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July 6, 2023

It’s a bleak prognosis for healthcare startup Mojocare. The company’s board may delve deeper into the forensic audit report this month, and decide whether to shut shop and return the money to investors. This and more in today’s ETtech Morning Dispatch.

Also in this letter:

■ Online gaming firms plan to discuss rules with states
■ Swiggy joins co-branded credit card rush
■ Nasscom, IndiaTech call out Delhi’s EV transition

Mojocare board to decide on shutting shop, returning money to investors

Hi, this is Supriya in Bengaluru, counting the days till the board at the beleaguered healthcare and wellness startup Mojocare discusses the final report of a forensic audit being conducted by Deloitte.

Fresh off the press: In the next meeting, currently being planned for July 12, the board will take up the matter of winding down the operations of the startup backed by B Capital and Chiratae Ventures, sources tell me.

Why this matters? According to people briefed on the contents of the final forensic report, founders have been found to have inflated revenues and sales in internal presentations to investors, and shown elevated expenses as well (to explain the losses in spite of the higher revenues). The findings are similar to the draft note earlier shared with investors, which I had reported on June 20.

Quote unquote: “While some of the investors also explored a fire sale — like GoMechanic — most investors are backing the idea of shutting the company and returning the remaining capital to the investors’’, a person aware of the matter said.

Operations grounded: Following the revelations at Mojocare last month, its operations have come to a halt even as it appointed Ashwani Gupta as the chief financial officer to work closely with the investor consortium.

Streaming and publishing firms join fight against Google’s billing policy

In their battle against tech titan Google, startups are joining forces. Four more companies — streaming player Altt, audiobook portal Pratilipi, art and design platform Crafto, and Tamil publisher Ananda Vikatan — have approached the Madras High Court seeking relief against Google’s payment policy implementation.

Startups’ case: Shaadi.com founder Anupam Mittal told us that it is clear that companies are hurting due to Google’s predatory moves and hence, they’re turning to the court. The cases in the Madras HC seek very specific reliefs against Google, compared to the CCI proceedings that are broader in nature, he said.

‘Google finding loopholes’: Mittal alleged that even after the Competition Commission of India’s order stated that Google should not discriminate and impose any conditional billing charges, the company is “finding loopholes and exploiting developers” while they await further orders from the antitrust body.

Startups vs Google: Several companies including Matrimony.com, Shaadi.com, Unacademy, Kuku FM, and TrulyMadly had earlier approached the high court, challenging Google’s notice asking them to either adopt the company’s mandated billing route or risk being removed from its Play Store.

The petitioners claimed that Google’s payment policy violated local laws and that imposing an 11-26% commission on their revenues would cause irreparable losses to app developers.

Google pushes back: Google too has filed an application saying that the complaint must be rejected, a person in the know said. “The hearings have concluded on that application and the parties have been given time to file their written submissions, and the judgment in that application is reserved. As of now there are 14 petitioners who have filed complaints against Google and the court has ordered that these companies cannot be delisted from the Play Store’’, the person added.

Online gaming companies plan to discuss rules with states

Even though the rules issued by the central government earlier this year give much needed legitimacy to online real-money games, state governments continue to have the authority to decide what can be classified as a gambling or betting game. To address this differential, firms are planning to approach state governments, ETtech has learnt.

The update: Industry associations such as the E-Gaming Federation, the All India Gaming Federation, and the Federation of Indian Fantasy Sports contend that while certain online games are permissible under central rules, the states may still go ahead and ban them. These bodies plan to approach the governments of Tamil Nadu, Odisha, Assam, and Telangana over the issue.

Centre’s stance: It is learnt that gaming companies have already conveyed to the Ministry of Electronics and Information Technology (MeitY) that despite the newly-notified central rules, gambling and betting continue to be state subjects, with the states having the authority to prohibit such games. The industry should “go to the states and advocate that there is a new set of rules notified by the central government,” a MeitY official said on condition of anonymity.

Swiggy joins co-branded credit card rush

Swiggy is the latest consumer-facing app to join the co-branded credit card bandwagon. Three sources in the know told ET that Swiggy is working with HDFC Bank on this. Mastercard will be powering the offering, a source said.

Beyond the headlines: Swiggy joins the likes of Paytm, Myntra, Amazon, and Flipkart, who have all launched co-branded credit cards. The food tech major has set up a tech team to focus on integrations with the bank and prepare for the launch. Sources told us that they will offer extra discounts on Swiggy-HDFC Bank cards to encourage more customers to apply for one.

How does it help the partners? For HDFC Bank, Swiggy will be an onboarding partner. It will be a point through which the lender can target the younger generation of customers who order food regularly on Swiggy.

For Swiggy, this will be another loyalty feature. Plus, it will also earn revenues from interchange on the card swipes. The bank and Swiggy will also share the cashbacks offered to cardholders.

Why the co-branded bandwagon? After the success of Amazon-ICICI Bank and Flipkart-Axis Bank credit cards, many others also want to create a similar product proposition which can build a sticky user base.

Nasscom, IndiaTech join IAMAI against Delhi’s EV transition

Multiple tech and internet industry bodies such as Nasscom, IndiaTech, and the Internet and Mobile Association of India (IAMAI) have approached the Delhi government seeking relaxation of the electric vehicle (EV) transition timelines it has prescribed in its draft policy on bike taxi and delivery service aggregators.

Industry bodies join hands: Nasscom, which represents companies like Flipkart, Amazon and Uber, and tech industry lobby group IndiaTech (which represents companies including Ola, Zomato, and Zepto) have voiced concerns about the timelines for the Delhi government’s EV transition.

This comes days after the IAMAI had called out Delhi’s aggressive EV transition, saying it could impact the livelihoods of gig workers across the capital who had invested in conventionally powered two-wheelers.

Tech bodies’ stance: “Targets for EV adoption should be in consonance with the availability of vehicles and supporting infrastructure. Given the low availability of EVs in Delhi today, especially in the 2-wheeler and 4-wheeler segments, the electrification mandates appear to be impossible to achieve,” Nasscom wrote in its submission.

Urging the Delhi government to relax the targets and remove the penalties, IndiaTech said that the scheme puts the responsibility of transition on the platforms, which have no control over the vehicles.

Delhi’s plan: A draft policy paper issued by the Delhi government proposes allowing only electric bike taxis in the city, and a phased transition for delivery fleets and four-wheeler taxi aggregators. Delhi has mandated the immediate adoption of EVs for bike taxi operators and has given delivery companies till 2030 to fully convert their fleets.

TIS Staff

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