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Home services marketplace <keyword id="8681398" type="COMPANY" weightage="20" keywordseo="Urban-Company">Urban Company</keyword> on Wednesday said it has raised USD 255 million (about ₹1,857 crore) in funding led by <keyword id="8265057" type="COMPANY" weightage="20" keywordseo="Prosus-Ventures">Prosus Ventures</keyword>, <keyword id="2106816" type="COMPANY" weightage="20" keywordseo="Dragoneer">Dragoneer</keyword> and <keyword id="268904" type="COMPANY" weightage="20" keywordseo="Wellington-Management">Wellington Management</keyword>. The series F round - which also saw participation from <keyword id="2603376" type="COMPANY" weightage="20" keywordseo="Vy-Capital">Vy Capital</keyword>, Tiger Global and Steadview - takes Urban Company's valuation to USD 2.1 billion. The latest round includes a <keyword id="11365744" type="UNKNOWN" weightage="20" keywordseo="primary-capital-infusion">primary capital infusion</keyword> of USD 188 million and a secondary sale of approximately USD 67 million by select angels and early investors, Urban Company CEO and co-founder Abhiraj Singh Bhal told . He added that Urban Company has raised about USD 330 million in primary capital till date. Bhal said the funds will be used towards innovation, training, product development, enhanced quality control and safety measures for both partners and consumers. The company also aims to increase its geographic footprint by entering the top 100 cities in India by 2022 and further expanding into international markets. "With this funding, we plan to rapidly scale our business while continuing to invest further in the safety of our consumers and service partners, training of partners and product development...We will continue to penetrate existing markets while venturing into new overseas geographies," Bhal said. Currently, Urban Company has more than 35,000 service partners across 35 cities in India, the UAE, Singapore, Australia and the Kingdom of Saudi Arabia. The marketplace offers a variety of home services to consumers across categories like beauty and personal care, cleaning services, plumbing, carpentry and appliance repairs. Bhal said the company has also been focussed on upskilling and training its service partners. The number of partners is set to grow in line with its expansion into more cities. Talking about the impact of pandemic on business, Bhal said while there was significant impact initially but the situation has changed now. "After the lockdown was lifted last year, we saw momentum returning and double to pre-COVID levels. We expect strong growth momentum to continue as more people use our services while staying safe within their homes," he added. Bhal noted that the company has undertaken a number of steps to ensure the safety of its partners, including taking care of their vaccination and providing safety gear. He added that over 50 per cent of its partners have already been vaccinated, and by June-end, this number is expected to go up to 75-80 per cent. Consumers can see the overall vaccination rate along with the vaccination status of the partner assigned when they book a service. SEE ALSO: <a href="https://www.businessinsider.in/tech/apps/news/google-photos-alternatives-are-hardly-any-good/articleshow/83138238.cms">Google Photos alternatives are hardly any good – here’s what made the Google service so good</a> <a href="https://www.businessinsider.in/stock-market/economy/news/indias-gdp-has-contracted-five-times-since-1947-but-never-as-bad-as-7-3/articleshow/83135455.cms">India’s GDP has contracted five times since 1947, but never as bad as 7.3%</a> <a href="https://www.businessinsider.in/tech/mobile/news/xiaomis-latest-wired-charging-tech-can-fully-charge-a-phone-in-just-8-minutes-and-wirelessly-in-15-minutes/articleshow/83136172.cms">Xiaomi’s latest wired charging tech can fully charge a phone in just 8 minutes and wirelessly in 15 minutes</a>

Urban Company raises $255 million at over $2 billion valuation, eyes global expansion

Hospitality major <keyword id="7036155" type="COMPANY" weightage="20" keywordseo="OYO-Hotels-Homes">OYO Hotels &amp; Homes</keyword>' valuation has reached the $9 billion-mark, according to industry sources. The development comes after the latest fundraise of ₹54 crore or $7.31 million from <keyword id="145884" type="DOMAIN" weightage="20" keywordseo="Hindustan-Media-Ventures-Ltd">Hindustan Media Ventures Ltd</keyword>. In a regulatory filing with the Ministry of Corporate Affairs, OYO said that it has raised ₹54 crore ($7.31 million) at a share price of $58,490 as part of its <keyword id="10872902" type="UNKNOWN" weightage="20" keywordseo="series-f1-round">Series F1 round</keyword>. With over 50 products and more than 500 microservices, the company plans to utilise the capital in strengthening its technology stack for delivering an improved partner and customer experience. <keyword id="183958" type="DOMAIN" weightage="20" keywordseo="Hindustan-Media-Ventures">Hindustan Media Ventures</keyword> subscribed to OYO's Series F1 Compulsory Convertible Cumulative Preference Shares (Series F1 CCCPS) for cash at an issue price of ₹43.20 lakh per Series F1 CCCPS for an aggregate consideration equivalent to ₹54 crore to Hindustan Media Ventures Limited on a private placement basis. The growth in valuation comes after it dropped to $8 billion last year from $10 billion in November 2019. OYO Hotels &amp; Homes is also backed by investors including the SoftBank Vision Fund, <keyword id="122716" type="COMPANY" weightage="20" keywordseo="Sequoia-Capital">Sequoia Capital</keyword>, <keyword id="860456" type="PERSON" weightage="20" keywordseo="Lightspeed-Ventures">Lightspeed Ventures</keyword>, Airbnb, and Hero Enterprise, amongst others. In October 2019, OYO announced that it had raised $1.5 billion, as part of its Series F funding round. As a part of this round, RA Hospitality Holdings' infused approximately $700 million as primary capital in the company, with the balance of $800 million being supplemented by other existing investors. When contacted Abhishek Gupta, Chief Financial Officer, OYO Hotels &amp; Homes told: "We are delighted to welcome HT <keyword id="283616" type="DOMAIN" weightage="20" keywordseo="Media-Ventures-Ltd">Media Ventures Ltd</keyword>. as an investor in OYO. Their support will help us to further build on our unique technology stack for small hotels and homeowners across the world." He said that OYO is on a steady path of resurgence in 2021, the company is seeing signs of recovery in its core markets of India, Europe, and Southeast Asia while sustaining gross margin dollars at pre-Covid levels. "Despite the pandemic, the company's valuation has held through and we believe this will only improve as the guests across the world gradually begin to travel again," Gupta said. Piyush Gupta, Group CFO, HT Media Ventures Ltd, said: "We are extremely excited to partner OYO in its mission of supporting owners and operators of small and independent hotels and homes through its pioneering technology. We look forward to working with the company's management as it continues to add value to the experience of its asset partners and guests alike." Hindustan Media Ventures is promoted by HT Media Ltd which holds 74.4 per cent stake in the company. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/apple-find-my-stalking-airtags-item-safety-alerts/articleshow/81342449.cms">Apple’s new Find My feature updated to prevent stalking as launch of the rumoured AirTags nears</a> <a href="https://www.businessinsider.in/tech/news/regulating-digital-news-is-important-but-freedom-of-press-is-precious/articleshow/81341289.cms">OPINION: Regulating digital news is important but freedom of press is precious</a> <a href="https://www.businessinsider.in/stock-market/news/heranba-industries-ipo-makes-a-bumper-debut-on-stock-exchanges/articleshow/81342578.cms?upcaceh=2">Heranba Industries makes a bumper debut on stock exchanges — shares soar 44% over the issue price band</a> <a href="https://www.businessinsider.in/finance/banks/news/ignore-low-cibil-score-for-street-vendor-loans-work-on-holidays-and-other-diktats-from-indian-government-to-banks-rushing-to-meet-march-target/articleshow/81223572.cms">EXCLUSIVE: Bankers may be working all 31 days of March with the government looking to double the loans doled out under the PM SVANidhi scheme</a>

OYO's valuation climbs again — hits $9 billion after its latest fundraise of $7 million

