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Edtech Byju’s can go ahead with its extraordinary general meeting on Friday after the National Company Law Tribunal refused to stay the same on Thursday. This and more in today’s ETtech Top 5.

Also in this letter:

■ Urban Company partners earn more than IT staff?

■ What’s with Amazon’s Anthropic bet?

■ ETtech Done Deals

NCLT refuses to stay Byju’s Friday EGM for $200 million rights issue

Byju crisis

The National Company Law Tribunal (NCLT), Bengaluru, on Thursday refused to stay the extraordinary general meeting (EGM) called by Byju’s on Friday to increase the authorised share capital to account for its $200-million rights issue. The company needs new capital desperately to manage daily operations and clear pending dues.

Decoding the issue: Four investors — led by Prosus — moved the NCLT, seeking a stay on the planned EGM to effectively block the rights issue. The matter will now be heard on April 4.

The tribunal also directed Byju’s to share its captable registry sought by investors, which the company said would be made available immediately.

Top shareholders in Byju

What happens now? Byju’s will need at least 50% votes at the EGM to increase its share capital. If it obtains the majority vote, it can issue shares to new investors for the crucial rights issue.

This is of significance as lawyers appearing for the investors said that once new shares are issued, it cannot be reversed and thus pleaded for a stay on the EGM.

High court update: Meanwhile, the Karnataka High Court extended the interim stay on the outcomes of a February EGM called by investors who demanded the ouster of CEO Byju Raveendran and a change of board at parent firm Think & Learn. The court will now hear this matter after two months. Raveendran had told employees in February that he remains the CEO and there are no changes.

Also read | Byju’s lender group says US court ordered freezing $533 million

Critical rights issue: The troubled edtech firm is keen to close this rights issue to clear staff salaries and other pending dues to vendors. Byju’s is also battling a lawsuit in the US against a group of its $1.2 billion term-loan B lenders. It previously said its $200-million rights issue – at a 99% discount to its peak valuation of $22 billionhas been fully subscribed.

Byju new valuation

Also Read | Exclusive: Chaudhry unlikely to return to steer Byju’s-owned Aakash Institute

Laid-off startup CXOs stranded as big companies refuse fancy packages

CXO salary

Layoffs that struck the startup and tech sector did not spare the senior executives. Many former startup CXOs are facing difficulty finding new roles after being let go, as established companies are hesitant to match their past high salaries and titles.

Unused talent: There is now a burgeoning pool of ‘unemployed CXOs’ in the job market. Many of these have made themselves expensive outliers with their above-market compensation packages and lofty titles doled out by small and young internet firms, officials from startups, large companies and executive search firms told ET.

Lots to choose from:
A lot of resumes from companies like Paytm, Fi, Udaan, ZestMoney, Khatabook, DealShare, CoinSwitch and others are in circulation, as per the HR of a big finance firm. “But many of these senior-level talent are unemployable as their current salaries are hugely inflated and unrealistic,” the person added.

Also read | Layoffs at big internet firms keep staffers at startups on the edge

Reality check: Executives at search firms said these senior executives need a reality check.

Established industries typically offer lower salaries compared to the booming digital sector, explained Atul Vohra, managing partner at Transearch India, a leadership search firm. He added that many laid-off senior executives are unable to re-enter the workforce as they have not adjusted to the new reality.

Faux boost: A couple of years ago, startups went aggressive in hiring senior talent. In 2021-22, startups offered inflated compensation packages to attract talent from established companies. These packages included generous bonuses and stock options that may have been overvalued.

For some, it was like a mirage created by a 3-4-fold jump in pay.

Also read | Startup recruiters find few takers amid overall hiring slowdown

ETtech Explainer: Why is Amazon’s $4-billion investment in Anthropic significant?

Amazon Anthropic investment

Amazon announced its $2.75 billion investment in artificial intelligence startup Anthropic on Wednesday, taking its total investment in the firm to $4 billion. This is not the first time that a tech giant has invested in an upcoming AI startup. ETtech looks at the importance of this deal.

Emerging trend: This investment underscores the trend of big tech companies piggybacking on upcoming startups to advance their AI ambitions, particularly around generative artificial intelligence. Microsoft has ChatGPT; Google has DeepMind; now Amazon has Anthropic.

More than just equity: The investment in Anthropic is not just a simple equity stake for Amazon. Like Microsoft’s investment in OpenAI, it includes getting access to AI systems and commitments to provide computing power. However, it stops short of the high-value acquisitions that could trigger an antitrust review.

Advantage, Amazon: According to a New York Times report, Anthropic has agreed to build its AI using specialised computer chips designed by Amazon. The Seattle-based company has said it hopes Anthropic will help its efforts to meet the cutting-edge demands of AI and collaborate on designs of these specialised chips.

ETtech Done Deals

Anshu Sharma

Skyflow CEO Anshu Sharma

Data privacy startup Skyflow raises $30 million: Skyflow, a data privacy startup, that stores user data for companies, has raised $30 million to extend its Series B funding round. The round was led by Khosla Ventures and existing investors Mouro Capital, Foundation Capital and Canvas Ventures.

AI-led security startup SydeLabs raises $2.5 million: Artificial intelligence (AI)-led risk management solutions provider, SydeLabs on Thursday said it has raised $2.5 million in seed funding of funding led by RTP Global. SydeLabs will use the funds for research and development (R&D) and to build on its existing product portfolio.

Small town-focused retailer SuperK raises $6 million: SuperK, which runs retail supermarkets in tier 3 towns and beyond, has raised $6 million (Rs 50 crore) in a funding round led by Blume Ventures.

Top 20% partners earn 50% more than entry-level IT staff: Urban Company

Abhiraj Singh Bhal

Abhiraj Singh Bhal, cofounder and CEO, Urban Company

At-home services platform Urban Company said in a report on Thursday that the top 20% of its partners earn 50% more than employees in entry-level IT jobs in India.

Report details: As per the firm’s H2 2023 Earnings Index, service partners who provide over 30 services per month earned a monthly net income of Rs 33,469.

In the calendar year 2023, the Tiger Global-backed company provided loans totaling Rs 31.2 crore to service partners through third-party NBFCs. These loans included personal loans and service kit loans.

Services on offer: Urban Company primarily functions within two major categories: beauty and wellness, which includes salon and spa services along with laser hair reduction; and home repairs and maintenance, comprising tasks like plumbing, electrical work, carpentry, cleaning, pest control, appliance repair, and painting.

Freelance jobs on the rise: There has been a consistent increase in the demand for freelance jobs in the country, offering individuals more flexibility compared to traditional organised employment. According to Urban Company, it has around 50,000 service partners in India.

A survey conducted by the National Association of Software and Services Companies (Nasscom) and recruitment firm Indeed revealed that eight out of ten organisations are either considering or receptive to gig models.

Today’s ETtech Top 5 newsletter was curated by Vaibhavi Khanwalkar in Bengaluru and Gaurab Dasgupta in New Delhi.

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