Daily News Digest- 4th Feb'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• No Certificate of Commencement Required to Start Business: Private companies will no longer have to wait for a certificate of commencement to start business operations. The government has done away with this requirement, taking another step to ease doing business in India. Promoters will only have to inform the Registrar of Companies online, a measure to ensure that starting a business in India is less cumbersome as Prime Minister Narendra Modi pushes to improve India's image as an investment destination. India is ranked 142 out of 189 nations in the ease of doing business rankings, according to the World Bank. Singapore tops the global ranking. “The procedural requirement to commence business operations was seen as cumbersome. We have changed the provisions to intimation and not obtaining the COB,“ said a senior official of the Ministry of Corporate Affairs who did not want to be identified. According to the Companies Act 2013, after completion of incorporation, companies had to obtain a certificate of commencement of business operations within 30 days and no activity could start before that. “The form meant an additional procedural requirement and payment of stamp duty , which translated into 1-2 days lead time after incorporation and before commencing business activities,“ said Riaz Thingna, partner at Walker Chandiok & Co.

• Xiaomi may Do an Amazon with Own Portal in India: When Chinese phone maker Xiaomi starts its own portal to sell phones in India, it may adopt the model followed by Amazon and Flipkart to work around the country’s retailing regulations. Xiaomi will likely set up a marketplace platform and bring on board third-party retailers to sell the phones on its portal Mi.com. Xiaomi will supply the sellers so that it doesn’t flout retailing norms, according to sources. By creating a marketplace-like structure, it will avoid regulatory issues around retail foreign direct investment, said a person aware of Xiaomi’s plans in India. “Technically, they can’t set up a business-to-consumer ecommerce site in India because that’s not allowed,” said Devangshu Dutta, chief executive officer of retail consulting firm Third Eyesight. Xiaomi, one of China’s largest smartphone vendors, has been selling devices in India by holding flash sales on e-tailer Flipkart and through Airtel stores. The company is yet to finalise its own online plans. “We’ve been seeking expert advice on how to structure it.

• Snapdeal gains a lot of weight, turns five: Snapdeal is setting up regional teams to bring local sellers to its ecommerce platform. The Delhi- based online retailer is setting up four teams in the fashion segment that will be based in Delhi, Bengaluru, Mumbai and Kolkata. Fashion makes up around 35 per cent of Snapdeal’s sales and 55- 60 per cent of transactions. In 2012, it comprised 21 per cent of sales and 30 per cent of transactions. Snapdeal expects fashion to generate $ 2 billion revenue by 2015- 16, up from the estimated $600 million in 2014- 15. “Our priority is to have variety on the platform, so we are setting up regional teams,” Amit Maheshwari, vice- president for the fashion business at Snapdeal, told Business Standard here. “There is a need to understand their (sellers’) problems in their language,” he added.

• AirAsia to start Delhi flights in March: AirAsia India would launch service from Delhi in March and hopes to break even with the addition of its sixth aircraft in May, the airline’s Chief Executive Officer Mittu Chandilya said on Tuesday. The airline initially planned to break even in four- five months but had gone slow on its expansion. AirAsia India began its service from Bengaluru in June and has three aircraft at present. It will add a fourth plane in the next three weeks. It also plans to introduce wifi and videostreaming service on flights. The airline plans to launch Delhi- Bengaluru and Delhi- Goa services in its summer schedule and will also introduce red eye flights ( wee- hour flights).

• Startups Crash Out of Funding Grand Slam: Scores of startups that emerged in recent years backed by a plethora of angel investors and accelerators are struggling to secure follow-on funds from larger investors, raising doubts about their ability to cross over to the crucial growth stage. While it is becoming easier to launch a business, entrepreneurs are realising it is not quite so simple to carry on as growth-stage investors subject them to greater scrutiny -leading to a funding chokehold known in venture capital terminology as a “Series-A crunch“. This is more so for non-tech startups. Startups typically seek $1-3 million (₹6-18 crore) in Series-A or follow-on investments 2-3 years after securing their first round of investments, as they prepare to scale up having sorted out early hitches and firmed a business plan.

