Jeffreys; Paytm inventory drop by 75% sets world record

Aggressive discounts don’t seem to be a guarantee of online food delivery success. According to a report released earlier today by brokerage firm Jefferies, Swiggy underperformed Zomato in market share in the first half of 2022, despite offering larger discounts than its main competitor. The report comes just a day after Prosus reported that Swiggy, its food delivery business in India, recorded strong growth in the first half of the calendar year.

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Also in this letter:
■ Paytm’s 75% drop in one year is the worst in the world for a major IPO in a decade.
■ Meta received 55,497 requests for user data from India in the first half of 2022.
■ ‘I failed’: FTX’s Sam Bankman-Fried wrote an apology note to former employees


Swiggy lagged behind Zomato in first half of 2022 despite big discounts: report

Swiggy Zomato

Food delivery race in India held on the basis of Gurugram Zomato wins market share from Bangalore-based rival Swiggy in January-June 2022, despite Swiggy offering big discounts, according to research published by Jefferies on Thursday.

By numbers: Zomato’s average market share in the food delivery segment during this period was 55%, with a gross merchandise value (GMV) of $1.6 billion compared to Swiggy’s $1.3 billion.

Food delivery

“In our view, this is the highest market share for Zomato, and this despite the aggression from Swiggy, which offers higher discounts and continues to release its flagship product Swiggy One,” Jeffreys said.

The report comes a day after Prosus, the Dutch-listed arm of South African tech investor Naspers, reported its half-year results, saying Swiggy, its food delivery business in India, recorded strong growth in the first half of the calendar year.

Prosus said that in January-June 2022, Swiggy’s food delivery business posted a rise in orders and gross value of goods (GMV) growth of 38% and 40%, respectively.

Losses: Jeffreys said Swiggy’s losses for the January-June period were “much higher, in excess of $315 million” compared to about $50 million in Zomato’s losses separately and nearly $170 million including Blinkit’s losses.

“Certainly since then, Zomato has further improved its numbers, with a recent quarterly loss of just under $25 million on a consolidated basis,” the post reads.

Quick Trade: Jeffreys also said that Swiggy’s Instamart business continues to gain momentum and has grown 15x year-over-year to reach a GMV of $257 million. This compares to the $270 million in GMVs registered by Zomato-owned Blinkit.

Jefferies said it sees good reason for Swiggy to drop her “aggressive food delivery stance to reduce her losses” going forward.

Also read | Prosus reports strong growth for Swiggy, Instamart, PayU in 2022


Paytm’s 75% annual decline is the worst in the world for a major IPO in a decade.

Soft Bank Pay™

Parent company of Paytm One 97 Communications set another dubious record as a public company.

Now what? A year after it was listed on the Indian stock exchanges, the company’s shares have fallen more than any firm that has had a major initial public offering (IPO) in the past decade, and there is no end in sight to the carnage.

The company’s shares lost 75% of their market value a year after a $2.4 billion offering last November, India’s largest so far.

According to data compiled by Bloomberg, this is the sharpest first-year drop in the world among IPOs that have raised at least the same amount since Spain’s Bankia plunged 82% in 2012.

Paytm

P word: Paytm’s bleak first anniversary highlights the declining investor confidence in its ability to turn profitable.

Its shares fell to a new all-time low on Tuesday after Analysts at Macquarie Group noted the risks associated with billionaire Mukesh Ambani’s foray into financial services.

Last week, the Japanese group SoftBank sold its shares in Paytm after the lock-up period set in the IPO expired, resulting in a three-day drop.

Tech stocks fell: Paytm debuted on the public market at a time when the Indian IPO market was enamored with tech startups. It was one of many startups listed in 2021 with valuations that many investors thought were inflated.

On Monday, Delhivery shares hit a new 52-week low of Rs 340.30 as a six-month pre-IPO investor lockup period expired. CA Swift Investments, part of the Carlyle Group, sold a 2.5% stake in the company on the same day for Rs 607 crore.

And on Tuesday Nykaa shares fell 3.6% after private equity firm Lighthouse India India likely sold 1.8 crore of the company’s shares in a block deal.

Global route: Technology stocks around the world have sold off as investors shun money-losing companies amid deteriorating macroeconomic conditions, analysts at JM Financial wrote in a note this week.


Meta received 55,497 requests for user data from India in the first half of 2022.

Meta

The Government of India has made 55,497 requests to Meta for user data. in the first half of this year is second only to the US government, which sent 69,363 such requests. In the second half of 2021, India sent Meta 50 382 requests for user data.

Transparency Report: In its transparency report released on Wednesday, Meta said it had limited access in India to 597 items in response to guidance from the Ministry of Information Technology over the reporting period. These items have been restricted for violating section 69A of the Information Technology Act of 2000, including content that violates public safety and public order.

Meta also said it restricted six products in response to instructions from the Ministry of Information and Broadcasting for violating Rule 16 of the Information Technology Rules (Guidelines for Intermediaries and Code of Ethics for Digital Media) 2021.

Internet failures: According to the report, India had the highest number of internet outages — 18 in total — in the first half of 2022. Sudan finished second with 15.


‘I failed’: FTX’s Sam Bankman-Fried wrote a letter of apology to employees

Sam Bankman Freed

Former FTX CEO Sam Bankman-Fried wrote a letter of apology to his former employees, saying he “deeply regrets” the collapse of the cryptocurrency exchange, which resulted in billions of dollars in losses for about a million creditors.

Excerpts: “I lost sight of the most important things in the turmoil of the company’s growth. I care deeply for all of you and you were my family and I’m so sorry,” SBF wrote in a letter obtained by CNBC.

“Out of desperation, there was a strong coordinated pressure to declare bankruptcy of all FTX – even solvent organizations – and despite the claims of other jurisdictions,” he added.

“I was the CEO, and so it was my job to make sure everything was going right at FTX. I wish I had been more careful. I want to give you the best description of what happened – what I should have written in the way I understood better much earlier, ”he continued.

Click here to read the letter in full.

Also read | Global Regulators Target Crypto Platforms After FTX Crash


FTC likely to file lawsuit to block Microsoft’s Activision bid: report

FTC

The US Federal Trade Commission (FTC) is likely to file a lawsuit. antitrust lawsuit to block $69 billion of Microsoft Corp. Acquisition announcement for video game publisher Activision Blizzard Inc, Politico reported, citing sources familiar with the matter.

Yes, but: The report said litigation challenging the deal is not guaranteed and the four FTC commissioners have not yet voted on the complaint or met with the companies’ lawyers, adding that FTC officials reviewing the deal are skeptical of the companies’ arguments.

Microsoft announced a deal to buy Activision in January in what would be the largest deal in gaming history. He is betting on the acquisition to help him compete better with video game leaders Tencent and Sony.

Global check: The deal is also under scrutiny outside the US. Earlier this month, the EU launched a full-scale investigation. The EU Competition Commissioner said he would decide by March 23, 2023 whether to go through with the deal or block it. And in September, the UK competition authority said it would open a full-scale investigation.


Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant from Mumbai. Graphics and illustrations by Rahul Awasti.