Govt De-Fies crypto hoarders; India’s 100th startup unicorn
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Also in this letter:
■ Open turns unicorn as IIFL Finance plans neobanking foray
■ Zepto approaches unicorn status with $200M funding
■ Tatas is talks for semiconductor packaging foray
Programming note: There will be no edition of ETtech Top 5 on May 3 and ETtech Morning Dispatch on May 4 on account of Eid. Best wishes to you and your family!
De-Fi under taxman’s lens; govt set to levy additional taxes
![decentralised finance decentralised finance](https://img.etimg.com/photo/msid-91275530/decentralised finance.jpg)
Indians earning interest on their crypto from platforms outside India have come under taxman’s scrutiny, two people familiar with the development told us.
What’s happening? The tax department is looking to impose an additional tax deducted at source (TDS) and equalisation levy on such transactions and interest income generated by Indians, they said.
The government is looking to levy 20% TDS on such transactions and income, especially when one of the parties involved has not submitted their PAN card details, a person aware of the development said.
CBDT has reached out to some tax experts in this regard to figure out how interest income from cryptocurrencies could be brought under the tax lens.
The government is also exploring whether these transactions could attract an equalisation levy.
DeFi in the spotlight: The move comes at a time when decentralised finance (DeFi) is fast gaining traction.
DeFi is an alternative financial ecosystem built on blockchains that can be used for everything from remitting money to buying insurance and even borrowing against crypto.
Many Indians have taken to earning interest income by depositing cryptocurrencies for a fixed period with DeFi platforms.
Quote: “For the tax department tracking of these transactions is very crucial. The government could slap a 5% additional tax in the form of equalisation levy on any transaction where one of the persons is not based in India and has not submitted their PAN card or other tax details,” said Girish Vanwari, founder of tax advisory Transaction Square.
Open turns unicorn as IIFL Finance charts neobanking foray
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IIFL Finance is preparing to foray into the neobanking segment and will set up a joint venture (JV) with neo-banking fintech firm Open following after investing $50 million in the startup on Monday, a top company executive told us.
Open’s existing investors Temasek, Tiger Global and 3one4 Capital also participated in the funding round. The company said in a press statement later in the day that it had become the 100th Indian unicorn.
![Indian startup unicorns Indian startup unicorns](https://img.etimg.com/photo/msid-91275631/Indian startup unicorns.jpg)
JV details: IIFL Finance and Open will own 51% and 49%, respectively in the new neobank JV, the companies told ET.
- The JV, IIFL Open Fintech, is expected to cater to Mumbai-based IIFL’s captive customers, as well as newer micro, small and medium enterprises (MSMEs).
- As a part of its offerings, the JV is expected to provide a bank account, chequebook as well as point-of-sale (PoS) terminals to small enterprises. It will also look to cross-sell other products of the IIFL Group.
- The venture is also expected to provide loans to Bengaluru-based Open’s existing base of customers through IIFL Finance.
- The JV is expected to disburse Rs 10,000 crore worth of business loans over the next 18 months, IIFL said.
New unicorn: With this, Open becomes the 15th Indian startup unicorn of 2022. We reported last December that the company was looking to raise around $100-150 million in its next funding round but those talks didn’t lead to a deal and the company has now closed a $50 million round.
Zepto approaches unicorn status with $200M funding
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Quick commerce startup Zepto has closed a $200 million funding round led by existing investor YC Continuity Fund, the growth-stage fund run by Silicon Valley’s famed accelerator Y Combinator.
Its valuation hit $900 million in the latest round. This is a nearly 60% jump from its previous fundraise last December, when it was valued at $570 million.
New investor Kaiser Permanente joined the latest round along with existing backers including Nexus Venture Partners, Glade Brook Capital, and Lachy Groom.
![Zepto Zepto](https://img.etimg.com/photo/msid-91275640/Zepto.jpg)
Rapid fire: The quick commerce segment has seen intense competition of late. Food delivery platform Swiggy has earmarked $700 million to scale up its quick commerce platform Instamart, chief executive Sriharsha Majety told us last December.