• Matrimony.com Ready for IPO, Targets $450-500m Valuation: Match-making portal Matrimony .com has set the ball rolling on its much-awaited initial public offering (IPO), expected to be the first by an Indian internet company after Justdial's successful listing in June 2013. The Chennai-based company has signed on Citigroup Global Markets, Deutsche Bank and Kotak Mahin dra Capital as investment bankers to the upcoming issue and is eyeing a valuation of $450-500 million ₹2,700 crore to (₹3,000 crore), said persons with knowledge of the plan. “The three banks have just been formally given the mandate to start the IPO process-$450-500 million valuation seems fair at this stage,“ said one person. “The company is expected to file the DRHP (draft red herring prospectus) in the next two months,“ said another source.

• Now NGOs Get Startups’ Help to Sell Wares via Online Platforms: Startups are increasingly partnering with non-governmental organisations to market products and services offered by people from low-income groups, accessing the vast networks of NGOs and skilling marginalised youngsters in the process while taking their products such as handicrafts to international markets via online platforms. Shop for a Cause, Dharavimarket.com, Upcycling Project and Green the Gap are among the startups that are working with NGOs for their social enterprises, creating a bridge between non-profit and for-profit enterprises. Megha Gupta, founder of Dharavimarket.com, and an urban planner, realised the potential of marketing the products made by the residents of Mumbai's large slum cluster online.Leather bags, shoes, costume jewellery and accessories made in Dharavi are sold on the online platform, which was launched in August 2014. “I had an opportunity to study Dha ravi closely during my research on daily commutation within Dharavi for a car company. I realised the richness and variety of products made within Dharavi, and felt that if I could get them on an online platform, the reach could go international,” said Gupta. She started the venture with a self investment of.

• Wipro Sets up Team to Unearth Next Big Startup: Wipro, India's third largest software company , is doubling down on its hunt for the next disruptive startups by hiring an Intel Capital executive and promoting a company veteran from within to set up its corporate venture arm in the Silicon Valley . Venu Pemmaraju, a senior investment manager at Intel Capital's San Francisco, Bay Area offices, and Biplab Adhya, who currently heads Wipro's Oracle software practice, are being appointed to lead the company's Corporate Venture arm backed with a $100 million (Rs 600 crore) fund. The duo will lead Wipro's startup investments, and report to Rishad Premji, the chief strategy officer, according to people familiar with the decision. When contacted, a Wipro spokesperson said Wipro is in the process of setting up a corporate venture arm, and the details will be shared “at an appropriate time.“ 

• New Silk Route to Raise Fresh Fund in 2016 after Slew of Exits This Year: Late-stage private equity firm New Silk Route plans to hit the road next year to raise its new fund, a strategy that could see the PE major build on the improving investor sentiment towards India after a dismal two years. “We want to let this year run, hear the budget, let some exits happen, but after that, we certainly will look to hit the road,“ said Parag Saxena, chief executive and founding general partner of New Silk Route. The size of the new fund is yet to be finalised by the private equity firm that currently manages assets of about $1.3 billion (. `8,630 crore), and looks for opportunities across Asia and West Asia. India, however, will continue to be the primary investment market for New Silk Route, as it looks to invest across sectors such as consumer services, media and telecom and technology. “The first thing we need to accomplish is to make sure that we return some of the capital that we have taken from investors, from the investments we've made between 2008 and 2010,“ Saxena said.

• New Call Telecom in Talks to Acquire Nextra Teleservices: New Call Telecom is in talks to acquire Delhi-based Nextra Teleservices for its third buyout in the country in just over three months as the British internet service provider looks to aggressively expand its presence in India's fast-growing telecom sector. Nextra Teleservices, an internet service provider (ISP) founded in 2012, currently provides broadband services for homes and leased line internet services to enterprises in Delhi and the National Capital Region. The proposed acquisition is in line .with New Call Telecom's strategy to target the growing demand for broadband in homes as well as the small and medium-sized enterprises or SMEs. New Call Telecom's spokeswoman in India told ET that Nextra is among the few companies in wireline segment that her firm is talking to for an acquisition. Nextra Teleservices' president Kapil Dev Sharma confirmed the talks, but said that nothing has been finalised as yet.

