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Chill sets in for consumer lending apps; what’s cooking at food delivery platforms?

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Consumer lending firms are set for difficult days ahead as a central bank diktat on reining in unsecured loans has choked off much-needed credit lines. This and more in today’s ETtech Morning Dispatch.

Also in this letter:
■ GenAI startup Sarvam AI raises $41 million in funding
■ Indian AI startups hop on to LLM bandwagon
■ Indian talent gets senior-level roles as GCCs mushroom


Unsecured loans in focus, fintechs see NBFC credit taps drying up

Hi, this is Pratik Bhakta in Bengaluru. For consumer lending startups, ‘winter is here’. With the Reserve Bank of India (RBI) asking banks to increase their risk weightage on unsecured lending, many large non-banking lenders are freezing small-ticket personal credit lines.

What’s the news? Senior industry executives said NBFCs like Aditya Birla Finance and Poonawalla Fincorp, which partner with fintechs, have eased down on lending, especially impacting unsecured small-ticket loans. While ZestMoney said it’s shutting down completely by December 31, Paytm will scale down its BNPL (buy-now-pay-later) business. Even InCred Finance has said it expects the small-ticket segment to shrink.

Debt Story graphic ETTECH

Domino effect: The RBI, sensing some early stress build-up in the consumer loan portfolio of large banks, has asked lenders to slow down disbursals to this segment. This impacts NBFCs which depend on banks for their credit lines. Realising that they will now need to set aside more capital for this business, NBFCs are tightening the screws. And fintechs, which cater to the bottom of the pyramid in terms of the risk profile of customers, are bearing the direct impact of the move.

Also read | Fintech lenders may face the brunt of RBI’s tightening of capital norms for unsecured lending

Larger Impact: Personal loans are primarily used for consumption activities like home renovation, purchase of new electronic gadgets, furniture, vehicles etc. Industry insiders believe the credit squeeze can impact consumption at a national scale. A significant share of purchases during this year’s Diwali sale season were driven by credit cards and pay-later loans.

Also read | ZestMoney saga highlights drying NBFC credit flow


Food delivery platforms seek to woo value-conscious users

Online food delivery THUMB IMAGE ETTECH

Online food delivery platforms are adopting new strategies to attract value-conscious consumers in a bid to boost expansion.

Who’s doing what?

  • Swiggy has launched a pilot called ‘Pockethero’ in about 15 cities to target students and freshers looking for more affordable food delivery options.
  • Swiggy has tied up with specific restaurants to offer higher discounts and free deliveries to onboard new customers.
  • Zomato rolled out its ‘Everyday’ programme to provide affordable home-cooked meal options.
  • “We believe affordability with high-quality food is the way to grow the overall restaurant industry,” said Rakesh Rajan, food delivery CEO at Zomato.

Key metrics: Bank of America (BoFA) Securities said in a research note earlier this week, citing Sensor Tower data, that there was only a marginal growth or even a drop in daily active users (DAUs) for food delivery platforms over the last six months.

In November, while Zomato saw a 0.6% sequential rise in DAUs, Swiggy recorded a 1.9% drop. Even in terms of app downloads, food delivery apps posted a decline, with Zomato seeing the highest sequential drop of 21% in November, the report said.

Zomato vs Swiggy Food order growth trends

Greener pastures: Dutch consumer internet investor Prosus, an investor in Swiggy, said the platform clocked a 17% year-on-year rise in food delivery gross merchandise value (GMV) to $1.43 billion during April-September 2023, led by growth in transacting users driving double-digit order growth in addition to an increase in average order values (AOV).

Zomato said, in its earnings report for the September quarter, that going forward, it expects growth from monthly transacting customers. Currently, of its total customer base that orders food at least once a year, only 30% order food at least once a month.

Also read | Despite numbers, Zomato must tweak Gold to cut profitability drag, say experts


ETtech Done Deals: GenAI startup Sarvam AI raises $41 million in funding

Sarvam AI

(From left) Sarvam AI cofounders Pratyush Kumar and Vivek Raghavan

Sarvam AI, a Chennai-headquartered company developing its own generative artificial intelligence (GenAI) models, said it has raised $41 million in a Series A round of funding, among the largest fundraises for an India-based AI startup. The round was led by Lightspeed Venture Partners.

Sarvam GFX

Peak XV Partners and Khosla Ventures, one of OpenAI’s early investors, also participated. “We are building training models. In the next few weeks, we will be announcing our first model, which is being trained for Indian languages,” cofounder Vivek Raghavan told ET.

