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Zomato Shares Fall Over 20 Percent After Blinkit Acquisition Announcement

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By Agencies | Updated: 4 July 2022

Food aggregator Zomato announcement of the acquisition of instant delivery service platform Blinkit has not gone down well with the investors as the former’s shares tumbled over 20 percent since the announcement.

The food aggregator company Zomato’s Board of Directors on June 24 approved a proposal to acquire the cash-strapped quick commerce company Blinkit for Rs 4,447 crore. Blinkit was earlier known as Grofers.

Zomato said quick commerce increases the company’s potential market, the potential profit pool and also makes the business more defensible.

Besides, the peak demand times for food delivery are also complementary to the quick commerce demand peaks in non-meal times. It believes the acquisition will help increase Zomato’s hyperlocal delivery fleet utilisation and reduce the cost of delivery.

“In today’s funding winter, people have increased their scrutiny on profitability, Zomato net losses tripled in the recent quarter. Investors are not taking it kindly the fact that a loss-making company is acquiring another company which might be subjected to strict govt regulations and has not yet demonstrated path to profitability,” Yashvardhan Singh, principal associate at Sarvaank Associates, had said.

On Friday, the shares of Zomato closed at Rs 54.9, down around 23 percent since the announcement of the Blinkit acquisition.

So far in 2022, it declined over 60 percent, data showed.

Even though the company reported healthy gains on its listings on the stock exchanges in July last year, it could not capitalize on it further.

The company’s current market capitalisation is worth Rs 43,147 crore, National Stock Exchange data showed.

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Just Eat Takeaway Grabs Cash, Sells Brazil’s iFood to Prosus for EUR 1.8 Billion

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By Reuters | Updated: 19 August 2022

Technology investor Prosus said on Friday it would pay up to EUR 1.8 billion (roughly Rs. 14,500 crore) to buy the 33 percent stake in Brazil’s iFood from rival Just Eat Takeaway.com that it does not already own. The deal will give Prosus sole control of iFood, considered one of the most attractive food delivery businesses in one of the world’s biggest markets. It also gives Takeaway, which is racing to achieve profitability, a vital cash infusion.

Prosus said it would pay EUR 1.5 billion (roughly Rs. 12,100 crore) in cash and an additional consideration of up to EUR 300 million (roughly Rs. 2,400 crore) for the 33 percent iFood stake. The price amounts to about half the market capitalisation of Takeaway, Europe’s largest meals delivery company, and more than the market value of its rival Deliveroo.

“Increasing our stake to full ownership is a demonstration of our committed and disciplined approach to investment and reflects our confidence in the long-term potential of iFood,” said Prosus Chief Executive Bob van Dijk in a statement.

Takeaway, whose shares have lost two thirds of their value over the past year, had long been seeking to sell the iFood stake, but had been unable to reach terms.

While they were partners in iFood, Prosus and Takeaway had fought bitterly during a 2020 takeover battle for Just Eat, which Takeaway eventually won.

Takeaway CEO Jitse Groen said in August 2021 he had turned down a EUR 2.3 billion (roughly Rs. 18,500 crore) offer for iFood from an unnamed bidder as “inadequate”, as valuations of meals companies soared amid the COVID-19 pandemic.

The price Takeaway is receiving now “represents an equity multiple of over five times” the company’s investments, it said.

According to a disclosures in Takeaway’s half year results last month, iFood had a net loss of about EUR 120 million (roughly Rs. 1,000 crore) in the first half of 2022, although sales grew 28 percent. Prosus said iFood was making about 70 million deliveries per month.

Takeaway said it expected the iFood deal to close in the fourth quarter and that it was continuing to explore “the partial or full sale” of Grubhub, the U.S. meals delivery company it bought last year for $7.3 billion (roughly Rs. 58,200 crore).

© Thomson Reuters 2022

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Indian Apps, Games Saw 200 Percent Growth in Monthly Active Users on Google Play in 2021: Details

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By Press Trust of India | Updated: 18 August 2022

Indian apps and games saw a 200 percent increase in active monthly users in 2021 compared to 2019, a Google Play official said in a blog post on Thursday. Google Play Partnerships Director Aditya Swamy in the blog said there has been an 80 percent increase in consumers spends in 2021 compared to 2019 on Google Play. “Indian apps and games saw a 200 percent increase in active monthly users and an 80 percent increase in consumers spends in 2021 compared to 2019 on Google Play. Local developers are also finding global audiences with Indian apps and games seeing a 150 percent increase in time spent by users outside India in 2021 compared to 2019 on Google Play,” Swamy said.