• Unilever looks to push sales through e-com: With consumers increasingly tapping technology for their purchases, Unilever CEO Paul Polman expects the $58-billion consumer goods giants to garner significant sales volumes through the e-commerce channel globally, which may equal Hindustan Unilever’s (HUL) business. Polman, who met Prime Minister Narendra Modi on Tuesday evening, said that in India too the e-commerce channel appeared to be an attractive proposition, although it was still in initial stages of development. “An advantage in big cities in India is products can be delivered within a day, as offering these the next day or the day after isn’t attractive to consumers. You can do that in India at a low cost, as there is abundance of labour. Globally, I expect our e-commerce business to approach the size of HUL’s total business; so, it won’t be small. 

• BMW hopes to arrest 2-yr sales dip with new models: Hit hard by stiff competition from Audi and Mercedes Benz, German luxury car maker BMW has said it will drive in a slew of new models as it looks to arrest the twoyear decline in its India sales. The company, which sold 9,375 units at its peak in 2012 before its volumes started slipping to finish 2014 at 6,409 units (7,327 in 2013), is boosting localisation on its cars to check price points in a tough economic scenario and pinching competition. Phillip von Sahr, president of BMW group India, said the company is confident of registering a growth in numbers this year as it embarks on a fresh pitch of going aggressive with its mainline products like 3and 5-series sedans and SUVs like X3 and X5. “A new era is coming as far as our business is concerned,” von Sahr said, even as he shrugged questions about the company’s decline from the numero uno position in the Indian luxury car market. Audi sold 10,851 units in 2014, while Mercedes Benz sold 10,201 units. “We do not want to play in the volumes category with low-cost entry models. Unlike some of our competitors, BMW India’s focus will be on having a profitable business through sale of higher-end cars, but without discounts,” he said.

• Mahindra Group Acquires BabyOye: The city-headquartered Mahindra Group has completed the acquisition of BabyOye, the Accel Partners and Tiger Global backed baby care products etailer that has been on the block since last year. The deal is likely to have been structured as an asset sale and could mark the first major venture capital writeoff in India's booming ecommerce sector. Tiger Global, Accel Partners and Helion Venture Partners had together invested $14.5 million in the Mumbai-based etailer over the past four years. “BabyOye is now no longer part of our portfolio. There is no cash involved in the transaction,“ said a source in the one of the venture capital firms that had invested in Nest Childcare Services, the Mumbai-based company that owned BabyOye. None of the investors responded to emailed queries from ET.

• Chetan Maini Quits as Reva Chief Executive: Chetan Maini, who founded Reva more than two decades ago, has resigned as CEO of the electric car company now owned by Mahindra & Mahindra. He will be replaced by Arvind Mathew, a former managing director of Ford in India. Maini, 44, has been hailed as India's Elon Musk, chief product architect at Tesla Motors. “I may take up a position within the Mahindra Group or may even look outside. To be honest, I have still not decided,“ Maini told ET. “I will continue to be a shareholder, while Arvind will look after the day-to-day operations at the company. I ran the company for 20 years. I will figure out what I want to do next,“ he said. Mathew will take over on May 1.

International:

• Tesco's ex-boss and finance officer to share £2m payout: Tesco's former chief executive and finance director will share £2.2m in severance pay after the supermarket said it was "contractually committed" to make the payments. Philip Clarke and Laurie McIlwee, who left the firm last year, will receive £1,217,000 and £970,880 respectively. The payments were initially suspended while Tesco investigated last year's £263m accounting scandal. Tesco said it had taken legal advice and could not withhold the payments. "Defending costly claims for the payments would not be in the company's best interests," it added in a statement. In September, Tesco stunned investors when it announced that it had misstated its half-year profit guidance by £250m - a figure that was subsequently revised to £263m in October.

• McDonald's Big Mac sauce auction attracts $18,000 bid: McDonald's is selling a bottle of the special sauce used on their iconic Big Mac burgers on eBay, which has attracted a bid for more than $18,000 (£12,000). All the proceeds raised will go towards Ronald McDonald House Charities that support families with sick children. The auction is for the first edition of 200 500ml bottles of sauce and runs from February 9 to 11. However, it will only be available for sale in Australia. The advertisement on eBay has already attracted 135 bids and the auction price may rise further given there is another eight days to go. McDonald's said in the description page that the bottles "won't be sold in restaurants. That makes it rarer than a spot on Bondi beach on New Years Day".

