Now, P2P lending players under RBI lens; BigBasket, Town Essentials tussle is back

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The emerging peer-to-peer (P2P) lending industry is the latest to attract the attention of the Reserve Bank of India (RBI). This and more in today’s ETtech Morning Dispatch.

Also in this letter:
■ Byju’s weighs Aakash IPO in mid-2024
■ ONDC launches B2B ecommerce, SignCatch, Rapidor join network
■ Apple unveils AR headset


After online payments, digital loans, now P2P lending under RBI lens

Hi, this is Pratik Bhakta in Bengaluru. Multiple sources told me that the fledgling peer-to-peer (P2P) lending industry has been receiving detailed queries from the Reserve Bank of India (RBI) on the nature of their partnership businesses.

Driving the news: Multiple P2P players stitched up partnerships with fintechs and consumer-facing applications to source customers for both loans and investments. Some of these partnerships were structured in a way that it stretched regulatory boundaries (details in the story). It turns out that the RBI is now trying to understand how these partnerships are working.

Major NBFC P2P platforms

So, what’s next? The expectation is that the regulator might come out with clear instructions around what is allowed and what is not, like what we saw with Slice, Uni and the likes around credit on prepaid cards.

RBI rules for NBFC P2P companies

The big picture: The RBI has been clamping down on fintech players by bringing them within regulatory control. We saw that happen with payments players like Cashfree and Razorpay. Then the digital lending sector faced the heat from the regulator. However, unlike the other spaces, the P2P lending industry never really scaled up. So, given the workload on the banking regulator, it never received priority treatment from them.


HC orders trial in BigBasket, Town Essentials tussle

BigBasket and Town Essentials

Starting June 12, a trial court in Bengaluru will commence hearings into a three-year-old dispute between Tata Group-owned online grocery platform BigBasket and Bengaluru-based company Town Essentials. The matter pertains to BigBasket’s 2020 acquisition of micro-delivery platform DailyNinja, which had a supply and procurement contract with Town Essentials.

What’s the dispute? In its suit, Town Essentials alleged that BigBasket migrated the customers of DailyNinja to BBdaily without keeping Town Essentials in the loop, because of which major losses were incurred by the business-to-business (B2B) procurement partner. A Bengaluru commercial court ordered parties to go into arbitration to settle the matter.

Town Essentials vs BigBasket

The appeal: Town Essentials then challenged the commercial court order in the Karnataka High Court. The HC held that while BigBasket and its directors couldn’t be subjected to arbitration given they are non-signatories to the agreement between Town Essentials and Daily Ninja, the case could not be bifurcated into two parts, and ordered the parties to appear before the trial court on June 12.

Tell me more: In its plaint, Town Essentials has sought a temporary injunction, restraining BigBasket to carry on any micro-delivery business, as well as procuring all supplies from Town Essentials, until the final disposal of the suit. In addition, the company has sought damages of over Rs 36 crore from the defendants.

Quick catch-up: The Tata group in May 2021 announced the completion of 64.3% stake in BigBasket after Town Essentials had taken the matter up with the online grocer. Earlier in December 2022, the e-grocer raised $200 million in fresh funding from majority owner Tata Digital, along with other investors. The round pegged BigBasket’s valuation at roughly $3.2 billion.


Byju’s weighs launch of Aakash IPO in mid-2024

Byjus

Beleaguered edtech startup Byju’s plans to launch the initial public offering (IPO) of its test-prep subsidiary Aakash Education Services in mid-2024. In a statement on Monday, the company said its board had cleared the IPO proposal. This comes at a time when the edtech startup is struggling to repay its $1.2 billion loan.

Driving the news: The company said the appointment of the merchant bankers for the IPO will be announced soon. “The upcoming IPO will provide a significant capital infusion to bolster Aakash’s infrastructure, broaden its reach, and extend high-quality test-prep education to a larger number of students across the nation,” it said.

IPO prep: ET had reported on May 13 that Byju’s has closed a Rs 2,000-crore round from Davidson Kempner Capital in a structured credit transaction against the cash flows of Aakash Educational Services, linked to the test-prep arm’s public listing.


ET Ecommerce Index

We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.

ET Ecommerce Tracker


ONDC launches B2B ecommerce, SignCatch and Rapidor join network

ONDC B2B

The government-backed Open Network for Digital Commerce (ONDC) has launched business-to-business (B2B) ecommerce on the network with startups SignCatch and Rapidor enabling the buyer side and seller side platforms, respectively.

Tell me more: While SignCatch licences its platform-as-a-service (PaaS) solutions to brands, distributors, and retailers, Kochi-based Rapidor is a platform that enables B2B trade and transactions in closed-loop networks. The two had executed their first B2B transaction on the network last month within a closed group of network players in Bengaluru.

Competition: This foray means ONDC will offer services that compete with B2B players such as Udaan, Amazon Business, IndiaMart, Dealshare, Jumbotail and others. It has enabled features such as dynamic pricing, bulk order purchasing, delivery scheduling, and embedded finance in the form of B2B credit on its new offering.

Catch up quick: The network’s entry into B2B ecommerce has come at a time when its B2C transactions are dwindling in the backdrop of ONDC restricting its terms for incentives to network partners for funding discounts to users.


Apple reveals augmented-reality headset

Apple Event

Apple, at its annual developers conference in Cupertino, California,unveiled an augmented-reality headset called the Apple Vision Pro. This is the iPhone-maker’s first big move into a new product category since the introduction of the Apple Watch nine years ago.

Nothing on AI: Although Apple didn’t unveil any significant developments in generative AI products like ChatGPT or Google’s Bard search engine, it discreetly integrated AI into various smaller features, like live transcriptions of voicemails.

Other launches: Apple unveiled a 15-inch MacBook Air featuring its M2 processor chip, along with six speakers. Starting at $1,299, it will be released next week. Additionally, the 13-inch MacBook Air will be priced at $1,099. Apple also introduced a new edition of the Mac Pro, its top-performing desktop, equipped with the M2 Ultra chip.


Other Top Stories By Our Reporters

sentra

(L to R) Harsh Choudhry, cofounder & CEO, sentra.world, Vikas Upadhyay, cofounder & COO, sentra.world

Climate tech startup Sentra World raises $2 million: Sentra.world, an ESG (Environmental, social and corporate governance) focussed startup, has raised seed funding of $2 million in a round led by Avaana Capital, an early-stage climate-tech venture capital firm.

Zepto ss

Nehul Malhotra (left), Geetanshu Singla, cofounders, GenWise.

GenWise raises $3.5 million in funding led by Matrix to target elderly population: GenWise, an app catering to the elderly, has raised $3.5 million in a seed round led by Matrix Partners India, with participation from investors including DBR Venture, the family office of the Jagran Group and Climber Capital.


Global Picks We are Reading

We need to keep CEOs away from AI regulation (Financial Times)

Bluesky’s Custom Algorithms Could Be the Future of Social Media (Wired)

Apple and Foxconn lobbied India to relax its labor laws. Unions are fighting back (Rest of World)



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