<ul class="summary-list"><li>Primary care startup One Medical on Friday filed paperwork with the US Securities and Exchange Commission to go public. </li><li>The company plans to trade under the ticker "ONEM."</li><li><a href="http://newsletter.businessinsider.com/join/health-insider">Subscribe to Dispensed, Business Insider's weekly healthcare newsletter</a>.</li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary" target="_blank" rel="noopener">Click here for more BI Prime stories</a>.</li></ul>Primary-care startup <a href="https://www.businessinsider.com/category/one-medical">One Medical</a> just filed to go public. On Friday, the company filed <a href="https://www.sec.gov/Archives/edgar/data/1404123/000119312520001429/d806726ds1.htm">paperwork</a> with the US Securities and Exchange Commission to go public, and plans to trade under the ticker "ONEM."When One Medical opened for business in San Francisco in 2007, its goal was to upend the way people got medical care by making it easy and convenient to see a doctor. The company charges a $200 annual fee and bills your insurance.Read more: <a href="https://www.businessinsider.com/what-its-like-to-use-one-medical-for-primary-care-in-new-york-review-2019-4">I became a member of One Medical, a primary-care practice that charges a $200 annual fee and has plans to double over the next two years. Here's what it was like.</a>After a <a href="https://www.businessinsider.com/one-medical-ceo-amir-rubin-on-where-the-company-goes-in-its-second-decade-2018-7">big infusion of capital in 2018</a>, it's expecting to double the number of medical clinics it operates over the next two years.The company raised $220 million in funding in a 2018 round led by The Carlyle Group. In total, the company's raised $408 million and has a private valuation of $1.5 billion, according to PitchBook. This story is developing. <a href="/intelligence/digital-health?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_subscription&amp;itm_content=health&amp;itm_campaign=digital-health"></a>Featured Digital Health Articles: - <a href="/telehealth-industry-explained">Telehealth Industry: Benefits, Services &amp; Examples</a> - <a href="/value-based-care-pay-for-performance-healthcare-model">Value-Based Care Model: Pay-for-Performance Healthcare</a> - <a href="/senior-care-market-trends">Senior Care &amp; Assisted Living Market Trends</a> - <a href="/wearable-technology-healthcare-medical-devices">Smart Medical Devices: Wearable Tech in Healthcare</a> - <a href="/artificial-intelligence-healthcare">AI in Healthcare</a> - <a href="/remote-patient-monitoring-industry-explained">Remote Patient Monitoring Industry: Devices &amp; Market Trends</a>

Buzzy primary care startup One Medical just filed to go public

New Delhi, Jun 3 () Religare Enterprises Ltd on Wednesday said it has raised Rs 300 crore by divesting stake in group firm Religare Health Insurance Company Ltd (RHICL) to Kedaara Capital. Consequent to the capital raising, the company said it has retired previous loan and has become completely external debt free. Earlier in April, Religare Enterprises Ltd (REL) informed about the proposed divestment of part of the investment of the company in Religare Health Insurance Company Ltd (RHICL) to Kedaara Capital Fund II LLP. Kedaara Capital has acquired the stake through its subsidiary Trishikhar Ventures LLP (jointly referred as Kedaara). In this regard, the divestment of part of the investment of the company in RHICL and infusion of primary capital in RHICL by Kedaara was completed on Tuesday, REL said in a regulatory filing. "The total primary capital raised by RHICL from Kedaara is amounting Rs 300 crore. This is in line with Kedaara's additional subscription commitments wherein they had agreed to subscribe for the additional primary capital of Rs 100 crore in addition to their initial commitment of subscribing to primary capital of Rs 200 crore in RHICL," it said. REL said the total investment made by Kedaara to acquire shares of RHICL is Rs 567.31 crore, which comprises primary capital infusion of Rs 300 crore in RHICL and Rs 267.31 crore for the purchase of RHICL shares from existing shareholders, including purchase of 6.39 per cent stake from the company against a consideration of Rs 200 crore. Pursuant to these transactions, the shareholding of REL in RHICL now stands at 72.02 per cent on a paid-up capital basis. Further, it said that consequent to capital infusion by Kedaara, it has settled loan of Axis Bank. "Out of the mentioned consideration received from the divestment of stake in RHCIL, the company has utilised Rs 153 crore towards the payment of the full and final settlement consideration under the consent agreement dated October 1, 2019, entered by the company and its subsidiaries with Axis Bank Ltd," it said. With this, the company said it has become external debt-free. Core investment company REL is engaged into lending, broking and insurance business through its subsidiaries. "The settlement of our financial dues, much ahead of the prescribed time frame demonstrates our commitment to resolve all legacy issues and move forward on the path to revival," said Religare Enterprises Ltd Executive Chairperson Rashmi Saluja. REL Chief Financial Officer Nitin Aggarwal said that while there were many headwinds and legacy issues, we have successfully resolved most of them and others are on the path to resolution. Among them, the Axis settlement stands out as an important milestone as it has made Religare Enterprises external debt-free. He said REL has been on a course correction mode for the past two years and the company is steering the ship to ensure that all businesses perform to their full potential and accelerate growth. After achieving the important external debt-free milestone, the company is well positioned to address all the requirements of other subsidiary businesses as well, REL added. The healthcare insurance business is growing at almost 50 per cent CAGR (compound annual growth rate) over the past three years, and REL expects it to continue to grow at the same rate going forward. The broking business has stabilised and started growing in 2020-21. The company exuded confidence that for a turnaround in the current financial year owing to strong underlying group financial position on the back of long-term measures undertaken by the new board and management. KPM HRS

Religare Enterprises raises Rs 300 cr by divesting stake in RHICL to Kedaara Capital

New Delhi, Nov 27 () The government on Wednesday
increased the authorised capital of Food Corporation of India
(FCI) to Rs 10,000 crore from Rs 3,500 crore, paving the way for
additional equity infusion in the state-owned firm.
The decision would also help the FCI, the government's nodal agency for procurement and distribution of foodgrains, in reducing its debt and interest cost.
The Cabinet Committee on Economic Affairs (CCEA), chaired
by Prime Minister Narendra Modi, has approved increasing
the authorised capital of the FCI.
"With the increase of authorised capital, additional
equity capital can be infused in the FCI through Union Budget, to
fund the foodgrains stock, perpetually held by the FCI," an
official statement said.
This will reduce the borrowings of the FCI, save its interest
cost and reduce food subsidy, it added.
"The operations of the FCI require maintaining perpetual
stock of foodgrains which needs to be funded by the Government
of India through equity or long-term loan," the statement
said.
The Centre is providing equity to the FCI for maintaining
stocks. The present authorised equity capital of the Corporation is
Rs 3,500 crore and paid up equity capital as on March 31, 2019
is Rs 3,447.58 crore.
The FCI was constituted under the Food Corporations Act,
1964, to implement the food policy of the government.
Its primary objective is to ensure Minimum Support Price
(MSP) to farmers, maintain buffer stock of foodgrains besides distribution of foodgrains under National Food Security Act
and other welfare schemes of the central government. MJH
NAB DV ANU

