TeamLease acquires 40% stake in Schoolguru for Rs13 crore

The purchase of additional stake by TeamLease is linked to Schoolguru’s future performance and meeting its milestones.

The purchase of additional stake by TeamLease is linked to Schoolguru’s future performance and meeting its milestones.

New Delhi: Staffing services firm TeamLease Services on Wednesday said it has acquired 40% stake in online learning company Schoolguru Eduserve Pvt Ltd for Rs13.53 crore, a move that will accelerate TeamLease’s employability strategy.

Both the companies have signed a definitive agreement to this effect. “TeamLease’s infusion of Rs13.53 crore into the company (Schoolguru) will be primarily used to expand its business into new geographies, strengthen existing technology and content library, and innovate in new forms of delivery,” the company said in a regulatory filing.

The transaction involves purchase of both primary as well as secondary shares of the company through a structured deal. The purchase of additional stake by TeamLease is linked to the company’s future performance and meeting its milestones, it added.

“We began talks to be a customer for TeamLease Skills University but quickly realised that with some investments Schoolguru could emerge as important platform to accelerate our employability strategy,” TeamLease Services Managing Director Ashok Reddy said.

The transaction will be subject to customary closing conditions and regulatory approvals and is expected to close before the end of November 2017. Schoolguru will continue to operate as a separate and independent entity.

“This partnership with TeamLease helps us in two ways; one is pursuing our vision of technology enabled employable education and second is creating new forms of blended learning that combine our platform with on-thejob-learning,” Schoolguru CEO Shantanu Rooj said.

Schoolguru was founded in 2012 by Shantanu Rooj, Ravi Rangan and Anil Bhat. The company partners 18 Indian universities to help them provide premium online and virtual courses for their students. It services 70,000 students. The company has a library of 45 undergraduate courses and 30 masters courses with a total of over 5,00,000 minutes of video content.


Ola, Matrix Partners Explicitly Deny Stake Sale to Uber

Ola, Matrix Partners Explicitly Deny Stake Sale to Uber

Bengaluru-based transportation aggregator Ola and its investors Matrix Partners India have categorically denied a report that appeared in DNA on Friday, which alleged that certain investors in Ola plan to sell their stake to Uber.

The news report, based on information from an unnamed source alleged that Uber was acquiring stakes of all the investors, including the founders, except SoftBank, with a term sheet likely to be signed by this quarter.

“We would like to state that the article, attributed to an ‘unnamed source’ is completely false, misleading, malicious and planted in the said newspaper with the intent of causing harm to the Ola brand and creating confusion among our stakeholders.” a statement from Ola said.

Ola slammed the publication for its lack of journalistic ethics, and said that it will initiate appropriate legal action and seek redressal and compensation from the newspaper for the damage caused due to the report. “We also had received a verbal confirmation that the report shall not be carried given the company’s denial,” Ola said.

“It cannot be further from the truth that Uber is attempting to take a stake in Ola. No such discussions have taken place and even if we are approached anytime in the future, we have no intentions of selling to Uber,” said Avnish Bajaj, Managing Director of Matrix Partners India, one of the board members, and early investors in Ola. He added that just one taxi category – Ola Micro – is likely to yield a higher turnover than all of Uber’s operations in India, and that he had no doubts about the future of Ola.

Ola Micro, a new class of cabs launched in March this year offers rides at Rs. 6 per kilometre, and is currently available in 13 cities across India.

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Tags: Apps, Avnish Bajaj, India, Internet, Matrix Partners, Ola, Taxi Aggregators, Uber

Apple, FBI Stake Out Conflicting Positions Before Congress

Apple, FBI Stake Out Conflicting Positions Before Congress

The US government calls it a “vicious guard dog” that hurts national security. Apple says it’s critical to protecting consumer privacy against increasingly sophisticated hackers.

As the debate over built-in iPhone encryption has deadlocked in the courts, law enforcement and the world’s second-largest cellphone maker agreed on one point Tuesday: It’s now up to Congress to set boundaries in a long-simmering fight over who can legally access your digital life.

“We’re asking Apple to take the vicious guard dog away and let us pick the lock,” FBI Director James Comey told a House judiciary panel Tuesday, referring to a locked iPhone tied to the deadly December shooting in San Bernardino, California.

