16 October, 2024
Airtel admits spam call 'menace' in India, deploys free AI shield to all users
Bharti Airtel, India’s second-largest telecom operator, said on Wednesday it’s rolling out an AI-powered spam detection solution to all its customers to curb the raging spam calls and messages problem in the country.
The company claims the solution is India’s first network-based, AI-powered, spam detection system. The feature will alert Airtel’s customers in real-time to suspected spam calls and text messages, and will automatically activate for all users at no additional cost. Airtel has about 387 million wireless subscribers in India.
Indians have long grappled with a relentless barrage of spam. A recent survey by startup LocalCircles found that a staggering 95% of users report receiving unwanted calls every day, with most facing at least three such intrusions a day. The government’s “Do Not Disturb” (DND) registry has proven largely ineffective, with 90% of registered users still plagued by spammers, the survey found.
Gopal Vittal, managing director and CEO of Bharti Airtel, said the telecom operator spent 12 months building the new spam detection system. “Spam has become a menace for customers,” he said.
Airtel said the new system employs a dual-layer protection mechanism, filtering communications at both the network and IT systems layers. Airtel’s data scientists apparently developed a proprietary algorithm that analyzes various parameters such as caller usage patterns, call frequency, and duration in real-time, the company said.
This AI-powered solution will process a staggering 1.5 billion messages and 2.5 billion calls daily, and can identify 100 million potential spam calls and 3 million spam SMS messages every day, the company said.
Beyond filtering, the AI system also scans SMS content for malicious links, cross-referencing against a centralized database of blacklisted URLs. This additional layer of protection aims to prevent users from accidentally clicking on suspicious links, a common vector for fraud and phishing attempts.
The system can also detect anomalies such as frequent IMEI changes, which are often indicators of fraudulent behavior, the company said.
India’s phone spam problem extends beyond mere annoyance. There’s also been a marked rise in Indians reporting calls from scammers impersonating government authorities, delivery services and credit providers.
India’s Oyo acquires Motel 6 for $525M
One of India’s largest startups, budget hotel company Oyo, has reached a deal to acquire G6 Hospitality, which operates Motel 6.
Oyo says it will pay Blackstone Real Estate $525 million in an all-cash transaction. The acquisition also includes the Studio 6 extended stay brand and is expected to close in the fourth quarter of this year.
The Indian startup opened its first U.S. location in 2019 and now operates more than 320 hotels across 35 states. Oyo is dramatically expanding its North American footprint by acquiring Motel 6 — arguably the best-known budget motel brand in the country, with a franchise network of around 1,500 locations in the United States and Canada.
“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” said Oyo International CEO Gautum Swaroop in a statement. He added that Motel 6 will “continue to operate as a separate entity.”
Founded in 2012, SoftBank-backed Oyo’s was valued at $10 billion in 2019, but has struggled in recent years due to pandemic-related challenges, as well as criticism over practices such as offering rooms from unavailable or unlicensed hotels.
Over the summer, TechCrunch reported on a new funding round that saw the company’s valuation fall to $2.5 billion — less than its total capital raised. (Oyo has denied reporting about its lowered valuation.)
Motel 6, meanwhile, was founded in 1962. It popularized the budget motel concept (rooms originally cost $6 a night) and was eventually acquired by Blackstone for $1.9 billion in 2012.
India's Physics Wallah raises $210M at $2.8B valuation even as edtech funding remains scarce
Physics Wallah, an Indian edtech startup, has secured $210 million in fresh financing amid a tough funding environment for edtech companies in the country following the collapse of Byju’s, once the biggest company in the space.
Physics Wallah said on Friday the Series B round was led by Hornbill Capital, with Lightspeed Ventures Partners “significantly” participating, alongside existing backers WestBridge and GSV. The round values Physics Wallah at $2.8 billion, a substantial increase from the previous $1.1 billion valuation it scored in June 2022. The startup has raised $310 million to date.
The startup began its journey as a YouTube channel in 2016, where co-founder and teacher Alakh Pandey posted his lectures for free to help students who — like he had — lacked the financial means to enroll in premium coaching classes. By 2020, Physics Wallah had grown to become the largest Indian education community on YouTube, prompting Pandey to formalize his efforts into a company that now serves 46 million students in five vernacular languages.
“He always felt that he couldn’t crack the IIT entrance exam because he didn’t have access to quality education,” said Prateek Maheshwari, co-founder of Physics Wallah, explaining the motivation behind the startup’s mission.
