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EXCLUSIVE


FLIPKART RAISES IPO VALUATION TARGET TO $60-70 BILLION, EYES 2023 LISTING

The main reason for waiting for the IPO is due to Flipkart's internal plan to
boost valuations further by focussing on two of its relatively new businesses --
online healthcare services and travel bookings, two of the sources with direct
knowledge said.

 * Reuters
 * April 07, 2022, 13:09 IST

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NEW DELHI: Walmart's Indian e-commerce company Flipkart has internally raised
its IPO valuation target by around a third to $60-70 billion, and now plans a
U.S. listing in 2023 instead of this year, two sources with direct knowledge of
the plan told Reuters.

Flipkart, which competes with Amazon.com Inc in India's booming e-commerce
space, had earlier set an IPO valuation goal of $50 billion, Reuters has
reported.

The main reason for waiting for the IPO is due to Flipkart's internal plan to
boost valuations further by focussing on two of its relatively new businesses --
online healthcare services and travel bookings, two of the sources with direct
knowledge said.



Two separate sources familiar with Flipkart's plans said the ongoing global
market turmoil sparked by the Russia-Ukraine crisis also forced the Indian
company to reconsider its timeline.

Flipkart acquired Indian travel booking website Cleartrip in 2021, and this week
launched a "Health+" app to offer medicines as well as other healthcare products
and services.

"Flipkart thinks there is an even bigger upside of valuation than originally
envisaged ... The travel business has started showing great signs already for
them," said the first source.

The first source said the IPO valuation target could be as high as $70 billion,
while the second said it could be between $60-65 billion.

Flipkart didn't respond to a request for comment.

Asked about the IPO's timeline, Walmart CFO Brett Biggs told an analysts
conference in December that Flipkart's business was "performing almost exactly
like we thought" and an "IPO is still very much in the cards", without
specifying when the company will list.

The listing, according to sources, is now being planned for early-to-mid 2023.
Flipkart is incorporated in Singapore and wants to list in the United States,
they added.

The IPO planning comes amid growing protests from Indian brick-and-mortar
retailers that Flipkart and Amazon bypass federal regulations and favour select
sellers, allegations the companies deny. India is also working on a slew of
e-commerce sector regulations that could spook foreign giants.



Walmart acquired a roughly 77% stake in Flipkart for about $16 billion in 2018 -
its biggest deal ever - and said later that year that it could take the company
public in four years.

Just last year, Flipkart raised $3.6 billion in a funding round, giving it a
valuation of $37.6 billion.

That fund raising helped bolster the company's financial position, and it had
enough cash right now for expansion, meaning an IPO wasn't a necessity at this
stage, said one of the sources.

India's IPO market has slowed after having boomed as enthusiastic retail
investors and a pandemic-induced flood of easy money pushed prices to record
highs, encouraging a slew of Indian tech companies like Paytm and Zomato to go
public.

More than 60 companies made their market debut in India in 2021 and raised a
total of more than $13.7 billion, which was more than the previous three years
combined.


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Most Read
 * This Week
 * This Month

 * FLIPKART RAISES IPO VALUATION TARGET TO $60-70 BILLION, EYES 2023 LISTING
   
   The main reason for waiting for the IPO is due to Flipkart's internal plan to
   boost valuations further by focussing on two of its relatively new businesses
   -- online healthcare services and travel bookings, two of the sources with
   direct knowledge said.

 * COFFEE DAY DEFAULTS RS 480 CRORE ON LOAN REPAYMENT, SECURITIES

 * TATA PACKS POWER BRANDS IN MEGA APP TO RIVAL AMAZON, AMBANI

 * BIGBASKET GETS RS 1,000 CRORE INVESTMENT

 * DIRECT SELLING INDUSTRY GROWS 7.7% TO RS 18,067 CR IN FY21: REPORT
   
   The Annual Survey 2020-21 revealed that employment in the direct selling
   industry has also increased. The total number of active direct sellers in
   FY21 grew 6.32 per cent to 7.9 million against 7.4 million in FY2019-20. "In
   terms of the gender ratio of Direct Sellers, the industry currently comprises
   53 per cent of male and 47 per cent of female active Direct Sellers," as per
   the report.

