Banks wary about credit on UPI by fintechs; layoffs at edtech unicorn Physics Wallah

Indian fintechs are eyeing credit lines on UPI but banks want to put the brakes on the growth of unsecured credit. This and more in today’s ETech Morning Dispatch.

Also in this letter:
Sam Altman’s exit and key developments
■ Quick commerce firms score big on WC final
■ Taking stock of IT sector staff’s work hours

Banks wary of UPI credit even as fintech firms make big plans


Hi, this is Pratik here in Bengaluru. Today my colleague Ajay and I write about how fintechs are looking at credit lines on UPI as the next big opportunity in the space. While the central bank has only allowed banks to offer this credit line to their customers, fintechs are hopeful that they can play a role in distribution.

What’s the catch? Given the regulatory diktat and overall signs of stress in the ecosystem, banks are slowing down the disbursal of unsecured credit. This means that while fintechs are looking to go live with the product, the payment rail will not take off unless banks enable more and more customers for this credit line.

Also read | RBI’s brakes on lending largesse a timely move

Jargon buster:
UPI is a payment method that allows consumers to use funds in their savings accounts to make payments. But now with a credit line attached, they can be offered small ticket size credit which can be exhausted by them through UPI. For those consumers who do not own a credit card, this can give them a credit card-like feel.

Fintech UPI print GFX

Massive opportunity: Just for context, there are around 90 million credit cards in the country being used by around 50 million customers. UPI is being used by more than 300 million consumers and is reporting more than 11 billion transactions monthly.

Also read | Digital lending at an inflection point

Physics Wallah lays off 120 staffers after performance evaluation

Alakh Pandey

Alakh Pandey, founder and CEO, Physics Wallah

Edtech startup Physics Wallah has laid off 120 staffers, amounting to less than 0.8% of its workforce, due to performance concerns. Earlier, social media posts had said Physics Wallah was laying off over 500 staffers in a “totally unprofessional” manner.

Driving the news: A top official told ET the decision, undertaken after a mid-term appraisal analysis that ended in October, is aimed at ensuring Physics Wallah’s primary focus on maintaining a high-performing team.

“We plan to hire an additional 1,000 employees in the next six months, reinforcing our commitment to growth,” Satish Khengre, chief human resources officer of Physics Wallah, told ET.

Financial highlights: The unicorn‘s revenue in FY23 jumped three-fold to Rs 780 crore from Rs 233 crore in FY22. For FY24, it has set a revenue target of Rs 2,500 crore at the group level, with about Rs 1,900 crore coming in from its core operations and the remainder from acquired businesses.

Recent buys: In June, Physics Wallah announced a Rs 500 crore investment to acquire a 50% stake in Kerala-based hybrid learning platform Xylem Learning over the next three years. Since 2022, it has bought companies such as Knowledge Planet, iNeuron, Altis Vortex, PrepOnline, and FreeCo.

Sam Altman fired as OpenAI CEO: all that happened over the weekend

OpenAI CEO Sam Altman

Sam Altman, cofounder, OpenAI

In a shocking turn of events, Sam Altman — among the most influential tech entrepreneurs — was fired on Friday by the OpenAI board.

The reason? The board said, “he [Altman] was not consistently transparent in his communications, hindering the board’s ability to fulfill its responsibilities”.

Here are the key developments:

  • Why? OpenAI’s board did not offer a specific reason for the dismissal. But, an NYT report said, cofounder Ilya Sutskever was concerned about the potential dangers of OpenAI’s technology, feeling Altman wasn’t adequately addressing them. He also objected to what he saw as a diminished role in the firm.
  • Support for Altman: Brian Chesky, cofounder and CEO of Airbnb, said, “Sam Altman and Greg Brockman have my full support. I’m saddened by what’s transpired. They, and the rest of the OpenAI team, deserve better.” Eric Schmidt, ex-Google CEO, said, “He built a company from nothing to $90 billion in value, and changed our collective world forever. I can’t wait to see what he does next.”

