12 ‘flexible VCs’ who operate where equity meets revenue share

Previously, we introduced the concept of flexible VC: structures that allow founders to access immediate risk capital while preserving exit and ownership optionality. We list here all the active flexible VCs we have identified, broken into these categories:

  • Revenue-based
  • Compensation-based
  • Blended-return streams

Revenue-based flexible VCs

These investors are paid back primarily based on a percentage of revenues.

Capacity Capital

Chattanooga, TN-based Capacity Capital was launched in 2020 with a primary focus on the southeastern U.S. Jonathan Bragdon, its CEO, describes Capacity as “a team of founders-turned-funders making non-dilutive, founder-aligned investments of $50,000-$300,000 in post-startup, post-revenue businesses planning to 2x revenues in 12-24 months. Investments are typically in exchange for a capped, single-digit revenue share and a right to equity under certain circumstances.

If the company sells or raises enough capital, the investment converts into an agreed-upon percentage of equity. If the company grows without raising additional equity funding, founders redeem most of the equity right, based on a pre-agreed return amount. With a portfolio that includes food, tech and services, the fund is industry-agnostic and focused on the overlooked and underrepresented with high-margin business models.”

Jonathan sometimes refers to their investments as “micro-mezzanine” because “mezz is typically structured as a contractual periodic payment, with some equity-like upside, but subordinate to other debt … so most lenders look at it like equity. But, it is typically shorter term with fewer control mechanisms than equity (i.e., not VC). I wanted [a term for] something similar (between debt and equity) but on an extremely small scale.”

In addition to a fund, the overall Capacity organization provides direct mentorship, consulting and connects founders to a broad network of talent, diverse forms of capital and existing resources focused on the post-startup stage of growth. The founders, LPs and venture partners have a long history in local startup ecosystems in the Southeast including LaunchTN, The Company Lab, CO.STARTERS and several other regional funds and resources.

Greater Colorado Venture Fund

Greater Colorado Venture Fund (GCVF) is a $17 million seed fund that invests in high-growth startups in rural Colorado using equity and flexible VC structuring.

A typical GCVF flexible VC investment is $100,000-$250,000 for up to 10% ownership, of which 9% is redeemable, with a sub-10% revenue share and 12-month-plus holiday period. GCVF specializes in providing critical support to founders based in small communities, while connecting them to an unfair network well-beyond their small-town headquarters.

GCVF is pioneering the future of venture capital and high-growth startups for all small communities. With Colorado as an ideal pilot community, the GCVF team (which includes Jamie Finney, a co-author of this article) has helped grow multiple staple initiatives in the rural Colorado startup ecosystem, including West Slope Startup Week, Telluride Venture Accelerator, Startup Colorado, Energize Colorado Gap Fund and the Greater Colorado Pitch Series.

Recognizing the need for creative investment structures in their Colorado market, they co-founded the Alternative Capital Summit, creating the first community of flexible VCs and alternative startup investors.

They share their learnings on flexible VC and pioneering rural startup ecosystems on the GCVF blog.

WhatsApp faces legal challenge over privacy in its biggest market

WhatsApp is facing a legal challenge in India, its biggest market, after a petition was filed Thursday before Delhi High Court over the upcoming change in the Facebook-owned app’s data sharing policy.

The petition alleges the new terms that WhatsApp requires its roughly 450 million users in the country to accept is a violation of their fundamental rights to privacy and poses a threat to national security.

Through an in-app alert, WhatsApp has asked users in recent days to agree to new terms of conditions that grants the app the consent to share some personal data about them such as their phone number and location with Facebook.

Users will have to agree to these terms by February 8 if they wish to continue using the app, the alert said. The change has been mischaracterized by many as their personal communication being compromised, which WhatsApp clarified this week was not the case.

The Facebook-owned service, which serves over 2 billion users worldwide, said private conversations between people remain just as private as before. Facebook has also bought front-page newspaper ads in several leading Indian dailies this week to explain the change, which it first outlined last year.

The petitioner said the new terms grant WhatsApp a “360-degree profile into a person’s online activity” without any “government oversight.”

“WhatsApp has made a mockery out of our fundamental right to privacy while discharging a public function in India, besides jeopardizing the National Security of the country by sharing, transmitting and storing the users data in some [other] country and that data, in turn, will be governed by the laws of that foreign country,” the petition, which is expected to be heard Friday, reads.

