Daily Tech Snippet: Monday, May 11

• Late to the party, global banks try to muscle into India's start-up boom: Global investment banks are scrambling to get a piece of the action from India's booming technology start-ups, having missed out on the initial flurry of deal-making to their better-connected but much smaller domestic rivals. Banks including Goldman Sachs Group Inc, Citigroup and Morgan Stanley are looking to hire more bankers in India and are now regularly attending "bake-offs" to pitch for advisory roles on deals, according to several banking industry sources. Foreign money has been pouring into India's fast-growing e-commerce sector, with investors ranging from Japan's Softbank Corp to Singapore's Temasek Holdings [TEM.UL] and GIC Private Ltd [GIC.UL] piling in. Many large global investment banks have stayed away from work in the emerging sector though due to the relatively small deal sizes. Now they are stepping up efforts to build relationships while the companies are still young - learning lessons from China where many of them are struggling to compete with small boutique banks as Internet deals pick up speed. "Several of these companies will be large IPO candidates in the next 12 to 24 months, so the big banks have to start positioning themselves for this," said Harish HV, a partner in India at advisory firm Grant Thornton. The number of venture funding deals for technology start-ups in India in the first quarter of 2015 was the highest in nine quarters and exceeded the number of such deals in China, according to data from CB Insights. The total value of investments in India topped $1 billion for the third straight quarter. To compete with local rivals like Avendus Capital and Kotak Mahindra Capital, foreign banks are now pitching for relatively small deals at start-ups, hopeful they will eventually lead to more lucrative work, banking sources said. Avendus, which focused on the tech sector before the deal momentum picked up, ranks fourth in the advisory league table for announced technology deals in India so far this year. That's ahead of bigger global rivals including Credit Suisse, Bank of America Merrill Lynch and JPMorgan, according to Thomson Reuters data. Now foreign investment banks are starting to make in-roads. Jefferies' India arm advised home shopping firm Naaptol.com to raise about $20 million last month from Japan's Mitsui & Co Ltd and some existing investors. Citigroup Inc, which advised Indian online payment services provider One97 Communications in raising funds from Alibaba Group affiliate Ant Financial Services in February, is "very focused" on the internet space in India, said Madhur Deora, its managing director for investment banking in India. Global banks vying to offer services like loan financing to online retailers like Flipkart and Snapdeal, hoping this could help them secure mandates on any future IPOs, sources said.

• Alibaba in talks to buy $1.2 billion stake in India phone maker Micromax - 20% stake purchase would value Micromax at $6B: Alibaba Group Holding (BABA.N) is in talks with India's Micromax Informatics (IPO-MINF.NS) to buy an about 20 percent stake in the smartphone maker, helping the Chinese e-commerce giant expand in one of the world's fastest growing markets for the devices, several people with direct knowledge of the matter said. The deal, if completed, would see Alibaba investing as much as $1.2 billion in Micromax, the second-largest smartphone brand in India by sales, at up to $6 billion, two of the people said. India is the world's third largest smartphone market and was the fastest growing in the Asia Pacific region in the third quarter of last year, according to industry research firm International Data Corporation. Micromax and Alibaba began talks on the stake sale after discussions with investors led by Japanese telecoms firm Softbank Corp (9984.T) stalled over differences in valuations, the sources said. "The Softbank talks are not officially over, but it'll be hard to get back on track," said one of the people. Softbank is the largest shareholder in Alibaba. The sources said Alibaba wants to use the Micromax deal to tap into the boom in the number of internet users in India, which is also one of the world's most rapidly growing smartphone markets. Growth in India, and especially in mobile transactions, would help Alibaba offset stiff competition at home from domestic rivals including JD.com Inc (JD.O), as well as what appears to be growing e-commerce user saturation. "The talks are centered around using Micromax devices as a platform to get into a serious business of its own in India," said one of the sources, referring to Alibaba. Alibaba, for example, would be able to roll out services such as Alipay, its online payment platform, on Micromax phones. Ant Financial Services Group, which owns Alipay, is China's largest payment service provider and is controlled by Alibaba's executive chairman and founder Jack Ma. The stake sale is aimed at helping Micromax raise capital as it expands into new business segments including personal computing. The company is seeking funds from private investors, or a possible stock market listing, its co-founder told Reuters. Micromax started up in India in 2008, and its affordable, large-screen phones are now the country's most popular after Samsung Electronics Co Ltd (005930.KS) smartphones. Micromax counts Sequoia Capital and TA Associates among its investors.