 * FLIPKART RAISES IPO VALUATION TARGET TO $60-70 BILLION, EYES 2023 LISTING

 * RIL-ACRE'S OFFER FOR SINTEX INDUSTRIES GETS OVER 90% SUPPORT FROM LENDERS

 * COFFEE DAY DEFAULTS RS 480 CRORE ON LOAN REPAYMENT, SECURITIES


MOST READ IN E-COMMERCE

 * This Week
 * This Month

 * FLIPKART RAISES IPO VALUATION TARGET TO $60-70 BILLION, EYES 2023 LISTING

 * TATA PACKS POWER BRANDS IN MEGA APP TO RIVAL AMAZON, AMBANI

 * BIGBASKET GETS RS 1,000 CRORE INVESTMENT

 * TATAS REPLENISH ECOMMERCE WAR CHEST WITH RS 5,882 CRORE

 * FLIPKART RAISES IPO VALUATION TARGET TO $60-70 BILLION, EYES 2023 LISTING

 * TATA PACKS POWER BRANDS IN MEGA APP TO RIVAL AMAZON, AMBANI

 * BIGBASKET GETS RS 1,000 CRORE INVESTMENT

 * IN A SUDDEN MOVE, SINGAPORE’S ECOMMERCE MAJOR SHOPEE DECIDES TO EXIT INDIA


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 * DUBAI'S FUTURISTIC ECOMMERCE ECOSYSTEM

 * 25:01
   
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EXCLUSIVE


FLIPKART INVESTS $116 MILLION IN FASHION RETAILER MYNTRA AMID CHALLENGE FROM
RELIANCE, NYKAA

The new investment comes as Myntra is facing new challenges, with Reliance's
Ajio emerging as a significant second player in the market. Beauty retailer
Nykaa is also venturing into fashion, which Myntra has dominated for over a
decade.

 * Pranav Balakrishnan
 * ETtech

Click Here to Read This Story
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Bengaluru: After investing close to $700 million in Flipkart's marketplace and
new healthcare vertical, the Indian ecommerce company's Singapore entity has
invested $116 million in fashion retailer Myntra, according to regulatory
filings in Singapore accessed by ET. The investment was made on March 25, just
before the financial year ended.

This takes Flipkart’s investment in its various businesses in March to more than
$800 million. ET reported on March 31 that it had invested $553 million in
Flipkart Marketplaces and $143 million in its new healthcare business. Flipkart
also launched a separate app for the healthcare business, called Flipkart
Health+, on April 6.

Myntra and Flipkart did not respond to ET’s queries.



The new investment comes as Myntra is facing new challenges, with Reliance's
Ajio emerging as a significant second player in the market. Beauty retailer
Nykaa is also venturing into fashion, which Myntra has dominated for over a
decade.

While Nykaa dominates the beauty and personal care industry, several companies,
including India’s biggest conglomerates – Reliance Industries and Tata Group –
are looking at building their own beauty and personal care platforms. Tata Group
has launched multiple fashion platforms – Tata Cliq and Westside – on the
company’s new ‘super app’ Tata Neu, which was launched on April 7. ET reported
about Reliance’s plans in the category on January 25.

Myntra's new CEO Nandita Sinha told ET on February 24 that the company would
focus on building live commerce and the beauty category in the near future. The
live commerce feature is Myntra's new initiative to target Gen Z shoppers. The
company launched Style Squad on February 22 to lure more influencers onto the
platform and will rely on them to launch and promote new brands.

“The fashion category is a tough business and it requires significant
investments in emerging technologies like artificial intelligence, metaverse and
virtual reality,” said Ashutosh Sharma, vice-president and research director at
Forrester.



Flipkart CEO Kalyan Krishnamurthy told ET on January 4 that Myntra had only
scratched the surface of the online branded fashion space. Myntra will continue
to run independently under the new management with its own strategy, targeting
its customer segments, he said.

“We are going to invest heavily in it and grow it disproportionately. The new
team is very enthusiastic,” said Krishnamurthy.

The Walmart-owned online retailer has seen significant top-management churn in
recent months, with former chief executive Amar Nagaram leaving to start his own
venture, as ET reported previously. Other exits include those of chief financial
officer Ramesh Bafna and chief of marketing Harish Narayanan.