Several high-profile startup founders and executives in India have also criticized WhatsApp’s new data sharing policy. Vijay Shekhar Sharma, founder and chief executive of India’s most valuable startup Paytm, accused WhatsApp of operating with double standards, pointing to how the new change was not affecting the app’s users in Europe.

The outrage over the new change has resulted in tens of millions of users exploring other communication apps such as Signal and Telegram in recent days. In an interview with TechCrunch earlier this week, Signal co-founder and chairman executive Brian Acton said “the smallest of events helped trigger the largest of outcomes. We’re also excited that we are having conversations about online privacy and digital safety and people are turning to Signal as the answer to those questions.”

Google cracks down on personal loan apps in India following abuse and outcry

Google said on Thursday it has pulled some personal loan apps from Play Store in India and was implementing stronger measures to prevent abuse following reports that said several firms were targeting vulnerable borrowers in the country and then going to extreme lengths to recover their money.

The Android-maker said users and government agencies in India recently flagged several personal loan apps and the company reviewed hundreds of them. The review found an identified number of apps violated Play Store’s safety policies and were immediately removed from the Store.

Google said it has asked the developers of the remaining identified apps to demonstrate that their apps are in compliance with applicable local laws and regulations. “Apps that fail to do so will be removed without further notice. In addition, we will continue to assist the law enforcement agencies in their investigation of this issue,” the company said.

Users have identified several lending apps including 10MinuteLoan and Ex-Money in India in recent months that granted small ticket loans (typically in the range of $100 to $200) to people for short tenures without much verification to determine their eligibility and then charged steep processing fees.

To avoid such abuse, Google said Play Store will only allow personal apps that require customers to make their repayment in 60 days or longer.

When borrowers struggled to repay their debt in the short period, collection agents on behalf of some lending apps threatened to embarrass them in front of their friends, colleagues, and family, among other tactics. In November, local newspaper Indian Express reported that a 23-year-old man committed suicide after being bullied by a money lending app.

 

“To protect user privacy, developers must only request permissions that are necessary to implement current features or services. They should not use permissions that give access to user or device data for undisclosed, unimplemented, or disallowed features or purposes. Developers must also only use data for purposes that the user has consented to, and if they later want to use the data for other purposes, they must obtain user permission for the additional uses,” wrote Suzanne Frey, Vice President, Product, Android Security and Privacy, in a blog post.

More to follow…

Madrona promotes Anu Sharma and Daniel Li as Partners

Fresh off the announcement of more than $500 million in new capital across two new funds, Seattle-based Madrona Venture Group has announced that they’re adding Anu Sharma and Daniel Li to the team’s list of Partners.

The firm, which in recent years has paid particularly close attention to enterprise software bets, invests heavily in the early-stage Pacific Northwest startup scene.

Both Li and Sharma are stepping into the Partner role after some time at the firm. Li has been with Madrona for five years while Sharma joined the team in 2020. Prior to joining Madrona, Sharma led product management teams at Amazon Web Services, worked as a software developer at Oracle and had a stint in VC as an associate at SoftBank China & India. Li previously worked at the Boston Consulting Group.

I got the chance to catch up with Li who notes that the promotion won’t necessarily mean a big shift in his day-to-day responsibilities — “At Madrona, you’re not promoted until you’re working in the next role anyway,” he says — but that he appreciates “how much trust the firm places in junior investors.”

Asked about leveling up his venture career during a time when public and private markets seem particularly flush with cash, Li acknowledges some looming challenges.

“On one hand, it’s just been an amazing five years to join venture capital because things have just been up and to the right with lots of things that work; it’s just a super exciting time,” Li says. “On the other hand, from a macro perspective, you know that there’s more capital flowing into VC as an asset class than ever before. And just from that pure macro perspective, you know that that means returns are going to be lower in the next 10 years as valuations are higher.”

Nevertheless, Li is plenty bullish on internet companies claiming larger swaths of the global GDP and hopes to invest specifically in “low code platforms, next-gen productivity, and online communities,” Madrona notes in their announcement, while Sharma plans to continue looking at to “distributed systems, data infrastructure, machine learning, and security.”

TechCrunch recently talked to Li and his Madrona colleague Hope Cochran about some of the top trends in social gaming and how investors were approaching new opportunities across the gaming industry.

App stores saw record 218 billion downloads in 2020, consumer spend of $143 billion

Mobile adoption continued to grow in 2020, in part due to the market forces of the COVID-19 pandemic. According to App Annie’s annual “State of Mobile” industry report, mobile app downloads grew by 7% year-over-year to a record 218 billion in 2020. Meanwhile, consumer spending grew by 20% to also hit a new milestone of $143 billion, led by markets that included China, the United States, Japan, South Korea and the United Kingdom.