Swamy said that India has crossed a major milestone of 100 unicorns — a privately held startup valued at over $1 billion (roughly Rs. 7,900 crore) — and a significant portion of these were businesses powered by apps.

He said the enterprising and thriving ecosystem of developers and startups in the country has helped Google Play, which has completed 10 years in India, create a vibrant ecosystem of amazing apps across categories.

“Especially in the past two years, we have seen apps across categories such as education, payments, health, entertainment, and gaming witness stupendous growth,” Swamy said.

He said that there has been great momentum in gaming too with Ludo King becoming one of the first Indian games to cross 500 million downloads.

Swamy said more than 2.5 billion people in over 190 countries use Google Play every month to discover apps, games, and digital content and more than two million developers work with the organisation to build their businesses and reach people across the globe.

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Asset Managers Tighten Controls on Personal Communication Amid ‘WhatsApp’ Crackdown on Banks

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By Reuters | Updated: 18 August 2022

Asset managers are tightening controls on personal communication tools such as WhatsApp as they join banks in trying to ensure employees play by the rules when they do business with clients remotely.

Regulators had already begun to clamp down on the use of unauthorised messaging tools to discuss potentially market-moving matters, but the issue gathered urgency when the pandemic forced more finance staff to work from home in 2020.

Most of the companies caught in communications and record-keeping probes by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have been banks – which have collectively been fined or have set aside more than $1 billion (roughly Rs. 8,000 crore) to cover regulatory penalties.

But fund firms with billions of dollars in assets are also increasing their scrutiny of how staff and clients interact.

“It is the hottest topic in the industry right now,” said one deals banker, who declined to be named in keeping with his employer’s rules on speaking to the media.

Reuters reported last year the SEC was looking into whether Wall Street banks had adequately documented employees’ work-related communications, and JPMorgan was fined $200 million in December for “widespread” failures.

German asset manager DWS said last month it had set aside EUR 12 million (roguhly Rs. 100 crore) to cover potential US fines linked to investigations into its employees’ use of unapproved devices and record-keeping requirements, joining a host of banks making similar provisions, including Bank of America, Morgan Stanley, and Credit Suisse.

Sources at several other investment firms – described in the financial community as the ‘buy-side’ – including Amundi, AXA Investment Management, BNP Paribas Asset Management, and JPMorgan Asset Management, told Reuters they have deployed tools to keep all communications between staff and clients compliant.

Spokespeople for the SEC and CFTC declined to comment on whether their investigations could extend beyond the banks, but industry sources expect authorities to cast their nets wider across the finance industry and even into government.

Last month Britain’s Information Commissioner’s Office (ICO), the country’s top data protection watchdog, called for a review of the use of WhatsApp, private emails and other messaging apps by government officials after an investigation found “inadequate data security” during the pandemic.

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Regulations governing financial institutions have progressively been tightened since the global financial crisis of 2007-9 and companies have long recorded staff communications to and from office phones.

This practice is designed to deter and uncover infringements such as insider trading and “front-running,” or trading on information that is not yet public, as well as ensuring best practice in terms of treatment of customers.

But with thousands of finance workers and their clientele still working remotely after decamping from company offices at the start of the pandemic, some sensitive conversations that should be recorded remain at risk of being inadvertently held over informal or unauthorised channels.

Brad Levy, CEO of business messaging software firm Symphony, said concerns on managing that risk had driven a surge in interest for software upgrades that make conversations on popular messenging tools including Meta Platforms’ WhatsApp recordable.

“Most believe the breadth of these investigations will go wider as they go deeper,” Levy said.

“Many markets participants have retention and surveillance requirements so are likely to take a view, including being more proactive without being a direct target.”

He said Symphony’s user base has more than doubled since the pandemic to 600,000, spanning 1,000 financial institutions including JPMorgan and Goldman Sachs.

Symphony peer Movius also said its business lines specialising in making WhatsApp and other tools recordable have more than doubled in size in the space of a year, with sales to asset managers a growing component.

“Many on the buy-side have recognised that you can’t just rely on SMS and voice calls,” said Movius Chief Executive Ananth Siva, adding that the company was also seeking to work with other highly-regulated industries including healthcare.

