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Market summary: 📊
Indian markets saw momentum fizzle out a bit towards the end of the day. US stocks circled in place, but tech’s had a couple back to back awesome days.
US:
S&P 500 - up 0.032%
Nasdaq 100 - up 0.82%
India:
Nifty 50 - down 0.37%
Sensex - down 0.34%
Two old dudes, limping along into the future💁
Intel and IBM had their quarterly date with investors, and it ended up a colossal disaster. Both companies reported meh results Dec quarter, as their business models stand actively disrupted by shifts in technology.
Intel is facing disruption from Nvidia, AMD, and other emerging processor architectures, while nobody wants to pay to up to buy IBM’s bulky, old-school, and flat out boring servers systems called mainframes.
Intel’s revenues came in at ~$20 billion for the last 3 months, down 1% YoY. Datacenter revenues declined 16% YoY (nobody expected that). And the company, in the midst of changing CEOs, is now being a bit unclear on how manufacturing problems will be resolved.
Then IBM was like…
Revenues for the quarter down 6% YoY—and no positive hopes of growth returning either. They had recently replaced the CEO with Indian-American executive Arvind Krishna, but impact will naturally take time to play out.
Investors who had been patiently holding their breath for atleast a hint of positive directional change, were disappointed. A few frustrated ones were quick to run away, sinking both stocks big time, with IBM losing 7%, and Intel shaving off 4% right after results came out.
IT keeps pouring dough on modernizing 🖥️
Cognizant acquired another smaller competitor called Magenic, as IT giants continue to spend big money on adapting to a post-COVID world.
Magenic basically offers full-stack development solutions to build cloud native apps—with broad projects ranging from improving customer facing apps in healthcare, to fortifying IT operations for advertising clients. More than 600 of their global staff will join camp Cogni, all going to support an arm that deals with modern IT contracts.
Lil insight: this will be Cognizant's 12th acquisition in the last 12 months, and 3rd in 2021. Between INFY, TCS, Cognizant, and Wipro the total acquisitions these old-boys have made easily top 25+ just in the past year alone. 📈
IT giants are lapping up everything that’s shining, desperate for some of that yummy growth that SaaS and other tech platforms are routinely seeing.
SEBI clears way for India’s largest retail empire 🤙
Securities regulator SEBI gave its nod to the $3.4 billion acquisition of Future Group’s retail, logistics, and warehousing assets by Reliance Retail, handing Amazon a mild jolt.
Backdrop—in 2019, Amazon had taken a 49% stake in Future Coupons, and as part of the deal got the first rights to buy into Future if they ever go out and sell. Then COVID-man came and froze Future’s retail empire right in its tracks.
Unable to bear the losses and make loan payments, Biyani approached lenders. Amazon did not respond or probably Biyani wasn’t happy with the management, that part remains hazy, but when Mota bhai walked in the room, he offered an ultimatum—tell me before I walk out or else don’t call me again. Biyani sold to Reliance. All hell broke loose thereafter, with Amazon writing letters to SEBI, Singapore regulators, and even the Delhi High Court (where the proceedings are still going on) to intervene and halt the alliance.
Anyway, SEBI approval shows Bezos and company are running out of options. The Delhi High Court as well as a National Company Law Tribunal proceeding will still go on, and will decide the fate of the deal.
While we’re here, ☝️
AMZN is joining hands with Startup India to launch a program called Propel, to support consumer-product upstarts in India catch scale and go global. Top 10 ventures will be picked, few of which will get $50K in equity free grants from AZMN, and a few other VC partners have been pulled to the table for additional support as well. Give it a shot if it applies to you!
Kids, watch how its done 🎨
Asian Paints absolutely crushed last quarter, growing revenues and profits by a record rate, and streaming operations to deliver amazing margin improvements. What recession?
Like we’ve amply said before, the best managed companies in India have used the 2020-slump to shed all excess, and now as growth returns, every penny coming through the door is directly boosting profits.
Quick look at the numbers here:
Revenues of ₹6.8K crores, up 25% YoY
Margins of 26.1% expanded by nearly 4.6%
30% volumes growth in the domestic business
Pretty much all categories—industrial, decorative, home improvement showed solid momentum
Great stuff for you if you’re a shareholder!
Management is guiding for a solid recovery in demand going forward, as consumer spending further improves. Also, these stupendous growth numbers will further support the case of the Indigo Paints IPO—which is already oversubscribed like 10 times!
Game recognize game 💰
What’s common between Kunal Shah, Tony Fadell (iPod inventor), Casey Neistat (YouTuber), Kevin Lin (Twitch), Steve Huffman (Reddit ), Paddy Cosgrave (Web Summit), and Josh Buckley (CEO, Product Hunt)—they’re all builders, maverick trailblazers, and now they’re all investors in One Plus founder Carl Pei. $7 million in total, to fund Carl’s latest project. 🤯
Carl, who quit OnePlus last October has been secretly cooking plans for a consumer hardware bout. Since we got plenty of that boring software stuff lying around already ;)
Tweet of the day 🐦
Bumble’s gonna IPO soon — we looked into the company and turns out the zero to 100M user story, in under 6 years, is pretty wild!
What else are we Snackin’ 🍿
👏 Flipkart gets what it wants - The ₹1,500-crore deal by Flipkart to acquire Aditya Birla fashion has been approved by the Competition Commission of India. Flipkart is hoping that the Birla product portfolio adds to their online catalogue, helps build loyalty, boosts margins, and cuts down costs in the long run.
🚀 Musk is unstoppable - SpaceX has launched its seventeenth batch of Starlink satellites during its first mission of 2021, using a Falcon 9 rocket. This puts the total Starlink constellation size at almost 1,000. Thousands more still remain to go before the constellation works to provide global internet services.
😏 Go live without Search - Google is literally threatening Australia that it will kill the Google Search product in the country if the Government passes a law demanding payout of commissions to news publishers. Google holds 94% search market-share in Aus. “Tech has too-much power over government” debate just got some more free fodder.
Hit that 💚 if you liked today’s issue.
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