Hi, it’s Zaheer. Last week, Twitter launched its first crypto-related feature—NFT profile pictures. It now lets some users set an non fungible token-backed digital artwork they own as a hexagonal profile picture which, when clicked, allows others to learn more about the art.
Why would someone want to do that, you ask? Think of it as a display of status—digital bling, if you will.
A few days later, Reddit launched an identical feature. YouTube and Instagram have also said that they are exploring NFTs. And Facebook may be building an entire NFT marketplace, according to a recent Financial Times report.
But why? After all, NFTs are bought and sold on bespoke marketplaces such as OpenSea, Decentraland and SuperRare, not social media platforms such as Facebook and Twitter.
But how do they acquire value in the first place? NFTs, still in their infancy, are mainly used for certifying digital art, and a big part of buying art is being able to show it off. Social media, with algorithms that are finely tuned for virality, are perfect for this.
A classic example is the very first tweet ever sent out—by Twitter cofounder Jack Dorsey. Linked to an NFT, it was auctioned for a clearly crazy $2.9 million last year.
Social media platforms have another thing that NFT marketplaces lack: celebrities with gigantic followings. One Direction single Liam Payne told his 34.7 million Twitter followers on January 25 that he’d launched an alternative Twitter persona called @PaynoEth to express his love of NFTs.
The new account gained 26,000 new followers in half an hour.
“WELCOME! This is the start of something new for me which is always exciting… For those wondering about my new display picture, it’s my new @doodles piece that I got last week! So cool, right?!” Payne wrote from his alt account.
While NFTs and the digital art they represent aren’t created, bought or sold on social media platforms, the inherently social nature of art means these artworks would be significantly less valuable without them.
These platforms, which have been passively shaping the future of NFTs, are now looking to get in on the action.
OTHER TOP STORIES BY OUR REPORTERS
Market Mayhem batters India’s new-age tech stocks
A correction in the US markets following the Federal Reserve’s indication of a March liftoff in interest rates—the first since 2018—reverberated in the Indian bourses.
The S&P BSE Sensex declined nearly 1,800 points in the week to January 28. That, in just four trading sessions as the markets were closed on Wednesday on account of Republic Day. India’s new-age tech stocks, in particular, showed scars of the correction. Zomato Ltd., One97 Communications Ltd. (Paytm) and FSN Ecommerce Ventures Ltd. (Nykaa) hit all-time lows on Monday, and extended the slide after the outcome of the FOMC meeting on Wednesday.
Zomato CEO Deepinder Goyal, however, said he was waiting for a bear market. “Let me tell you a secret… I have been waiting for a bear market for a long time now. That is when funding dries up for everyone, and companies with the most solid teams and execution rise to the top,” he wrote in a note on the company’s internal chat group on Monday.
ETtech IPO Watch: Boat DRHP
Imagine Marketing Pvt. Ltd., the parent company of consumer electronics maker Boat, has filed its draft red herring prospectus for a Rs 2,000-crore IPO.
The company, seeking a valuation of $1.5-2 billion, is looking to hit the bourses by the first quarter of the next fiscal. Founded in 2016, the company was valued at around Rs 2,200 crore when it raised Rs 50 crore from Qualcomm Ventures in April last year.
Key takeaways from the Boat DRHP:
Issue size: The company aims to raise Rs 900 crore by issuing fresh stock and Rs 1,100 crore via an offer for sale by existing shareholders.
Shareholding: Founders Aman Gupta and Sameer Mehta have a combined 56% stake in the company. Private equity major Warburg Pincus is the single largest shareholder in Boat with around 36% in the company.
What will the funds be used for? To repay or prepay debt.
Financials: In six months ended September 2021, Boat’s operating revenues surpassed FY21 figures to Rs 1,550 crore, with net profit at Rs 118 crore.
Pre-IPO placement: The company is in consultation with book-running lead managers to consider raising Rs 180 crore before the offering.
Amazon vs Future Retail — The latest
(From left) Amazon founder Jeff Bezos, Future Group CEO Kishore Biyani and Reliance Industries Chairman Mukesh Ambani.
Four days after Future Retail’s independent directors turned down Amazon India’s offer of financial help for the ailing retailer and called it a “smokescreen”, the US-based etailer sent another letter, asking them to reconsider the proposed Rs 7,000-crore bailout by private equity firm Samara Capital.
- The attempt by the independent directors to question private equity firm Samara Capital’s term sheet “reveals that the statements are being made at the behest of Future’s promoters” and to protect their “mala fide action”, Amazon said in the new letter, a copy of which was reviewed by ET.
“We once again call upon you to consider our offer of assistance and provide access to FRL’s records for conducting the due diligence exercise as expeditiously as possible. We call upon you once again to share any such report(s) by tomorrow, ie, January 28, 2022.”
Gig workers ride solo during third wave of pandemic
India’s gig workers—the majority of whom are delivery staff for large online platforms—are raising red flags, saying their employers have failed to help them get fully vaccinated or even reimburse them for protective equipment and sanitisers amid the third wave of the pandemic.
