⚡️Google denied relief in antitrust case, PhonePe’s shareholders get a $1B tax bill

🤩 The Good

Nexus Venture Partners is in advanced talks to raise a $700M fund. Founded in 2006, Nexus was one of the first VC firms to invest in India- and US-based tech startups. The firm is now looking to raise a $700M fund, which will be the second-biggest in India after Sequoia’s $2.85B raise in June 2022. Nexus’ investments include Zomato, Zepto, Unacademy, and more.

Shaik Salauddin, an Uber driver turned union leader, is giving ride-hailing companies a run for their money. Hyderabad-based Salauddin joined Uber in 2014. But as declining earnings led to two drivers dying by suicide, Salauddin started believing that companies like Uber and Ola were exploitative. Since then, he has launched unions, discussed issues with Rahul Gandhi, and fought for workers' rights, earning the label of the most powerful Uber driver in India.

👿 The Bad

Indian crypto exchanges lost 81% of their trading volume between July and October 2022. The Finance Bill, 2022, imposed a 30% tax on crypto trading profits and a 1% TDS on transactions. A report has found that this requirement has resulted in over $3.8B of trading volume being moved from Indian exchanges to foreign counterparts between February and October 2022. ~17 lakh users switched from domestic exchanges to offshore ones.

PhonePe’s shareholders get a ~$1B tax bill after the company shifted headquarters from Singapore to India. PhonePe moved its headquarters from Singapore to India in October 2022. Sources have now said that the company’s shareholders, which includes Walmart, will have to pay ~$1B in tax. PhonePe is raising funds at a $12B pre-money valuation, resulting in the hefty tax levy.

🤔 The Wait-and-Watch

NCLAT refuses to grant Google interim relief in the Android antitrust case. The National Company Law Appellate Tribunal declined to grant an interim stay on the ~$162M fine imposed on Google by the Competition Commission of India (CCI). Google’s counsel had argued for putting the decision on hold or extending implementation beyond January 19. The tribunal instead directed Google to deposit 10% of the penalty. The internet giant had also argued that the CCI’s ruling should be quashed because parts of it were “copy-pasted extensively from a European Commission decision.”

The standoff between India and US tech companies will intensify in 2023 due to three legislations. A digital competition act to regulate anticompetitive practices, a telecom law that may require services like WhatsApp and Zoom to obtain licenses, and a new data privacy law: three key regulations could trigger a conflict between the Indian government and Big Tech in 2023. With 780M internet users, India is a crucial market for tech firms. But these regulatory moves could force companies to make hard choices in the country.

Byju Raveendran may raise his stake in Byju’s to as high as 40%. According to reports, the founder of the world’s most valuable edtech startup is looking to repurchase up to 15% of the company from shareholders to increase his stake to as much as 40%. Byju’s was valued at $22B in an October 2022 funding round. While this suggests that a 15% buyback will cost $3.3B, sources have indicated that the deal may happen at a lower valuation.

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