• Apple bond sale raises $6.5bn: US technology giant Apple raised a better than expected $6.5bn (£4.3bn) through a corporate bond sale, as part of a plan to return cash to investors. Monday's bond sale was Apple's third such sale in as many years and was just over half the $12bn the company raised in April 2014. The California-based firm plans to return more than $130bn to shareholders by the end of this year. The move comes despite the company sitting on a cash pile of $178bn. Some of the bonds are set to mature in five years, while others will not do so for another three decades. Analysts have said that Apple could increase the amount it returns to its investors to as much as $200bn over the next three years. Even when Apple's $35bn of debt is taken into account, it still has $142bn in cash.

• Prana to Open Store in Southern California: Outdoor clothing company Prana is set to open its first Southern California store as part of larger plans to grow its brick-and-mortar business. The Carlsbad, Calif.-based company, which Columbia Sportswear Co. bought last year for $190 million, has “a great opportunity to expand retail,” said chief executive officer Scott Kerslake. It has also become a necessity in today’s retail landcape, he added. “From where we stand, the companies that are going to win in the future are going to have multiple points of contact with the customer,” Kerslake said. “We see retail as being a key part of that multi-channel strategy. For us, retail should not only be a great exhibit for the brand, but also a place that makes it easy to transact for people. It’s one additional point of contact, integrated into the broader experience.”

• Lauren Conrad's Paper Crown Opens Pop Up: Lauren Conrad’s Los Angeles-based apparel line Paper Crown is dabbling in brick and mortar. The company teamed with Winter Park, Fla.-based Rifle Paper Co. on a collection of apparel and giftable items that will be sold at a pop-up shop at The Grove in Los Angeles. The store, located in the shopping center’s Grand Lobby and totaling about 1,100 square feet, opens Feb. 13 for a three-day run during Valentine’s Day weekend. “We don’t have any Paper Crown locations so this was really exciting for us and it’s the first time we’ve been able to take our entire collection into a retail space,” Conrad told WWD. “We thought it made sense to do a Valentine’s pop-up. The collection is very girly and romantic.”

• Former Raytheon CEO William Swanson Joins TJX Board: William Swanson, who retired as chairman of Raytheon Co. in September, has been elected to the board of The TJX Cos. Inc., the off-price retailer based in Framingham, Mass. The addition of Swanson expands the number of directors to 11, all but two of whom, chairman Bernard Cammarata and chief executive officer Carol Meyrowitz, are deemed to be independent. Swanson had a 42-year career with Raytheon, a leading defense and security company, and was named chairman and ceo in 2004. He relinquished the title of ceo in March. “Bill brings extensive experience in leading a global Fortune 200 company,” Cammarata said. “We see his deep international knowledge as a complement to our board as we continue to pursue our successful growth as a global value retailer.”

• Topshop Names Jacqui Markham to New Post: Topshop has named Jacqui Markham to the new post of global design director. Markham, who was previously women’s wear design director at Asos.com, will report to Mary Homer, Topshop’s managing director. Markham will oversee the brand’s 60-strong in-house design team and work alongside the creative director Kate Phelan. Topshop stressed the global nature of the position, and that it reflects the rapid international expansion of the brand in the U.S. and elsewhere overseas. The company said Markham would “re-focus the design and product development areas to ensure Topshop’s fashion authority position as it continues to expand. With 400 new styles in store every week, quality and first-to-market styles continue to drive the business,” the company said. Markham graduated from the University of Northumbria with an honors degree in fashion design, and has worked at the British retailers Oasis, Karen Millen — and Topshop, where she served for 14 years. Her last job at Topshop was design director.

• Target Corp. Names Mike McNamara its CIO: Target Corp. has named Mike McNamara vice president and chief information officer. McNamara will report to Target chairman and chief executive officer Brian Cornell. He succeeds Bob DeRodes, who is retiring. DeRodes, a 40-year information technology veteran, joined Target last spring to focus on enhancing the retailer's data security and technology infrastructure. In 2013, between Nov. 27 to Dec. 15, the discounter's U.S. stores were the target of a data breach in which about 40 million Target customer accounts — both credit and debit — were stolen by hackers. Cornell said, "Technology is critical for Target's future success. So finding the right leader for this role was one of my absolute top priorities."