Govt hikes authorised capital of FCI to Rs 10,000 cr

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Pat Greenhouse/The Boston Globe via Getty Images</div></div></div><ul class="summary-list"><li>A number of ad agencies are trying to crack direct-to-consumer market by applying what they've learned working with DTC startups over the years to launch brands of their own.</li><li>Agencies including Decoded, former agency Gin Lane, and The Engine is Red are launching everything from <a href="https://www.businessinsider.com/dtc-boom-has-created-a-roster-of-specialized-ad-agencies-2018-11">eco-friendly yoga equipment</a> and cookware to cannabis-infused beverages and snackable ricotta cups.</li><li>While launching their own DTC brands enables agencies to expand their revenues, not everyone is convinced that ad agencies can create viable and long-lasting consumer companies. </li><li><a href="https://www.businessinsider.com/prime">Click here for more BI Prime stories.</a></li></ul>Last week, Gin Lane, the creative and design agency behind direct-to-consumer upstarts including Harry's and Hims, shut shop.The move wasn't driven by financial challenges or increasing competition and decreasing margins. Instead, it was driven by the agency's desire to carve a piece of <a href="https://www.emarketer.com/content/direct-to-consumer-brands-2019">the burgeoning DTC pie</a> for itself by launching its own suite of DTC brands.Read More: <a href="https://www.businessinsider.com/gin-lane-is-spinning-off-into-multi-brand-dtc-company-2019-8">A leading direct-to-consumer ad agency behind upstarts including Harry's and Hims just raised $14 million to spin off into its own multi-brand DTC company</a>Gin Lane is hardly alone. A number of ad agencies are trying to crack the DTC arena by applying what they've learned working with startups over the years to launch brands of their own, from <a href="https://www.businessinsider.com/dtc-boom-has-created-a-roster-of-specialized-ad-agencies-2018-11">eco-friendly yoga equipment</a> and intimate activewear to cannabis-infused beverages and snackable ricotta cups.<h2>Specialist agencies around DTC brands are now launching DTC brands of their own</h2>Ad agencies incubating brands in-house is nothing new, and even established shops like BBH, Huge and <a href="https://www.fastcompany.com/40427324/advertising-superstar-david-droga-knows-how-to-get-in-your-head">Droga5</a> have all dabbled in developing their own products alongside the services they provide their clients. And big brands, including P&amp;G and Mars Petcare, have also attempted to build DTC brands of their own. But DTC upstarts have given rise to a <a href="https://www.businessinsider.com/dtc-boom-has-created-a-roster-of-specialized-ad-agencies-2018-11">new type of agency that caters specifically to the needs of such brands.</a> And with several years of experience under their belt, many of these specialist agencies including Axione, Decoded, Gin Lane, GYK Antler, and The Engine is Red, think that they are better poised than others to take their own DTC brands to market.Decoded came out with yoga equipment brand <a href="https://42birds.com/">42 Birds</a> last November and GYK Antler's founder Travis York runs DTC athletic footwear company York Athletics, while Gin Lane recently launched Pattern, a holding company of DTC brands, with cookware company Equal Parts as its flagship brand. Axione's athletic intimate wear brand in collaboration with The Coveteur cofounder Stephanie Mark is set to roll out later this year, while The Engine is Red has developed a CBD-infused sparkling water."Until now, agencies have never really been responsible for the outcome," Matt Rednor, founder and CEO at Decoded and cofounder at 42Birds, told Business Insider. "Launching 42Birds has allowed us to be more invested in our clients and combine the breadth of an ad agency with the depth of an in-house marketer. We have learned how to build a business, rather than just market one."Launching its own DTC brand enabled the agency to move faster, said Chris Denny, founder and president of The Engine is Red, allowing it to test quickly, and iterate faster based on real-time customer feedback. It has also meant that agencies can expand their revenue streams to go beyond providing services and gain an understanding of not only digital media, e-commerce, and performance marketing, but also pricing, packaging, shipping, storage, and supply chain management, said Chris Sojka, cofounder and chief creative officer at Madwell. "We didn't need to jump on the DTC bandwagon just because it's hot - direct-to-consumer is a channel mechanism, not a value proposition in itself," said David Eisanmen, cofounder and CEO at Madwell, which initially envisioned its ricotta snack cups Rif Raf as a DTC product, but decided to go straight to retailers upon realizing the limitations of a perishable DTC product. "Our biggest lesson was that it's about the value the product is ultimately providing."<h2>But not everyone is on board with the idea that agencies should develop their own DTC brands</h2>Agencies building their own DTC brands is still nascent, and the jury is still out on whether agencies can develop successful products. But some are seeing initial success.Pattern, the DTC umbrella company launched by what was formerly Gin Lane, has raised $14 million in funding from investors including RRE Ventures, Primary Ventures, and Kleiner Perkins. And the CBD-infused sparkling water developed by The Engine is Red not only sold out its initial test inventory in 45 days, but was also ultimately sold to a PE firm before its official launch this April, according to Denny. (He declined to name the brand due to the terms of the deal).Not everyone, however, is convinced that ad agencies can create viable and long-lasting direct-to-consumer companies. Mike Cassidy, the former CEO of ad tech company Undertone, who now runs his own DTC and e-commerce focused agency BVAccel said that his agency didn't see the need to develop its own products as it has vast experience spanning more than 150 DTC brands. Plus, running an agency is time-consuming."Being an agency is hard work: long hours, high demands and lots of complex external relationships to manage," he said. "Some of the agencies don't want to be agencies anymore and are looking for a way out. But we are doubling down with acquisitions and other investments, and our goal is to keep training our teams, and finding new ways to help DTC companies sell more and drive profitability."The skillsets that agencies bring to the table are also different than those pertinent to building DTC brands, such as figuring out logistics, or making sure a subscription box gets shipped, said Mohan Ramaswamy, founding partner at digital product agency Work + Co."Where we've been able to succeed in supporting these companies is their experience - helping streamline customer acquisition to actual conversion or making sure that their digital fulfillment forms are easy and simple to use," he said.Steve Parker, cofounder and CEO at agency Levelwing, as well as founder of seed-stage venture capital firm, Third <keyword id="46801" type="COMPANY" weightage="60" keywordseo="prime">Prime</keyword>, agreed."Models whereby an agency is attempting to create a brand from scratch or ones in which they take equity for work are not smart, because agencies are service businesses and because most brands ultimately fail," he said. "From a VC perspective, we have a few DTC brands, and they take immense focus and dedication and funding." <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/cmos-how-brands-should-participate-in-social-political-issues-2019-8">Brands can no longer stay away from social and political issues. We asked some of the biggest names in the industry how to do it right.</a></h3> <div> </div> </div>

Ad agencies are building brands around everything from yoga equipment and cookware to CBD-infused drinks to the crack direct-to-consumer market

