Top 5 tech and startup news of the day

Ather Energy promoters and backers doubled returns despite a weak debut. This and more in today’s ETtech Top 5.

Also in the letter:
■ Musk 1 Altman 0
■ ETtech Done Deals
■ Swiggy’s brand licensing play
Ather Energy listing delivers strong gains for founders, investors despite muted debut
(L-R) NSE MD Ashish Chauhan with Ather Energy cofounders Tarun Mehta and Swapnil Jain

Ather Energy promoters and major shareholders saw their investments more than double, even as the stock ended its debut day in the red.

Listing returns: Founders Tarun Mehta and Swapnil Jain, along with key investors, now hold a combined stake worth Rs 7,056 crore, or 2.22 times (2.2x) their pre-IPO investment.

• Tarun Mehta: Rs 590 crore
• Swapnil Jain: Rs 590 crore
• GIC: Rs 1,226 crore
• Tiger Global: Rs 586 crore
• NIIF: Rs 538 crore
• IIT Madras: Rs 45.9 crore

Early backers: Flipkart cofounders Sachin Bansal and Binny Bansal were among Ather’s earliest investors, each putting in around Rs 2.1 crore in 2014. Sachin later added Rs 400 crore, but exited before the IPO, selling his stake to Hero MotoCorp and Zerodha’s Kamath brothers – a move that cost him up to 20% in unrealised gains. Binny held on, and his original Rs 3.1 crore investment has grown to Rs 92 crore.

Also Read: Ather Energy IPO: From startup to stock market listing

What’s ahead? Chief executive Mehta told us Ather is eyeing strong growth, backed by a capex-light retail model and a rising pool of value-conscious upgraders.

Zoom out: Ather’s Rs 2,981-crore public issue ran from April 28 to 30, after raising Rs 1,340 crore from anchor investors on April 26. The book-built offer was subscribed 1.43 times (1.43x), with qualified institutional buyers (QIBs) stepping in on the final day.
Paytm Q4: Revenue declines, user base shrinks
Vijay Shekhar Sharma, CEO, Paytm

One 97 Communications (OCL), which operates digital payments platform Paytm, reported a year-on-year decline in operating revenue for the March quarter of FY25, while marginally narrowing its net loss.

Key highlights:

• Q4 Loss: Rs 545 crore, slightly lower than Rs 550 crore a year ago
• Q4 revenue from operations: Rs 1,911.5 crore, down 15.7% from Rs 2,267 crore in Q4 FY24
• FY25 full-year loss: Rs 645.2 crore, down over 50% from Rs 1,390.4 crore in FY24
• FY25 revenue: Rs 6,900 crore, down 31% from Rs 9,977.8 crore
• Esop impact: Founder Vijay Shekhar Sharma relinquished 210 million esops in Q4, triggering a one-off expense of Rs 492 crore
• Esop costs: Expected to fall to Rs 75 crore in Q1 FY26, down from Rs 169 crore in Q4 FY25

Also Read: Paytm Q4 revenue drops 16%, losses persist: Key takeaways

Business momentum:

• Subscribing merchant base grew 15% to 124 million.
• Monthly transacting users fell 25% year-on-year to 720 million.
• Customers accessing financial services dropped to 550,000, from 790,000 last year.

Between the lines: The March quarter reflects the fallout from the RBI’s January 2024 clampdown on Paytm Payments Bank, an associated entity barred from onboarding new customers and conducting key banking operations.

Additional regulatory challenges during the quarter:

• The Enforcement Directorate (ED) issued show-cause notices to two step-down subsidiaries — Little Internet Pvt Ltd and Nearbuy India Pvt Ltd — over alleged Fema violations worth Rs 611 crore related to FDI non-compliance between 2015 and 2019.
• Sebi action led founder Vijay Shekhar Sharma to forfeit 21 million shares in Paytm.

Elon Musk gets a win as ChatGPT maker OpenAI scraps for-profit plans
(L-R) Sam Altman, CEO, OpenAI, Elon Musk, CEO, Tesla

OpenAI, the company behind ChatGPT, announced on Monday that it will remain under nonprofit control, shelving earlier plans to become a fully for-profit entity.

The context: Founded as a nonprofit in 2015, OpenAI adopted a “capped-profit” model in 2019 to raise capital, with Microsoft emerging as its largest backer.

A leadership crisis in 2023 – which saw CEO Sam Altman briefly ousted, triggering a staff revolt and board shake-up – prompted some investors to call for a complete for-profit transition within two years, citing the need for stability and clearer governance.

Structure shift:

• OpenAI will retain nonprofit governance.
• Its for-profit arm, created in 2019, will be converted to a Public Benefit Corporation (PBC), a hybrid model balancing commercial and mission-driven goals.
• The nonprofit will remain the controlling shareholder in the PBC to ensure alignment with its public mission.

Musk vs OpenAI: OpenAI cofounder-turned-bête noire Elon Musk sued the company last year, alleging it had drifted from its original mission of prioritising public good over profit. While OpenAI’s move appears to align with Musk’s concerns, his lawyer Marc Toberoff confirmed the lawsuit will proceed.

In other news: OpenAI has agreed to acquire AI-assisted coding platform Windsurf for around $3 billion. If finalised, it would be OpenAI’s largest acquisition to date.
ETtech Done Deals
(L-R) Keshav Biyani, Prabhu Karthikeyan, cofounders, The Good Bug

The Good Bug raises Rs 100 crore from Susquehanna Asia VC, Fireside: Gut health startup The Good Bug has raised Rs 100 crore (around $12 million) in a Series B round led by Susquehanna Asia Venture Capital, the VC arm of Susquehanna International Group. Existing investor Fireside Ventures also participated.

Deal details:

• Founder Keshav Biyani told ET the funds will be used to step up R&D in microbiome science, scale clinical trials, expand distribution, and strengthen brand visibility among consumers and healthcare professionals.
• Earlier in 2024, The Good Bug raised $4 million in a Series A extension led by Sharrp Ventures, the family office of Marico Group chairman Harish Mariwala.

Also Read: The Good Bug launches ‘natural’ weight loss solution amid GLP-1 drug debate

Fresh dough: Kitchen robotics startup Posha has secured $8 million in Series A funding, led by venture capital firm Accel.
Swiggy transfers food brands The Bowl Company, Homely to Kouzina

Swiggy has partnered with cloud kitchen platform Kouzina to exclusively license its digital-first food brands, marking a continued shift away from its private-label operations.

Deal snapshot:

• Kouzina will run operations and expansion for Swiggy’s in-house brands—The Bowl Company, Homely, Soul Rasa, and Istah.
• Full ownership of these brands will shift to Kouzina once certain undisclosed conditions are met.

Why it matters: Swiggy launched these brands to fill gaps in restaurant offerings and meet rising demand for convenience and variety in online food delivery. The move comes amid growing concerns from restaurant partners over competition from aggregator-owned labels.

Context: Swiggy has steadily scaled back its private-label ambitions since 2022. In March 2023, it sold its cloud kitchen business to Loyal Hospitality, which operates Kitchens@.

Meanwhile in the sector:

• Swiggy shut down its pickup-and-drop service Genie in several cities this week due to operational hurdles.
• Rival Eternal has discontinued its 15-minute food delivery vertical Quick, as well as its homestyle meal brand Everyday, citing low demand and inconsistent service.