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Startup Street: Why Nomura Sees A SpaceX-Tesla Merger

Here’s what went on this week on Startup Street.

Elon Musk’s Tesla in space, sent up by Falcon Heavy. (Source: Elon Musk/Instagram)
Elon Musk’s Tesla in space, sent up by Falcon Heavy. (Source: Elon Musk/Instagram)

This week on Startup Street we have a Nomura analyst telling us why a marriage between Tesla and SpaceX makes sense. Two Indian hospitality startups Oyo Rooms and Zostel are filing legal complaints against each other after a deal fell through, and IT industry body Nasscom has announced the 10 winners of its Social Innovation Forum 2018. Here’s what went on.

The Inevitable?

Sign of a Telsa Inc. and SpaceX marriage? (Source: Elon Musk/Instagram)
Sign of a Telsa Inc. and SpaceX marriage? (Source: Elon Musk/Instagram)

Could Tesla and SpaceX merge into one entity? Nomura says yes.

“The idea of Tesla and SpaceX merging together is a tantalizing idea and I personally think this will absolutely happen. The question is just when. There’s a tremendous amount of overlap between the two companies,” Romit Shah, Nomura Instinet analyst said in an interview to Bloomberg.

Not only do both the companies have the same chief executive officer — Elon Musk — but also several directors on the boards are common too. More importantly, both the companies want to merge artificial intellegence and machine learning technologies into their products, Shah pointed out.

On the financial side, “The SpaceX business is actually a great business... one that could dramatically improve Tesla’s revenues and operating profit,” he said.

While SpaceX has had multiple landmark rocket launches in the first two months of the year, Tesla has had to push back the production schedule on its Model 3 electric car, putting pressure on the company’s cash position. Chinese giant Tencent invested $1.7 billion in Tesla in March 2017, while SpaceX last raised money in November.

Oyo Accuses Zostel Of 'Blackmailing’

OYO Townhouse in Bengaluru. (Photographer: Nishant Sharma/BloombergQuint)
OYO Townhouse in Bengaluru. (Photographer: Nishant Sharma/BloombergQuint)

Online hotel aggregator Oyo Rooms accused hostel startup Zostel of “blackmailing” for getting into a deal, after having filed a case for data theft.

“For more than one year, we’ve been continuously inconvenienced and harassed by Zostel and its directors. They’ve used every tactic, from sending letters carrying false allegations to Oyo’s management to writing to our shareholders, for intimidating and pressurising us to submit to their unreasonable demands,” the startup said in a statement.

Zostel did not respond to an email sent by BloombergQuint seeking comment. Oyo filed a criminal complaint against Zostel on Jan. 16 alleging breach of trust, cheating and misinterpretation of data.

Oyo was earlier in talks to acquire a smaller hotel aggregator Zo Rooms, promoted by Zostel. However, the deal fell through late last year as Oyo said it did not see any business value in the transaction.

They shut down the app and website giving neither us, nor their customers, or owners any prior notice; thereby making it impossible for Zostel to ever effect any customer migration, leave alone a smooth business transfer which was key to the deal discussion.
Oyo Statement

Zostel has also filed formal civil proceedings against Oyo Rooms.

“Oyo will, of course, oppose and contest all claims made by Zostel since in our view Zostel does not have any justifiable and/or valid claim against Oyo. We have full faith in the courts of law and believe that it will take the right decision and justice will be delivered,” Oyo’s statement added.

The Winners Of NASSCOM Social Innovation Forum

Information technology industry association NASSCOM announced the 10 winners of its annual Social Innovation Forum, with four startups from Bengaluru taking centre-stage for their contributions and innovations.

Bengaluru based organizations, Blank Solutions and Thinkerbell Labs made a clean sweep in the accessibility category, while Empathy Design Labs and Danamojo were one of the winners in their respective categories of Healthcare and Financial Inclusion.
Nasscom Statement

Other winners include Pi Jam Foundation, Saajha, Epocare, DonateKart, StrataEnviro and Schemopedia.

All ten winners will be receiving a grant of Rs 10 lakh each, the statement said.

“It is great to see that social innovators are not shying away from the new technologies but instead are embracing them. Most of the entries we received this year were using new age technologies like Internet of Things, wearables, predictive analysis and self-learning algorithms,” Shrikant Sinha, chief executive officer of Nasscom Foundation said.

Other Updates

  • The trial phase for Bandicoot — a startup that will provide robots to help clean Kerala’s sewers — has been completed successfully. The plan will now be launched next week, Kerala Water Authority (KWA) Managing Director, A Shainamol said, according to a PTI report.
  • This Israeli data crunching startup is taking on Google.
  • SpaceX just launched an imaging satellite and its own broadband demos.