ChrysCapital acquires 75% stake in ProHance: ChrysCapital said it has acquired a 75% stake in ProHance Analytics, a business-to-business software-as-a-service (B2B SaaS) platform offering workforce analytics and operations enablement. The investment marks ChrysCapital’s entry into the SaaS sector, as per a statement from the private equity firm.

DigitalPaani secures $1.2 million in funding: Water management startup DigitalPaani has secured funding of $1.2 million from Elemental Excelerator, Enzia, Peer Cheque, SAE, DevC, and Bharat Founders Fund. Angel investors including Urban Ladder founder Ashish Goel and Delhivery cofounder Mohit Tandon also participated in the seed funding round.

Speciality chemicals platform Scimplifi secures $3.6 million: Speciality chemicals’ sourcing and manufacturing platform Scimplifi said on Thursday it has secured $3.67 million in funding from institutional investors 3one4 Capital and Beenext.


Indian AI startups hop on to LLM bandwagon

AI startup funding

Indian startups are looking into building large language models (LLMs) to boost generative AI in Indian languages with launches lined up in the coming months, but experts said it may take three to five years for India to have its own ChatGPT equivalent.

In the works: Gurgaon-based Soket Labs is eyeing the release of its foundation multilingual LLM ‘Pragna’ by Q2 next year, founder and CEO Abhishek Upperwal told ET.

A 7-billion-parameter version of Pragna, trained on India’s 23 scheduled languages and English, will be released open source, followed by a 30-billion-parameter model a few months thereafter, he said.

GENAI gfx

What else? Conversational AI platform Corover AI’s LLM project, BharatGPT, supporting 14 Indian languages, meant for enterprise-specific use, is set for an official launch in the coming weeks. The company already has an order pipeline worth Rs 91 crore for the next 12 months.

The BharatGPT project has increased Corover’s expenses, people in the know told us, and the company is in the process of optimising techniques and improving accuracy. Corover, which is funded by Google, is in the process of raising more funds.

‘Significant small steps’: “Startups venturing into building LLMs is significant for India as small steps matter,” said Pushpak Bhattacharya, professor of computer science and engineering at IIT Bombay.

“It (building LLMs) is a capital-intensive task and there’s no short route to profitability,” said Sachin Arora, partner and national head – Digital Lighthouse (Cloud, Data and AI) at KPMG India.

Also read | Adobe acquires Lightspeed-backed Indian generative AI startup Rephrase.ai


Indian talent gets senior-level roles as GCCs mushroom

startups-Hiring blue-collar temporary workforce-Recruitment_Hiring_jobs_THUMB IMAGE_ETTECH2

The surge in global capability centers (GCCs) is expected to result in a 40-50% rise in global and senior-level roles located in India over the last five years, as per data from ET. Deloitte estimates suggest that the GCC sector will potentially create 300,000-400,000 jobs overall in the next two to three years.

GCC x gfx

Shifting strategies: The surge in demand for talent in GCCs is a result of the transformation of business strategies, shifting from GCC 1.0 to GCC 4.0, according to Vamsi Karavadi, director at Deloitte India. Over the last five years, there has been a 30-40% increase in the number of global and senior roles based in India, as GCCs transitioned from operational centres to market expansion hubs, becoming integral business drivers for global multinationals.

Also read | India’s tech chops help GCCs to look within for solutions

India preferred: Organisations are expanding their presence in India to establish capabilities in areas such as AI/ML, analytics, and digital spaces. Early success stories of GCCs in India have inspired others to recruit talent and invest strategically in succession plans at senior leadership levels to ensure continuity, according to industry experts.

Also read | Global capability centers follow top tech talent to India’s heartland


Other Top Stories By Our Reporters

google gemini

Google launches ChatGPT competitor Gemini AI: all you need to know | Upping the stakes in the generative artificial intelligence (AI) race, Google has launched its largest language model, Gemini, which is a technology capable of crunching different forms of information such as video, audio and text. Read our primer on one of ChatGPT’s biggest competitors.

Private credit assets in India to reach $60-70 billion by 2028: Report | Assets managed by alternative investment funds (AIFs) in India are likely to soar to $60-$70 billion by 2028, despite geopolitical tensions and inflationary pressures, an industry report said on Thursday.

Delhi HC allows Google to withdraw its appeal against order on billing system: A division bench of the Delhi High Court on Thursday allowed Google’s parent company Alphabet Inc to withdraw its appeal against its single-judge order that directed the Competition Commission of India to consider the applications moved by an alliance of startups against the tech giant’s new in-app user choice billing policy.


Global Picks We Are Reading

■ The Rise of AI in Alternative Browsers—and What’s Next (Wired)

■ PlayStation keeps reminding us why digital ownership sucks (The Verge)

■ Once Unstoppable, Alibaba Is Now Faltering (WSJ)


Consumer lending firms are set for difficult days ahead as a central bank diktat on reining in unsecured loans has choked off much-needed credit lines. This and more in today’s ETtech Morning Dispatch.