Flipkart acquired Myntra in March 2014 for Rs 2,000 crore.


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EXCLUSIVE


TPG-BACKED FIRSTCRY NEARS $700 MILLION IPO FILING

The online baby product marketplace is seeking a valuation of at least $6
billion, said the people, who asked not to be identified as the information is
private. The issuance will include both new and existing shares and a listing
could take place as soon as this year, the people said.

 * Bloomberg

Click Here to Read This Story
 * 
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E-commerce startup FirstCry.com is planning to file for an initial public
offering in Mumbai as soon as this month that could raise about $700 million,
according to people familiar with the matter.

The online baby product marketplace is seeking a valuation of at least $6
billion, said the people, who asked not to be identified as the information is
private. The issuance will include both new and existing shares and a listing
could take place as soon as this year, the people said.

TPG-backed FirstCry, led by founder Supam Maheshwari, was profitable in the
financial year ended March 31, 2021, latest company filings show. It turned
around losses from previous years as the pandemic accelerated the shift to
online shopping. It is one of the few startups in India seeking to tap the IPO
market after being profitable at an operational level.



Deliberations are ongoing and details of the IPO, including size and timing,
could still change, the people said. A spokesman for FirstCry declined to
comment.

The company, formally known as BrainBees Solutions Pvt, runs an online store
featuring products for children and expecting mothers. Its investors include
TPG, SoftBank Group Corp. and PremjiInvest, the family office of Wipro Ltd.
founder Azim Premji.

PremjiInvest has stepped in to buy a stake that was initially planned to be sold
to India’s sovereign wealth fund National Investment & Infrastructure Fund Ltd.,
by an existing shareholder, Bloomberg News reported earlier this month. The deal
valued FirstCry at close to $3 billion, the people said.


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EXCLUSIVE


AMAZON ADDS 5% 'FUEL AND INFLATION SURCHARGE' TO SELLER FEES

The latest fee hike follows one announced in November and went into effect in
January. Amazon didn't immediately respond to a request for further details on
the recent move. But in a notice sent to sellers Wednesday, the company said its
costs had gone up since the beginning of the COVID-19 pandemic due to increases
in hourly wages, the hiring of workers and construction of more warehouses.

 * AP

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Amazon is taking a step to offset its rising costs, announcing Wednesday it will
add a 5% "fuel and inflation surcharge" to fees it charges third-party sellers
who use the e-commerce giant's fulfillment services.

The Seattle-based company said on its website that the added fees, which take
effect April 28, are "subject to change" and will apply to both apparel and
non-apparel items.

The latest fee hike follows one announced in November and went into effect in
January. Amazon didn't immediately respond to a request for further details on
the recent move. But in a notice sent to sellers Wednesday, the company said its
costs had gone up since the beginning of the COVID-19 pandemic due to increases
in hourly wages, the hiring of workers and construction of more warehouses.



It said it had absorbed costs whenever possible, and only increased fees to
address permanent costs and to be competitive with other providers. Amazon
competitors FedEx and UPS both have fuel surcharges.

"In 2022, we expected a return to normalcy as COVID-19 restrictions around the
world eased, but fuel and inflation have presented further challenges," the
company said in the notice.

Federal data released Tuesday showed inflation jumped 8.5% in March, its fastest
pace in more than 40 years. Gasoline prices have rocketed 48% in the past 12
months.

Though the company is blaming inflation and rising fuel costs for the surcharge,
Stacy Mitchell, co-director for the anti-monopoly group Institute for Local
Self-Reliance, criticized Wednesday's announcement, saying Amazon was taking
advantage of the moment.

"Amazon keeps increasing its fees on the sellers that have to depend on its
platform," Mitchell said, adding the new fees are a way "to take more money out
of the pockets of independent businesses and put it into Amazon's coffers."

Amazon's third-party marketplace, where independent merchants list millions of
their products, is a huge part of its business. It has about 2 million sellers,
and more than half the goods sold on Amazon.com come from these sellers.



Last year, sellers paid Amazon about $103 billion in fees, which made up about
22% of the company's revenue. The online retailer said the new fees will apply
to products ordered before April 28 but shipped and delivered after that date.
Amazon is also expected to release its earnings report from the first three
months of this year on April 28.

