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Also in this letter:
■ Financial services for seniors
■ Swiggy’s pre-IPO Esop sale
■ LinkedIn’s video offering launch
ETtech In-depth: How GenAI is helping Indian GCCs become front office of the world
Once tagged as the back office of the world, India is starting to become the front office for several multinational corporations that have established captive technology centres in the country. The proliferation of generative artificial intelligence (GenAI) will only accelerate this wave, said experts.
State of play: GCCs are “moving up from a back office to a central office”, said Deepak Mangla, CEO, corporate centres, India and Philippines, at JPMorgan Chase, which has one of the largest GCC presence in India with over 55,000 employees across Bengaluru, Mumbai, Hyderabad, Pune, and Noida.
![GCC GCC](https://img.etimg.com/photo/msid-111768160/GCC.jpg)
GenAI in focus: Multinationals are building cyber capabilities in India along with new functions like legal, supply chain procurement plan, vendor management, and R&D facilities. There is also a big focus on AI and GenAI-related centres of excellence (COEs).
“We are increasingly seeing AI and GenAI proof of concepts (POCs) moving to the production stage at a higher level across GCCs,” said Rohan Lobo, partner and GCC consulting leader at Deloitte India. About one-third of such work is in the BFSI (banking, financial services, insurance) sector, he added.
Numberwise: As per technology industry body Nasscom’s last count, there were over 1,580 GCCs with 1.66 million employees in India until March 2023.
![Global GenAI gold rush july ettech GFX Global GenAI gold rush july ettech GFX](https://img.etimg.com/photo/msid-111768151/Global GenAI gold rush july ettech GFX.jpg)
In FY23, GCCs generated cumulative revenue of about $46 billion. This is more than double the estimated $20 billion generated by about 1,000 such centres in 2016, according to a report by ICICI Securities. It forecasts GCC revenue to reach about $100 billion by 2030.
Also read | The rise of the GCC ecosystem in India
Expert take: Srikanth Srinivasan, vice president and head, member and outreach, at Nasscom said earlier GCCs used to do a lot of routine operational work. “But now you see a huge transformation or jump in the kind of work that’s happening today, where people are looking at doing very focused work with the help of AI,” he said.
Despite global AI funding surge, Indian startups struggle with market volatility
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Funding for AI startups in India has seen a massive drop, contrary to the global trend.
Driving the news: Funding for AI startups in India stood at $8.2 million in the April-June quarter, declining about 91% sequentially and by 82% year-on-year (YoY), data sourced from market tracking firm Tracxn showed.
![AI funding AI funding](https://img.etimg.com/photo/msid-111768186/AI funding.jpg)
This, however, comes on top of a near 110% sequential growth in funding in the previous quarter and 56% in the quarter ended December 2023.
Global trend: Calendar year-to-date, Indian AI startups raised nearly $96 million, a 61% increase over the same period in 2023. This is an 82% decline compared to the first half of 2022 when AI funding peaked at $560 million for the whole year. However, globally, AI startups have been defying the ‘funding winter’. In the US, for instance, AI startups received $27 billion in funding in April-June, accounting for nearly half of all startup funding in the country during that period.
Also read | PE, VC funding slows in first half of 2024; secondary deals become prominent
The bottom line: Investors remain bullish in the long term, despite existing concerns. “Numbers around AI investing need to be taken with a pinch of salt… AI today is like the cloud—almost every new startup is utilising it to varying degrees,” said Alok Goyal, partner at Stellaris Venture Partners.
Stellaris is “very bullish on the outlook for AI-centric funding,” he said, adding that more than 50% of its investments in the last 12 months have gone into AI-first startups.
Also read | Indian fintech sector sees 59% drop in funding in H1 2024, remains among top three globally
Seniors find a helping hand in tech startups wielding fintech tools
![elderly care fintech startups increasing THUMB IMAGE ETTECH elderly care fintech startups increasing THUMB IMAGE ETTECH](https://img.etimg.com/photo/msid-111768190/elderly care fintech startups increasing THUMB IMAGE ETTECH.jpg)
Titan Capital-backed Khyaal, Aroa Venture Partners-backed Samarth Life, and Hyderabad-based Anvayaa are offering prepaid cards, wallets, investment products, and insurance services, aimed at meeting the financial needs of seniors.
What’s happening: Khyaal offers a prepaid card called the ‘Khyaal card’ to enable online transactions, with most transactions being done on e-commerce and quick commerce platforms. Similarly, Anvayaa provides a prepaid wallet account that can be used to manage the expenses of parents living far away from their children.
