On the Flip Side, the Tech World is Bustling
Imploding Crypto: FTX
Early in November 2022, the cryptocurrency exchange FTX went down after a CoinDesk story highlighted potential leverage and solvency issues with trading firm Alameda Research. A liquidity crisis forced FTX to look for bailout money, and rival exchange Binance briefly explored purchasing some of the business before withdrawing. On November 11, 2022, FTX’s CEO resigned and the business declared bankruptcy. In the hours that followed, FTX may have been the victim of a hack in which tokens valued at hundreds of millions were taken.
The enormous amount of venture capital the cryptocurrency exchange was able to raise and the calibre of investors it attracted are two intriguing facets of FTX’s downfall, among many others. In just two years, FTX raised a total of $1.9 billion from 80 investors. The cap table of the now-bankrupt company resembles a ranking of the top hedge funds, private equity firms, and venture capital firms in the globe.
Others who have invested in FTX and FTX US include Sequoia, SoftBank, Tiger Global, Temasek, Ribbit Capital, and Blackrock; some as recently as January 31, 2022.
Sequoia then gave FTX a $210 million investment. On November 11, the Japanese giant disclosed that it has invested just under $100 million in FTX through its Vision Fund 2. Similar to Sequoia, it has since written off the investment.
The Ontario Teachers’ Pension Plan, one of the biggest pension plans in the world with approximately $242.5 billion in assets under management, invested $75 million in FTX in October 2021. It made an additional $20 million investment in January 2022. It said this week that it was zeroing out its $95 million investment.
The Economic Times Startup Awards 2022
The seventh annual The Economic Times Startup Awards 2022 will celebrate the greatest and brightest stars of the Indian startup world in Bengaluru.
A highly esteemed panel which will include top CEOs, investors and startup founders will gather together to discuss how companies can reconcile their profitability with growth during the ongoing tech downturn, the worst the globe has experienced since the dotcom crash in 2000.
According to its founders, Harshil Mathur and Shashank Kumar, Razorpay, the coveted Startup of the Year winner, plans to go public in the next two to three years and doesn’t need to raise any more money even if its revenue is still increasing by 100% annually.
The founder and CEO of Nykaa, Falguni Nayar, who was named “CEO of the year” at The Economic Times Startup Awards 2022, claimed the company’s fashion and business-to-business (B2B) businesses will be profitable in the coming year with manageable growth rates.
The Midas Touch award went to Accel India partner Shekhar Kirani, who is renowned for his early investment in SaaS business Freshworks, which is listed on the Nasdaq. He explained to us that before approaching the public markets, businesses must demonstrate profitability for at least two quarters. According to Kirani, several Indian companies will aim to go public in the second half of 2023, although the same is still uncertain for the US.
Tech News
Amid the digital winter and worries about an imminent recession, tech behemoth Amazon started laying off workers to reduce expenses, boost operating margins, and enhance revenues. It declared that it would let go of roughly 260 employees at various workplaces where data scientists, software engineers, and corporate staff are employed. There is a good chance that Amazon may make layoffs in India as well, which could potentially affect at least a few hundred workers from various divisions. Ajit Mohan’s replacement as Meta’s head in India has been announced as Sandhya Devanathan.
Large software companies like Meta and Twitter, which recently let go roughly 11,000 and 3,700 workers, respectively, are among those undergoing a wave of layoffs. Indian or executives of Indian ancestry, particularly those based in the US, are suffering from extreme anxiety as a result.
Semiconductor Push in India’s tech run
The Indian government has placed a significant bet on domestic semiconductor production as the political standoff between the US, China, and Taiwan is far from resolved. The India Semiconductor Mission was established by the Center to take advantage of the current opportunity and tap into the enormous potential of the market currently controlled by China and Taiwan.
The government has allocated a fund of Rs 1,000 crore to support semiconductor design in India.
One of the candidates for the government’s initiative to establish semiconductor manufacturing facilities in the nation, Mumbai-based ISMC Analog, is close to finalising a debt agreement with a five-bank consortium led by State Bank of India (SBI) for its $3 billion project near Mysuru.