Amazon has long faced accusations of undercutting merchants that sell on its
platform by making "knock-offs," or very similar products, and boosting their
presence on the site.


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EXCLUSIVE


COUTLOOT LAUNCHES WHOLESALE PLATFORM TO CONNECT SELLERS TO MANUFACTURERS
DIRECTLY

Through this platform, sellers and merchants can source fast-moving products and
categories directly from the manufacturers, eliminating the need for middlemen
and increasing profit. The platform would immediately help over 7 lakh sellers
source their products faster and also boost their earnings three-fold.

 * Sagar Malviya
 * ET Bureau

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Mumbai: CoutLoot, a social commerce platform, has announced the launch of a
wholesale platform to connect millions of offline and online sellers directly to
small and medium manufacturers across the country.

Through this platform, sellers and merchants can source fast-moving products and
categories directly from the manufacturers, eliminating the need for middlemen
and increasing profit. The platform would immediately help over 7 lakh sellers
source their products faster and also boost their earnings three-fold.

Over the past year, Coutloot has helped over six lakh small street shops and
sellers expand their business online and generate seven times more income. “The
platform is tailor-made for smaller retailers and sellers coming from beyond the
metro cities of India. The wholesale SAAS platform will be integrated with other
platforms, short video apps, and logistics platforms to plug supply chain issues
for every small Indian business or creator. The sellers would be able to source
products directly from the manufacturers at smaller MoQs (minimum order
quantity) at the right price through which they can order even with small
working capital. It will also help them earn better margins,” Jasmeet Thind,
co-founder, CoutLoot said.



At present, all the bigger B2B platforms offer large quantities that smaller
sellers can’t afford. With the help of technology, CoutLoot is trying to get
into smaller MOQs to help smaller sellers and even creators start their own
online stores in smaller towns. Nearly 70% of Coutloot’s users are in smaller
towns, indicating a suppressed demand for online buying and selling in a more
local and trusted way.

The wholesale platform currently lets sellers choose from over 5000 SKUs from
across 240 small and medium factories in India. The plan is to have around
60,000 SKUs over the next two months.

Founded by Thind and Mahima Kaul, Coutloot is a platform that allows buyers and
sellers to bargain while shopping. It helps sellers list non-MRP
(non-fixed-price), unbranded local market products across fashion, electronics,
home decor, sports and other boxed categories that account for three-fourths of
India's retail market.

CoutLoot, which has raised around $12 million in total from Ameba Capital,
9Unicorns, Venture Catalysts and Astarc Ventures, expects to have a strong
network of three million sellers on its platform by end of 2022. The company has
also crossed 10 million downloads on both Android and iOS apps.



Unlike larger social commerce facilities like those provided by Facebook,
Instagram and Whatsapp, Coutloot’s dedicated app not just helps sellers with a
free store but also with logistics, payments, demand and supply chain services.
It plans to launch a ‘buy now pay later’ facility for sellers soon. CoutLoot
also offers first-of-its-kind bargaining- as a feature on its platform for both
sellers and buyers in their local language.


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EXCLUSIVE


N CHANDRASEKARAN FORMALLY TAKES CHARGE AS CHAIRMAN OF TATA DIGITAL

For Chandrasekaran, who was reappointed as the chairman of Tata Sons for another
five years in February, Tata Digital has been his brain child since he took
charge as Tata Sons chairman.

 * Kala Vijayaraghavan
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 * ETtech

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Mumbai/Bengaluru: Tata Sons executive chairman N Chandrasekaran has now formally
taken charge as chairman of Tata Digital which had announced the launch of its
much-hyped super app Tata Neu on April 7.

For Chandrasekaran, who was reappointed as the chairman of Tata Sons for another
five years in February, Tata Digital has been his brain child since he took
charge as Tata Sons chairman.

He has been closely involved in its growth plans from the beginning as the
Mumbai-based conglomerate eyes to make a dent in the Indian ecommerce universe.



Chandrasekaran’s formal appointment is of significance considering its future
plans of raising funds from external investors. At present, Tata’s digital
strategy is being spearheaded by Pratik Pal, CEO along with Mukesh Bansal,
founder of Cultfit-who previously founded fashion ecommerce startup Myntra.
"Chandrasekaran helming the entity is also a kind of additional reassurance for
external investors about the kind of attention and focus that the digital
initiative will get in the Tata system" said an official close to the
development.