Food aggregators, e-commerce firms and other delivery-dependent companies employ an estimated 800,000 to 1 million people in India. Thanks to a steep rise in online commerce since the start of the pandemic, the sector has been among the largest recruiters of blue-collar workers.
But a large percentage of these gig workers are only partially vaccinated and say they are facing a drop in earnings. At least four gig workers told us that online food ordering platforms have even barred those who have not taken the second dose from working.
Budget 2022 Expectations: Crypto and Fintech
With the Union Budget 2022-23 just a week away, India’s crypto and fintech sectors are clear about their wish lists for the government.
Crypto firms want clarity on taxes: Cryptocurrency companies say they have been suffering due to a lack of regulations and clarity on taxation. There is widespread confusion among crypto firms on matters of indirect taxes, and the GST implications on the purchase and sale of cryptocurrencies.
The government has sought the opinion of senior tax advisors on whether income earned from trading cryptocurrencies could be treated as business income, as against capital gains.
Fintech firms rally for sops: Fintech companies, meanwhile, are lobbying the government to bring back the merchant discount rate (MDR)—a fee that payment providers charge for each transaction—on the Unified Payments Interface (UPI).
The digital lending industry, which was severely hit at the start of the pandemic, wants the government to announce measures to ease liquidity flow to NBFCs.
India’s fledgling neobanks, meanwhile, are just looking for recognition. Since they are not eligible for banking licences under RBI rules, they have to tie up with traditional banks to offer their services.
ETtech Done Deals
■ Google’s plan to invest $1 billion in India’s Bharti Airtel Ltd. and their cooperation in the cloud space will accelerate the internet giant’s digital ambitions in one of its largest markets, making it a stronger competitor to Microsoft Azure and Amazon Web Services. (read more)
■ Swiggy has closed a $700-million funding round led by US asset manager Invesco, doubling its valuation to $10.7 billion and thus making it a decacorn.
■ Ola Electric has raised over $200 million from Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss and others in a funding round that pegged the mobility startup’s valuation at $5 billion.
■ Darwinbox has raised $72 million in a funding round led by Netflix Inc.’s backer TCV at a valuation of more than $1 billion, thus making the cloud-based HRtech startup the fourth Indian unicorn so far this year.
■ Dealshare has raised $130 million in a funding round led by Tiger Global and Alpha Wave Ventures at a valuation $1.5 billion, thus making the social commerce grocery startup the fifth Indian unicorn so far this year.
■ Zomato is investing in two more startups—digital advertising agency Adonmo and food ordering system UrbanPiper. The company’s board has also approved the incorporation of an NBFC, which will be a wholly owned subsidiary.
■ Moglix, a business-to-business ecommerce platform, has raised $250 million from Tiger Global and others, in a funding round that pegged its valuation at $2.6 billion.
■ German IT major SAP AG has picked up a minority stake in Indian SaaS firm Icertis, deepening their existing partnership, Financial details of the deal weren’t disclosed.
Reliance readies Nykaa rival using Fynd, Netmeds
Reliance Industries is preparing to launch its omnichannel beauty platform, with two of its recent acquisitions—Fynd and Netmeds—working in tandem to make it a reality.
- The venture is being built on the marketplace model under Reliance Retail and will compete directly with Nykaa, which went public in November. Internally called ‘Project Adore’, the venture is likely to be named Tiara.
Netmeds is developing the backend—warehousing and data management—from Chennai, while Fynd is building the frontend, including the customer interface.
From the crypto world
■ Indian cryptocurrency exchanges have recorded higher trading volumes in the past few days owing to extreme volatility in the market, as several traders and investors liquidated riskier tokens, rebalanced their portfolios using stable coins and also indulged in opportunistic buying to average down their portfolios.
■ Wealthy individuals and their family offices that bought cryptocurrencies in the past two years have started transferring them to family trusts and wallets outside India as the country drags its feet on cryptocurrency regulations
■ The YouTube accounts of various Indian crypto firms including CoinDCX, CoinSwitch Kuber, WazirX and Unocoin were among those compromised in a worldwide hack.
Indian IT firms gear up to tap metaverse opportunities
India’s top software exporters are racing to prepare for a surge in demand for technology services aimed at the metaverse, which is widely regarded as the next phase of the internet.
Tata Consultancy Services, Infosys, HCL Technologies and Wipro are among those piloting new initiatives for metaverse, building proof-of-concept and virtual laboratories in a bid to equip themselves for the transition.
IT firms to petition govt over exceptions in data bill
The IT sector will petition the government on broad exemptions lawmakers are seeking in the proposed data protection bill.
- These exemptions have left regulators and corporations worried and would adversely affect India’s $190 billion IT-BPM business in Europe, according to Rama Vedashree, CEO of Data Security Council of India (DSCI), an affiliate of industry body Nasscom.
She added that such exemptions would dilute an otherwise comprehensive data privacy regime, and could make it difficult to get adequacy status from the European Union, which facilitates business between EU and other countries. The industry grouping will send a representation to the central government as early as next week, she added.
That’s all from us this week. Stay safe and get that jab.