Egaming cos trim World Cup spends; Peak XV, Flipkart’s new bets

The online gaming industry, ubiquitous during major sports events, is low on enthusiasm ahead of the ICC Men’s Cricket World Cup, burdened as it is with a 28% tax levy. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ India key for WhatsApp monetisation: Meta India head
■ Google adds new features to AI chatbot Bard
■ Startups face likely angel tax scrutiny amid down rounds

Online gaming companies to slow spends during cricket World Cup


The ICC Men’s Cricket World Cup is afoot, but the usually enthused online gaming industry, especially the fantasy sports segment, is holding back on spending. The reason? The 28% goods and services tax (GST) levy which threatens to severely dent their financials.

Game, upset, match: A senior executive at one of the large online real money gaming platforms told ET that it is planning to spend only a fourth of what was originally planned for the upcoming cricket tournament that is being played in India. Another executive said their company is in a “wait and see” mode. The GST levy has hit these players hard, and several have undertaken huge cost cuts and laid off people since the tax was announced.

GST burden on egaming companies_Timeline_Graphic_ETTECH

Uncertainty ahead: Companies typically lay out the marketing spend plan before the beginning of the financial year, but industry watchers predict spending to be much lower than expected and see less enthusiasm across television and digital mediums.

There were 10-12 brands from the gaming segment advertising during the Indian Premier League (IPL) that took place in April-May this year. “But for the World Cup, there are no indications that there will be as many,” said Mansi Datta, chief strategy officer, Wavemaker India, a WPP and GroupM media agency.

Online gaming reset:
As per the new law, effective October 1, online real money gaming companies will be subjected to a 28% levy on full face value of the bets placed. As a result of this, several gaming firms have had to tighten their belts.

ETtech Done Deals

Peak XV and_consumer luggage brand Mokobara investment_THUMB IMAGE_ETTECH

Peak XV in talks to invest in new-age luggage brand Mokobara | Peak XV Partners is eyeing internet-first direct-to-consumer (D2C) luggage brand Mokobara for an investment that could value the startup at $65-80 million, sources told ETtech. Another consumer brand-focussed investment fund may also join the round, expected to be $12-15 million in size.


What is Mokobara? The luggage brand was founded by former Urban Ladder executives Sangeet Agrawal and Naveen Parwal in 2020. It started opening offline stores this year. So far, Mokobara has raised around $8 million from investors such as Sama Capital and According to Tracxn, it was last valued at around $21 million.

Peak XV’s backing: Formerly Sequoia Capital India, Peak XV has previously backed startups such as IPO-bound Mamaearth, and pet care product and services company Heads Up For Tails that started online, but are expanding offline to tap into wider audiences.

Prakash Sikaria_flipkart_ETTECH

Prakash Sikaria, senior vice president, Flipkart

Flipkart lining up $20 million for in-house credit marketplace |
Ecommerce major Flipkart is pumping $15-20 million into its in-house credit marketplace startup being helmed by senior executive Prakash Sikaria, sources have told ETtech.

Gradual outlay: The investment is likely to be in stages as the team is working on several products, and the platform is expected to be ready by end-2023 or early next year, the sources added.

Sikaria – a senior vice president at Flipkart who was heading the firm’s social commerce offering Shopsy – is building a credit marketplace that would be housed as a Flipkart entity. The amount being committed for Sikaria’s venture by Flipkart is quite significant, even as the industry is faced with a broader funding slowdown.

Also read | Former Flipkart executive Ranjith Boyanapalli’s Flash raises $6.7 million in funding

Tech-tonic trail, fostering global tech companies

Copy of Accel_Article2_1200x900_

In the second episode of SeedToScale Specials, Accel partners Sameer Gandhi, Harry Nelis, and Mahendran Balachandran traverse the venture capital giant’s 40-year-long journey in supporting visionary tech founders to build disruptive tech-led businesses around the world. They unravel several entrepreneurial triumphs, from backing founders building category creators such as Flipkart, Swiggy and Freshworks in India, to global giants such as Slack, Spotify, Atlassian and Chainanalysis. Find out more here

WhatsApp means business as monetisation plans take shape

Meta India head Sandhya Devanathan ...

Meta India head Sandhya Devanathan

India is a key market for the monetisation of instant messaging platform WhatsApp with business messaging playing a key role, Meta India head Sandhya Devanathan said.

