A closer look at all the top developments in the startup space on Monday.

1. Draft e-commerce policy seeks tough data rules, fair competition through multiple players

The Department for Promotion of Industry and Internal Trade (DPIIT) has finalised its draft e-commerce policy and is set to make it public soon. It plans to impose tougher rules around data and seeks to ensure fair competition through multiple players.

The draft policy mentions a regulator for the sector, especially on matters of fair competition and national security.

The government has also cited concern over just “one or two strong companies” emerging as leaders and exercising control over the information repository. The draft policy further highlights other challenges when it comes to “law and order, revenue base erosion, privacy, anti-competitive behaviour, consumer protection, counterfeit products, piracy, copyright infringement.”

2. COVID-19 takes toll on startups

The COVID-19 pandemic has hurt businesses across the world and Indian startups are no exception. A pan-India survey on the “Impact of COVID-19 on Indian startups”, conducted by Federation of Indian Chambers of Commerce and Industry (FICCI), jointly with the Indian Angel Network (IAN) of 250 startups and 61 incubators has thrown up some grim findings.

The COVID-19 pandemic has taken a toll on startups with over 70 percent of them reporting a hit on business, while 12 percent startups have had to shut operations.

The report found that only 22 percent startups have cash reserves of up to 3-6 months to meet fixed costs and 43 percent have already cut salaries between 20 percent and 40 percent over the period of April-June 2020.

3. Aye Finance raises over Rs 125 crore from Invest in Visions

Within a week of raising Rs 210 crore in Series E equity round from CapitalG, MSME lender Aye Finance has raised an additional Rs 125 crore in debt from Germany-based impact investor, Invest in Visions. Aye Finance will be utilising these funds to lend to micro enterprise sector, facilitate job creation and their inclusion in to the organised lending fold.

Invest in Visions was founded by Edda Schröder in 2006 with the vision of offering institutional and retail investors access to impact investments—investments that offer investors both financial and social returns. They specialise in investments in sustainable agriculture, social enterprises and social impact lending.

4. Frontier Markets raises $2.25 million from clutch of investors

Last mile distribution startup Frontier Markets raises $2.25 million financing from ENGIE, The Rise Fund, The Singh Family Trusts, Teja Ventures and others.

The startup connects rural customers with global products and services through an assisted e-commerce platform. The funds will be used to launch a B2C platform for consumer purchasing, digital services, with its own branded product line, and pilot franchise expansions in new states.

5. Paytm set to acquire private sector general insurer Raheja QBE

Payments firm Paytm along with its founder Vijay Shekhar Sharma, is set to acquire private sector general insurer Raheja QBE. Raheja QBE is owned 51 percent by Prism Johnson and 49 percent by QBE Australia. Paytm is set to acquire both stakes and own 100 percent of the company.

The acquisition is subject to customary conditions, including approval from the Insurance Regulatory and Development Authority of India (IRDAI).

With this acquisition, Paytm would expand its financial services offerings and democratise general insurance for driving financial inclusion.

6. OYO plans to offer ESOPs to all employees, including furloughed staff

After furloughing thousands of employees, SoftBank-backed Oyo has now decided to offer all its employees, including furloughed staff, deeply discounted ESOPs. The company claims that the ESOPs would be worth Rs 130 crore rupees. The ESOPs programme is subject to requisite board approvals which OYO hopes to obtain in the next few weeks.

According to the company, these RSUs will have a strike price of Rs 10 per unit and will have a cliff vesting of one year from the date of grant. That’s another caveat as all employees have been offered deeply discounted ESOPs comparable to RSUs. This means all employees have been enabled to buy the company stock at a deeply discounted pre-determined price of value.

7. Uber buys Postmates for $2.65 billion

Ride hailing platform Uber is buying food delivery startup Postmates for $2.65 billion in an all-stock deal. The buyout comes at a time when Uber is trying to grow its share of the on-demand food delivery segment as it works to sustain its business during the pandemic.

Uber intends to keep the Postmates app running separately, “supported by a more efficient, combined merchant and delivery network.”