Samarth Life has partnered with the likes of HDFC Bank to create a ‘special’ senior citizen account for its users.
Tell me more: Khyaal sees around 75% of the seniors using the platform for their financial needs. Anvayaa has served over 60,000 elders to date, with over 80% utilising their prepaid account offering. Investors are also seeing major growth potential here. Khyaal raised $4.2 million in February this year from a bunch of investors. Samarth Life raised around Rs 12 crore in its first institutional funding in February this year.
“We believe that with rising incomes, better health, and a longer lifespan, the Indian senior citizen segment is emerging as an economically relevant target segment,” said Sajith Pai, investment partner at Blume Ventures
IPO-bound Swiggy to facilitate $65 million Esop sale for employees
![sriharsha majety sriharsha majety](https://img.etimg.com/photo/msid-111768200/sriharsha majety.jpg)
Sriharsha Majety, MD & group CEO, Swiggy
Food and grocery delivery company Swiggy on Monday said it will buy back employee stock ownership plans (Esops) worth $65 million.
Driving the news: The Esop buyback is being conducted at a valuation of around $9 billion, compared to $10.7 billion that Swiggy fetched during its last fundraise in January 2022. So far, the company has cumulatively enabled over Rs 1,000 crore ($119.6 million) of Esops liquidity, benefiting more than 3,200 employees.
“Employees owning shares of their company creates alignment of incentives and a sharp focus on collaborative excellence, which is a virtuous cycle that we believe in and espouse,” said Girish Menon, head of HR at Swiggy.
Also read: Swiggy IPO: Food-delivery major secures shareholder nod for potential $1.25 billion public offering
![Key IPO details Swiggy in a nutshell Apr 2024 Graphic Key IPO details Swiggy in a nutshell Apr 2024 Graphic](https://img.etimg.com/photo/msid-111768211/Key IPO details Swiggy in a nutshell Apr 2024 Graphic.jpg)
Esops galore: Startups like Meesho, Purplle, and Urban Company have conducted staff share buybacks this year. Flipkart conducted the largest ever Esop buyback for a new-age firm as part of a ‘one-time payout’ worth $700 million last year.
Razorpay and Udaan also figure among well-funded startups that have conducted such buybacks over the past couple of years.
Platform fee hike: Separately, Zomato and Swiggy increased the platform fee they charge customers to Rs 6 per order, a 20% hike, in key markets like Bengaluru and Delhi.
Other Top Stories By Our Reporters
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LinkedIn to launch video offerings in India: Professional community platform LinkedIn is set to launch its video offering in India to tap into the burgeoning opportunity in the short-form video market, which is currently worth $5.5 billion. LinkedIn has observed a 60% increase in video uploads in India, compared with 45% globally, LinkedIn vice president of product management Gyanda Sachdeva told ET.
ET Explainer: Behind EU vs Elon Musk fight over blue tick: The past week saw a faceoff erupt between tech billionaire Elon Musk and the European Union (EU) after the latter accused Musk-owned social media platform X (formerly Twitter) of violating its online content regulations around transparency and accountability. Here’s an explainer on the accusations against X and what the two sides have been saying.
Yali Capital launches Rs 810 crore deep tech fund: Deep-tech focused venture fund Yali Capital on Monday announced the launch of its maiden fund with a target corpus of Rs 810 crore, including a greenshoe option of Rs 310 crore.
IndusDC earmarks Rs 100 crore to build 5 deep-tech startups in 2 years | IndusDC, a venture studio, has earmarked Rs 100 crore, or about $12 million, to identify and develop deep-tech startups in India’s industrial and energy sectors in fiscal years 2025 and 2026.
EV ride-hailing company BluSmart raises $24 million in funding | BluSmart, a ride-hailing startup that uses only electric vehicles, has raised $24 million, or Rs 200 crore, in a funding round led by its existing investors, Zurich-based climate finance firm ResponsAbility Investments, cricketer MS Dhoni’s Family Office, and ReNew founder Sumant Sinha.
Global Picks We Are Reading
■ The hidden ties between Google and Amazon’s Project Nimbus and Israel’s military (Wired)
■ Samsung’s ‘chip crisis’: AI ambitions hit by unprecedented worker unrest (FT)
■ How startup Wiz went from zero to a possible $23 billion sale to Google in four years (WSJ)