In an era where customer experience is a primary business differentiator, the role of service hubs has evolved from merely answering calls to becoming innovation centers. With the infusion of advanced technologies like <keyword id="107950" type="General" weightage="20" keywordseo="artificial-intelligence" source="Orion">Artificial Intelligence</keyword> (<keyword id="6355999" type="General" weightage="20" keywordseo="AI" source="Orion">AI</keyword>) and Generative AI (Gen-AI), the service hub industry is now undergoing a transformation that promises to redefine customer interactions, according to experts. “The nature of the industry will change. I think even calling it <keyword id="19945906" type="General" weightage="20" keywordseo="customer-service" source="keywords">customer service</keyword> or service industry may be a very different outlook 5 years from now,” said Sameer Bapat, SVP and COO of Cognizant IOA, during a panel discussion on “Revolutionsing Customer Experience Innovating Service Hubs Through Technology,” hosted by Business Insider India. Leaders in the industry believe that India is entering the golden age of customer service, one powered by data-driven insights, AI-driven empathy, and evolving human-machine collaboration. “The net amount of venture capital and private equity capital that you’re going to see in the customer service industry going forward is going to 5-10x of what it has been in the last 5 years,” predicted panelist Vijay Narsapur, SVP and Business Head of Infosys BPM. <div type="Youtube" id="E23CeECUh9A" title="Revolutionizing Customer Experience: Innovating Service Hubs Through Technology" thumbUrl="https://i.ytimg.com/vi/E23CeECUh9A/mqdefault.jpg"><url><![CDATA[https://www.youtube.com/watch?v=E23CeECUh9A]]></url></div> <h2>The evolution of service hubs: More than customer service</h2>No longer just centers for addressing customer complaints or technical issues, today’s service hubs are integrating innovative technologies to become the nerve center of business operations. According to Sanjay Kukreja, Global Technology Head at Eclerx, tools like data engineering and cloud computing have shifted customer service into real-time interactions, allowing businesses to assist customers faster and more efficiently than ever before. For Narsapur, service hubs are now the lifeblood of the business process management (BPM) industry. End customers have become increasingly comfortable interacting with AI and automated systems. However, they still crave human connection, especially when complex or emotionally charged issues arise. Narsapur points out that this blending of technology and human touch is crucial for refining the customer journey. As businesses scale, service hubs are expected to balance these elements more tightly to deliver both efficiency and empathy. <h2>AI and Gen-AI: Disruptors or Enhancers?</h2>Arguably, the most significant driver of change in the service hub industry has been the integration of AI and Gen-AI. Bapat explains that these technologies have transformed how service hubs operate. Automation tools have led to productivity gains ranging between 20% to 60%, primarily by streamlining mundane tasks, improving scalability, and delivering more personalized customer interactions. This isn’t just an incremental improvement—it’s a deep, domain-led transformation of how companies interact with their customers. But, as Abhinandan Jain, Chief Growth Officer at Startek, notes, AI doesn’t just enhance efficiency—it also amplifies empathy. Service hubs are learning how to use AI as an "empathy amplifier," where AI-driven systems handle routine queries, and human agents step in for more complex, emotionally charged interactions. This helps agents focus on delivering the high-touch experiences customers expect when they escalate an issue to a real person. While there has been some anxiety surrounding AI replacing jobs, the experts argue that this technology will instead create more high-value roles. ““There is going to be an increase of anywhere between 2x to 5x in the number of jobs that are going to be created in this particular industry,” said Narsapur. For example, there will be an increasing demand for professionals skilled in data science, machine learning, and algorithm management to maintain and improve AI systems. According to a <a href="https://www.mckinsey.com/mgi/our-research/generative-ai-and-the-future-of-work-in-america">McKinsey</a> report, AI will automate 25-30% of jobs in customer service, but the technology will also create new roles in AI supervision, data analysis, and customer experience management. <h2>Data-driven insights and the role of <keyword id="23232621" type="General" weightage="20" keywordseo="CRM-tools" source="keywords">CRM tools</keyword></h2>One of the most promising developments in the service hub sector is the increasing reliance on data to drive customer interactions. Jain explains that service hubs are now equipped with sophisticated Customer Relationship Management (CRM) tools that can mine both structured and unstructured data, enabling companies to gain a holistic view of customer behavior. This level of insight allows businesses to not only address customer queries more efficiently but also predict future needs, making the customer journey more proactive than reactive. These CRM platforms are evolving, too. Narsapur notes that many service hubs, particularly in industries like banking and telecom, now use platforms that integrate various aspects of customer interaction, from onboarding to relationship management. These platforms provide a unified view of customer interactions, allowing agents to access the information they need quickly, which ultimately drives faster resolution times and higher customer satisfaction. A <a href="https://www.gartner.com/en/newsroom/press-releases/2021-01-12-gartner-predicts-80--of-customer-service-organization">Gartner</a> study revealed that by 2025, 80% of customer service interactions will be handled by AI and CRM systems, up from 52% in 2020. <h2>The economic impact of AI on service hubs</h2>The rise of AI and Gen-AI is also fueling an economic boom in the service hub sector. Jain predicts that the influx of venture capital and private equity in AI research for customer service hubs will increase five- to ten-fold in the coming years. This investment is primarily driven by the need for businesses to remain competitive in an increasingly tech-driven market. The economic growth potential is massive, especially in regions like India, where the talent pool for AI and data science is unmatched. Kukreja echoes this sentiment, noting that India’s service hubs are well-positioned to lead this transformation due to their depth of talent in areas such as data engineering, mathematics, and AI development. This gives Indian service hubs a competitive edge as companies look to scale their customer service operations with tech-driven solutions. Global spending on Gen-AI is expected to reach $26 billion by 2027, with Japan and India set to become the most rapidly expanding markets in the forthcoming years, according to <a href="https://www.idc.com/getdoc.jsp?containerId=prAP52048824">IDC</a>. <h2>What lies ahead for service hubs?</h2>As we look to the future, the role of service hubs will likely expand even further. Narsapur warns that while platforms and AI will drive efficiency, businesses should not rely solely on technology. Competitive advantage will come from the integration of human expertise, technology, and industry-specific solutions. Different sectors, such as banking, telecom, and retail, each have unique needs that service hubs must adapt to in order to provide effective, personalized customer experiences. AI will play a central role in this transformation. But as Jain points out, it won’t replace human agents entirely. Instead, it will coexist with them, moving people up the value chain to focus on higher-value tasks. AI will handle the routine, while humans will step in where emotional intelligence and complex problem-solving are required. In the end, the future of service hubs is not just about technology; it’s about blending tech and humanity in a way that elevates customer experiences to new heights. We are at the dawn of a new era for customer service hubs. The infusion of AI and Gen-AI, along with data-driven insights and sophisticated CRM tools, is transforming the industry from the ground up. Far from being a threat to jobs, AI will create new opportunities, leading to a more dynamic, efficient, and empathetic customer experience. With significant economic growth on the horizon, particularly in regions like India, the service hub industry is set to play a pivotal role in the future of business. The golden age of customer service is here, and the best is yet to come. This article is part of a four-part webinar series in partnership with nasscom. These monthly webinars aim to delve deep and offer insights into the evolving BPM landscape. You can watch the full video of the second session <a href="https://www.youtube.com/watch?v=E23CeECUh9A">here</a>. Disclaimer: This article is generated and published by the Insider Studios team. You can get in touch with them on insiderstudios@businessinsider.in

Customer service hubs: Entering the golden age with Gen-AI and tech-driven solutions

