Content creators such as Tanmay Bhat and Ranveer Allahabadia are getting into angel investing and other such investors are welcoming them with open arms. Find out why, and whether this trend is likely to take off, given that influencers are used to getting paid immediately, while angel investing is a long-term game.
Elsewhere in today’s letter:
- 🚨 The threat to end-to-end encryption
- 👨🏭 Flexible hours for gig workers
- 💰 Ant Group shelves share buyback
The rise of the Indian influencer-investor
(Illustration: Rahul Awasthi/ETtech)
Top content creators are turning angel investors in early-stage startups. From producing content for such companies, many creators are now investing anywhere between Rs 2 lakh and Rs 20 lakh in them. In just the past week, creators such as Tanmay Bhat and Ranveer Allahbadia (@BeerBiceps) have announced angel investments in Qoohoo, a platform that helps creators monetise their followers, and Ready Set Jet, an American beauty brand looking to India for expansion, respectively.
But why? Content creators are keen to invest in direct-to-consumer brands, fintech startups, and platforms that are building monetisation tools and avenues for the creator economy, experts told The Economic Times.
- Until now, creators made money from startups eager to leverage their reach to market their products. With the growing interest in startups and their rapidly increasing valuation figures, many creators now think it wiser to be a part of the brand’s journey as an investor instead.
- In turn, startups see value in their vast distribution channel and their storytelling abilities.
India must not break end-to-end encryption, says Internet Society
The Internet Society, an international internet advocacy body, has said that India must not use its new digital media rules to force messaging platforms to break end-to-end encryption or stop them from launching new products that offer it.
The new rules, announced last week, make it mandatory for short-messaging apps—such as Whatsapp, Signal, and Telegram—to trace the originator of flagged messages, a move that would force them to break end-to-end encryption.
Matter already in Supreme Court: The contentious provision on traceability was first proposed by the Ministry of Electronics and Information Technology (MeitY) in a draft version of the rules released in December 2018.
It is also the subject of a 2018 case—’Antony Clement Rubin vs Union of India’—that’s pending in the Supreme Court. The case began as a public interest litigation in the Madras High Court and sought the linking of people’s Aadhaar details with their social media accounts.
Over time the focus of the case shifted to how the originators of information could be traced on platforms such as WhatsApp and Signal, which are end-to-end encrypted.
The case was transferred to the Supreme Court in late 2019. On Jan. 30, 2020, the Supreme Court asked the Madras High Court to transfer all files related to the case to it, and scheduled the next hearing for three weeks later. There have been no subsequent hearings, probably owing to the pandemic.
What the government says: The government has said the new rules will help it in cracking down on crimes of a severe nature, such as those concerning the country’s security and sovereignty and public order, as well as sexual crimes against women and children.
Yet, but: Millions of Indians use encryption to prevent data theft and many other cyber threats. The Internet Society said that any attempts to weaken encryption would undermine the digital security not only of people in India, but those with whom they communicate outside the country as well. “Any requirements that force businesses to make themselves and their products less secure by breaking end-to-end encryption gives a green light to criminals and hostile actors to exploit confidential and sensitive information,” they said.
The Internet Freedom Foundation said previous proposals that seek to implement traceability without breaking end-to-end encryption have been shown to be vulnerable to spoofing, in which bad actors can falsely modify the originator information to frame an innocent person.
Unconstitutional? In 2019, when Justice BN Srikrishna, one of the main architects of the landmark Personal Data Protection Bill, was asked about the traceability mandate for encrypted messaging services, he said that such a rule would be unconstitutional if the government did not clearly define the objective, authority and procedure for doing so.
Flexible hours for gig workers on the cards
A panel set up by the National Association of Software and Service Companies (Nasscom) has started consultations to usher in flexible work conditions for gig workers and part-time IT professionals.
The industry body is also examining state and central laws to ascertain any legal challenges for such workers in the IT and business process management industries.
What’s the purpose? A new framework, Nasscom said, would allow companies to manage their employees’ working hours efficiently and figure out hybrid working models that would improve collaboration between workers.
Last year, in one of the biggest reforms for the tech industry, the government allowed permanent ‘work from home’ and ‘work from anywhere’ for IT companies after removing most of their registration and compliance requirements. Nasscom said the reviewed norms have made it easy for IT and BPM companies to hire more women professionals and others who can only work remotely.
Ant’s unsellable shares
Jack Ma’s Ant Group has shelved a share buyback program for current and departing staff, in part because of uncertainty over how to value the company, Bloomberg reported.
The company is struggling to determine a fair price, four months after Chinese authorities jeopardised its $ 35 billion initial public offering. China’s push against the Alibaba founder has already made investors nervous.
Here’s a timeline of how things went sour for Alibaba:
- Sep. 14, 2020: China issues new rules to regulate financial holding companies.
- Oct. 21, 2020: China’s securities watchdog gives the final nod to Ant Group to register its Shanghai IPO.
- Oct. 21, 2020: At a public event, Ma says the financial and regulatory system stifles innovation.
- Nov. 2, 2020: Chinese regulators suggest strict norms for digital micro-lending companies.
- Nov. 3, 2020: The Shanghai stock exchange suspends Ant Group’s IPO on its STAR Market, prompting Ant to also freeze the Hong Kong leg of its dual listing.
- Dec. 14, 2020: China fines deals involving Alibaba Group and Tencent Holdings.
ETtech Done Deals
■ Apna.co, a professional networking platform for blue- and grey-collar workers, has raised $ 12.5 million led by Sequoia Capital India and Greenoaks Capital. Existing investors Lightspeed India and Rocketship.vc also participated in the round.
■ IdeaForge, a homegrown unmanned aerial vehicle (UAV) startup, has picked up Rs 15 crore in venture debt from BlackSoil as it looks to fulfil a recent order from the Indian Army worth about Rs 145 crore. The Mumbai-based drone startup said it will use the debt capital to meet its working capital requirements and service its large order book.