Tech:

• Google developing its own Uber competitor: Uber faces an ever-growing cast of adversaries that includes dubious regulators, litigious drivers, hostile members of the press, and some well-funded rivals. But the most significant threat to the app-based transportation company may be much closer to home: one of its biggest investors, Google. Google Ventures, the search giant’s venture capital arm, invested $258 million in Uber in August 2013. It was Google Ventures’ largest investment deal ever, and the company put more money into Uber’s next funding round less than a year later. Back then, it was easy for observers to imagine Google teaming closely with Uber, or even one day acquiring it. David Drummond, Google’s chief legal officer and senior vicepresident of corporate development, joined the Uber board of directors in 2013 and has served on it ever since.

• Sony, Panasonic Allow Stores to Sell Their Products Online: Consumer electronics majors, including Sony and Panasonic, are now encouraging trade partners to sell their products online, lifting a ban on such sales imposed due to heavy discounting on ecommerce marketplaces. Two industry executives requesting anonymity said several of these firms were under pressure from their headquarters to come up with an online sales strategy to cash in on the rapid growth of India's ecommerce market. Japanese firm Sony has already partnered with Snapdeal to appoint its dealers as sellers in the ecommerce marketplace, which will ensure pricing parity with offline trade, genuineness of product and warranty support in perhaps the first such deal. “This will ensure customers would face no issues with product availability , serviceability and that pricing is stable,“ said Sunil Nayyar, sales head at Sony India.

• Imgur is Holding Its First Ever IRL Internet Meetup: Camp Imgur: Imgur is undebatably one of the best places on the internet for funny and interesting images. The company has today announced its first ever in-real-life weekend camp, where you can meet other people who spend time on the site. Camp Imgur will be held August 7-10 at a campground in Mendocino, CA. The company is touting it as “part meetup, part festival and part conference” where you’ll get the chance to meet other internet people. The full lineup hasn’t been announced yet, but the Camp Imgur site promises stand-up comedians, GIF makers, a banana expert, PBS and more. The weekend costs $150, which includes camp activities, meals, beverages, parties and speakers.

• Google Can Now Help You Calculate The Size Of a Mortgage: It seems like Google can do almost everything for us now; the company today added a new feature that allows you to quickly do calculations for taking out a mortgage. The new feature lets you ask the search engine questions like “how much can I borrow at $200 a month” and Google will quickly spit out an answer on your maximum loan size. 

• OnePlus Teases Upcoming Lollipop Update: Are you a OnePlus user? Have you been eagerly anticipating the latest version of Google’s mobile OS? Then you may be in luck. The company today showed off a brief teaser video of its OnePlus One phone running Android Lollipop on its Google+ page. When the phone was released in back in June, we thought it was one of the best Android phones around – Lollipop would only make it better.

• Amazon Launches First Staffed Pickup and Drop-Off Location: Online shopping is a godsend for university students who can’t or won’t leave their campus to buy things they need. If you’re a student, alumni or faculty at Purdue University, however, Amazon just made online shopping even more convenient for you. The company today announced the opening of its first-ever staffed customer pick up and drop-off location at the University. The location will allow students to easily receive and return school items and other orders. Purdue members even get free one day pickup. There are some special university-only featues as well. Once Purdue students activate their Amazon Student account, they will be able to identify the books they need for class by looking for items with Purdue’s logo and class information. After an order arrives, they’ll receive a notification and will be able to either scan a bar-code to pick the item up from a locker, or ask one of the store staff to help them. Purdue students aren’t the only ones to getting the retail hub – Amazon intends to move into the University of California, Davis and the University of Massachusetts, Amherst next.

• Microsoft Launches Another Free Android Lock Screen App: Things are busy at Microsoft Garage, where the company’s employees share experimental projects they’ve been working on. The most recent release is Picturesque Lock Screen, a free Android app that adds useful functions, handy shortcuts and beautiful images to your lock screen. Picturesque Lock Screen feels almost like a second home screen. It features multiple screens that you scroll through and adds a Bing search bar, a customizable news feed, weather reports, device notifications, shortcuts to frequently used apps and settings toggles. It also pulls in the daily Bing homepage image to use as a background and lets you swipe through images from the past week to use.