<ul class="summary-list"><li>Big businesses such as hospital systems, insurers, and PE firms are gobbling up medical clinics.</li><li>Some doctors and industry experts fear corporate owners could prioritize profits ahead of patients.</li></ul>Independent doctors are almost a thing of the past.UnitedHealth Group struck a deal in March to buy the nine-state doctor group of the struggling hospital system Steward Health Care. The same month, the powerful healthcare conglomerate, which owns the nation's largest <a target="_blank" href="https://www.businessinsider.com/one-medical-patients-affected-unitedhealthcare-mount-sinai-dispute-2024-3">health insurer</a>, got the green light to take over a decades-old independent Oregon <a target="_blank" href="https://www.oregonlive.com/business/2024/03/oregon-health-officials-give-emergency-ok-to-corvallis-clinics-acquisition-by-insurance-giant-unitedhealth-group.html">medical practice</a>, adding another 100 healthcare providers to its roster. It picked up a 400-doctor <a target="_blank" href="https://www.fiercehealthcare.com/payers/unitedhealth-quietly-scoops-new-york-physician-group-crystal-run">group</a> in New York about a year before.These are just the purchases we know about; there could be many more. Physician practice deals often go unannounced and get little attention from regulators, but they add up. Near the end of 2023, <a target="_blank" href="https://www.businessinsider.com/optumhealth-ceo-plans-to-make-clinics-a-100-billion-business-2021-4">UnitedHealth's Optum</a>, the business unit housing its clinics and surgery centers, said it employed or was affiliated with 90,000 doctors. That's a whopping 10% of all doctors in the US.Though it's the hungriest, <a target="_blank" href="https://www.businessinsider.com/optumhealth-ceo-plans-to-make-clinics-a-100-billion-business-2021-4">UnitedHealth</a> is just one buyer in the market for physicians. Little by little, big businesses have taken over healthcare in the US. Hospitals have been scooping up medical practices for decades to create giant health systems. Insurance companies fought back with their own clinic purchases. Private equity firms increasingly staked claims to nursing homes and groups of specialists such as emergency physicians and dermatologists.And in the last few years, tech companies and retailers like Amazon, CVS Health, and Walgreens added thousands of doctors to their payrolls when they bought <a target="_blank" href="https://www.businessinsider.com/cvs-walgreens-amazon-primary-care-acquisition-strategy-2024-3">primary-care chains</a>.Nearly 78% of US doctors are employed by hospitals or other corporate entities, such as insurers and PE firms, according to <a target="_blank" href="https://www.physiciansadvocacyinstitute.org/PAI-Research/PAI-Avalere-Study-on-Physician-Employment-Practice-Ownership-Trends-2019-2023">research</a> from consultancy Avalere and the Physicians Advocacy Institute. For the first time, more medical practices were owned by corporate entities (30%) than hospitals (28%) as of January 2024, the research found.There's mounting evidence that this trend toward corporatization could harm patients. Research has found that prices go up when hospitals and private-equity firms buy medical groups. Sometimes, care gets <a target="_blank" href="https://www.nber.org/papers/w30928">worse</a>, but there's still much unknown about how corporate ownership affects medical care, especially when it's a giant like UnitedHealth or CVS doing the buying.Some doctors and experts in the industry fear corporate owners could prioritize their investors and profits ahead of patients, and doctors could lose the ability to make their own decisions about what's best for a patient."The big guys aren't cheaper. They don't deliver better customer service, they aren't more timely, none of that. They're just able to negotiate higher prices," said Farzad Mostashari, the CEO of Aledade, a company that aims to help primary care practices stay independent.The federal government is starting to pay attention. In March, it <a target="_blank" href="https://www.ftc.gov/news-events/news/press-releases/2024/03/federal-trade-commission-department-justice-department-health-human-services-launch-cross-government">launched</a> an inquiry into PE firms and other corporate owners' "increasing control over healthcare" and how this might threaten patients' access to affordable and quality care.The feds also zeroed in on UnitedHealth, <a target="_blank" href="https://www.wsj.com/health/healthcare/u-s-launches-antitrust-investigation-of-healthcare-giant-unitedhealth-ff5a00d2">reportedly</a> facing an antitrust investigation by the US Justice Department into how its medical group acquisitions affect consumers and competitors. News of the probe surfaced before a <a target="_blank" href="https://www.businessinsider.com/change-healthcare-cyberattack-small-mental-health-practices-payments-money-2024-3">cyberattack on UnitedHealth's</a> technology business, Change Healthcare, caused hospitals and clinics nationwide to forgo billions in payments — raising more questions about UnitedHealth's chokehold on the healthcare industry.<h2>Doctors are hot commodities</h2>It's tough to lump the many buyers of medical practices together, as they're pursuing different strategies. But, in essence, they're all hiring doctors for their relationships with patients, who bring opportunities for more profits. <a target="_blank" href="https://www.businessinsider.com/gen-z-millennials-giving-up-medical-care-cant-afford-costs-2024-2">US healthcare spending</a> reached $4.5 trillion in 2022, representing almost a fifth of the national GDP.Hospitals rely on doctors — especially those who provide primary care — to refer patients for lucrative procedures or surgeries. <a target="_blank" href="https://www.businessinsider.com/unitedhealth-stock-exec-medical-costs-rising-2023-6">Insurers like UnitedHealthcare</a> and CVS' Aetna are required by federal law to spend most of the money they collect in premiums on medical care. Still, they can pocket more of those premiums by sending patients to clinics they own.Pharmacies hope that buying medical practices will give more prescriptions to fill and get more customers to buy over-the-counter products at the front of the store."They all realize that patients will follow what their doctors tell them to do or where their doctors tell them to go," said Chas Roades, a longtime healthcare consultant. "So it allows them to both drive traffic to a downstream profit model that they're interested in growing, and I think it also is a way to get consumers to trust them."Meanwhile, independent doctors have a tough time going it alone. Reimbursement is shrinking, and small practices don't have the ability to <a target="_blank" href="https://www.ama-assn.org/system/files/2022-prp-practice-arrangement.pdf">negotiate higher rates</a> as big hospital systems do. Plus, running a modern medical practice is expensive, requiring investments in staffing, technology, and electronic health records. <a target="_blank" href="https://www.businessinsider.com/ai-chatbots-tech-doctors-medicine-healthcare-system-empathy-quality-email-2023-6">The pandemic</a> made things even more challenging, spurring many doctors to sell their private practices.<h2>The quiet takeover of physician practices</h2>Much of the takeover of physician practices has slid under the radar. That's because acquisitions valued below <a target="_blank" href="https://www.ftc.gov/enforcement/competition-matters/2024/02/new-hsr-thresholds-filing-fees-2024">$119.5 million</a> don't have to be reported to federal regulators, and many practice purchases don't meet that threshold. Publicly traded UnitedHealth, for instance, rarely announces its purchases of medical groups and surgery centers."We're really flying blind here with respect to understanding how many acquisitions by which entities and what geographies and what specialties," said Yashaswini Singh, an assistant professor at Brown University who studies healthcare consolidation.This lack of disclosure has made consolidating doctor practices difficult to study. Research into private equity's effects on healthcare is just emerging, and there's little to no academic, peer-reviewed research on how other corporate owners' acquisitions affect healthcare prices and quality, Singh said.Studies, including Singh's <a target="_blank" href="https://jamanetwork.com/journals/jama-health-forum/fullarticle/2795946">research</a>, have shown, however, that PE ownership leads to steeper prices and more utilization, meaning patients may have more frequent doctor's appointments. Together, that drives healthcare costs higher. Research also suggests that PE ownership of nursing homes and hospitals <a target="_blank" href="https://jamanetwork.com/journals/jama/article-abstract/2813379?guestAccessKey=e0cef9be-d55c-4bcf-8892-412af8f24355&amp;utm_source=For_The_Media&amp;utm_medium=referral&amp;utm_campaign=ftm_links&amp;utm_content=tfl&amp;utm_term=122623">worsens the quality</a> of care. One <a target="_blank" href="https://www.nber.org/system/files/working_papers/w28474/w28474.pdf">paper</a> found that patients who went to nursing homes owned by private equity firms had a 10% greater chance of dying.And yet, private equity companies are rapidly expanding their presence in healthcare. A 2023 <a target="_blank" href="https://www.antitrustinstitute.org/wp-content/uploads/2023/07/AAI-UCB-EG_Private-Equity-I-Physician-Practice-Report_FINAL.pdf">study</a> found that one private equity firm owned 30% of the market share for physician practices in over a quarter of metropolitan areas across the US. A single PE firm owned over half the market share in some areas.