Tata Sons confirmed the appointment.

People involved in building Tata Neu have echoed Chandrasekaran’s involvement in
the project.

In fact, in his first interaction after the Tatas acquired BigBasket, cofounder
and CEO Hari Menon had told ET that it was Chandrasekaran who first called him
in July 2020 and proposed to discuss a majority investment in the egrocery firm.

“Not just Mukesh and Pratik, but he has been involved with new-age founders and
other key executives at Tata Digital while building out the Tata Neu up. This is
also a big opportunity for him to showcase how he is taking an traditional
Indian conglomerate into the fast growing internet economy in India,” a person
who has worked with the Tata Sons chairman said.



ET had reported on February 17 saying Tata Sons had written to the Ministry of
Corporate Affairs seeking approval to appoint Chandrasekaran in few more group
firms as their board chairperson.

Tata Digital has recently sought additional funds from the holding company, Tata
Sons, to support its growth plans of ambitious digital retail initiative as
negotiations with global firms are taking longer to materialise because of
geopolitical issues and a broader slowdown in big-ticket funding deals.

The group is expected to make an “interim investment” of an estimated $500
million as working capital requirements. Tatas have been in talks with global
investors, including some sovereign and pension money managers, to fund its
digital foray.

Tata Digital has estimated a valuation of over $18 billion for the digital
entity, which includes Big Basket, online pharma store 1mg, Croma and Tata Cliq.
Investors are however keen to assess the scale of revenue or gross merchandise
value that Tata Digital can offer within the first year.

A bunch of long-term investors including Canada Pension Plan Investment Board,
Singapore’s Temasek Holdings, SoftBank Group, Abu Dhabi Investment Authority and
two European money managers were among those approached for a potential deal.

Post Tata Neu’s launch last week, it would be critical to see how general
consumers adopt to the ecommerce offering of the salt-to-steel conglomerate. The
app was being tested with access limited to Tata group employees, for the past
several months.

In a statement, Tata Digital, which houses Tata Neu, said the super app
“seamlessly blends product commerce, service commerce and financial services
into a consumer-first, future-ready, integrated experience”.

Tata Neu has been launched during the Indian Premier League (IPL) and Tatas are
the title sponsor of the tournament. Tata-owned brands including BigBasket, 1mg,
Croma, AirAsia, IHCL, Qmin, Starbucks, Tata Cliq, Tata Play, and Westside will
be available on the super app initially. Vistara, AirIndia, Titan, Tanishq, and
Tata Motors will be added soon, said Chandrasekaran.


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EXCLUSIVE


BIGBASKET GETS RS 1,000 CRORE INVESTMENT

Tata Digital owns an around 64% stake in Supermarket Grocery. Innovative Retail
Concepts was made a subsidiary of Supermarket Grocery after Tata Digital
acquired the BigBasket operator, ET had reported in October last year.

 * ETtech

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Bengaluru: Tata-owned Innovative Retail Concepts, which runs online grocery
platform BigBasket, has received a capital infusion of Rs 1,000 crore from
holding company Supermarket Grocery Supplies, regulatory filings sourced from
business intelligence platform Tofler showed.

The transaction was approved on March 31.

Tata Digital owns an around 64% stake in Supermarket Grocery. Innovative Retail
Concepts was made a subsidiary of Supermarket Grocery after Tata Digital
acquired the BigBasket operator, ET had reported in October last year.



The investment comes at a time when Tata Digital has finally launched its
superapp, Tata Neu. BigBasket is one of its key online businesses. Besides the
egrocery business, BigBasket is providing key logistics infrastructure to
ecommerce delivery of other Tata brands too.


ET reported on March 23 about how the Bengaluru-based firm was planning to offer
multiple models of delivery to consumers including one-hour delivery of BB
Express besides the recently launched 10-20 minutes delivery service, BB Now.

Tata Digital, which acquired new-age businesses like BigBasket and 1mg, received
Rs 5,882 crore from Tata Sons to build its war chest against rivals like
Walmart-owned Flipkart, Amazon India and Reliance Industries’ JioMart.

