Archive for September, 2020

Indian startups explore alliance and alternative app store to fight Google’s ‘monopoly’

Google, which reaches more internet users than any other firm in India and commands 99% of the nation’s smartphone market, has stumbled upon an odd challenge in the world’s second-largest internet market: Scores of top local entrepreneurs. Dozens of top startups and firms in India are working to form an alliance and toying with the idea of launching an app store to cut their reliance on Google, five people familiar with the matter told TechCrunch. The list of entrepreneurs includes high-profile names, such as Vijay Shekhar Sharma, co-founder and chief executive of Paytm (India’s most valuable startup), Deep Kalra of travel ticketing firm MakeMyTrip, and executives from PolicyBazaar, Sharechat and many other firms. The growing list of founders expressed deep concerns about Google’s “monopolistic” hold on India, and discussed what they alleged was unfair and inconsistent enforcement of Play Store’s guidelines in the country. The conversations, which began in recent weeks, escalated on Tuesday after Google said that starting next year developers with an app on Google Play Store must give the company a cut of as much as 30% of several app-related payments. Dozens of executives “from nearly every top startup and firm” in India attended a call on Tuesday to discuss the way forward, some of the people said, requesting anonymity. A 30% cut to Google is simply unfeasible, people on the call unanimously agreed. Vishal Gondal, the founder of fitness startup GOQii, confirmed the talks to TechCrunch and said that an alternative app store would immensely help the Indian app ecosystem. TechCrunch reached out to Paytm on Monday for comment and the startup declined the request. In recent months, several major startups in India have also expressed disappointment over several of the existing industry bodies, which some say have failed to work on nurturing the local ecosystem. The tension between some firms and Google became more public than ever late last month after the Android-maker reiterated Play Store’s gambling policy, sending a shockwave to scores of startups in the country that were hoping to cash in on the ongoing season of Indian Premier League cricket tournament. Google temporarily pulled Paytm’s marquee app from the Play Store citing repeat violation of its Play Store policies. Disappointed by Google’s move, Paytm’s Sharma said in a TV interview, “This is the problem of India’s app ecosystem. So many founders have reached out to us… if we believe this country can build digital business, we must know that it is at somebody else’s hand to bless that business and not this country’s rules and regulations.” Google has sent notices to several firms in India including Hotstar, TechCrunch reported last month. Indian newspaper Economic Times reported on Wednesday that the Mountain View giant had also sent warnings to food delivery startups Swiggy and Zomato. Vivek Wadhwa, a Distinguished Fellow at Harvard Law School’s Labor and Worklife Program, lauded the banding of Indian entrepreneurs and likened Silicon Valley giants’ hold on India to the rising days of East India Company, which pillaged India. […]

Lots of happy people as Palantir and Asana spike on first day of trading

The markets are closed and the verdicts are in: investors liked what they saw in Palantir and Asana . The two companies, which debuted this morning in dual (and duel) direct listings, continued to prove that enterprise tech companies without the brand recognition of Spotify (which conducted its own direct listing back in 2018) can make direct listings work. So far, the evidence is decent that the mechanism isn’t throwing off investors. Michael Nagle/Bloomberg via Getty Images Asana closed its first trading day at $28.80 a share — a gain of 37% against its reference price of $21 a share. The company’s first trade was at $27. Meanwhile, Palantir closed the day at $9.73, a gain of 34% against its reference price of $7.25. Its first trade was at $10. Asana is valued at about $4.3 billion at close, while Palantir reached $24.8 billion, based on its fully diluted share count, including recent securities sold. As an aside, my Equity co-host Natasha Mascarenhas and I did an “Equity Shot” talking more about these early numbers. Tune in if you want to hear our discussion and analysis: That done, with big bold numbers on the board, there were a number of winners. First and foremost, Founders Fund, which is the only major investor shared between the two companies, has a lot of capital incoming. The firm owns 5.8% of Asana and approximately 6.6% of Palantir, netting it somewhere around $1.8 billion given today’s valuations (that’s definitely back-of-the-envelope math mind you). Meanwhile, Benchmark owns 9.3% of Asana, and a number of other investors including Japanese insurer SOMPO, Disruptive Technology Solutions, UBS, and 8VC own significant stakes in Palantir. The other winners are the founders of these companies. Dustin Moskovitz retains a 36% stake in Asana, while his cofounder Justin Rosenstein holds a 16.1% stake. Over at Palantir, the trio of founders of Alex Karp, Stephen Cohen, and Peter Thiel now have liquid billions at their collective disposal. Asana founders Justin Rosenstein and Dustin Moskovitz. Photo via Asana Of course, employees will be happy to get liquidity as well. Asana does not have a lockup period, and so its employees and insiders are free to trade. Palantir coupled a direct listing with a lockup, and so only about 28% of the company’s shares are eligible for sale today. The remainder will be authorized to be sold over the next year. In an interview with Moskovitz shortly after the markets closed today, he said that “it’s been an exciting morning, but ultimately it’s just one step in a much longer journey towards fulfilling our mission” (you can read more of our interview with Moskovitz on Extra Crunch). Dustin Moskovitz discusses Asana’s first trading day While it’s just one trading day, it was a positive one for both companies, and that provides even more evidence that the classic IPO now has stiff competition from direct listings and other alternative methods like SPACs.