<h2>'An unsatisfying way of practicing medicine'</h2>Acquisitions by other corporate giants might not produce the same outcomes as PE firms, said Zirui Song, an associate professor of healthcare policy and medicine at Harvard Medical School who studies private equity in healthcare. PE firms are unique in holding on to their acquisitions for only a few years and saddling their acquired companies with debt and fees. Owners who hang on to their medical groups might be more motivated to improve services, he said.Anecdotally, though, many doctors don't like working for corporate overlords, Roades said. Older physicians who own equity in their medical practice get a nice payday when they sell, but the younger ones left behind are closely managed and measured in terms of cost and productivity, he added.It's "an unsatisfying way of practicing medicine. We're seeing a growing number of disgruntled early and mid-career physicians in these groups who find themselves suddenly working for large corporations, and this is not what they wanted to do with their lives," he said.After a few years working at Optum-owned Oregon Medical Group, Dr. Nick Jones opened a <a target="_blank" href="https://www.businessinsider.com/direct-primary-care-a-no-insurance-healthcare-model-2017-3">direct primary care practice</a>, a type of clinic that charges a monthly fee instead of billing insurance. He said there's a sense of powerlessness for primary-care doctors in the traditional healthcare system — whether they're employed by Optum, a large hospital system, a private-equity firm, or a nonprofit clinic.With thousands of patients to treat, they face a mountain of administrative paperwork and have no control over their schedules. These problems stem from the fact that primary-care doctors are <a target="_blank" href="https://kffhealthnews.org/news/article/compensation-pay-primary-care-shortage-solution/">underpaid</a> in the traditional "<a target="_blank" href="https://www.commonwealthfund.org/publications/newsletter-article/moving-health-care-system-away-fee-service">fee-for-service</a>" healthcare system, in which doctors are paid for every visit, he said.While he felt supported at his previous Optum-owned clinic because of his office manager, "the financial underpinnings and the economics of medicine" made it unsustainable and stressful, Jones said. "There was a three or four month wait for patients to see me. There was still too much on our plate to do, and [during the pandemic] there weren't enough medical assistants or case managers or nutritionists or other support to make 20 patients a day feel like the right thing to do."<h2>Doctors worry corporate giants put profits over patients</h2>The insurers and retailers say care is better and cheaper when integrated under one roof, connected to the health plan, pharmacy, or other provider organizations.For its part, Optum says it wants to improve the health and well-being of people and lower the cost of care with integrated care teams and better technology. It says it's helping clinics transition to providing <a target="_blank" href="https://www.businessinsider.com/optumhealth-ceo-plans-to-make-clinics-a-100-billion-business-2021-4">"value-based"</a> or "accountable" care, which means that its doctors get paid fixed fees upfront that, in theory, encourages them to keep patients healthy and order fewer unnecessary tests.Optum said in a statement it continues "to focus on supporting physicians, advance practice clinicians, and nurses in closing gaps in care and helping the health system perform better for everyone."A spokesperson pointed to a <a target="_blank" href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2799376">study</a> by Optum published in JAMA Network Open in December 2022 that found seniors in value-based care arrangements were less likely than seniors in traditional payment models to visit the emergency room, or be admitted at the hospital for COPD, asthma, stroke, or heart attack.But there are potential dangers. Patients may end up with fewer choices as bigger companies edge out competitors.California health system Emanate Health sued Optum in 2023 for anticompetitive behavior. It alleged that Optum canceled its contracts with Emanate hospitals and steered patients away after Emanate refused to agree to certain terms. Among the terms: Emanate primary-care doctors would serve only Optum patients, and Optum would get first dibs if Emanate decided to sell its primary-care practices.Care might also feel less personal. Some <a target="_blank" href="https://www.businessinsider.com/one-medical-patients-affected-unitedhealthcare-mount-sinai-dispute-2024-3">One Medical patients</a> complained that since the chain folded into Amazon, their appointments were shortened, and certain features for seniors, like having health coaches available during patient visits, went away, according to a report from <a target="_blank" href="https://www.washingtonpost.com/technology/2024/02/28/amazon-health-one-medical/">The Washington Post</a>.<h2>Patients could end up spending less time with doctors and face higher costs</h2>Dr. Mitch Li, an emergency physician who started Take Medicine Back, a group that opposes corporate owners pushing into healthcare, said patients will spend less time with their doctors and potentially face higher costs from predatory billing practices."The corporate practice of medicine is the reason why <a target="_blank" href="https://www.businessinsider.com/gen-z-millennials-giving-up-medical-care-cant-afford-costs-2024-2">healthcare costs</a> are out of control," Li said.Above all, some doctors fear having to make decisions that benefit the owner's bottom line, even though they may not be the best option for a patient.Dr. Michelle Cooke, a primary-care physician, previously practiced at an Atlanta clinic owned by a hospital system. Though the system was not-for-profit, it didn't operate like that, and over time, the job became unbearable, she said.She had more than 3,000 patients assigned to her care — <a target="_blank" href="https://www.jabfm.org/content/jabfp/29/4/496.full.pdf">far more</a> than typical — and appointments were too short, especially for the chronically ill, she said. The hospital system would prioritize lucrative physicals for <a target="_blank" href="https://www.businessinsider.com/cigna-selling-medicare-advantage-business-insurers-higher-costs-slower-growth-2024-2">Medicare patients</a> rather than seeing patients with an urgent need."It really got to the point where I feel like I was working to feed the corporation," Cooke said. "It really wasn't incentivizing what the patients needed."Cooke has since opened a direct primary care practice, where she sees just a few hundred patients and can spend more time with them. She said she's found that she prescribes less medication now because she has time to educate patients on lifestyle habits and nutrition.<h2>The federal government and states are dialing up the scrutiny</h2>The Federal Trade Commission, the US Department of Justice, and the Department of Health and Human Services are <a target="_blank" href="https://www.wsj.com/articles/federal-agencies-probe-private-equity-profiteering-in-healthcare-2ba4c23a">stepping up scrutiny</a> of healthcare deals, particularly those backed by private-equity firms. The agencies also signaled that they want to look at smaller deals that typically wouldn't trigger an antitrust review.Several states have also increased their oversight of local healthcare consolidation. Some state lawmakers are also trying to strengthen <a target="_blank" href="https://www.nejm.org/doi/full/10.1056/NEJMp2306904#f1">laws prohibiting</a> corporations from practicing medicine. Most states have these bans on the books, but companies have found various ways around them.It's unclear if any of these efforts will meaningfully slow the corporatization of healthcare. And, to be sure, some physician practices may not have survived without an infusion of capital from a corporate buyer.A bill introduced by Oregon State Rep. Ben Bowman would have closed certain <a target="_blank" href="https://www.opb.org/article/2024/02/22/oregon-lawmakers-could-limit-corporate-ownership-of-medical-practices/">loopholes</a> and put more distance between corporate entities and their medical practices. Bowman told Business Insider he wanted to prevent big businesses from eroding doctors' autonomy."A physician who went to medical school who took an oath — their highest ethical duty is to care for their patients. Whether it's a private equity firm or a large corporation, their highest ethical duty is to generate a return on investment for their shareholders. Those two incentives are fundamentally at odds," Bowman said.The bill, opposed by Amazon and CVS, died in March, but Bowman said he plans to reintroduce it in 2025.Around the same time the bill died, UnitedHealth's Optum and The Corvallis Clinic — the small Oregon medical practice that Optum struck a deal to buy — requested that their tie-up receive an emergency exemption from state review because of the Oregon clinic's deteriorating finances.The proposed acquisition, first announced in December, had received plenty of pushback from state residents. The request also came as hospitals and clinics nationwide faced cash shortfalls because of the cyberattack on UnitedHealth's Change Healthcare.A week later, Oregon's health authority approved the request.