India, the world’s most populous nation, boasts one of the largest education markets globally, with approximately 250 million students attending school and about 4 million giving entrance exams for engineering colleges and medical schools every year.
Physics Wallah caters to a broad spectrum of this market, serving students from third grade through those preparing for competitive engineering and medical entrance exams and government positions. It even offers live classes that typically draw tens of thousands of simultaneous attendees.
The startup employs teaching assistants and AI to address student queries, and has developed an app called AI Guru that helps students solve problems in their learning material. Maheshwari noted that Physics Wallah has trained the AI on its own data.
One of Physics Wallah’s key strengths is the affordability of its courses, with prices starting as low as $50 for an entire year. More than 5.5 million students are paying subscribers, the startup said.
“We are covering nearly all exams in India, and for all the special ones – JEE, NEET, GATE, UPSC, and CAT — we are No. 1 in terms of revenue and the size of the student base served,” Maheshwari said.
That traction is serving Physics Wallah well: It reported revenue of $96.2 million in the year ended March 2023, and the startup told TechCrunch revenue increased 2.5x between March last year and March 2024. It expects its fiscal year ending March 2025 to be its most profitable yet in EBITDA terms.
Dev Khare, a partner at Lightspeed and one of the earliest investors in Indian edtech startups, told TechCrunch that many trends have converged to help Physics Wallah grow. “When you bring the price point down, it just makes things way more accessible,” he said, pointing to budget-hotel chain Oyo, quick-commerce startup Zepto, and storytelling platform PocketFM as other examples of Lightspeed’s portfolio startups that run similar playbooks.
Maheshwari said Physics Wallah will explore inorganic growth opportunities with the fresh funds, but added that the company largely raised the capital because the funding was available and the investors saw value in doing so. The company is thinking about an IPO, but he cautioned that it would not make any immediate moves soon.
The new funding arrives as India’s edtech sector faces significant headwinds. Online learning startups, which saw rapid growth during the COVID-19 pandemic when schools were closed, have seen a sharp decline in usage since.
Unacademy, a major edtech company based in Bengaluru, has cut approximately 2,000 jobs since 2022. The company cut another 250 positions in July this year, citing the need to restructure for profitability.
Byju’s, formerly India’s most valuable startup at $22 billion, has suffered a dramatic downturn over the past two years. The company now faces the prospect of bankruptcy proceedings.
Maheshwari said recent industry events haven’t affected the market opportunity. “From a student’s lens, things haven’t changed much post-COVID. The market is entirely hybrid and students are enjoying the best of both worlds to strengthen their preparation,” he said.
Accel turns to rural India in hunt for future unicorns
Accel, one of the most prolific e-commerce and marketplace investors in India, is making a contrarian move by turning its focus to smaller towns and villages in search of future unicorns.
The venture firm argued on Wednesday that these areas, which it refers to as “Bharat,” represent a significant market ripe with opportunities for entrepreneurs even though many startups have struggled to make inroads in these regions.
“There’s a perception that rural means poor. But if you look at what the top 20% to 30% is spending there, it’s quite significant. We estimate it’s north of $250 billion,” Accel partner Anand Daniel told TechCrunch in an interview. The firm claims that the top 20% of these untapped markets spend more per month than about half of the population in urban cities.
Daniel said the firm plans to feature this new focus as at least one of the major themes in its next early-stage investment program.
Accel’s decision is notable, since most other venture investors in India chase startups that serve the top urban cities. An early investor in startups like Flipkart, Myntra, Swiggy, Zetwerk, Urban Company, Acko, Eruditus, Moglix and Infra.Market, Accel holds a stake in about a fifth of all Indian unicorns — even though it has not deployed as much capital as some of its peers.
Underpinning Accel’s belief in rural India is the improvement in infrastructure in these regions. The proliferation of smartphones and affordable internet has allowed people across the country to adopt digital services, like mobile payments via UPI. Warehousing and logistics have also improved countrywide, enabling faster deliveries.
Rural Indians are also demonstrating a propensity to upgrade their lives, opting for 125cc bikes over 100cc models, double-door fridges instead of single-door units, and used iPhones, said Accel.
While this improvement in infrastructure also enables big companies like Flipkart to serve customers in these regions, Daniel believes “it’s such a large and non-zero-sum game market that there will be opportunities for newer players.”
Many startups that have launched or expanded to smaller Indian cities in the past have seen little success. For example, commerce startup Udaan’s attempt to serve merchants in smaller cities has largely faltered despite the company raising over $1 billion on the promise.
