top tech news: ETtech Evening Briefing on Feb 19, 2021: SPACs explained, govt squeezes social media

Immediately, we take a more in-depth take a look at particular objective acquisition firms (SPACs) and why, after years within the wilderness, they’ve turn out to be extra common lately, attracting big-name buyers.

In the meantime, after its weeks-long battle with Twitter over the elimination of sure accounts and tweets associated to the farmers’ protest in Delhi, the federal government is planning to tweak its info expertise guidelines to drive social media platforms to take down ‘illegal’ content material inside 36 hours. Below the present guidelines, Twitter and others have 72 hours to take action.

1. SPACs are again. However what are they?

At the moment, one of many hottest developments amongst dealmakers within the Silicon Valley is the SPAC, quick for Particular Objective Acquisition Firm.

These funding autos, which have been round for many years within the West, have emerged as a well-liked various to the standard IPO, or preliminary public providing, for a number of non-public startups. About 300 SPACs had been searching for offers with about $90 billion in money as of final month, with extra autos popping up at a livid tempo,
according to the Wall Street Journal.

SPACs
raised a record $82 billion through IPOs last year and have raised about $38.3 billion up to now in 2021, as in comparison with $19.8 billion by conventional IPOs, in response to knowledge from Dealogic.

What’s an SPAC? SPACs, generally known as ‘clean cheque’ firms, are shell firms created with the only real intention of merging with a personal enterprise. These corporations listing on the inventory exchanges with none actual enterprise and lift cash from buyers. They then usually purchase non-public corporations and assist them go public rapidly with out the effort of a standard IPO. A SPAC has two years to discover a firm to accumulate or it should return the funds to buyers.

Execs: Elevating cash from a SPAC is simpler than doing so by a standard IPO for the reason that SPAC has already raised cash by an IPO. This implies the corporate in query solely has to barter with a single entity, versus 1000’s of particular person buyers.

This additionally makes the method of fundraising quite a bit quicker than by an IPO. And SPACs aren’t topic to shifts available in the market like IPOs are.

Cons: It’s usually dearer for a corporation to lift cash by a SPAC than an IPO. And buyers’ cash, which might sit in a SPAC belief ready for an appropriate goal for as much as two years, may very well be put to raised use elsewhere.

Reuters

Chamath Palihapitiya, a former Fb government and founding father of enterprise capital agency Social Capital, is extensively thought-about to be
the king of SPACs. He has sponsored six such firms, raised a complete of $4.34 billion, and bought companies throughout a number of sectors together with area journey, medical health insurance, monetary providers and actual property. Earlier this week, Palihapitiya’s SPAC group Social Capital Hedosophia
filed for seven new SPACs.

SPACs and Indian corporations

• In 2015, Videocon d2h was listed on the Nasdaq by a reverse merger with a blank-cheque car Silver Eagle Acquisition Corp.
• In 2016, Yatra began buying and selling on the Nasdaq after a $218 million reverse merger with Terrapin 3 Acquisition Corp, a US-based SPAC.
• SoftBank-backed on-line grocery Grofers is reportedly eyeing the SPAC route whereas former Star and Disney India chairman Uday Shankar and James Murdoch’s funding firm Lupa Techniques are weighing SPAC plans to accumulate an Asian media agency.

2. Govt squeeze on social media

Getty Photographs

Social media platforms in India might quickly be required to take down ‘illegal’ content material in 36 hours, as towards the present 72 hours, on the request of the federal government or on court docket orders,
The Times of India reported.

In keeping with the proposed amendments to Info Expertise (Intermediaries Tips) Guidelines, 2011, the federal government needs social media firms to behave extra rapidly on requests to take away such content material.

There’s extra: The brand new guidelines may make it obligatory for platforms with greater than 50 lakh customers in India to arrange an workplace within the nation and appoint a nodal officer to liaise with law-enforcement businesses. The amended guidelines additionally search to deploy automated instruments to proactively establish and take away illegal content material.

Why it issues: Earlier this month, when the federal government requested Twitter to droop accounts that it claimed had been behind the violence in Delhi on Republic Day, the corporate
wrote in a blog post that it might not take motion on “accounts that consist of reports media entities, journalists, activists, and politicians. To take action, we consider, would violate their elementary proper to free expression below Indian legislation.”

Tweet of the Day

3. ETtech Offers Digest

This week in
ETtech Deals Digest, India’s largest edtech startups continued to buy smaller rivals, fintech startups bagged the largest funding rounds, and a brand new fundraising route has opened for Indian startups.

Additionally, Tata Group has signed a $1.2 billion deal to purchase BigBasket, which might see India’s largest on-line grocery listing on the bourses in 24-36 months time.

ETtech

4. Elon Musk says Bitcoin much less dumb than money

Elon Musk has known as Tesla’s Bitcoin
bet an “adventurous enough” investment for the corporate. This got here after Binance Holdings CEO Changpeng Zhao known as out the world’s richest man for tweeting about Dogecoin, a cryptocurrency that actually
began as a joke.

The story up to now: A rising variety of Musk’s current tweets have
fuelled buying frenzies in shares and cryptocurrencies. Earlier this month, Tesla
acquired $1.5 billion value of Bitcoin. The electrical carmaker had mentioned it expects to start accepting Bitcoin as a type of cost for its merchandise within the close to future.

5. A $30-billion alternative in 5G

Indian IT providers corporations
are set to faucet into a possible $30-billion international alternative over the subsequent 5 years as 5G rollouts start globally.

Why it issues: Creating 5G options is predicted to be the subsequent large space for IT providers corporations after cloud computing, permitting them to broaden the scope of labor with current purchasers and work with enterprises in industries which have historically not been large spenders on IT.