Read what business leaders had to say on Altman’s ouster

  • Reconsiderations? According to another NYT report, Altman and Brockman are in discussions with board members about the possibility of returning to OpenAI. Investors and Altman’s supporters have exerted pressure on the board members to reinstate him, and Microsoft is reportedly leading the campaign.
  • Altman joins executives at HQ: Altman and Brockman joined executives at the company’s San Francisco headquarters on Sunday, after interim CEO Mira Murati told staff she invited the former CEO.
  • Collateral damage: Altman’s crypto project Worldcoin saw its token plummet more than 12% to $1.91. Meanwhile, OpenAI’s planned share sale might be in jeopardy, The Information reported.

Indian startup industry’s take: Entrepreneurs and investors from India’s startup ecosystem were left reeling on Saturday after Altman’s ouster. Early-stage VC fund India Quotient’s founding partner Anand Lunia said, “With businesses such as OpenAI and X, ownership and control sees many forces including governments, lobby groups, and investors. The world is yet to see a format where founders are in actual control.”

Cola, chips, beer and flowers emerge winners on day of World Cup final

australia AFP

Quick commerce platforms like Zepto, Swiggy Instamart, and Zomato-owned Blinkit reported a surge in demand during the Cricket World Cup final between India and Australia in Ahmedabad on Sunday.

Record day for some: Both Zepto and Swiggy Instamart witnessed their best day ever. Zepto was set to record 4-5 lakh orders for the day, its chief executive Aadit Palicha said. Swiggy’s food delivery vertical saw orders surpass records from New Year’s eve and Diwali, a spokesperson for the firm said.

Also read | India-Australia match: Disney+ Hotstar sees record 59 million concurrent viewers

Snacks lead the way: Snacks and beverage categories on Zepto saw surges of between 50% to 100%, Palicha said. Chips, snacks, and cold drinks were the top-ordered items on Swiggy, a spokesperson said. Blinkit was on track for its biggest sales of chips, said chief executive Albinder Dhindsa.

Restaurants try to cash in: Many restaurants run live broadcast of the match expecting a huge influx. Angithi, a restaurant in Mayur Vihar, New Delhi, and Connaught Place-based fine dining restaurant Kwality said their outlets were broadcasting the live match and anticipated a significant turnout of customers.

IT staff forced to work 50 hours/week to meet deadlines: data

IT companies employee productivity dropped_THUMB IMAGE_ETTECH_2

While Infosys founder Narayana Murthy is of the view that Indians should work 70 hours every week, data sourced by ET show IT employees are already putting in longer hours than industry standard. Experts believe the industry’s emphasis on counting hours worked rather than measuring productivity hinders employee productivity.

Doing the math: IT employees in the country work on an average work for around 45-50 hours per week, translating around 10 hours a day in the 5-day week while the standard is 40 hours a week as a large part of them is often compelled to work longer hours to meet project deadlines, as per data from staffing firms.

Expert take: “Per-person productivity at Indian IT bellwethers, measured in terms of the ratio of people cost to revenue, has been nearly stagnant over four fiscal periods,” said Prasadh MS, head – workforce research at Bengaluru-based recruitment firm Xpheno. “No notable growth in productivity has been achieved despite digitalisation, AI, and automation initiatives and investments.”

Other Top Stories By Our Reporters


Amazon Business looking to offer multiple licence options at signup: Amazon Business is looking to provide its business customers with an extended array of licence options to choose from while signing up, in a bid to further expand its customer base among the small businesses in the country.

Ecommerce SaaS firm Unicommerce eyes IPO in second half of 2024: Ecommerce enablement service provider Unicommerce is readying to list on the bourses in the second half of 2024, sources told ET. The firm has started the book-building process, and capital markets and investment firm CLSA in as one of the managers for the IPO

Tech provides the assist to find football’s uncut gems: Programmes like Reliance Foundation’s Young Champs (RFYC) have joined hands with, a UK-based talent discovery programme for amateur players, to develop a tool for Indian scouts and amateur football players.

Global Picks We Are Reading

■ The Future of Game Accessibility Is Surprisingly Simple (Wired)

■ Humane’s AI Pin seems to be forgetting what makes a good wearable (The Verge)

■ Who wins in the battle between nation states and Big Tech? (FT)