Consumers also spent 3.5 trillion minutes using apps on Android devices alone, the report found.

In another shift, app usage in the U.S. surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours on their mobile device.

The increase in time spent is a trend that’s not unique to the U.S., but can be seen across several other countries, including both developing mobile markets like Indonesia, Brazil and India, as well as places like China, Japan, South Korea, the U.K., Germany, France and others.

The trend isn’t isolated to any one demographic, either, but is seen across age groups. In the U.S., for example, Gen Z, millennials and Gen X/Baby Boomers spent 16%, 18% and 30% more time in their most-used apps year-over-year, respectively. However, what those favorite apps looked like was very different.

For Gen Z in the U.S., top apps on Android phones included Snapchat, Twitch, TikTok, Roblox and Spotify.

Millennials favored Discord, LinkedIn, PayPal, Pandora and Amazon Music.

And Gen X/Baby Boomers used Ring, Nextdoor, The Weather Channel, Kindle and ColorNote Notepad Notes.

The pandemic didn’t necessarily change how consumers were using apps in 2020, but rather accelerated mobile adoption by two to three years’ time, the report found.

Investors were also eager to fuel mobile businesses as a result, pouring $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year. According to Crunchbase data, 26% of total global funding dollars in 2020 went to businesses that included a mobile solution.

From 2016 to 2020, global funding to mobile technology companies more than doubled compared with the previous five years, and was led by financial services, transportation, commerce and shopping.

Mobile gaming adoption also continued to grow in 2020. Casual games dominated the market in terms of downloads (78%), but Core games accounted for 66% of games’ consumer spend and 55% of the time spent.

With many stuck inside due to COVID-19 lockdowns and quarantines, mobile games that offered social interaction boomed. Among Us, for example, became a breakout game in several markets in 2020, including the U.S.

Other app categories saw sizable increases over the past year, as well.

Time spent in Finance apps in 2020 was up 45% worldwide, outside of China, and participation in the stock market grew 55% on mobile, thanks to apps like Robinhood in the U.S. and others worldwide, that democratized investing and trading.

TikTok had a big year, too.

The app saw incredible 325% year-over-year growth, despite a ban in India, and ranked in the top five apps by time spent. The average monthly time spent per user also grew faster than nearly every other app analyzed, including 65% in the U.S. and 80% in the U.K., surpassing Facebook. TikTok is now on track to hit 1.2 billion active users in 2021, App Annie forecasts.

Other video services boomed in 2020, thanks to a combination of new market entrants and a lot of time spent at home. Consumers spent 40% more hours streaming on mobile devices, with time spent in streaming apps peaking in the second quarter in the west as the pandemic forced people inside.

YouTube benefitted from this trend, as it became the No. 1 streaming app by time spent among all markets analyzed except China. The time spent in YouTube is up to 6x that of the next closet app at 38 hours per month.

Of course, another big story for 2020 was the rise of e-commerce amid the pandemic. This made the past year the biggest ever for mobile shopping, with an over 30% increase in time spent in Shopping apps, as measured on Android phones outside of China.

Mobile commerce, however, looked less traditional in 2020.

Social shopping was a big trend, with global downloads of Pinterest and Instagram growing 50% and 20% year-over-year, respectively.

Livestreaming shopping grew, too, led by China. Downloads of live shopping TaoBao Live in China, Grip in South Korea and NTWRK in the U.S. grew 100%, 245% and 85%, respectively. NTWRK doubled in size last year, and now others are entering the space as well — including TikTok, to some extent.

The pandemic also prompted increased usage of mobile ordering apps. In the U.S., Argentina, the U.K., Indonesia and Russia, the app grew by 60%, 65%, 70%, 80% and 105%, respectively, in Q4.

Business apps, like Zoom and Google Meet among others, grew 275% in Q4, for example, as remote work and sometimes school, continued.

The analysis additionally included lists of the top apps by downloads, spending and monthly active users (MAUs).

Although TikTok had been topping year-end charts, Facebook continued to beat it in terms of MAUs. Facebook-owned apps controlled the top charts by MAUs, with Facebook at No. 1 followed by WhatsApp, Messenger and Instagram.

TikTok, however, had more downloads than Facebook and ranked No. 2 by consumer spending, behind Tinder.

