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Also in this letter:
■ IT companies focus on small deals in a sensitive environment
■ The next financial crisis will come from crypto, says the RBI governor
■ Foxconn’s India unit received a 357-crore incentive
As startup hiring falls, job tech companies hit non-tech firms.
As new age startups slow to hire, edtech and white-collar startups are hitting non-tech firms.
Back to the drawing board: Edtech startups such as Masai School, Simpliern and Revel are reworking their approach due to the job market slowdown, particularly for roles such as software development, sales and marketing.
Kamal Karanth, founder of specialist staffing firm Xpheno, said: “The funding winter and the looming threat of recession have put the brakes on hiring plans in the startup sector.” “Recruiting funds have cooled after more than 18 months of intense action by investors serving venture capital (VC) funds and advice to funded tech startups.”
Startups like Swiggy, Meesho, Udaan, Cars24 and others have laid off jobs this year to save money.
In numbers: In October, nearly 11,000 active monthly job openings were posted on startups alone, Xpheno data shows. This contrasts sharply with December 2021’s peak of 40,000 listings.
Who is doing what? Masai School and Simplilearn are actively trying to expand their recruitment base on the IT front to larger non-tech companies and system integrators.
These companies offer tech-focused courses in web development, backend development, data science, digital marketing, machine learning, DevOps and business analytics, among others.
Unacademy’s Relevel can’t keep up with growth expectations, doing fewer than 250 placements per month, a person familiar with the matter told us. It relies on a pool of late-stage and early-stage startups to hire and, like its peers, is trying to tap into other types of companies.
IT companies tend to focus on small deals in a sensitive environment
Due to the cautious macroeconomic environment in major geographies such as the US and Europe, clients of IT services companies are focusing on smaller deals.
driving news; Discounts in the annualized contract value (ACV) range of more than $100 million (Rs 800 million) fell to a five-year low, accounting for just 10% of deal activity in the July-September quarter, the ISG report said.
Historically, over 20% of the value of Mega Awards is managed ACV in the IT and Business Services sector. However, by the third quarter of 2022, this percentage has dropped to 10 percent.
In fact, awards between $5 million and $19 million showed the largest year-over-year growth. This is also reducing the overall impact of the mega awards, says ISG.
There were a total of three mega deals in the third quarter calendar year, with a combined ACV of $705 million. Since 2017, the sector has seen little. This means the sector is growing, but the growth is coming from smaller awards, while mega awards are relatively flat, the report says.
Year-to-date, 18 mega awards were awarded with a total ACV of $2.7 billion, up from $2.5 billion from 13 awards a year ago, according to ISG. This shows that economic worries hit home between July and September, analysts said.
Quote: “When the technology cycle is unpredictable, customers prefer to spend in pockets where they can see immediate results,” said Mrinal Rai, principal analyst at ISG. This trend is observed in all industries.
Rai expects that if this trend sees success, some of these smaller deals could turn into bigger deals.
Next financial crisis will come from crypto, says RBI governor
RBI Governor Shaktikanta Das said on Wednesday that the next financial crisis will come from private cryptocurrencies if they are allowed to grow unchecked.
Speaking at the BFSI Insight Summit 2022 organized by Business Standard, Das still maintains that cryptocurrencies should be banned as they lack fundamental value and pose a threat to macroeconomic and financial stability.
Digital Rupee Pilots: The RBI has long considered private cryptocurrencies a threat to stability and opposed legalizing their use.
To combat them, the central bank recently launched pilots of its own digital currency, the digital rupee.
The pilot for the retail version of the digital rupee began on December 1 and will cover selected locations within a user group consisting of participating customers and merchants.
The mass version pilot started a month ago, on November 1, in partnership with nine banks. In this pilot, the digital rupee will be used to settle secondary market transactions in government securities.
The Amazing Year of Crypto: Bitcoin has lost 60% of its value and the broader crypto market is down $1.4 trillion this year due to rising interest rates, risk concerns and corporate failures, including Sam Bankman-Fried’s FTX.
Cryptocurrencies saw a net worth of $498 million in 2022, compared to $9.1 billion in 2021, according to data from digital asset manager CoinShares.
TWEET OF THE DAY
Foxconn’s India unit received a Rs 357-crore incentive hike
The Indian division of Foxconn, the world’s largest electronics technology manufacturer, is set to become the first global company to receive SOAP under India’s Product Linkage Incentive (PLI) mobile manufacturing programme.
Details: An empowered committee headed by NITI Aayog CEO Parameswarn Iyer has approved incentives worth Rs 357.17 crore.
The PLI scheme for large-scale electronics manufacturing – aimed at offloading electronics manufacturers from China – has attracted an investment of Rs 4,784 crore till September 2022 and generated a total production of Rs 2,03,952 crore, which includes exports worth Rs 80,769 crore. According to the government statement
spread on the cards; ET had earlier announced that Foxconn had infused $500 million in its Indian unit and much of this is expected to help expand its smartphone manufacturing capabilities in India.
The company is building large hotels near its facility outside Chennai, Tamil Nadu, that can accommodate up to 60,000 workers, to replicate its extensive presence in China.
Digital economy grew 2.4x faster than overall economy in 2014-19: RBI
India’s digital economy grew 2.4 times faster than the overall economy from 2014 to 2019 due to strong technology adoption, according to a research paper published in the latest RBI Bulletin.
“India’s digital economy has grown 2.4 times faster than India’s economy, with strong linkages with non-digital sectors, and the digital output multiplier has increased over time. In a digital-dependent economy,” the central bank said in the announcement.
Size estimation: The RBI study aims to measure the size of India’s digital economy and how it interacts with other non-digital sectors.
According to a research paper conducted following the Asian Development Bank’s 2021 framework, the core digital economy is estimated to be $0.11 trillion or 5.40% or $1.99 trillion of the Indian economy’s gross value added (GVA) in 2014.
This has increased by more than 15% annually until 2019, when the digital economy contributed 8.5% of the economy’s GVA.
Other major reports by our reporter
WinZO looks to double its workforce: Game technology company Winzoo is looking to hire in technology, animation and design and business roles this year, and has visited 30 campuses as part of a recruitment drive. So far, the firm has issued 50 offers and expects to issue 30 more by the end of the allocation period. This year, it plans to double its team strength to increase its presence in the global market. Currently, it has about 150 employees.
Court acquits Xiaomi India FD worth Rs 3,700 crore: The Karnataka High Court on August 11 has placed a seizure order of Rs 3700 crore in fixed deposit accounts of Xiaomi India suspended by the Deputy Commissioner of Income Tax, Bengaluru.
Over 7,600 rides and counting on Kochi’s open mobile network. Since its launch in July 2021, commuters have availed 7,673 rides on the Kochi Open Mobility Network (KOMN), with an average of 35 daily trips. This is important because KOMN will be affiliated with the government-backed Open Network for Digital Commerce (ONDC).
The international elections we are reading
■ Indian Rural Sextortion Scammers (Rest of World)
■ Case indicating FTX failure (wire) classes
■ Five things you need to know about nuclear fusion and if it will move your house (The Washington Post)
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