Another Zepto rival, Gurugram-based Blinkit (earlier known as Grofers), is in advanced stages of closing a merger with food delivery app Zomato after struggling to raise new capital from external investors amid increased competition.
ETtech Done Deals
■ Toothsi, a dental startup, has raised $40 million in funding from Eight Roads Ventures, South Korea-based Paramark and IIFL, among others. It said it would use the funds to further its geographic penetration and for category expansion.
■ Social commerce startup Frendy has raised Rs 23 crore in a funding round led by New York’s Marv Capital and UK-based Centera Fund, with participation from existing investor Desai Family Office and new investors via LetsVenture Angel Fund.
TWEET OF THE DAY
Tata Electronics is talks for semiconductor packaging foray
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Tata Electronics is in talks with large global semiconductor companies and outsourced semiconductor assembly and test (OSAT) vendors to foray into advanced packaging of semiconductor components, said Raja Manickam, the chief executive of its OSAT arm.
OSAT vendors provide third-party integrated circuit packaging and test services.
Tata Electronics has surveyed four states – Tamil Nadu, Karnataka, Telangana and Odisha – as prospective locations to house its facility, Manickam told us. It already has a facility that’s up and running in Hosur, Tamil Nadu.
“We’ve written up a report on pros and cons in all the four states. Hopefully, by mid-May, we’ll make an announcement on location,” Manickam said. “We have not finalised or signed up with any of them yet but we will get into advanced packaging for sure,” Manickam said.
Last year, Tata Sons chairman N Chandrasekharan said the conglomerate planned to foray into semiconductor manufacturing.
Govt’s push: The government has unveiled a $10 billion (about Rs 76,000 crore) plan to attract chipmakers from around the world to set up shop in India. Three consortiums — Vedanta-Foxconn, ISMC, and IGSS Venture — have applied for incentives to manufacture chips and set up a fab.
Coinbase hires former Snap India head to lead emerging markets
![Durgesh Kaushik. Durgesh Kaushik.](https://img.etimg.com/photo/msid-91275708/Durgesh Kaushik..jpg)
Coinbase has hired Durgesh Kaushik, the former head of Snap India, to lead the company’s growth in emerging markets. Coinbase confirmed Kaushik’s appointment.
We reported on April 30 that Kaushik, who joined Snap Inc. in 2019, had quit the company.
Durgesh is joining Coinbase to scale its operations in India and to support its entry into other markets in Asia Pacific, Europe, the Middle East and Africa, and the Americas.
India growth story: In the past year, Snap has seen India’s daily active users grow 150% year-on-year, hitting 100 million monthly active users, Evan Spiegel, its cofounder and CEO, told us.
We reported on March 21 that Coinbase was hiring for multiple senior roles in India including a regional managing director.
Coinbase has plans to triple its employee base in India to 1,000 and continue investing in web3 startups, its cofounder Brian Armstrong said on April 4.
Other Top Stories By Our Reporters
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■ TN, Netherlands to sign MoU on agritech: The Tamil Nadu government will soon sign a memorandum of understanding (MoU) with the government of The Netherlands on a wide range of industries from agritech to water management to pave the way for closer collaboration on key projects, the ambassador of The Netherlands, Marten van den Berg, told us on Monday.
■ TCS achieves net zero emissions across Asia Pacific: Tata Consultancy Services has achieved net zero emissions across its Asia Pacific locations, ahead of its 2030 target, a senior executive told ET. Last year, the company announced plans to reduce its absolute greenhouse gas emissions and achieve net zero emissions by 2030.
Global Picks We Are Reading
■ Hacking Russia was off-limits. The Ukraine war made it a free-for-all (The Washington Post)
■ Today I learned about the ‘secret’ Twitter DM inbox — here’s how to see it (The Verge)
■ Another firing among Google’s AI brain trust, and more discord (NYT)
Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.