It now competes with the likes of upstart Zepto, Swiggy’s Instamart, Dunzo Daily
and Blinkit in the quick commerce space.

BigBasket is the largest online grocer in the country. In an interaction with ET
last month, chief executive Hari Menon said he was bullish on one-hour delivery,
and his 20-minute delivery service was also expanding but 80% of the BigBasket’s
gross sales would still come from planned grocery purchases through its core
model, where it was mostly able to deliver products on the same day.



BigBasket is estimated to have closed the last financial year with gross sales
of $1.3 billion and is expected to grow its sales by 40% annually in the next
couple of years.

Besides a multi-mode approach to delivery, it has also set up franchise stores
for assisted shopping and unveiled its Fresho stores for selling fresh supplies
in November last year.

The company was recently valued at around $2.7 billion after a secondary share
sale, as reported by ET on March 11.


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EXCLUSIVE


ETSY SELLERS PROTEST FEES BY HALTING THEIR SALES FOR A WEEK

Cassidy and others are also taking issue with Etsy's advertising policy
implemented early in 2020. It requires sellers making at least $10,000 a year on
Etsy and who have have their products advertised on Etsy's offsite social media
and search-engine partners, to pay a 12% advertising fee on sales made through
the ads.

 * AP

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NEW YORK: Some vendors on Etsy say they are halting sales of their items on the
site for a week to protest a hike in the fees the crafts e-commerce marketplace
charges them.

Starting Monday, Etsy sellers must pay a 6.5% commission on each transaction, up
from the 5% in place since 2018.

A protest organizer, Kristi Cassidy, said thousands of Etsy sellers - a fraction
of the 5.3 million vendors on the site - have temporarily halted selling their
items. Cassidy, who has been selling gothic and punk costumes on Etsy since
2007, also launched a petition that so far has garnered more than 50,000
signatures from buyers and sellers. Roughly 20,000 are sellers. Cassidy said
it's hard to estimate the exact number of sellers that have actually stopped
selling on the site.



Cassidy and others are also taking issue with Etsy's advertising policy
implemented early in 2020. It requires sellers making at least $10,000 a year on
Etsy and who have have their products advertised on Etsy's offsite social media
and search-engine partners, to pay a 12% advertising fee on sales made through
the ads.

Cassidy also said that Etsy needs to crack down on resellers, people selling
mass-produced goods that they have not designed themselves.

Raina Moskowitz, chief operating officer at New York-based Etsy, said that the
new fee structure will enable the company to increase spending on marketing,
customer support and removing listings that don't meet its policies.

"Our sellers' success is a top priority for Etsy," she said in a statement.

Etsy, best known for selling handmade soap and jewelry, was one of the few
beneficiaries in the pandemic as more people stayed at home and either made
items or sought homemade items online.

But it's now under pressure to ramp up its offerings to compete better with
Amazon. As part of its growth strategy, it made two acquisitions last year. It
bought Depop, an app that's popular among young people looking to buy and sell
used clothing and vintage fashions from the early 2000s. It also acquired Elo7 -
known as the "Etsy of Brazil" for its popular marketplace for crafty creators.



Cassidy said the protest over fees is just the beginning. She told The
Associated Press she wants to actually "build an equivalent of a union" for Etsy
sellers and said she's been inspired by the union organizing activity heating up
at such companies as Amazon and Starbucks.

"As individual crafters, makers and small businesspeople, we may be easy for a
giant corporation like Etsy to take advantage of," Cassidy wrote on the online
petition. "But as an organized front of people, determined to use our diverse
skills and boundless creativity to win ourselves a fairer deal, Etsy won't have
such an easy time shoving us around."

The Rhode Island-based mother of two young children said she has seen her income
drop last year to one third of what it was in 2019, blaming in part to some of
the moves Etsy has made.


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EXCLUSIVE


SHOPIFY ANNOUNCES 10-FOR-1 STOCK SPLIT, PROPOSES FOUNDER SHARE FOR CEO

Shopify would also seek shareholder approval to authorize and issue a new class
of shares, called the Founder share, to Tobi Lutke, its chief executive officer
and founder.

 * Reuters

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Canadian e-commerce giant Shopify Inc on Monday announced a 10-for-1 split of
its class A and class B stock, joining a growing list of companies that have
split their shares to make them more attractive for investors.