Also in this letter:
■ GenAI startup Sarvam AI raises $41 million in funding
■ Indian AI startups hop on to LLM bandwagon
■ Indian talent gets senior-level roles as GCCs mushroom


Unsecured loans in focus, fintechs see NBFC credit taps drying up

P2P lending credit business loan app THUMB IMAGE ETTECH

Hi, this is Pratik Bhakta in Bengaluru. For consumer lending startups, ‘winter is here’. With the Reserve Bank of India (RBI) asking banks to increase their risk weightage on unsecured lending, many large non-banking lenders are freezing small-ticket personal credit lines.

What’s the news? Senior industry executives said NBFCs like Aditya Birla Finance and Poonawalla Fincorp, which partner with fintechs, have eased down on lending, especially impacting unsecured small-ticket loans. While ZestMoney said it’s shutting down completely by December 31, Paytm will scale down its BNPL (buy-now-pay-later) business. Even InCred Finance has said it expects the small-ticket segment to shrink.

Debt Story graphic ETTECH

Domino effect: The RBI, sensing some early stress build-up in the consumer loan portfolio of large banks, has asked lenders to slow down disbursals to this segment. This impacts NBFCs which depend on banks for their credit lines. Realising that they will now need to set aside more capital for this business, NBFCs are tightening the screws. And fintechs, which cater to the bottom of the pyramid in terms of the risk profile of customers, are bearing the direct impact of the move.

Also read | Fintech lenders may face the brunt of RBI’s tightening of capital norms for unsecured lending

Larger Impact: Personal loans are primarily used for consumption activities like home renovation, purchase of new electronic gadgets, furniture, vehicles etc. Industry insiders believe the credit squeeze can impact consumption at a national scale. A significant share of purchases during this year’s Diwali sale season were driven by credit cards and pay-later loans.

Also read | ZestMoney saga highlights drying NBFC credit flow


Food delivery platforms seek to woo value-conscious users

Online food delivery THUMB IMAGE ETTECH

Online food delivery platforms are adopting new strategies to attract value-conscious consumers in a bid to boost expansion.

Who’s doing what?

  • Swiggy has launched a pilot called ‘Pockethero’ in about 15 cities to target students and freshers looking for more affordable food delivery options.
  • Swiggy has tied up with specific restaurants to offer higher discounts and free deliveries to onboard new customers.
  • Zomato rolled out its ‘Everyday’ programme to provide affordable home-cooked meal options.
  • “We believe affordability with high-quality food is the way to grow the overall restaurant industry,” said Rakesh Rajan, food delivery CEO at Zomato.

Key metrics: Bank of America (BoFA) Securities said in a research note earlier this week, citing Sensor Tower data, that there was only a marginal growth or even a drop in daily active users (DAUs) for food delivery platforms over the last six months.

In November, while Zomato saw a 0.6% sequential rise in DAUs, Swiggy recorded a 1.9% drop. Even in terms of app downloads, food delivery apps posted a decline, with Zomato seeing the highest sequential drop of 21% in November, the report said.

Zomato vs Swiggy Food order growth trends

Greener pastures: Dutch consumer internet investor Prosus, an investor in Swiggy, said the platform clocked a 17% year-on-year rise in food delivery gross merchandise value (GMV) to $1.43 billion during April-September 2023, led by growth in transacting users driving double-digit order growth in addition to an increase in average order values (AOV).

Zomato said, in its earnings report for the September quarter, that going forward, it expects growth from monthly transacting customers. Currently, of its total customer base that orders food at least once a year, only 30% order food at least once a month.

Also read | Despite numbers, Zomato must tweak Gold to cut profitability drag, say experts


ETtech Done Deals: GenAI startup Sarvam AI raises $41 million in funding

Sarvam AI

(From left) Sarvam AI cofounders Pratyush Kumar and Vivek Raghavan

Sarvam AI, a Chennai-headquartered company developing its own generative artificial intelligence (GenAI) models, said it has raised $41 million in a Series A round of funding, among the largest fundraises for an India-based AI startup. The round was led by Lightspeed Venture Partners.

Sarvam GFX

Peak XV Partners and Khosla Ventures, one of OpenAI’s early investors, also participated. “We are building training models. In the next few weeks, we will be announcing our first model, which is being trained for Indian languages,” cofounder Vivek Raghavan told ET.

