1947 Tech — week 12
A few good articles that I came across this week..
1. Government may exempt funding by recognized investors in start-ups from angel tax
The government is considering a proposal to exempt investments from recognized angel investor groups in start-ups from the so-called angel tax.
According to Section 56 (II) (viib) of the Income Tax Act, for start-ups raising capital at a valuation higher than the “fair market” value determined by the government, the excess capital is construed as income and is taxed.
Start-ups have complained about the angel tax, especially after many of them were served tax demands over the last few months.
A committee has been set up under the Securities and Exchange Board of India (Sebi) to form a framework for regulating angel investments. Prominent angel groups such as Indian Angel Network, Venture Catalysts, AngelList and LetsVenture, among others, are currently presenting proposals to the Sebi panel on the contours of the regulations
2. Naspers raises $9.8 bn from 2% Tencent share sale; may invest in OLX, Swiggy, PayU
South African technology major Naspers announced on Friday that it has raised $9.8 billion from the sale of 2% of its holdings in Chinese internet conglomerate Tencent as part of efforts to strengthen its balance sheet and fund growth in its e-commerce business.
It may look to invest a part of the proceeds in Indian startups, including in internet technology companies. In the past, both Naspers and Tencent have backed several Indian startups, including Flipkart, Ola, Makemytrip-Ibibo, Swiggy, Practo, Gaana and PayU
3. The 70 Startups That Raised Funding Under Startup India Fund of Funds
When PM Narendra Modi announced the $1.5 Bn Fund of Funds for Startups (FFS) in January 2016 as part of his ambitious his Startup India Plan, for many it was just another promise on paper. But, the hopes and aspirations of several young entrepreneurs of India go When PM Narendra Modi announced the $1.5 Bn Fund of Funds for Startups (FFS) in January 2016 as part of his ambitious his Startup India Plan, for many it was just another promise on paper. But, the hopes and aspirations of several young entrepreneurs of India got an uplift, when on June 22, 2016, the Union Cabinet actually approved the fund and designated SIDBI for the disbursement of the Fund of Funds’ corpus to eligible startups through AIFs (Alternative Investment Funds) registered with the SEBI.
According to October 2017 status report by DIPP on the Startup India website, about $92 Mn (INR 605.7 Cr) from the fund has already been released to SIDBI, and 75 startups have received funding from 17 AIFs so far. The entire Fund of Funds corpus has been earmarked to get allocated across two finance commission cycles (2015–2020 & 2021–2025).
4. Reliance Industries to merge Jio Music with Saavn, create $1 B music-streaming platform
In what is possibly the biggest transaction in the Indian music-streaming market so far, Reliance Industries has inked a strategic deal with New York-based music-and-artiste platform Saavn to merge its own digital music offering, Jio Music. The deal is valued at $1 billion, with Jio Music’s implied valuation at $670 million.
Reliance will acquire partial stake from Saavn’s existing investors, Tiger Global, Liberty Media and Bertelsmann, at an investment of $104 million. It will put in an additional $100 million to make the resultant entity, Jio-Saavn, a top music-streaming platform globally, Reliance said in a statement.
The combined entity will take on the likes of Gaana, Amazon Prime Music, Apple Music, Wynk, and the soon-to-be-launched Spotify in India’s fast-exploding music-streaming space.
Please share any feedback, questions or comments with me on Twitter
Have a great week :)