The full report is available only as an online interactive experience this year, not a download. The report largely uses data from both the iOS App Store and Google Play, except where otherwise noted.

Byju’s is reportedly buying Indian brick-and-mortar institute Aakash for $1 billion

We may finally have an answer to why Byju’s, the world’s most valuable edtech startup, spent the last year raising hundreds of millions of dollars.

Bloomberg reports that the Bangalore-based startup has agreed to buy Aakash Educational Services, which owns and operates more than 200 physical tutoring centres across the country aimed at students preparing to qualify for top engineering and medical colleges.

According to the publication, Byju’s will pay $1 billion to buy Aakash Educational Services, which serves more than 250,000 students. A Byju’s spokesperson declined to comment.

Byju’s has raised over $800 million in the past two years, and more than doubled its valuation to over $11 billion. The startup, like several other edtech firms, attracted tens of millions of students to its platform last year after the pandemic prompted New Delhi to shut down schools nationwide.

Byju’s prepares students pursuing undergraduate and graduate-level courses, and in recent years has also expanded its catalog to serve all school-going students. Tutors on Byju’s app tackle complex subjects using real-life objects such as pizza and cake. The startup, which turned profitable in late 2019, serves over 70 million students.

In an interview at TechCrunch Disrupt last year, Byju’s co-founder and chief executive Byju Raveendran said the startup, which acquired a coding platform aimed at young students called WhiteHat Jr for $300 million last year, was open to more merger and acquisition opportunities.

The startup is backed by several high-profile investors, including Bond, which was co-founded by Mary Meeker. Bond expects Byju’s to be worth over $30 billion within three years, a person familiar with the matter told TechCrunch earlier.

YouTube and WhatsApp inch closer to half a billion users in India

WhatsApp has enjoyed unrivaled reach in India for years. By mid-2019, the Facebook-owned app had amassed over 400 million users in the country. Its closest app rival at the time was YouTube, which, according to the company’s own statement and data from mobile insight firm App Annie, had about 260 million users in India then.

Things have changed dramatically since.

In the month of December, YouTube had 425 million monthly active users on Android phones and tablets in India, according to App Annie, the data of which an industry executive shared with TechCrunch. In comparison, WhatsApp had 422 million monthly active users on Android in India last month.

Factoring in the traction both these apps have garnered on iOS devices, WhatsApp still assumes a lead in India with 459 million active users1, but YouTube is not too far behind with 452 million users.

With China keeping its doors closed to U.S. tech giants, India emerged as the top market for Silicon Valley and Chinese companies looking to continue their growth in the last decade. India had about 50 million internet users in 2010, but it ended the decade with more than 600 million. Google and Facebook played their part to make this happen.

In the last four years, both Google and Facebook have invested in ways to bring the internet to people who are offline in India, a country of nearly 1.4 billion people. Google kickstarted a project to bring Wi-Fi to 400 railway stations in the country and planned to extend this program to other public places. Facebook launched Free Basics in India, and then — after the program was banned in the country — it launched Express Wi-Fi.

Both Google and Facebook, which identify India as their biggest market by users, have scaled down on their connectivity efforts in recent years after India’s richest man, Mukesh Ambani, took it upon himself to bring the country online. After he succeeded, both the companies bought multibillion-dollar stakes in his firm, Jio Platforms, which has amassed over 400 million subscribers.

Jio Platforms’ cut-rate mobile data tariff has allowed hundreds of millions of people in India, where much of the online user base was previously too conscious about how much data they spent on the internet, to consume, worry-free, hours of content on YouTube and other video platforms in recent years. This growth might explain why Google is doubling down on short-video apps.

The new figures shared with TechCrunch illustrate a number of other findings about the Indian market. Even as WhatsApp’s growth has slowed2 in India, it continues to enjoy an unprecedented loyalty among its users.

More than 95% of WhatsApp’s monthly active users in India use the app each day, and nearly its entire user base checks the app at least once a week. In comparison, three-fourths of YouTube’s monthly active users in India are also its daily active users.

The data also showed that Google’s eponymous app as well as Chrome — both of which, like YouTube, ship pre-installed3 on most Android smartphones — has also surpassed over 400 million monthly active users in India in recent months. Facebook’s app, in comparison, had about 325 million monthly active users in India last month.

When asked for comment, a Google spokesperson pointed TechCrunch to a report from Comscore last year, which estimated that YouTube had about 325 million monthly unique users in India in May 2020.