Big corporations are quietly taking over your medical practice. Some doctors and experts say it's ruining healthcare.

<ul><li><keyword id="1553175" type="General" weightage="100" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword>’s shares zoomed on Monday after the government agreed to convert interest dues worth ₹16,133 crore into equity.</li><li>The equity conversion will make the government the largest shareholder of Vodafone Idea, with a 33% stake.</li><li>The government will remain a passive investor, leaving the Aditya Birla Group and Vodafone Plc as the primary decision makers of the telco.</li></ul>Vodafone Idea’s shares zoomed by 25% on Monday hitting an upper circuit, after the government agreed to convert interest dues worth ₹16,133 crore into equity. The move breathed a fresh lease of life into the telco’s attempts to raise funds to make payments to vendors and sign contracts with telecom equipment makers and roll out its 5G network. The share price of the troubled telco is back to its December 2022 levels, erasing the losses it saw this year, so far. <div type="image" title="Vodafone Idea share price April 2022 to Feb 2023." msid="97642952" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea share price in FY23&amp;lt;/p&amp;gt;"></div> “The total amount to be converted into equity shares is ₹16133,18,48,990. The Company has been directed to issue 1613,31,84,899 equity shares of the face value of ₹10 each at an issue price of ₹10 each,” Vodafone Idea said in an exchange filing on February 3. The equity conversion will pave the way for the government to become the largest shareholder of Vodafone Idea, long after the telecom reforms package was <a href="https://www.businessinsider.in/business/telecom/news/telecom-relief-package-airtel-vodafone-idea-get-four-year-moratorium-on-agr-dues/articleshow/86227218.cms">announced in September 2021</a>. As a result of this, the Aditya Birla Group’s stake will stand at 31.8%, while Vodafone Plc’s stake will be at 18.3%. This is a reduction from the existing stake of 75% held by the two promoters. <div type="Article" hostid="261" msid="86221662" title="Government picking up a stake in Vodafone Idea ‘might be a remedy worse than the disease’, say experts" mstype="2" mssubtype="0"></div> However, Aditya Birla Group, and Vodafone Plc, will continue to drive the company. Vodafone Idea’s management has already underlined that the government will neither take a seat on the company’s board, nor will it take decisions regarding the company’s operations. <cmsannotation type="cmsannotation" annotationid="Capital infusion key to Vodafone Idea’s future" comment="subhead" text="Capital infusion key to Vodafone Idea’s future">Capital infusion key to Vodafone Idea’s future</cmsannotation> Capital infusion remains a key to Vodafone Idea’s future, according to analysts. The telco has been struggling to retain subscribers while its rivals <keyword id="6354504" type="General" weightage="50" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> and Bharti Airtel have seen both their subscriber numbers as well as the average revenue per user (ARPU) climb up each quarter since FY22. In the company’s post-result investor call in Q2, Vodafone Idea’s chief executive officer Akshaya Moondra had said, ‘’We are trying to close the funding quickly so that some of the backlog of vendor payments that we have can be addressed.” Vodafone Idea needs funds not just to fund its capital expenditure requirements, but also to service its debt. According to a Motilal Oswal report, its current earnings before interest, taxes, depreciation and amortization (EBITDA) of ₹8,700 crore in FY23 is inadequate to service debt. Capex is another piece of puzzle that the telco needs to solve. Vodafone Idea is yet to roll out its 5G offerings even as Jio and Airtel 5G services have been available in several parts of the country since October 2022. “The much-awaited capital raise remains critical to provide immediate liquidity and invest in the rollout of 5G and extending 4G infrastructure. Vodafone Idea acquired 5G spectrum in the 3300Mhz and 26GHz bands in the recent auction (September 2022) but unlike Reliance Jio and Bharti Airtel, it has not deployed the spectrum and remains significantly behind in 4G network rollout too,” said the Motilal Oswal report. It remains to be seen if the equity conversion gives investors enough confidence about the future of Vodafone Idea, and whether it will be enough for them to infuse funds that the telco needs desperately. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/adani-stocks-59844-crore-market-capitalisation-wiped-out-today-in-morning-trading/articleshow/97638076.cms">Adani group stocks continue to plummet – lose ₹59,844 crore in market capitalisation on Monday</a> <a href="https://www.businessinsider.in/business/corporates/news/adanis-stock-rout-can-impact-its-ability-to-raise-capital-or-refinance-debt-says-moodys/articleshow/97582403.cms">Adani’s stock rout can impact its ability to raise capital or refinance debt, says Moody’s</a> <a href="https://www.businessinsider.in/budget/news/budget-for-the-amrit-kaal-powered-by-capex-rooted-in-fiscal-consolidation/articleshow/97551916.cms">Budget for the Amrit Kaal: Powered by capex, rooted in fiscal consolidation</a>

Vodafone Idea shares hit 25% upper circuit after govt agrees to convert ₹16,133 cr dues into equity