Some startups have struggled on this front because they tried to force-fit urban strategies to these rural markets, while others struggled because they didn’t prioritize exurbs.
Another reason could be simply how these markets function: Often, family-run businesses maintain generational relationships with lenders and logistics providers in these regions, and it can be hard for startups to break into such a market with only their tech.
Daniel suggests that entrepreneurs attempting to serve Indian exurbs need to be mindful of such relationships and try to help scale them. He pointed as an example to Citymall, an Accel portfolio company that works with micro-entrepreneurs in smaller Indian towns and ensures they play a significant role in — and benefit from — the company’s growth.
Startups serving rural India will likely have to look and operate differently from their counterparts in cities. Their business models, customer acquisition strategy, and distribution will likely be very different, said Accel.
But the firm is certain that big startups will emerge from these rural regions, and their valuations will be just as good as their urban counterparts, Daniel said.
AI dominates India's Reliance annual general meeting
Reliance Industries, India’s largest company by market capitalization, is not sitting out the AI frenzy that has gripped the tech world.
At the company’s annual general meeting Thursday, Reliance chairman Mukesh Ambani made over 50 mentions of AI, detailing plans to integrate the technology across Reliance’s vast business empire.
Reliance announced plans for large-scale AI-ready data centers in Jamnagar, powered by the company’s green energy resources. Ambani claimed these facilities would enable lower AI inferencing costs in India, potentially making AI applications more affordable. The company was short on details about the feasibility and timeline for achieving the goal.
Reliance’s telecom arm, Jio, is developing a “comprehensive” AI suite called “Jio Brain” to accelerate AI adoption across its operations and other Reliance companies. The firm is partnering with Jio Institute to develop an AI program aimed at cultivating next-generation AI talent in India.
Ambani also announced Jio AI-Cloud, providing Jio users with up to 100 GB of free cloud storage starting from the festival Diwali in late October this year. This initiative aims to enable widespread access to AI services through a model Reliance calls “Connected Intelligence.”
In a demo of AI applications, Reliance unveiled JioPhonecall AI, a service that can record, transcribe, summarize, and translate phone calls. The company also unveiled Jio TvOS, a home-grown operating system for its set-top boxes, integrated with AI-powered voice assistant Hello Jio.
Reliance didn’t offer an update on the initial public offerings for Jio, India’s largest telecom operator, and Reliance Retail, the nation’s largest retail chain. Analysts were anticipating that the firm will offer key updates on the future IPOs.
“As 5 years ago, RIL chairman had mentioned that they will IPO telco and retail within 5 years, the market is expecting an update on this,” Bank of America analysts said.
More to follow.
India scraps 'angel tax' in boost for startups
India’s federal government has removed the so-called angel tax for all classes of investors, delivering a major victory to the country’s startup ecosystem that had lobbied for years against the measure.
“To bolster the India startup ecosystem, to boost entrepreneurial spirit and support innovation, I propose abolishing angel tax for all classes of investors,” Finance Minister Nirmala Sitharaman said in her budget speech.
The tax, introduced in 2012 as a measure to control money laundering, has long been a pain point for early-stage companies and their backers. It taxed investments in startups when valuations exceeded what tax officials deemed fair market value — a calculation that often clashed with investors’ more optimistic projections.
The Indian government attempted to simplify the tax in 2019, but even the new structure had limited benefits for the ecosystem. The local tax authority was scrutinizing investment in startups as recently as earlier this year.
“It is a watershed moment in the Indian startup story. A tax on capital is antithetical to capital formation and this has long been used to harass startups and investors,” Siddarth Pai, co-founder and partner at venture capital fund 3one4 Capital, told TechCrunch.
The problem stemmed from how different parties valued startups. Investors typically use discounted cash-flow methods, betting on future potential. Tax authorities, on the other hand, looked at current worth, which is usually low for fledgling startups. This mismatch led to headaches for founders trying to raise capital. For years, prominent voices in India’s startup ecosystem have railed against the angel tax, arguing it was choking off vital funding for innovation.
Amit Mehra, CFO of venture capital fund Lightspeed, said the abolition of the angel tax will help reduce the “significant uncertainty on taxation of investments received by startups on account of the angel tax provisions.”
“The removal of the tax will foster a more supportive environment for investments in the startups and will certainly fuel innovation and growth in the startups. This is essential for startups to remain in India and build from here,” he added.
Sitharaman also announced that the federal government will launch a $120 million venture capital fund to spur the growth of the country’s space economy.