A separate report by research firm Media Partners Asia on Monday estimated that YouTube commanded 43% of the revenue generated in the online video market in India last year (about $1.4 billion). Disney+ Hotstar assumed 16% of the market, while Netflix had 14%.


1 For simplicity, I have not factored in the traction WhatsApp Business and YouTube Kids apps have received in India. WhatsApp and YouTube also maintain apps on KaiOS, which powers JioPhone feature handsets in India. At last count — which was a long time ago — more than 40 million JioPhone handsets had shipped in India. TechCrunch could not determine the inroads any app has made on this platform. Additionally, the figures of YouTube on Android (phones and tablets) and iOS (iPhone and iPad) will likely have an overlap. The same is not true of WhatsApp, which restricts one phone number to one account. So if I have WhatsApp installed on an iPhone with my primary phone number, I can’t use WhatsApp with the same number on an Android phone — at least not concurrently.
2 WhatsApp Business appears to be growing fine, having amassed over 50 million users in India. And some caveats from No. 1 also apply here.
3 Users still have to engage with the app for App Annie and other mobile insight firms to count them as active. So while pre-installing the app provides Google an unprecedented distribution, their apps still have to win over users.

Moderna is developing three new mRNA-based vaccines for seasonal flu, HIV and Nipah virus

Moderna, the biotech company behind one of the two mRNA-based vaccines currently being rolled out globally to stem the tide of COVID-19, has announced that it will purse development programs around three new vaccine candidates in 2021. These include potential vaccines for HIV, seasonal flu and the Nipah virus. Moderna’s development and clinical trial of its COVID-19 vaccine is among the fastest in history, and thus far its results have been very promising, buoying hopes for the efficacy of other preventative treatments being generated using this technology which is new to human clinical use.

An mRNA vaccine differs from typical, historical vaccines because it involves providing a person with just a set of instructions on how to build specific proteins that will trigger a body’s natural defenses. The mRNA instructions, which are temporary and do not affect a person’s actual DNA, simply prompt the body’s cells to produce proteins that mirror those used by a virus to attach to and infect cells. The independent proteins are then fought off by a person’s natural immune response, which provides a lasting lesson in how to fight off any future proteins that match that profile, including those which help viruses attach to and infect people.

Moderna’s new programs will target not only seasonal flu, but also a combinatory vaccine that could target both the regular flu and SARS-CoV-2, the virus that leads to COVID-19. The HIV candidate, which is developed in collaboration with both the AIDS Vaccine Initiative and the Bill and Melinda Gates Foundation, is expected to enter into Phase 1 trials this year, as will the flue face. Nipah virus is a highly lethal illness that can cause respiratory and neurological symptoms, and which is particularly a threat in India, Bangladesh, Malaysia and Singapore.

mRNA-based vaccines have long held potential for future vaccine development, in part because of their flexibility and programmability, and in part because they don’t use any active or dormant virus, which reduces their risks in terms of causing any direct infections up front. The COVID-19 pandemic spurred significant investment and regulatory/health and safety investment into the technology, paving the way for its use in other areas, including these new vaccine candidate trials by Moderna.

Jumbotail raises $14.2 million for its wholesale marketplace in India

Jumbotail, an online wholesale marketplace for grocery and food items, said on Friday it has raised an additional $14.2 million as the Bangalore-based startup chases the opportunity to digitize neighborhood stores in the world’s second largest internet market.

The five-year-old startup said the new tranche of its Series B financing round was led by VII Ventures, with participation from Nutresa, Veronorte, Jumbofund, Klinkert Investment Trust, Peter Crosby Trust, Nexus Venture Partners, and Discovery Ventures.

The startup told TechCrunch that the new tranche concludes its Series B round, which it kickstarted in 2019 with $12.7 million in funding. It ended up raising about $44 million in the Series B round (including Friday’s tranche), and to date has amassed about $54 million in equity investment, the startup told the publication.

Jumbotail said it serves over 30,000 neighborhood stores (popularly known in India as kiranas) in the country. In addition to its business-to-business marketplace, the startup also provides working capital to neighborhood stores through partnerships with financial institutions.

The startup, which has built its own supply chain network to enable last-mile delivery, also supplies these stores with point-of-sale devices so that they can easily get access to a much wider selection of catalog and have the new inventory shipped to them within two days. It also integrates these stores with hyperlocal delivery startups such as Dunzo and Swiggy to help mom and pop shops further expand their customer base.

