Whalesbook
New Draft Rules Scrutinize Gig Worker Benefits
New draft regulations from the central government now require gig and platform workers to complete at least 90 days of service with an employer annually to qualify for essential social security benefits. These rules, falling under the Social Security Code, aim to differentiate between regular employment and short-term gigs, potentially reducing disputes and streamlining benefit administration.This policy shift occurs against a backdrop of renewed discussions concerning the nature of gig work, its inherent safety concerns, and prevailing wage structures, particularly within the fast-paced quick commerce sector. For workers, continuity of employment becomes paramount for accessing any safety net. Businesses, especially startups and smaller enterprises reliant on flexible staffing, face increased obligations in record-keeping, digital registration, and compliance, which could lead to higher costs and stricter oversight under recently implemented labor codes.
Blinkit and Zomato Face Worker Strike Backlash
Amidst these regulatory considerations, Zomato-owned Blinkit and Zomato experienced a surge in orders on New Year's Eve, reportedly unaffected by a gig worker strike. Zomato founder Deepinder Goyal's subsequent defense of the gig model as a significant job creator divided public opinion. Critics highlighted issues of low pay, safety risks, and intense delivery timelines, while supporters pointed to flexible earning opportunities. This conflict underscores the broader tension in India as the nation grapples with formalizing gig work while debating fair treatment and ambition for those powering the economy.India's Labour Codes Now in Effect
These draft rules follow closely on the heels of India's comprehensive labor codes, which were nationally implemented on November 21, 2025. These codes consolidate 29 existing labor laws into four major categories: wages, social security, industrial relations, and workplace safety. Gig and platform workers now have formal recognition within this framework, with platforms expected to contribute a portion of their annual turnover towards worker social security.Startup Funding Rebounds Amid Deal Count Dip
Indian startups collectively secured $104.2 million in funding last week, marking a significant 112% increase from the previous week's $49.2 million. However, the number of deals declined to just two, down from seven in the preceding week. This pattern aligns with historical trends, where fewer funding announcements occur in late December as investors typically defer major decisions until the new year. Looking ahead to 2026, funding is anticipated to recover selectively, with capital likely to concentrate on high-conviction sectors such as AI, fintech, manufacturing, and pioneering consumer and B2B ventures.D2C Brands Grapple with Profitability
Direct-to-consumer skincare brand Foxtale reported a 32.5% year-on-year widening of its net loss to INR 72.7 crore in FY25. Despite this, operating revenue surged by 138.7% to INR 198.7 crore for the fiscal year. Aggressive expansion, including customer acquisition, inventory build-up, and team scaling, drove proportionate increases in cash burn. Total expenses more than doubled year-on-year to INR 278.9 crore.Similarly, personal care brand Pilgrim posted a 105% year-on-year revenue jump to INR 408.3 crore in FY25. However, this growth came at the cost of its bottom line, with consolidated net loss ballooning 2.6 times to INR 68.7 crore. Total expenses also more than doubled year-on-year.
Startup Stocks End 2025 with Mixed Performance
Indian new-age technology stocks concluded the final week of 2025 with varied results. Out of 50 covered startup stocks, 24 registered gains ranging from 0.25% to over 20%, while the remaining 26 saw declines between 0.34% and nearly 10%. Nazara, Ola Electric, and Honasa were among the top performers, whereas Zelio, Meesho, and DroneAcharya experienced the most significant drops. This divergence suggests that market participants are selectively favoring companies with clear near-term catalysts, upcoming earnings, or regulatory tailwinds.UPI Transactions Surpass Expectations
The Unified Payments Interface (UPI) concluded 2025 with over 22,000 crore transactions valued at INR 299.76 lakh crore, solidifying its role as the cornerstone of India's real-time digital payment infrastructure. While PhonePe and Google Pay maintained their dominant market share, smaller players like Paytm, Navi, CRED, and Flipkart-backed super.money also saw their market presence grow. However, the system experienced several brief outages during the year, raising concerns about resilience and prompting fintech firms to explore monetization avenues like an MDR regime to cover escalating infrastructure and maintenance costs.Bachatt Targets Self-Employed Savings Gap
Bachatt, a fintech startup founded in 2024, is addressing the savings gap for India's self-employed workforce. The platform enables daily savings as low as INR 51 via UPI, channeling investments into low-risk debt products. Backed by Lightspeed India and InfoEdge Ventures, Bachatt claims to have onboarded 10 lakh users and manages INR 50 crore in assets under management, aiming to tap into the projected $2.1 trillion Indian fintech market by 2030.360° Investment Research Note
Bullish Case: The formalization of the gig economy could eventually lead to more stable employment conditions and improved worker welfare, indirectly boosting consumer demand. A rebound in startup funding, particularly for AI and fintech, signals renewed investor confidence in India's tech sector. The consistent growth of UPI points to the ongoing expansion of the digital economy.Bearish Case: Increased regulatory compliance for gig platforms may compress profit margins, especially for smaller entities. The widening losses for D2C brands highlight significant challenges in achieving profitable scaling. Mixed performance in startup stocks indicates that many ventures face investor skepticism regarding execution and sustainability.
Skeptical Case: The 90-day rule might prove to be an administrative hurdle rather than a significant improvement in worker welfare without robust enforcement. The funding rebound's sustainability is uncertain, with a lower deal count suggesting potential investor caution. D2C brand performance might reflect market saturation and unsustainable growth strategies.
Data-Driven Outlook: Key metrics to monitor include the $104.2 million weekly funding inflow, the 112% week-on-week increase, and the INR 299.76 lakh crore transaction value for UPI. The impact of the 90-day gig work rule on platform operational costs and compliance is critical. Financials for D2C brands like Foxtale and Pilgrim will remain under scrutiny for signs of profitability.