(Also see:  Husband of San Bernardino Attack Victim Takes Apple’s Side in FBI Spat)

“The FBI is asking Apple to weaken the security of our products,” Apple general counsel Bruce Sewell countered later that afternoon.

Tuesday’s hearing shifted attention from the courts – where judges in the last month have issued significant but conflicting opinions – to Congress, where both sides say the broader policy debate belongs.

It also provided an extraordinary public forum for the Obama administration and Apple Inc. to stake out competing positions that could have sweeping ramifications. Apple’s recent opposition to bypassing security features for the government has pushed that dispute from tech circles into the mainstream.

The strong positions articulated Tuesday make clear the deep divide between Silicon Valley and the government, even as the administration advocates open dialogue and resolution.

“Is it the right thing to make our society overall less safe in order to solve crime?” Sewell asked. “That’s the issue that we’re wrestling with.”

On Monday, a federal judge in Brooklyn said the government couldn’t force Apple to help it gain access to the phone in a drug case. US Magistrate Judge James Orenstein said Justice Department attorneys were relying on the centuries-old All Writs Act to “to produce impermissibly absurd results.”

But two weeks ago, a different magistrate judge in California, Sheri Pym, directed the company to help the FBI hack into a locked iPhone used by one of the shooters in the December attack in San Bernardino, which killed 14 people. Apple’s lawyers, in court papers filed Tuesday, formally objected to Pym’s order, a procedural move intended to ensure an appeal.

With those two conflicting rulings in mind, Congress needs to get involved to address the broader collision between privacy and public safety, Comey said.

The Obama administration last year decided against a legislative fix.

Now, though, “Congress must decide this issue,” said Sewell, while also criticizing the US government for simultaneously supporting encryption used by activists and journalists in countries with fewer free-speech rights.

The San Bernardino case involves an iPhone 5c owned by San Bernardino County and used by Syed Farook, who was a health inspector there. He and his wife, Tashfeen Malik, later died in a gun battle with police. The FBI wants specialized software that would bypass security protocols on the encrypted phone so investigators can test random passcode combinations in rapid sequence to access its data.

Should Apple create the specialized software to allow the FBI to hack the iPhone, Comey said it would take 26 minutes to do what’s known as a brute force attack – testing multiple passcodes in quick succession.

Comey also acknowledged Tuesday there “was a mistake made” shortly after the San Bernardino attack, when the FBI asked the county – which owned the phone – to reset the password for Farook’s iCloud account.

That data, stored on Apple servers, kept backups of his phone. Had the password not been reset, the phone may have made a fresh backup available to investigators for further examination. Still, Comey said, “The experts tell me there’s no way we would have gotten everything off the phone from a backup.”

Republican Rep. Darrell Issa of California, a critic of the administration’s domestic surveillance practices, asked Comey whether the FBI had first asked Apple for the underlying iPhone software – called source code by developers – before trying to force the company to create its own digital workaround.

Issa suggested the FBI hadn’t exhausted its own efforts before the government went to court. Comey said the government has tried hard to break into iPhones, like the one in California, but he seemed unaware if those methods were successful.

Manhattan District Attorney Cyrus Vance told the House panel Tuesday that there are 205 phones his investigators can’t access in criminal investigations.

House Judiciary Committee Chairman Bob Goodlatte said technology is moving toward newer generations of encryption and security, and “we’re going to have to figure out a different way to help law enforcement.”

Whatever emerges from debate as the legislative response to the controversy will “not change the fact that law enforcement is going to have to change the way it investigates and gathers evidence,” said Goodlatte, a Virginia Republican.

Alex Abdo, a staff lawyer with the American Civil Liberties Union’s speech, privacy and technology project, told The Associated Press on Tuesday that the larger debate is “ultimately about whether we trust our devices.”

“If the government prevails, then there is nothing to stop it from turning every major tech company into a tool of government surveillance,” Abdo said. “Companies will be required to spy on, rather than secure, their customers.


RBI eases stake sale rules in start-ups

The RBI said it would clarify certain other issues that are permissible under current rules. Photo: Ramesh Pathania/MintThe RBI said it would clarify certain other issues that are permissible under current rules. Photo: Ramesh Pathania/Mint

Mumbai: The Reserve Bank of India (RBI) allowed overseas investors to sell their stakes in Indian start-ups to local companies, potentially giving foreign venture capital (VC) funds an easier exit route. The regulator also allowed start-ups to file reports over the Internet, and eased rules governing share transfer transactions, according to a statement posted on RBI’s website.