Ashish Jhina, co-founder of Jumbotail, said he believes the startup has reached an inflection point in its growth and is now ready for its next chapter, which includes hiring top talent and expanding to more regions in the country, especially in several cities in South India.

“We are seeing tremendous interest from investors across the globe who are drawn to our highly scalable and operationally profitable business model, built on the industry’s best technology and customer NPS,” said Jhina, who previously served in Indian army and then worked at e-commerce firms eBay and Flipkart.

At a recent virtual conference, Jhina said that the coronavirus pandemic, which prompted New Delhi to order a nationwide lockdown and put restrictions on e-commerce firms, has illustrated just how crucial neighborhood stores are in people’s lives. And for all the ills that the virus has wrought to the world, it did help accelerate the adoption of technology among these stores.

A number of food brands whose products neighborhood stores sell today are not standardized, which poses a question about their quality. To fill this gap, Jumbotail runs its own private label portfolio and Jhina said the startup will deploy part of the fresh fund to broaden this catalog. Having private label also allows Jumbotail to ensure that its retail partners can get the supply of items throughout the year — and of course, it also helps the startup, which has been operationally profitable for nearly three quarters, improve its margin.

There are more than 30 million neighborhood stores in India that dot across the thousands of cities and towns in the country. These small businesses have been around for decades and survived — and even thrived — despite e-commerce giants pouring billions of dollars in India to change how people shop. In recent years, scores of startups — and giants — in India have begun to explore ways to work with these neighborhood stores.

One of them is India’s largest retail chain Reliance Retail, which serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country. In late 2019, it entered the e-commerce space with JioMart through a joint venture with sister subsidiary telecom giant Jio Platforms. By mid last year, JioMart had expanded to over 200 Indian cities and towns — though currently its reach within those cities and customer service leave a lot to be desired.

Reliance Retail also maintains a partnership with Facebook for WhatsApp integrationFacebook, which invested $5.7 billion in Jio Platforms last year, has said that it will explore various ways to work with Reliance to digitize the nation’s mom and pop stores, as well as other small- and medium-sized businesses.

For JioMart, Reliance Retail is working with neighborhood shops, giving them a digital point-of-sale machine to make it easier for them to accept money electronically. It is also allowing these shops to buy their inventory from Reliance Retail, and then use their physical presence as delivery points. At present, the platform is largely focused on grocery delivery. In a recent report to clients, Goldman Sachs analysts estimated that Reliance could become the largest player in online grocery within three years.

US says India, Italy, and Turkey digital taxes are discriminatory, but won’t take any actions for now

Digital services taxes adopted by India, Italy, and Turkey in the past years discriminate against U.S. companies, the U.S. Trade Representative said on Wednesday.

USTR, which began investigations into the three nation’s digital services taxes in June last year, said it found them to be inconsistent with international tax principles, unreasonable, and burdening or restricting U.S. commerce.

In its detailed reports, which the office has made public, USTR studied how these digital taxes affected companies including Amazon, Google, Facebook, Airbnb, and Twitter. USTR said it conducted these investigations on the ground of Section 301 of the U.S. Trade Act of 1974.

India, which has become the largest market for Silicon Valley giants Google and Facebook, introduced digital taxes in 2016 to target foreign firms. Last year, the world’s second largest internet market expanded the scope of its levy to cover a range of additional categories.

USTR investigation found (PDF) that New Delhi was taxing “numerous categories of digital services that are not leviable under other digital services taxes adopted around the world” and that the aggregate tax bill for U.S. companies could exceed $30 million per year.  It also took issue with India not levying similar taxes on local companies.

Despite the strong findings on three nations’ digital services taxes, USTR said it is not taking any specific actions “at this time” but will “continue to evaluate all available options.”

U.S. tech companies have in the past supported terms brokered by the Organisation for Economic Co-operation and Development. But OECD, which is currently in the middle of working out technical details for agreements for over a 100 nations, doesn’t expect to finish the work until mid-2021. In the absence of OECD agreements, various countries are moving forward with their own versions of the taxes.

Since June last year, USTR has initiated investigations into digital services tax instituted — or proposed to be put in place – by a number of countries including Austria, Brazil, the Czech Republic, the European Union, Indonesia, Spain, the United Kingdom, and France, which resumed collecting digital services tax from US companies late last year.

In retaliation, USTR had set a January 6 deadline for levying a 25% tariff on a range of French imported goods including cosmetics and handbags.

USTR did not say whether the tariff had been enforced, but in a statement said it expects to announce the progress or completion of additional investigations in the near future.