Tata Digital’s consolidation play; Paytm turns compliance-first

Tata Digital could soon be integrating BigBasket, 1mg and Tata Cliq to boost efficiency and market agility. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ Healthtech platforms leverage AI
■ Interview with Applied Materials MD
■ Investors await bitcoin halving


Tata Digital explores operational integration

Tata Digital

Tata Sons chairman N Chandrasekaran

In a move aimed at streamlining operations and cutting costs, Tata Digital is mulling the integration of operational structures of key assets such as Big Basket, 1mg and Tata Cliq, officials familiar with the matter told ET.

Funding plans: Additionally, online grocer BigBasket is looking to secure funding of up to $100 million from parent Tata Sons. The egrocer – the group’s flagship digital asset – is likely to float a proposal for the same later this week as part of its annual operating plan.

The capital infusion would be crucial to drive BigBasket’s expansion in the competitive quick-commerce sector, crowded with Zomato-owned Blinkit, Zepto, and Swiggy’s Instamart, while maintaining profitability in its core grocery-delivery business.

Sources hinted that 1mg may also get financial support.

Tata Digital

Under one roof: Tata Digital also has plans to consolidate its various standalone apps, such as BigBasket, Tata 1mg, and Tata Cliq, under the Tata Neu app to improve consumer engagement and increase utilisation of the super app, whose slow take-off has been a cause of concern for the company.

Hari Menon

BigBasket CEO Hari Menon

Word for word: “The common logistics framework has been in place for all Tata Digital assets and is being helmed by BigBasket’s Hari Menon. They (Tata Neu) are looking for synergies across operations to reduce operating costs and faster implementation of technology,” a person aware of the matter said.

New moves: A comprehensive action plan is being developed, with new CEO Naveen Tahilyani tasked with its implementation.

Consolidation is the need of the hour, an official explained. “Initially, Tata Digital’s management focused on establishing teams, making acquisitions, and launching the Tata Neu app. However, traction has been lacking since then, with stagnant figures and conflicting strategies among internal teams.”

Quick catch-up: ET had reported on February 9 citing sources that Tata Sons is set to invest about $1 billion in Tata Digital over the next few years, as the parent of the diversified Tata Group puts a pause on external fundraising for the ecommerce entity.

Also read | Tata Digital appoints Naveen Tahilyani as CEO, replacing Pratik Pal


Paytm’s switch to compliance-first mode seen too little too late

Paytm Vijay Shekhar Sharma

One 97 Communications, which runs Paytm, has made a bunch of changes in its internal functions over the last two years to adhere to regulatory guidelines strictly. Multiple people in the know told ET that every product decision at Paytm gets vetted by compliance officers these days.

Making changes: From getting compliance executives to attend product meetings to getting their nod before any updates to the flow of action, Paytm tried to ensure that every aspect of the business was fulfilling regulatory asks.

Even in terms of new product launches, Paytm focused on executing every update that NPCI or RBI came up with much earlier than competition.

Paytm compliance GFX

Founder speaks: “I’m very proud to say that today, the technology stack that we have for operational risk and compliance is actually world class, except like what we have seen today is what is very sad and bad. But as far as the group is concerned, as well the entity is concerned, we (now) look at (a) compliance first, technology second approach,” Vijay Shekhar Sharma, founder, Paytm said during an analyst call on February 1.

Perhaps not enough: While people in the know said Paytm did make an effort to become a compliance-first organisation even if it meant sacrificing the speed of innovation, perhaps the RBI was still not satisfied with its progress. Now the leadership wants to focus on partnerships and scalability to ensure growth in the coming years.

Paytm crisis

Quick catch-up: Reserve Bank of India Governor Shaktikanta Das on Monday ruled out any review of the central bank’s action against Paytm Payments Bank, saying the decision was taken after a comprehensive assessment of the lender’s functioning.

One 97 Communications also informed the exchanges that independent director Manju Agarwal has resigned from the board of the payments bank.

Our top stories on the Paytm crisis:


Healthtech platforms leverage AI to enhance product offerings

Healthtech brands

Tech platforms in the health and fitness space are increasingly leveraging artificial intelligence (AI) to enhance their offerings. While these startups embrace the technology, they also stress that it cannot do certain things as well as humans can – such as motivating a user.