In the offing: Meta Platforms is focussing on launching features that will expand its ambitious bet WhatsApp Pay in India. It will also try to widen the direct interface between merchants and customers where they will let users avail service delivery and make payments for it directly to merchants through WhatsApp.

Quote, unquote: “As a company, we are looking to monetise WhatsApp. We are seeing a pretty big difference in terms of not just people messaging each other, but also people messaging businesses. About 90% of people that we surveyed said they were talking to a business,” Devanathan said.

Meta cashing in

On layoffs, recent exits: Devanathan said there is a broader company-wide push towards efficiency, and job cuts or people quitting jobs at the company were not India-specific. Over the last 12 months, Meta India has seen several high-profile exits, including the resignation of former India head Ajit Mohan. Other high-ranking executives such as Director and Head of Partnerships, Manish Chopra, public policy chief Rajiv Aggarwal and WhatsApp India head Abhijit Bose also resigned in quick succession over the past year. These positions have not yet been filled.

Google announces AI chatbot Bard’s integration with apps and services

Google integrates Bard chatbot with its apps and services

Google on Tuesday announced it is taking its AI chatbot Bard to the next level by integrating it with Google apps and services, rolling out its ‘most advanced model yet’.

Driving the news: The Sundar Pichai-led tech company said its AI chatbot Bard would now be able to show relevant information from Google tools such as Gmail, Docs, Drive, YouTube, flights and hotel service. The information will be available even if the user needs it across multiple apps and services.

Push for privacy: Google explicitly stated that if a user chooses to use the extension, no human would be able to review their data, neither will the data be used to show them ads or train the Bard model.

Updated tech: Bard’s director of project management Yury Pinsky said the new features could be added after updates were made to the chatbot’s PaLM 2 model. PaLM 2 is Google’s newest large language model (LLM) that will power Google’s updated Bard chat tool.

Startups face likely angel tax scrutiny amid down rounds

Angel tax

Startup founders raising funds at lower valuations than earlier are approaching experts to discuss possible angel tax scrutiny, smelling the income tax department on their trail after changes to the tax provisions.

Threat of getting ‘noticed’: Tax sleuths have in recent times issued notices to specific startups, seeking information on investor creditworthiness and verifying if investment amounts align with declared incomes. After this, entrepreneurs whose companies have seen valuation cuts in the past year or so are growing increasingly concerned.


What’s the fear? The concern in the industry is that the department will not only scrutinise the lofty valuations made earlier but could also demand additional taxation under the angel tax provisions. Startups raised funds at a premium but now the valuations of high-profile startups like Byju’s, Dunzo and Pharmeasy among many others have plummeted.

Experts said downgrades will put more stress on past valuations and more scrutiny.

Expert take: “Though litigations happened in the past, the judicial precedents have been that as long as the valuations are reasoned and backed by evidence, companies have got relief. However, now, with the extension of the scope of angel tax in the last budget and several deep downgrading of companies, it will be interesting to see how things pan out,” Girish Vanvari, cofounder of tax and regulatory advisory Transaction Square, said.

Background: Until 2022-23, the angel tax provision was applicable only upon issuance of shares to tax residents in India. The Finance Act 2023 has expanded its scope to include the issuance of shares to tax non-residents in India.

Other Top Stories By Our Reporters

Micron confirms

Micron to break ground for India chip facility Saturday | Micron Technology is scheduled to break ground for its semiconductor testing and assembly plant in Gujarat’s Sanand on Saturday, barely three months after the American chipmaker said it would set up the facility. The unit, which is likely to become operational by late 2024, is coming up with a total proposed investment of $2.75 billion. While Micron has committed to invest $825 million, the rest will be covered by central and state subsidies.

Noise partners with Il Jin Electronics to manufacture smart wearables in India: Wearables brand Noise announced a joint venture with Il Jin Electronics, a subsidiary of Amber Enterprises India, for manufacturing, assembling and designing of wearables and other smart electronics products in India.

Ola applies for licence to operate e-bike taxis in Karnataka: ANI Technologies, which operates Ola, submitted an application with the Karnataka transport department seeking a licence to operate an EV bike taxi service in Bengaluru and other towns, official sources said.

Global Picks We Are Reading

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