Meta says India is the largest market for Meta AI usage
WhatsApp’s massive 500 million users in India have supercharged Meta’s AI ambitions.
Meta CFO Susan Li said Wednesday that India is the largest market in terms of Meta AI usage, a notable milestone considering the product launched in India just a few months ago.
Li said during Meta’s second-quarter earnings call that people have used Meta AI for billions of queries since its launch.
“We’re seeing particularly promising signs on WhatsApp in terms of retention and engagement, which has coincided with India becoming our largest market for Meta AI usage,” she noted.
Meta first launched Meta AI, which is present across Instagram, Facebook, Messenger, WhatsApp and the web, in the United States last year. The company upgraded the chatbot in April with the new Llama 3 model and rolled it out in more than a dozen countries.
While Meta started testing Meta AI in India around the same time, it wasn’t available to all users until June, after India’s general elections were completed.
The company has faced cultural challenges in making AI more attuned to the Indian market. In May, TechCrunch reported that Meta AI-generated images of Indian men predominantly with turbans. In July, several users on X complained that Meta AI generated jokes about one religion and declined to do the same for others. These results were inconsistent, and in the end Meta tweaked its algorithm to create a level playing field for religious jokes.
Last month, the social giant introduced support for languages apart from English, including French, German, Hindi, Hindi-Romanized Script, Italian, Portuguese and Spanish. Meta AI is now available in 22 countries, including the recent additions of Argentina, Chile, Colombia, Ecuador and Mexico.
Zuckerberg also talked about needing 10 times the computing power to train the next Llama 4 model.
“The amount of computing needed to train Llama 4 will likely be almost 10 times more than what we used to train Llama 3, and future models will continue to grow beyond that,” Zuckerberg said during the call.
Apart from AI, Meta saw promising signs for its social networks. The company noted that Threads now has “almost” 200 million users. Meta said last month that the Twitter/X rival had passed 175 million active users. Additionally, Zuckerberg mentioned that the company is seeing promising results of Facebook usage among young adults in the U.S.
Correction: The comments about India and Meta AI usage in the country was incorrectly attributed to Mark Zuckerberg. CFO Susan Li made those comments.
Flipkart blitzes into India's 10-minute quick delivery battle
India’s fast-growing quick commerce market is getting a new deep-pocketed entrant: Walmart-owned Flipkart, India’s largest e-commerce firm.
Flipkart has started to roll out Flipkart Minutes, its quick commerce service, in parts of Bengaluru. The new service offers customers the ability to have a wide range of items, from grocery to smartphones, delivered to them within 10 to 15 minutes. The e-commerce firm is offering customers free delivery on orders priced at Rs 100, or $1.20.
Flipkart is the latest entrant to the instant commerce market, which is quickly making inroads in India even as the model has failed in many other markets. Quick commerce players, which rely on hundreds of small warehouses or “dark stores” strategically located near residential and business areas for rapid deliveries, have expanded to numerous categories in recent months, including fashion and electronics, increasingly entering Amazon’s and Flipkart’s traditional territory.
Flipkart didn’t immediately respond to a request for comment. TechCrunch reported in March that Flipkart was working on a quick commerce offering.
This move comes at a time when the quick commerce sector in India is showing remarkable resilience and growth. The convenience of 10-minute grocery deliveries has struck a chord with urban Indian consumers, leading to encouraging signs for companies like Zomato-owned Blinkit, StepStone-backed Zepto and SoftBank-backed Swiggy Instamart.
Analysts and investors love the space, too. Goldman Sachs estimates that Blinkit, the leading quick commerce player in India, is already worth more than its parent firm’s eponymous food delivery operations. Zomato’s stock hit all-time high to as much as $30 billion in market cap last week after the firm, which acquired Blinkit for less than $600 million in 2022, reported a quarterly profit of about $30 million.
Flipkart leads the e-commerce market in India, but Amazon has a stronger grip on urban Indian customers. The Bengaluru-based startup sees quick commerce as a way to win some of Amazon’s top India customers, according to a person familiar with the matter.
Amazon, for its part, has shown little interest in entering the quick commerce space in India, instead focusing on same-day delivery for Prime members and questioning the quality of products from “fast” delivery services in its marketing campaigns. The world’s largest e-commerce firm is separately in talks to acquire a stake in Swiggy, which has confidentially filed for an initial public offering, according to people familiar with the matter.
A recent TechCrunch analysis found that many of Amazon India’s bestselling items were available on quick commerce platforms, meaning that the company stands to lose some business and traffic to quick commerce companies.