Shopify would also seek shareholder approval to authorize and issue a new class
of shares, called the Founder share, to Tobi Lutke, its chief executive officer
and founder.

The proposal seeks to preserve the voting power of Lutke, as the Founder share
will provide him with a variable number of votes and that combined with his
previously owned shares from other classes would represent 40% of the total
voting power attached to all of Shopify's outstanding shares.



The proposal, however, said that Lutke will hold the Founder shares only until
he is an executive at Shopify or a board member.

While D.A. Davidson & Co analyst Tom Forte said the brokerage is generally
opposed to founder shares and believes they are not in the interest of
shareholders, he said he is willing to give Lutke the benefit of doubt due to
his "superb" track record.

"We believe it may protect the company from unwanted suitors, such as Salesforce
and Oracle, considering the recent weakness in the (Shopify) stock," Forte
added.

U.S.-listed shares of Shopify were marginally down at $602.61 in morning
trading, while they were slightly up at C$765 on the Toronto Stock Exchange.
They have lost more than half their value this year.

Currently, the company's class A shares carry one vote per share and class B
shares carry 10 votes per share.

Other stock split announcements this year came from e-commerce giant Amazon.com
Inc, Google-parent Alphabet Inc as well as videogame retailer GameStop Corp .
Tesla Inc also had said it would seek shareholder approval for a stock split.


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EXCLUSIVE


MEESHO LAYS OFF OVER 150 EMPLOYEES FROM GROCERY BIZ AS IT RESTRUCTURES VERTICAL

“As we look to boost efficiencies in the light of the integration, a small
number of full-time roles and certain third-party positions on six-month
contracts at Meesho Superstore were reassessed to remove redundancies with the
core business,” the company said in a blog post.

 * Pranav Balakrishnan
 * ETtech

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Bengaluru: E-commerce firm Meesho has laid off 150 employees from its grocery
business, which it recently restructured and rebranded as Meesho Superstore from
Farmiso earlier. The company said last week it would integrate the grocery
vertical into its main app, leading to talks of redundancies within the firm.

A Meesho spokesperson confirmed the layoffs to ET and said, “ About 150 full
time employees will be impacted by the restructuring of Meesho Superstore which
is aimed at bringing in efficiencies. The company is offering severance packages
and outplacement assistance to help those impacted secure new opportunities
outside the company.”

Sources close to the development told ET that around 400 employees will be
impacted by the company’s downsizing move. Meesho, however, denied this and said
only 150 of its staff were being asked to go.



“ The redundancies do not impact any positions at the core Meesho marketplace
business, where we continue to hire and grow talent,” a blogpost from Meesho
said on Monday.

The company said on April 6 that its grocery service, currently available in six
cities, would be scaled up to 12 cities by the end of the year.

Superstore has the highest number of employees in the company with a headcount
of more than 500, said a source within Meesho. The roles that have been affected
are city level managers, product, design and executives who worked on its user
interface.

An employee who was asked to go told ET on the condition of anonymity that the
company said it was pivoting its grocery business and would move to a different
model that won’t rely on city level executives. The person said none of the
employees had been given a prior notice about their terminations.

The layoffs are an attempt to reduce its cash burn, according to sources in the
know.

ET reported in September that Meesho was burning around $20-25 million per month
amid intense competition in the online retail market. The cash burn inched up to
as much as $50 million per month earlier this year, sources in the know said.

Superstore began as a pilot in Karnataka last year and was mainly targeted at
tier-II cities and customers with an emphasis on lower prices than the
convenience of faster delivery, which quick commerce players like Swiggy’s
Instamart, Zepto and others have been focusing on.



Meesho competes with the likes of Dealshare, Citymall and Flipkart’s Shopsy,
which target users through community buying models.

The company has been in talks to raise fresh capital after having mopped up $570
million in September led by Fidelity.

Backed by SoftBank Vision Fund and Prosus (earlier Naspers), among others, it
has been in the market to raise new capital, but sources said it was yet to
close the fundraise.

Meesho, like many other well-funded startups, is looking to prune cash burn
after a year of eye-popping funding and skyrocketing valuations snagged by
Indian new age companies.

