#Marketwire is your quick summary of notable market movements in the technology industry. The firms covered in this segment include Flipkart, Foodpanda, Jabong and Amazon
The government of India has announced the repeal of ‘Angel Tax’, in a bid to promote entrepreneurship and investment in startups. The Central Board of Direct Taxes has made the required changes to Section 56(2)(viib) of the Income-Tax Act, which now exempts taxation on the angel investment raised by startups which doesn’t exceed Rs.10 crores.
Till date, investment raised by unlisted firms was taxable as “income from other sources” under Section 56(2) of the IT Act, and led to an effective taxation of upto 33%.
In order for startups to avail the benefits of this new rule, they would have to get a certificate from the Inter-ministerial Board of Certification as per the guidelines laid down by DIPP as per a circular released on February 17, 2016. Some of these criteria include – company not being older than 5 years, with turnover being under Rs.25 crore, working towards innovation and commercialisation of new products or services, and driven by technology or intellectual property. This makes only a small number of startups eligible for the benefits, since DIPP is being highly selective in giving the ‘startup’ status to the firms applying for the same.
Also, the investment raised from investments groups such as IAN, RAIN, Mumbai Angels etc. is not exempted under this rule. Read More
In order to get more Indians shop on its platform, Amazon has taken the decision to grow its offline presence. The company has tied up with telecom network Vodafone to provide a touch & feel experience of smartphones in its chain of stores.
The two have launched pilot operations of the service in 40 Vodafone stores across Bangalore, where an Amazon executive would be present to assist the customers. The move is targeted at the consumers who are still skeptical of making purchases online. The customers can order the product on Amazon from the store. Read More
Flipkart Chief Executive Binny Bansal is trying to bring old Flipkart hands back to company. At least three former senior Flipkart executives are back at the company under Binny Bansal. Flipkart bought PhonePe, a mobile payments startup, earlier this year.
In 2015, Flipkart cleared out its entire senior management team and replaced it with leaders from established companies such as Google Inc., McKinsey and Amazon. But these changes apparently ended up disrupting the organization and contributed to Flipkart’s poor performance, which cost three of Flipkart’s senior-most executives their jobs.
According to analysts, Flipkart is in danger of being overtaken by Amazon this year unless it significantly improves its product selection, delivery times and consistency, and other parts of its business. Read More
Jabong’s Chief Product Officer Saurabh Goel, who had joined the firm in 2015, has launched his own Fintech venture Prosperx.com. The new company which would be a marketplace for financial products like mutual funds, insurance etc will be launched in July 2016.
Sanjeev Mohanty, MD & CEO, Jabong announced that the company is now looking for a new CPO. In September 2015, Jabong’s Founders Arun Chandra Mohan and Praveen Sinha had left the organisation. The Rocket Internet backed firm has seen several top management personnel quitting the company in the last one year. Read More
Online food ordering platform Foodpanda, which was under fire for laying off over 300 employees earlier this year, has implemented a near complete automation of its order flow to become more operationally efficient with lower staff levels. The last six to eight months, Foodpanda has worked on near 100 percent automation of order flows to ensure operational efficiency to meet their target of becoming profitable in the next three years. Read More