position as chairman of Dentsu India Group and from the boards of the three advertising agencies.
SoftBank’s Investment to Exceed $10B In Indian Startups in 5-10 Years and More
Japan based telecom and Internet company Softbank finds Indian startup ecosystem a viable market for investments, as it announces that its investment in Indian startups might exceed $10 billion in the next 5-10 years. The firm holds a few India based companies like Snapdeal, Ola Cabs and InMobi in its portfolio. Masayoshi Son, CEO, Softbank has shared plans to further invest $350 million in India’s solar energy projects. SoftBank also has a joint venture with the Bharti Group in India, under the name Bharti SoftBank.
Jabong revenue grows in Q1 as losses shrink
Rocket Internet-incubated fashion e-commerce venture Jabong that hit a speed bump in the second half of 2015 has begun the new year with a marked improvement in performance while simultaneously cutting down operating loss. The firm posted its best transaction volumes, net revenue and gross merchandise value (GMV) since October-December 2014 (the firm stated that its growth in Indian currency terms was higher still at 21.8%). Operating loss, too, was the lowest in almost two years. The performance of the first quarter shows that the firm is back on the growth track while pruning its day-to-day losses even further. The company secured €300 million ($339 million or Rs 2,250 crore) from Germany’s Rocket Internet SE and Swedish investment firm Kinnevik. The transaction valued the company at €1 billion. This was a drop of almost 68% from its previous funding round in July when it was
valued at €3.1 billion. GFG was created by combining six e-commerce brands that continue to operate in emerging
markets around the world. It includes India’s Jabong, Latin America’s Dafiti, Russia’s Lamoda, Namshi of the Middle East, Southeast Asia’s Zalora and The Iconic in Australia.