Government Cautions, Fintech Reboots, and IPO Buzz: Latest Tech and Finance Updates

Key Highlights

• The Indian government is poised to caution users about DeepSeek, an AI tool with significant data privacy and cybersecurity concerns.
• Fintech companies are reimagining business transactions via NPCI’s Bharat Connect platform, seeking to regain momentum post-regulatory shifts.
• Manufacturing startup Zetwerk is on track to file for an IPO, targeting a valuation above $5 billion, amidst a growing trend in B2B market listings.
• Leading digital payments and SaaS firms continue to secure fresh funding amidst rapid industry changes.
• Other developments include mixed reviews on ONDC after two years and notable progress by global tech leaders.

Government Advisory on DeepSeek

The Indian government is bracing to issue an advisory against DeepSeek, a Chinese artificial intelligence application, citing concerns over data tracking and cyber espionage. Top cybersecurity officials from CERT-In have flagged potential risks related to the app’s collection of:

• User prompts: Incorporating images, documents, and comprehensive chat histories.
• Automatically collected data: Including device details, application metadata, and cookie tracking data.
• Other sources: Extracted from crowdsourced or publicly available information.

A senior official stressed that DeepSeek differs from models like ChatGPT, urging caution over its use. This move follows a directive from the Finance Ministry, which has ordered officials to refrain from using emerging AI tools like ChatGPT and DeepSeek. With India accounting for 15.6% of DeepSeek downloads since its launch, similar bans by Italy, Australia, and parts of the US underscore a global trend towards heightened cybersecurity measures.

Fintech Reboots via Bharat Connect

In a notable turnaround, several B2B fintech firms such as Happay, Open, EnKash, and PayMate are leveraging the NPCI Bharat BillPay initiative, Bharat Connect, to revive their business operations. Previously disrupted by regulatory changes affecting commercial credit cards, these startups are now pivoting to direct on-platform services despite facing lingering challenges:

• Structural challenges: Commercial cards remain unsupported on Bharat Connect, leaving some business owners skeptical about tangible benefits.
• Industry impact: Earlier regulatory adjustments, including the RBI's February 2024 directive on commercial credit card usage for vendor payments, have further complicated the fintech landscape.

This strategic shift represents a broader industry effort to fortify customer-facing models and innovate within a constrained regulatory framework.

Zetwerk’s IPO Journey

Manufacturing firm Zetwerk is preparing to make a significant market debut with an IPO slated for submission within the next six months. Key details include:

• Funding goal: The company aims to raise between $400-500 million, with partial backing from major players like Peak XV Partners and Accel.
• Global ambitions: The IPO is part of Zetwerk’s expansion strategy, targeting a valuation that exceeds $5 billion as it strengthens its presence in the US and globally.
• Banking support: Axis Bank, Goldman Sachs, and Kotak Mahindra Bank are set to spearhead the financial arrangements, with a pre-IPO funding round targeting $100 million already underway.

This move is illustrative of the growing heightened interest in B2B companies entering public markets, a trend also seen with other players like Infra.Market and OfBusiness.

ETtech Done Deals and Other Updates

Several key funding rounds and market movements have marked recent industry shifts:

• ToneTag: The Bengaluru-based digital payments company has secured $78 million in a combined primary and secondary capital infusion from ValueQuest Scale Fund and Iron Pillar.
• Zeta: Focused on banking technology, this startup has raised $50 million from US-based healthcare and financial services firm Optum.
• Nirmata: The SaaS firm has garnered $9.6 million from investors including Peak XV’s Surge, Dallas Venture Capital, and others.

Additional notable news includes mixed reviews following ONDC’s two-year milestone—with some praising its impact and others citing slow adoption—as well as impressive financial results from companies like Nykaa and strategic market moves by Peak XV Partners with Freshworks.

Global Perspectives and Media Insights

Industry watchers continue to monitor global trends, with significant coverage on topics such as:

• The evolving stance on AI, underscored by Arm’s CEO, who differentiates his views on DeepSeek from mainstream perceptions.
• Joint ventures such as Helsing and Mistral’s collaboration on AI systems aimed at military applications.
• Broader digital narratives resonating from platforms like TikTok, which continues to captivate users worldwide.

This comprehensive update encapsulates the latest in policy, business, and technology developments that are shaping the global market landscape.