Received wisdom in the tech world is that big, legacy companies are bound by inertia. The more established they are, the more they get set in their ways — and the more vulnerable they are to <a target="_blank" href="https://www.businessinsider.com/google-ai-how-big-tech-will-win-again-2023-5">disruption by a nimble startup</a>. Silicon Valley was founded on the principle that newcomers can move fast and break things — leading to world-transforming innovations.For the most part, though, that's not how it works anymore. Last year, a couple of economists found that <a target="_blank" href="https://www.businessinsider.com/venture-capital-funding-crunch-will-continue-2024-2023-12">venture-capital-backed startups</a> almost never lead to a new company listing on a <a target="_blank" href="https://ssrn.com/abstract=4322834">public stock exchange</a>. They don't replace the tech giants — they just get bought by the tech giants. That's been true in Silicon Valley for at least a decade. And the vast majority of startups have been acquired by <a target="_blank" href="https://www.nber.org/system/files/working_papers/w29642/w29642.pdf">the same five companies</a>: Alphabet, Amazon, Apple, Meta, and Microsoft.Ever since Joe Biden was elected, the Federal Trade Commission and the Justice Department have been <a target="_blank" href="https://www.businessinsider.com/tech-merger-deals-harder-adobe-figma-antitrust-startups-exit-options-2023-3">looking into tech mergers and acquisitions</a> for evidence of antitrust behavior. Have the tech giants been illegally short-circuiting competition by buying up their rivals? It's a really good question — but it may be the wrong one to ask. A new paper by two leading scholars suggests that these days, Big Tech doesn't have to resort to buyouts to crush aspiring startups. Instead, they're using their considerable cash and soft power to defang potential rivals from within — a process the scholars call "<a target="_blank" href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4713845">co-opting disruption</a>."According to the new paper — by longtime tech observers Mark Lemley at Stanford University and Matt Wansley at Cardozo School of Law — the tech giants are deploying a bunch of sneaky corporate judo moves to undercut their competitors. When an innovative threat to their business model comes along — everything from <a target="_blank" href="https://www.businessinsider.com/missy-cummings-robot-taxis-tesla-elon-musk-autonomous-cruise-waymo-2023-10">self-driving cars</a> to <a target="_blank" href="https://www.businessinsider.com/apple-vision-pro-experiment-brain-virtual-reality-side-effect-2024-2">virtual reality</a> to <a target="_blank" href="https://www.businessinsider.com/ted-underwood-ai-optimist-humanities-language-literature-research-bill-gates-2023-12">artificial intelligence</a> — they make a point of helping the promising little startups. They take a seat on their board of directors. They give them huge infusions of cash and access to selected data. They even lobby the government on their behalf. But all the while, the scholars found, Big Tech is actually using its seemingly benevolent show of support to protect its own interests — subtly steering the startups away from innovation, and into projects that reinforce the status quo. By working from within, they're turning the baying wolves of ambitious startups into harmless, well-trained lap dogs.This problem isn't academic. Co-opting startups not only quashes competition — it kills off meaningful innovation. Nearly all of the self-driving-car companies have shifted away from their big-vision plans for robot taxis to small-bore stuff like adaptive cruise control. Virtual-reality companies are working on virtual meeting software for the metaverse. AI companies that might have revolutionized drug discovery or engineering optimization are instead fiddling around with search, or customer service, or college-essay writing. With fewer rivals rising to challenge the incumbents, the pace of innovation slows. Some economists even think other startups in the same lanes as the co-opted ones stop trying as hard, for fear of <a target="_blank" href="https://www.businessinsider.com/silicon-valley-broken-out-of-truly-transformative-tech-ideas-2021-7">getting bought up and killed off</a> by Big Tech.This new theory of anticompetitive behavior could be a game changer when it comes to curbing the unprecedented power of the tech giants. It offers regulators a way to crack down on monopoly-minded companies before they try to buy up innovative young guns. "The traditional way of thinking about the threat to innovation from reduced competition has to do with market concentration," Wansley says. "Now we're taking it a little further. We're saying, by the time you get to an acquisition stage, that might be too late."Lemley and Wansley start their inquiry with a question: Why have two decades elapsed since the rise of the last massive, world-dominating <a target="_blank" href="https://www.businessinsider.com/rise-of-ai-artificial-intelligence-how-to-prepare-history-productivity-2023-7">disruptive company</a> in tech? Apple and Microsoft were founded in the mid-1970s; Amazon and Google in the 1990s. Facebook, the baby of the bunch, was founded in 2004. The iPhone came out in 2007. What do we have to show for the past 20 years of venture capital?The answer appears to be: just another industry that's terrified of competition. At this point, Big Tech looks at promising startups the way evil alien empires in science fiction look at helpless planets. Sometimes they act like the Borg from Star Trek, assimilating the "biological and technological distinctiveness" of competitors to make themselves more badass. Here on Earth, <a target="_blank" href="https://scholarship.law.duke.edu/dlj/vol63/iss2/1/">buying up little guys to gain access to their technology or personnel</a> is called an "acqui-hire," like when <a target="_blank" href="https://www.businessinsider.com/facebook-meta-rebrand-kills-oculus-brand-vr-headset-quest-2021-10">Facebook bought Oculus and turned it into Quest</a>. And if the smaller company doesn't want to be acqui-hired? Well, resistance is futile.Or sometimes, like the genocidal, xenophobic Daleks from "Doctor Who," powerful companies just straight-up exterminate their competition. In 2021 a team of researchers from Yale and the London Business School found that somewhere between 5.3% and 7.4% of mergers and acquisitions in the pharmaceutical industry were "<a target="_blank" href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3241707">killer acquisitions</a>." The smaller company had a drug that might have someday threatened the big guy's category-busting pill, and: pew pew. No more little guy.In a sense, a dominant company has no choice but to act this way. It can't really innovate anymore — not with thousands of middle managers defending fiefdoms, clients and customers bought into a product and marketing cycle, and hundreds of millions of dollars invested in technical infrastructure. Real disruption would be, well, disruptive. "This is not something that people write about or talk about, not something that surfaces regularly," Lemley says. "But it's in the air if you're in Silicon Valley and talking to venture capitalists. It's a problem."And the bigger the company, the greater the financial risk of any disruption, no matter how small. Like an evil king facing a prophecy that he will one day be overthrown by a firstborn child from the forest realm, the company has to kill all the children, just to be sure.<div type="image" title="Two men on a stage — Sam Altman of OpenAI and Satya Nadella of Microsoft — with their corporate logos in the background, the OpenAI knott and MSFT's quad-colored squares" height="2400" width="3600" msid="108942652" hostid="261"></div>The thing is, mass murders of forest-realm firstborns tend to attract the attention of regulators. So what if the evil king just adopted all the babies? Raise them rich and spoiled in the castle, distract them with nubile romantic prospects, teach them to exploit the peasants? Between assimilation or assassination lies "a third possibility," Wansley says. "It's not that the acquirer is going to take the startup and totally shut the technology down. It's that they will redirect the assets to something more profitable."That's what the tech giants are doing. How? First, by relying on Silicon Valley's <a target="_blank" href="https://www.businessinsider.com/venture-capital-big-tech-antitrust-predatory-pricing-uber-wework-bird-2023-7">network of venture capitalists</a> as an early-warning system for would-be disruptors. VCs see trends and startups that might someday pose a threat to the established order — so-called <a target="_blank" href="https://scholarship.law.upenn.edu/penn_law_review/vol168/iss7/1/">nascent competitors</a> — before anyone else. And there's nothing stopping them. As Lemley observes, it's part of Silicon Valley's "natural information flow" for an investor to tell a Google or a Microsoft about the promising newcomers they're backing. "If I'm a VC, how am I going to get the best deal for my client in this space?" Lemley says. "The best deal might be, sell out to the incumbent."Once a tech giant gets a tip-off about a startup that might threaten their bottom line, they're able to strategically invest their vast cash reserves in the fledgling firm. That's precisely what's taking place with artificial intelligence: Microsoft owns 48% of OpenAI, the emerging field's undisputed leader. Alphabet and Amazon have put billions of dollars into the AI startup Anthropic. When the two AI companies were founded, Wansley says, both were "worried about what would happen if one of the tech giants started looking in their direction." Now, both are directly influenced by the very companies they set out to disrupt. And since investments from Big Tech often come with a seat on a startup's board of directors, Wansley adds, the tech giants are in an ideal position to "start nudging the company in a direction that's going to be less competitive."Money isn't the only weapon that Big Tech can deploy to co-opt a potential competitor. Because the tech giants have amassed huge repositories of <a target="_blank" href="https://www.businessinsider.com/tesla-ford-gm-volvo-supercharger-electric-cars-charger-network-data-2023-7">data on user behavior</a>, they can choose with whom they share that data, and how much. Documents leaked from the discovery phase of a lawsuit against Facebook in 2015 showed that the company <a target="_blank" href="https://www.nbcnews.com/tech/social-media/mark-zuckerberg-leveraged-facebook-user-%20data-fight-rivals-help-friends-n994706">doled out data access preferentially</a>, allowing its allies more access than its potential competitors. The data that Big Tech shares — or doesn't share — can play an instrumental role in shaping a startup's work.Finally, the big companies use their clout on Capitol Hill in an effort to impose stricter regulations on the startups they're ostensibly trying to help. That's why tech giants like Meta testify before congressional hearings and ask for more government oversight for emerging threats like robot cars, or AI. They want to ensure that the rules favor them — and disfavor startups outside their zone of protection. Big Tech may hate regulation, but it doesn't mind using it to regulate any startups that might wind up threatening its dominance in the marketplace.Co-opting startups is a clever strategy. It's way easier — and less obvious — than buying up a competitor and shutting it down. And if it doesn't work, the nuclear option is always available. "If all those other strategies fail — investments, taking a seat on the board, playing hardball with data networks, and regulation — if none of them prevents a competitor from growing, then the tech companies can buy it off," Wansley says. "It's a little subtle, right?" It is — but that's what makes it so effective. Straight-up killer acquisitions are relatively easy to prove, says Florian Ederer, an economist at Boston University. "It's much, much harder to prove that a company got taken over and its focus got slightly shifted to not competing quite so intensely." It's even harder to prove that consumers suffered any ill effects. The co-opted companies don't get killed off, and they stay nominally independent. The founders and investors get rich either way.So how do we know startups are getting co-opted by Big Tech? One proof is that some of Silicon Valley's most powerful players are starting to grouse about it. Elon Musk is <a target="_blank" href="https://www.nytimes.com/2024/03/02/technology/elon-musk-openai-lawsuit-paradox.html">suing OpenAI</a> to keep the company from sharing its tech with Microsoft. The venture capitalist Marc Andreessen tweeted last month that Big Tech and the "New Incumbents" in AI are "<a target="_blank" href="https://x.com/pmarca/status/1762532979317043515">lobbying as a group with great intensity to establish a government protected cartel</a>." You know things are bad when the biggest kids on the block start whining about being victims.Wansley and Lemley argue that regulators need to step in — not to restrain competition, but to unleash it. For starters, they say, the feds should strengthen and enforce existing rules against "interlocking directorates," which are supposed to prevent executives from sitting on the boards of their competitors. In the 2000s, the CEO of Google was on Apple's board! These days that kind of thing gives the feds a frowny face; in 2022, the Justice Department pushed seven directors representing venture firms to resign from the boards of <a target="_blank" href="https://www.reuters.com/world/us/us-says-seven-board-directors-resigned-under-antitrust-pressure-2022-10-19/">five of their direct competitors</a> in space, edtech, and green energy. Microsoft currently enjoys a seat on OpenAI's board of directors. Technically it's only an observer role, without a vote. But, come on.The primary goal of the scholars I spoke with is broader than any specific regulation: They just want to get government watchdogs to recognize the new and subtle ways that tech giants are shutting down competition and innovation. Sure, people are still founding tech companies, and their startups are still getting funded. But more and more, they're basically serving as farm teams for the majors. "The incumbents have gotten much more attuned to competitive pressures from nascent competitors, and address them more aggressively and earlier," Ederer says.Regulators, for their part, appear to be catching on. In late January, the Federal Trade Commission ordered three titans of tech — Amazon, Microsoft, and Alphabet — to open the books on their investments in artificial intelligence. OpenAI and Anthropic received the same letter: Send over <a target="_blank" href="https://markets.businessinsider.com/news/stocks/ftc-to-look-into-tech-giants-ai-partnerships-1033002313">every scrap of documentation</a> on the financial ties between them and the massive incumbents that are funding them. That's a promising start. If technology is going to do what it always has — solve big problems, build value, create jobs and opportunity — Silicon Valley needs as much competition as possible. "We used to have these cycles of competitive disruption," Lemley says. "Microsoft runs the world, and the internet comes up, and they missed it. IBM runs the world, and the Dells of the world come up, and they're no longer in charge. That's what we'd like to get back." Startups once unlocked a golden age of tech innovation. Perhaps, if we can find a way to keep them from being co-opted, they can do it again.<a target="_blank" href="https://www.businessinsider.com/author/adam-rogers">Adam Rogers</a> is a senior correspondent at Business Insider.

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