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| Here's a look at today's Startups briefing. - ✂️ Macquarie Capital marked down Byju's valuation by 98%
- 👥 Tech layoffs surged in February as economic headwinds persist
- 🇨🇳 China is offering AI computing vouchers to struggling startups
Thank you. Karan
p/karan-chafekar | |
| 1 | | Macquarie Capital marked down the value of its stake in troubled edtech startup Byju's by about 98%. The markdown came weeks after investor Julius Baer Group Ltd. accused the firm of charging management fees on Byju's outdated peak valuation of $22B. More: - The Swiss bank Julius Baer's clients have invested in a feeder fund run by Macquarie Capital.
- In a letter addressed to Macquarie Capital, Julius Baer's chief investment officer, Yves Bonzon, wrote, "We believe this demonstrates a disincentive for Macquarie to devalue the position, despite the strong market indications that the March 2022 valuation no longer holds, in contravention of your fiduciary duties as a fund manager."
- Macquarie Capital invested "a few hundred millions of dollars" in Byju's, participating in its funding round in 2021.
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| 2 | | More than 13,000 U.S. tech workers were laid off by large-cap tech organizations and startups in February, per Crunchbase. 
What the numbers say: While layoffs had stabilized in the latter half of 2023, they surged again this year, with over 17,000 employees fired in January alone. What happened: Healy Jones, the vice president of financial strategy at Kruze Consulting, suggests that even startups that cut down operating costs at the start of the economic downturn might be nearing the end of their cash runways, forcing difficult decisions such as making more layoffs or shutting down altogether. Plant-based meat maker Meati Foods, luggage brand Away, and AI writing assistant Grammarly have all made layoffs. Where to see the impact: Jones expects 6% of his 800-plus startup client base to shut down this quarter. Amazon aggregator startup Thrasio filed for Chapter 11 bankruptcy last week. Notable VC-backed startups shut down this year include travel startup Journera and short-term accommodation provider Frontdesk. | | | |
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| 3 | | Israeli digital parking services provider Pango is in advanced talks to acquire corporate trip management solutions startup Gett. Sources close to the matter pegged the price to be between $220M to $250M. Gett started looking for a buyer after its negotiations with Fortissimo Capital fell through. With the acquisition, Pango will be able to combine parking and travel services. More: - Gett started as a taxi transportation services provider in 2010 and later pivoted into a cloud-based software provider for B2B companies looking to manage their trips by taxis and private cars.
- The startup has raised more than $900M from investors, including $300M from automaker Volkswagen in 2016.
- Volkswagen wrote off the investment in 2018.
- Swedish fund VNV Global has a 43% stake in the company and has invested $107M in the firm to date.
- Gett was valued at $1.5B when it raised a $100M round in 2020.
- Pango will likely divest Gett's U.K. operations and infuse additional capital into the profitable Israeli division.
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| 4 | | Seventeen city governments in China pledged to provide AI computing vouchers worth $140,000 to $280,000 to small startups. The initiative is aimed at leveling the playing field for smaller startups. Analysts believe the vouchers will only tackle the cost barrier problem and will not address the broader issue of resource scarcity. More: - The move comes as tech giants in China, including Alibaba, Tencent, and ByteDance, have stopped offering rental cloud-computing services of Nvidia GPUs to startups, instead reserving the compute power for internal use and important clients.
- Tech giants started hoarding GPUs after the Biden administration tightened restrictions over China's access to crucial AI chips.
- Companies have also started repurposing Nvidia gaming chips and buying chips on the black market.
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| 5 | | Fintech startup Melio is laying off 7% of its workforce as a part of its restructuring initiative. The layoffs will majorly impact the workforce in Israel, who were spared from the previous round of layoffs in August 2022. The firm let go of 40 employees from its Israel branch. More: - Prior to the layoffs, Melio employed approximately 650 individuals, 400 of whom were based in Israel.
- Melio touched a peak valuation of $4B in September 2021, when it raised $250M from investors.
- CEO Matan Bar attributed the restructuring to the company's rapid growth, which led to inefficiencies in certain departments' organizational structures.
- The company is offering higher severance packages, guidance in the job search process, and better terms for purchasing options to the affected employees.
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| 6 | | Wagely, an Indonesian startup that gives employees advances on their salaries, raised $23M through an equity and debt funding round led by Capria Ventures. The startup will use the proceeds to further expand into existing markets of Indonesia and Bangladesh; develop savings, insurance, and other financial services; and add generative AI-based solutions to the product portfolio. More: - The startup started services in Indonesia in 2020 and expanded into Bangladesh in 2021.
- Wagely charges nominal fees ranging from $1 to $2.50 for employees withdrawing their salaries early.
- The startup has facilitated nearly 1 million transactions worth $25M for 500,000 workers.
- Wagely has seen a 5x growth in revenue since its last funding round in March 2022.
Zoom out: - VC funding for Indonesian startups slumped 87%, from $3.3B in 2022 to $400M in 2023, per Indonesia's Financial Services Authority.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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