More options for VC funds to profit from their investments or exit struggling companies will attract more overseas investors into Asia’s third-largest economy that’s experiencing an Internet start-up boom. RBI governor Raghuram Rajan’s move follows Prime Minister Narendra Modi’s decision to set up a Rs.10,000 crore ($1.5 billion) fund to encourage start-up businesses and government pledges to offer tax breaks.

“This was a big pain point for foreign VCs in India,” said Anil Joshi, founder of Unicorn India Ventures. “If they are able to ease out that one problem, certainly it will attract a lot of overseas VC money.”

The central bank also said it would allow start-ups to access rupee loans under the external commercial borrowing (ECB) framework from eligible lenders. RBI also said that it would facilitate the issuance of innovative instruments such as convertible notes by start-up enterprises in an effort to make it easier for them to attract foreign direct investment. The changes will be finalized in consultation with the government, said RBI.

The changes will enable start-ups to receive foreign VC investment and also transfer shares from foreign venture capital investors to other residents or non-residents, RBI said in a statement issued outside the scheduled monetary policy review.

The central bank also said it would permit, in case of transfer of ownership of a start-up enterprise, receipt of the consideration amount on a deferred basis up to a period of 18 months.

RBI said it would clarify certain other issues that are permissible under current rules. These include the issue of shares without cash payment through sweat equity or against any legitimate payment owed by the company. The issue of collection of payments by start-up enterprises on behalf of their subsidiaries abroad would also be clarified, RBI said.

The proposals will help make both the investment and exit process smoother for investors, according to Anand Lunia, founder and partner at early-stage VC fund India Quotient.

The burgeoning start-up industry in India has lured billions of dollars and raised questions about whether valuations are becoming stretched. Much of the money is coming from foreign investors such as SoftBank Group and Tiger Global Management Llc.

In 2015, VC funding touched $5.4 billion (across 473 VC deals), up from $2.3 billion (across 307 deals) in 2014, according to data from VCCEdge, the financial research platform of

Existing rules

Under existing rules, shares held by foreign investors are subject to more restrictions than those held by locals.

“This is a reasonably good package,” said Harish Visweswara, a partner at consultant Grant Thornton India Llp. Most of the changes involve “procedural simplifications which would make life easier for entrepreneurs and investors”.

Certain announcements such as those involving foreign loans and convertible notes are a welcome move, experts said, as they will help boost investments.

“Proposals like permitting start-ups to access foreign loans, issuance of convertible notes will improve investor participation and also help start-ups raise capital at low cost,” said Amarjeet Singh, partner, tax, at audit and consulting firm KPMG.

According to Lunia of India Quotient, there is significant demand for debt from start-ups.

“After a point, (promoters of) start-ups would not like to dilute too much equity to raise funds. On the other hand, availing bank debt is a difficult proposition for start-ups,” he said.

Convertible notes carry a certain amount of interest and are convertible into equity shares based on certain criteria.

“Most angel or seed investments that we have seen outside of India typically happen through convertible notes. It works well for early stage investors as it allows investors to redeem their notes at a later date with a certain amount of return in a worst case scenario,” said Nitin Bhatia, managing director at tech-focused investment bank Signal Hill.

A lack of tax breaks has also curbed the involvement of local investors and encouraged entrepreneurs to domicile their companies in countries that offer lower levies.

In the past decade, most of India’s best performing Internet start-ups have chosen to establish themselves in countries such as Singapore, even though all of their business is in India.

Union budget

“I can’t say people won’t go to Singapore” because of the changes, Grant Thornton’s Visweswara said, referring to RBI’s rules. “But I would say that this was one of the steps that was required to encourage people to stay back.”

All eyes are now on 29 February, when finance minister Arun Jaitley presents the budget. Start-ups and investors are waiting to see if the government will ease taxes relating to capital gains on start-up investments. Any easing of those rules—for instance, exempting levies on gains made after holding for a year or more—could have a “huge impact”, Joshi said.

If Jaitley relaxes capital-gains tax rules “you will see a lot more money coming, not only from India but also from outside India”, Joshi said.