On March 26, ET reported that furniture rental company Furlenco let go of 180
employees and on April 7, we reported that Unacademy had laid off over 1,000
employees.


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EXCLUSIVE


CLOUDTAIL SENDS TERMINATION NOTICE TO VENDORS

The notice from the Cloudtail CEO marks the first instance of the Prione
subsidiary formally informing vendors of shutting Cloudtail.

 * Digbijay Mishra
 * ET Bureau

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Bengaluru: Cloudtail, one of the largest sellers on Amazon India, has sent out
contract termination notices to a bunch of vendors who were working with the
firm, saying that it was in the process of ceasing the listing and sale of
products on the Amazon marketplace in “near future”.

"In light of the above, Cloudtail proposes to sell/liquidate its
existing/residual inventory including the products procured from you. Please
also treat this communication as a formal notice of termination of the
agreement,” Cloudtail managing director and chief executive Ranjit Babu recently
wrote to the vendors. He assured the suppliers to honour all purchase orders
raised by it until April 18, 2022.

ET has seen the emails received by multiple sellers.



Emails seeking comment sent to Amazon India and Prione Business Services, which
operates Cloudtail, did not elicit any response till the time of going to the
press on Monday.

The letter from Cloudtail has caused anxiety among many of the small-scale
sellers as they are yet to be told where their current inventory and businesses
would be moved to. Cloudtail managers have assured these sellers that they would
hear soon from the company, but they did not provide any additional details on
the timelines, two such vendors to the company told ET.

“We received the notice last week and tried contacting our respective managers
from Cloudtail but there is no clarity as to how the transition will take
place,” one of the merchants said. “I am aware that some of the vendors moving a
larger volume of goods through Cloudtail have already got new agreements on
transfer of business to other seller entities.”

“As per our contracts, they (Cloudtail) had said they will give us a notice
before terminating and that has now come. Their managers are saying that
Cloudtail has 6,000-7,000 vendors and thus the transfer process for smaller
vendors will happen gradually and take relatively longer,” another seller told
ET.



ET reported on March 28 about Cloudtail starting to ship its inventory in top
categories like electronics, health and personal care to some of the existing
big sellers on Amazon India.

The notice from the Cloudtail CEO marks the first instance of the Prione
subsidiary formally informing vendors of shutting Cloudtail.

Prione is a 76-24 joint venture between Infosys founder NR Narayana Murthy's
Catamaran Ventures and Amazon. Amazon has proposed to buy Catamaran Ventures’
stake and the deal has been cleared by the Competition Commission of India.

ET reported on March 12 that Amazon had internally decided to close Cloudtail’s
seller business on Amazon following the clearance from the antitrust regulator.

VRP Telematics, Rocket Kommerce and Cocobulu Retail are among the leading seller
firms where Cloudtail is shipping its existing inventory to, ET has reported.
Amazon’s decision is because of the current regulations that do not allow an
entity running an online marketplace and its group companies to own equity in
any of the sellers on the platform, or to have control over their inventory.

Amazon, previously, held a 49% stake in Cloudtail, which was set up in 2014 as a
joint venture between Amazon and Catamaran. Amazon was forced to trim the stake
to 24% in 2019 to comply with foreign direct investment regulations for
ecommerce. With CCI’s clearance to Amazon buying Catamaran’s 76% in parent
Prione, Cloudtail cannot legally be a seller on the India marketplace of the US
etailer.

With Cloudtail formally informing sellers of ceasing operations, it would be a
significant end for the seller firm, which played a critical role in the initial
success of Amazon in India by moving large portions of orders and delivering
them to consumers in one-to-two days.

In the financial year 2021, its revenue increased by more than 45% to Rs 16,639
crore with a profit of more than Rs 182 crore. Cloudtail was credited for
shipping over 50% of total sales on Amazon India at one point before the
government tightened rules in 2016, stipulating that a single seller cannot
account for more than 25% of total sales on an online marketplace.

Similar to Cloudtail, Amazon had set up Frontizo Business Services in a joint
venture with the Patni group in 2017. Frontizo is involved in offering customer
support services to Amazon India, and its subsidiary Appario Retail is a large
seller on the Amazon India marketplace. Appario Retail recorded revenue of Rs
14,628 crore in FY21 with a profit of Rs 54 crore.


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