Indian IT firms facing headwinds; Fintech Slice's revenue nearly triples

Hello,

‘Twas a day of shuffles.

After four-and-a-half years at Swiggy, Sidharth Satpathy is stepping down as the Vice President of the company’s quick commerce vertical Instamart. His role will be taken over by Anirban Roy, who earlier worked as the head of performance marketing at Amazon India.

Then, online-first home and kitchen products brand 10clubhomes has onboarded Kavitha Rao as Co-founder and Chief Operating Officer. She will be key to the company entering new categories and creating an omnichannel approach post the startup's 'strategic pivot' from its D2C roll-up model.

Elsewhere, Infosys Senior VP Binny Mathews quit after 15 years, joining rival Accenture as its Chief Procurement Officer. This follows a string of top-level exits from the IT services company, including CFO Nilanjan Roy who exited last month.

In other news, more women cab drivers for Delhi-NCR thanks to BluSmart. The company has signed an MoU with Automotive Skill Development Council to upskill and train 250 women in the region and will also provide employment opportunities to trained women drivers after screening and driving tests.

ICYMI: It’s time for smart outdoor lighting and, of course, it dances to music.

Lastly, we leave you with the story of Satyam Sundaram, a Bihar resident who started selling bamboo bottles on the roadside. Today, his company Manipuri Bamboo Artifacts clocks an annual revenue of Rs 25 lakh. 

Now, that’s a turnaround!

In today’s newsletter, we will talk about 

• Indian IT sector to see muted growth
• Fintech Slice's revenue nearly triples
• Fighting China's CCTV dominance

Here’s your trivia for today: In which country were gummy bears invented?

Technology

Indian IT sector to see muted growth

Indian IT services companies are expected to see subdued numbers in the third quarter of the current fiscal year due to macroeconomic conditions. Leading Indian IT services companies like TCS, Infosys, HCL Tech, and Wipro are expected to report under 1% QoQ growth, and in some cases, it might be negative.

“Over the last year, there has been a realisation among enterprises that they overspent on transformation projects and needed to rationalise," as per JP Morgan.

Future outlook:

• Brokerage house HSBC noted that IT stocks are likely heading towards a prolonged period of consolidation and range-bound returns. “This is similar to FY14-18 when the IT index offered mid-single digit CAGR returns,” HSBC said.
• According to brokerage house Jefferies, the primary focus will be on commentary on the demand environment and 2024 IT budgets, along with company-specific issues.
• The silver lining comes from the technology investment platform Recognize which noted that 73% of all CIOs foresee an increase in their IT budgets in 2024. Cyber/data security, AI, and cloud migration will be top priorities.

Funding Alert

Startup: Impact Analytics

Amount: $40M

Round: Growth financing

Startup: makeO

Amount: $16M

Round: Bridge

Startup: Grip Invest

Amount: $10M

Round: Series B

Fintech

Fintech Slice's revenue nearly triples

Garagepreneurs Internet Private Limited, the parent company of fintech unicorn Slice, nearly tripled its revenues in the fiscal year 2023 on the back of rising sales of services. Its revenues from operations grew to Rs 846.74 crore from Rs 283 crore earned in the preceding fiscal year.

Earnings:

• Slice more than doubled its income from fees and commissions. Additionally, interest income on loans surged more than 3.5X, reaching Rs 471.81 crore in FY23.
• The rise in revenues was also followed by higher expenses, which more than doubled to Rs 1,272.56 crore in FY23 from Rs 542.49 crore in the year-ago period.
• The company faced a 60% increase in losses, which amounted to Rs 405.78 crore in fiscal year 2023—up from Rs 253.67 crore incurred in FY22.

Security

Fighting China's dominance in CCTV sector

Between 2010-2015, Sparsh CCTV (Sparsh Securitech) faced difficulties due to China’s growing control over the CCTV industry despite having an approximately 12% domestic market share. Today, it has 200 SKUs, with a range of CCTV solutions, IoT devices, AI-based software, and accessories, and is an active part of the 5G movement in India.

Behind the pivot:

• “We were one of the first to develop homegrown remote operating switches for CCTV cameras and from there the manufacturing journey started,” says Founder and CEO Sanjeev Sehgal. 
• During the 'Make in India' campaign, Sparsh CCTV pivoted to the government sector for the deployment of a security surveillance system.
• At Indian Mobile Congress 2023, the company presented 20 5G use cases like facial recognition and driver alert systems for railways and airports, intelligent traffic monitoring system explosion-proof cameras etc. It also launched an indigenous cloud platform. 

News & updates

• Predictions: Samsung Electronics expects to post a 35% drop in operating profit in the fourth quarter of 2023, missing expectations by a wide margin as a rebound in semiconductor prices likely narrowed losses in the company’s biggest profit-driving segment. 
• Investigation: Microsoft’s $13 billion investment into OpenAI risks a full-blown investigation. The European Commission is examining whether Microsoft’s involvement should be vetted under the bloc’s merger rules, paving the way for a formal probe and even a potential unwinding if it’s found to hamper fair competition. 
• Deal talks: TikTok owner ByteDance is in talks with multiple prospective buyers of its gaming assets, including the world's largest video games company, Tencent, as the Chinese social media firm retreats from the gaming industry. Talks are ongoing but no deal has been reached.

In which country were gummy bears invented?

Answer: Germany. They were first created by Hans Riegel Sr, Founder of Haribo, in 1922.

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