Movius software integrates third-party communications tools such as email, Zoom, Microsoft Teams, and WhatsApp into one system that can be recorded and archived as required, he said.

Amundi, AXA IM, BNPP AM and JPMorgan Asset Management all confirmed they had adopted Symphony software but declined to comment on the full breadth of services they used or when these had been rolled out.

Amundi and AXA IM both confirmed they used Symphony services for team communications, while AXA IM also said they used it for market information.

Amundi, BNPP AM, and JP Morgan AM declined to comment on whether they thought regulators would seek to investigate record keeping at asset managers after enforcement actions against the banks were completed.

A spokesperson for BNPP AM said it had banned the use of WhatsApp for client communications due to compliance, legal and risk considerations including General Data Protection Regulation (GDPR).

© Thomson Reuters 2022

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UPI to Provide Hassle-Free QR Code-Based Transactions to Indians in UK

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By Press Trust of India | Updated: 18 August 2022

Expanding further outside India, the indigenously developed real-time payments solution UPI will foray into the UK market starting with QR code-based transactions.

The NPCI International Payments Ltd (NIPL) has forged a partnership with payments solutions provider PayXpert to internationalise the acceptance of its payment solutions in the UK.

NIPL is the wholly-owned subsidiary of National Payments Corporation of India (NPCI) which developed the world’s largest real-time payment solution the Unified Payments Interface (UPI) and the RuPay card scheme.

“This collaboration will make the Indian payment solutions available in the UK on all PayXpert’s android point-of-sale (POS) devices for in-store payments, starting with UPI-based QR code payments and later integrating the possibility for RuPay card payments,” NPCI said in a release on Thursday.

Counted as one of the most successful Real-Time Payments (RTP) systems globally, UPI clocked a volume of $940 billion (roughly Rs. 74,81,800 crore) in 2021, equivalent to 31 per cent of India’s GDP.

RuPay is the domestically developed global card payment network in India with over 70 crore (700 million) cards issued to date.

David Armstrong, Managing Director, PayXpert in the UK, said the foray of UPI and RuPay will open up a new field of opportunity for the company in the UK. It will further strengthen the capability of company’s solution for UK merchants, he said.

NPCI said over 5 lakh Indians, including over 1 lakh students, travel to the UK every year.

It said this number is expected to grow exponentially over the next few years.

The partnership will provide Indian travellers a familiar and convenient way to make payments in the UK.

NPCI said the UPI and RuPay payment options are set to benefit both consumers and retailers across the UK, while providing a welcome boost to commerce across the retail, hospitality and tourism sectors.

“With this development, Indians travelling to the UK will be able to enjoy the benefits of UPI’s payments platform through PayXpert’s POS devices. This collaboration is an important milestone for us and we plan on augmenting the facility of RuPay card payments in the near future,” Anubhav Sharma, Head International Business – Partnership, Business Development & Marketing, NPCI International, said.

In July 2021, Bhutan became the first country to adopt Unified Payment Interface standards for NPCI’s QR deployment, and the only country to accept RuPay cards.

Earlier in February this year, the UPI forayed into another neighbourhood country Nepal in a move aimed at bolstering real-time digital transactions.

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Facebook Fails to Detect Election-Related Misinformation in Ads for the Fourth Time: Report

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By Associated Press | Updated: 16 August 2022

Facebook failed to detect blatant election-related misinformation in ads ahead of Brazil’s 2022 election, a new report from Global Witness has found, continuing a pattern of not catching material that violates its policies the group describes as “alarming.”

The advertisements contained false information about the country’s upcoming election, such as promoting the wrong election date, incorrect voting methods, and questioning the integrity of the election — including Brazil’s electronic voting system.

This is the fourth time that the London-based nonprofit has tested Meta’s ability to catch blatant violations of the rules of its most popular social media platform— and the fourth such test Facebook has flubbed. In the three prior instances, Global Witness submitted advertisements containing violent hate speech to see if Facebook’s controls — either human reviewers or artificial intelligence — would catch them. They did not.

“Facebook has identified Brazil as one of its priority countries where it’s investing special resources specifically to tackle election related disinformation,” said Jon Lloyd, senior advisor at Global Witness. “So we wanted to really test out their systems with enough time for them to act. And with the US midterms around the corner, Meta simply has to get this right — and right now.”