• Uber might raised $1.5B at $50B valuation: Uber is fund-raising again. The mobile car-hailing application is in early talks to raise a new round of financing that could value the start-up at $50 billion, according to a person familiar with the discussions, who spoke anonymously because the process is confidential. Uber could raise around $1.5 billion, given the amount of interest from investors in the company, the person said. The new capital will not be used primarily for expansion purposes, unlike Uber’s previous financing rounds. Instead, the funding is strategic, with an eye on partnerships, the person said. Uber, based in San Francisco, has raised money relentlessly in recent years at rapidly swelling valuations. So far, the company has raised more than $4 billion as it moves into new markets globally, disrupting established taxi and other transportation industries by letting people request rides through their smartphones. The company was founded in 2009 and is led by Travis Kalanick, who is chief executive. In December, Uber closed a $1.2 billion round of financing that valued it at $40 billion. The company then moved to accommodate additional investors like Baidu, the Chinese Internet giant. That round followed one in June, when the service said that it had raised $1.2 billion at a valuation of $17 billion. At a $50 billion valuation, Uber would be the world’s most valuable private start-up, topping the Chinese electronics maker Xiaomi, which was last valued at $45 billion. It would also be worth more than publicly traded companies like FedEx, with a market value of $48 billion, and Nissan Motor, with a capitalization of $47 billion. The divide between Uber and other “unicorns” — Silicon Valley’s term for billion-dollar start-ups — would also grow. Even at its current $40 billion valuation, it was nearly triple that of other elite Silicon Valley start-ups like the data analysis firm Palantir, according to the research firm CB Insights. Among Silicon Valley start-ups, only Facebook had attained a $50 billion valuation as a private company.

• Pinterest Adds $186M To Series G Funding Round, Offers Secondary Sale To Employees Looking to Cash Out: Pinterest confirmed that it has padded its Series G funding a bit and is carrying out a new secondary sale that will allow employees to cash in some of their shares. As first reported by Re/code, the social sharing startup raised an additional $186 million in funding as part of its Series G round, bringing the total amount raised in that financing to $553 million. New investors in the round include Wellington Management Company and Goldman Sachs, while existing investors Andreessen Horowitz, Bessemer, First Mark, SV Angel, Valiant, and Fidelity also participated. Altogether, the company has raised about $1.3 billion since being founded in 2009. In addition to the primary financing, Pinterest is carrying out a secondary sale for employees who wish to sell their vested at the $11 billion valuation of the Series G round. This is the second time Pinterest has offered the option of a secondary sale to its employees, with the first being held in October 2012.

• Apps Need A New Data Center Stack, Because Infra is Difficult to Get Right: Google, Facebook and Amazon serve billions of users overall — and many, many millions concurrently — and store incredible amounts of data. Yet they rarely crash. Once it finally decided to make a significant investment in infrastructure engineering, Twitter all but slayed the fail whale. Among some of the better-known technologies these companies have produced are MapReduce, Hadoop, Cassandra and Kafka. A new suite of tools — some created by startups, some in labs, some as open source projects — has also emerged in their image, designed to make applications perform and scale better, and sometimes to enable new capabilities altogether. These include technologies such as Spark, Storm and Elasticsearch. In concert with these advances, new architectures also caught on in order to address the problems that come with trying to develop applications that can run reliably at such extreme scale. One is the concept of microservices, which involves treating applications as a collection of services that might serve multiple applications, rather than as monolithic entities with their own dedicated components. Among other things, a service-oriented approach results in less dependency among components and the ability to scale individual services without re-architecting the entire application. Another big architectural trend has been containerization, whether it’s done via developer-friendly means like Docker or lower-level means like Linux control groups. Containers can make it easier to plug applications into distributed services and to shift the focus from deciding where something should run; instead, containers let developers focus on what their applications need to run. Taken as a whole, this new collection of distributed services and architectural techniques could be called the “data center application stack.” Anyone building an application that serves millions of users on multiple platforms, and can make use of the volume, variety and velocity of data today, is going to be using this collection of services or something very much like it. In fact, these technologies are all gaining popularity fast. Many are already staples in the technology repertoires of startups trying to deliver everything from the next huge consumer app to the next Salesforce.com. “Big data,” “real-time” and “Internet of Things” are more than just buzzwords. They’re imperatives for corporate success in many parts of the 21st century economy. However, the elephant in the room — which you might not hear from IT vendors, open source advocates or expert Facebook engineers — is that building out these capabilities is hard. Deploy, manage and scale Hadoop. Deploy, manage and scale Cassandra. Deploy, manage and scale Kubernetes. Rinse and repeat for every framework or service you want to use. At some point, companies probably will want to give a little thought to actually writing the application, building the data pipeline and making sure the architecture is resilient. Huge, engineer-rich companies such as Google and Microsoft solved (or largely solved) this problem for themselves with systems like Borg and Autopilot, respectively. The systems automatically manage resource allocation and high availability for the services and applications that run across their millions of servers. Algorithms, not developers or software architects, determine where things run and on how many machines. Sure, they’re great systems, but they’re also proprietary. Google only recently officially acknowledged Borg’s existence by publishing a paper on it. Microsoft has done very little public discussion of Autopilot. Neither are for sale.