AI trainer: Unilever Ventures-backed startup Healthify, which offers nutrition and calorie tracking as well as fitness coaching, has seen an increase in conversions and user engagement since incorporating AI into its services. “This has contributed to a doubling of conversions … AI is seen as a cost-effective alternative to personal nutritionists and trainers,” said Tushar Vashisht, cofounder and chief executive of Healthify.

Health tech apps

Human touch: Jitendra Chouksey, founder of Pune-based fitness startup Fittr, said they have been incorporating AI into all their services, emphasising that while AI plays a significant role, it can never fully replace the human touch.

AI vs humans: “AI cannot alter people’s behaviour, but it can make things easy, for example, creating a diet plan, training plan, changing workouts, changing recipes based on your preferences. It can do all sorts of assistance tasks but it cannot motivate you,” Chouksey said.

Investor’s view: Investors see a growing trend of AI transforming the healthcare and fitness landscape.

“In fitness, AI is already providing value in designing bespoke workouts, physical therapies, and nutrition plans that are constantly evolving based on one’s training habits, metabolic data, and user feedback – ultimately, giving people a better chance of achieving their fitness or health goals,” said Nessan Bermingham, partner, Khosla Ventures.

Also read | AI will not only solve challenges for India but also for the world: Satya Nadella


Applied Materials to help suppliers cut time-to-market: MD

Suraj Rengarajan

Suraj Rengarajan, MD, Applied Materials India

In an effort to expedite semiconductor commercialisation in India, US-based chip equipment supplier Applied Materials will collaborate with domestic supplier organisations, Suraj Rengarajan, managing director, Applied Materials India, told ET in an interview.

Game plan: “Applied Materials will collaborate with semiconductor supplier organisations with the intent to reduce the time to commercialisation and develop a sustainable semiconductor ecosystem in India,” he told ET.

AI in ops: To improve efficiency and generate insights, the company has incorporated artificial intelligence (AI) into some of its process equipment, such as defect inspection and review tools, and in its service offerings in tool calibration and process optimisation, he said.

Also read | Applied Materials to establish collaborative engineering centre in Bengaluru for $400 million


Investors count on blockbuster 2024 ahead of bitcoin halving

Bitcoin

Cryptocurrency investors are expecting 2024 to be a watershed year for crypto trading with landmark events such as listing of crypto exchange-traded funds (ETFs) and the upcoming Bitcoin halving day set to fuel an extended bull run.

Numbers game: Crypto holding of Indian investors, which today stands at nearly $4 billion, is predicted to double as Bitcoin (BTC) prices are expected to touch new all-time highs after the halving day in April. Ethereum (ETH) ETFs are also likely to get approval soon.

Jargon buster: Bitcoin halving is a once-in-four-years event when the number of new coins awarded to its miners when they add a group of transactions, or a block, to the Bitcoin blockchain is cut by half. This helps reduce supply of the cryptocurrency, making it more valuable. The next halving is expected to occur in April 2024 when the reward for each BTC miner will be cut from 6.25 BTC to 3.125 BTC, thus halving the overall new currency supply.

Also read | Bitcoin hits $50k level for first time in more than two years


Other Top Stories By Our Reporters

Google Play store

Indian startups urge Google to not delist app developers from Play Store: A clutch of Indian startups have written to tech giant Google requesting it not to delist them or take ‘any precipitative steps’ against app developers till March 19, when their Special Leave Petition (SLP) comes up for hearing.

Petcare startup Supertails raises $15 million: Bengaluru-based startup Supertails, which focuses on petcare products and services, has raised $15 million (around Rs 125 crore) in equity funding led by RPSG Capital Ventures.

Sachin Bansal’s Navi Finserv to raise Rs 600 crore through NCDs: Flipkart cofounder Sachin Bansal’s lending startup Navi Finserv is looking to raise Rs 600 crore through non-convertible debentures (NCDs).


Global Picks We Are Reading

■ This website tracked hate crimes in India; then the government took it offline (Wired)
■ Why China is betting big on chiplets (MIT Technology Review)
■ Hands off! With $3,500 headsets in the wild, new social norms apply (WSJ)