ChrysCapital acquires 75% stake in ProHance: ChrysCapital said it has acquired a 75% stake in ProHance Analytics, a business-to-business software-as-a-service (B2B SaaS) platform offering workforce analytics and operations enablement. The investment marks ChrysCapital’s entry into the SaaS sector, as per a statement from the private equity firm.

DigitalPaani secures $1.2 million in funding: Water management startup DigitalPaani has secured funding of $1.2 million from Elemental Excelerator, Enzia, Peer Cheque, SAE, DevC, and Bharat Founders Fund. Angel investors including Urban Ladder founder Ashish Goel and Delhivery cofounder Mohit Tandon also participated in the seed funding round.

Speciality chemicals platform Scimplifi secures $3.6 million: Speciality chemicals’ sourcing and manufacturing platform Scimplifi said on Thursday it has secured $3.67 million in funding from institutional investors 3one4 Capital and Beenext.


Indian AI startups hop on to LLM bandwagon

AI startup funding

Indian startups are looking into building large language models (LLMs) to boost generative AI in Indian languages with launches lined up in the coming months, but experts said it may take three to five years for India to have its own ChatGPT equivalent.

In the works: Gurgaon-based Soket Labs is eyeing the release of its foundation multilingual LLM ‘Pragna’ by Q2 next year, founder and CEO Abhishek Upperwal told ET.

A 7-billion-parameter version of Pragna, trained on India’s 23 scheduled languages and English, will be released open source, followed by a 30-billion-parameter model a few months thereafter, he said.

GENAI gfx

What else? Conversational AI platform Corover AI’s LLM project, BharatGPT, supporting 14 Indian languages, meant for enterprise-specific use, is set for an official launch in the coming weeks. The company already has an order pipeline worth Rs 91 crore for the next 12 months.

The BharatGPT project has increased Corover’s expenses, people in the know told us, and the company is in the process of optimising techniques and improving accuracy. Corover, which is funded by Google, is in the process of raising more funds.

‘Significant small steps’: “Startups venturing into building LLMs is significant for India as small steps matter,” said Pushpak Bhattacharya, professor of computer science and engineering at IIT Bombay.

“It (building LLMs) is a capital-intensive task and there’s no short route to profitability,” said Sachin Arora, partner and national head – Digital Lighthouse (Cloud, Data and AI) at KPMG India.

Also read | Adobe acquires Lightspeed-backed Indian generative AI startup Rephrase.ai


Indian talent gets senior-level roles as GCCs mushroom

startups-Hiring blue-collar temporary workforce-Recruitment_Hiring_jobs_THUMB IMAGE_ETTECH2

The surge in global capability centers (GCCs) is expected to result in a 40-50% rise in global and senior-level roles located in India over the last five years, as per data from ET. Deloitte estimates suggest that the GCC sector will potentially create 300,000-400,000 jobs overall in the next two to three years.

GCC x gfx

Shifting strategies: The surge in demand for talent in GCCs is a result of the transformation of business strategies, shifting from GCC 1.0 to GCC 4.0, according to Vamsi Karavadi, director at Deloitte India. Over the last five years, there has been a 30-40% increase in the number of global and senior roles based in India, as GCCs transitioned from operational centres to market expansion hubs, becoming integral business drivers for global multinationals.

Also read | India’s tech chops help GCCs to look within for solutions

India preferred: Organisations are expanding their presence in India to establish capabilities in areas such as AI/ML, analytics, and digital spaces. Early success stories of GCCs in India have inspired others to recruit talent and invest strategically in succession plans at senior leadership levels to ensure continuity, according to industry experts.

Also read | Global capability centers follow top tech talent to India’s heartland


Other Top Stories By Our Reporters

google gemini

Google launches ChatGPT competitor Gemini AI: all you need to know | Upping the stakes in the generative artificial intelligence (AI) race, Google has launched its largest language model, Gemini, which is a technology capable of crunching different forms of information such as video, audio and text. Read our primer on one of ChatGPT’s biggest competitors.

Private credit assets in India to reach $60-70 billion by 2028: Report | Assets managed by alternative investment funds (AIFs) in India are likely to soar to $60-$70 billion by 2028, despite geopolitical tensions and inflationary pressures, an industry report said on Thursday.

Delhi HC allows Google to withdraw its appeal against order on billing system: A division bench of the Delhi High Court on Thursday allowed Google’s parent company Alphabet Inc to withdraw its appeal against its single-judge order that directed the Competition Commission of India to consider the applications moved by an alliance of startups against the tech giant’s new in-app user choice billing policy.


Global Picks We Are Reading

■ The Rise of AI in Alternative Browsers—and What’s Next (Wired)

■ PlayStation keeps reminding us why digital ownership sucks (The Verge)

■ Once Unstoppable, Alibaba Is Now Faltering (WSJ)

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