Brazil’s national elections will be held on October 2 amid high tensions and disinformation threatening to discredit the electoral process. Facebook is the most popular social media platform in the country. In a statement, Meta said it has “ prepared extensively for the 2022 election in Brazil.”

“We’ve launched tools that promote reliable information and label election-related posts, established a direct channel for the Superior Electoral Court (Brazil’s electoral authority) to send us potentially-harmful content for review, and continue closely collaborating with Brazilian authorities and researchers,” the company said.

In 2020, Facebook began requiring advertisers who wish to run ads about elections or politics to complete an authorisation process and include “paid for by” disclaimers on them, similar to what it does in the US. The increased safeguards follow the 2016 US presidential elections, when Russia used rubles to pay for political ads designed to stoke divisions and unrest among Americans.

Global Witness said it broke these rules when it submitted the test ads (which were approved for publication but were never actually published). The group placed the ads from outside Brazil, from Nairobi and London, which should have raised red flags.

It was also not required to put a “paid for by” disclaimer on the ads and did not use a Brazilian payment method — all safeguards Facebook says it had put in place to prevent misuse of its platform by malicious actors trying to intervene in elections around the world.

“What’s quite clear from the results of this investigation and others is that their content moderation capabilities and the integrity systems that they deploy in order to mitigate some of the risk during election periods, it’s just not working,” Lloyd said.

The group is using ads as a test and not regular posts because Meta claims to hold advertisements to an “even stricter” standard than regular, unpaid posts, according to its help center page for paid advertisements.

But judging from the four investigations, Lloyd said that’s not actually clear.

“We we are constantly having to take Facebook at their word. And without a verified independent third party audit, we just can’t hold Meta or any other tech company accountable for what they say they’re doing,” he said.

Global Witness submitted ten ads to Meta that obviously violated its policies around election-related advertising. They included false information about when and where to vote, for instance and called into question the integrity of Brazil’s voting machines — echoing disinformation used by malicious actors to destabilise democracies around the world.

In another study carried out by the Federal University of Rio de Janeiro, researchers identified more than two dozen ads on Facebook and Instagram, for the month of July, that promoted misleading information or attacked the country’s electronic voting machines.

The university’s Internet and social media department, NetLab, which also participated in the Global Witness study, found that many of those had been financed by candidates running for a seat at a federal or state legislature.

This will be Brazil’s first election since far-right President Jair Bolsonaro, who is seeking reelection, came to power. Bolsonaro has repeatedly attacked the integrity of the country’s electronic voting system.

“Disinformation featured heavily in its 2018 election, and this year’s election is already marred by reports of widespread disinformation, spread from the very top: Bolsonaro is already seeding doubt about the legitimacy of the election result, leading to fears of a United States-inspired January 6 ‘stop the steal’ style coup attempt,” Global Witness said.

In its previous investigations, the group found that Facebook did not catch hate speech in Myanmar, where ads used a slur to refer to people of East Indian or Muslim origin and call for their deaths; in Ethiopia, where the ads used dehumanising hate speech to call for the murder of people belonging to each of Ethiopia’s three main ethnic groups; and in Kenya, where the ads spoke of beheadings, rape and bloodshed.

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YouTube Plans to Launch Online Store for Streaming Video Services: Report

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By Reuters | Updated: 13 August 2022

Alphabet’s YouTube is planning to launch an online store for streaming video services, the Wall Street Journal reported on Friday.

The company has renewed talks with entertainment companies about participating in the platform, which it is referring to internally as a “channel store”, the report said, citing people close to the recent discussions.

The platform has been in the works for at least 18 months and could be available as early as this fall, the report added.

Alphabet did not immediately respond to a Reuters request for comment.

With more consumers cutting the cord on cable or satellite TV and shifting to subscription-based streaming services, the planned launch will allow YouTube to join companies like Roku and Apple in a bid to gain a portion of the already crowded streaming market.

Earlier this week, the New York Times reported that Walmart has held talks with media companies about including streaming entertainment in its membership service.

Last month, YouTube collaborated with Shopify to allow merchants to sell through the video platform, as the Canadian company looks to tap into the growing number of content creators launching their own e-commerce stores. The partnership, which builds on an existing one with Google, will allow merchants to integrate their online stores with YouTube, which reaches over two billion monthly users. Shopify, which makes tools for merchants to set up their online stores, in June launched new features to help its clients sell to other businesses and on Twitter in a bid to counter a post-pandemic slowdown in online shopping.

© Thomson Reuters 2022

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