Another one

Bezos wants more, electric Lambo, and Airtel fighting hard.

May 19, 2021

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Back over 50K Sensex baby! Indian markets seem to have found the second wave floor, with back to back couple of great sessions. US had another down day, as investors continue to sell growth names and buy back to routine business stocks.

US:

S&P 500 - down 0.85%
Nasdaq - down 0.72%

India:

Nifty 50 - up 1.24%
Sensex - up 1.24%

What’s brewing hot? ☕

✅ Lambo’s goin electric—electric fever is now gripping the luxury sports segment as well with Lamborghini looking to invest nearly $1.8 billion to plot a complete transformation away from combustion. A hybrid lineup of Lambo models will be ready by 2024, and the company hopes for a full shift of production by the end of the decade. Kinda unsurprising, and other luxury players—the Ferraris and the McLarens will have to follow.

✅ Big league hustle—Darkside, the eastern European group that shut down the Colonial Pipeline and got paid $5 million in ransom apparently made $90 million+ over the past 9 months by hacking nearly 47 enterprises for ransom! The group emptied all its crypto wallets, and dissolved forever after the Colonial incident, but nobody remotely estimated the total heist pot to be that big.

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Bezos thirsty for more 👀

Just yesterday we saw Warner Media and Discovery announce a $150 billion marriage to form one of the largest streaming companies in the world, mounting an offense against the insurgent tech companies trying to disrupt the media game.

By evening, one of the tech bros counter punched—rumours broke out that Amazon is courting MGM Studios for a $7-$10 billion acquisition, hoping to add MGM’s content slate to Prime Video, and reminding the old guys this won’t be easy.

What’s the big deal—firstly, no sane person expected Amazon to go chase an acquisition right now, especially with regulators all concerned about how big (and monopolistic) the business has really gotten. But Bezos don’t bend for nobody...

Most importantly, MGM owns legendary content franchises including the James Bond, Rocky Balboa, Vikings, Stargate, in addition to hundreds of other world class chart topping movies and shows including Shark Tank.

All of that coming to Amazon could seriously beef up Prime's content library, secure sufficient arsenal to take on Netflix head on, while fending off any Disney, CBS, or Warner Media type old media giant coming from behind.

Big picture—with Netflix at 210 million subs, Amazon at 125 million, Disney at 103 million, and the rest lagging under 50, we’re still in the early phases of a long drawn out war.

Btw, put some guys up to smooth out the Prime Video UI too please? That 2010 shit is annoying af to operate. That should help.

Quick look at some restaurant innovation 🍽️

What happened—Goldbelly, a unique food delivery startup in the west, which ships freshly cooked food from high-profile restaurants across the country, raised $100 million from Spectrum Equity, and Intel Capital, at a $500 million+ valuation.

Goldbelly is quite an amusing idea—most food delivery platforms are geo-restricted, meaning you can’t Swiggy something outside of specific regions in BLR, if that's where you’re based. But what if you could order an artisanal delicacy from Gujarat, or street-food craving from Delhi?

The company essentially picks stuff up from local restaurants, packs it to last, freezing it if needed, and then ships it to you on an express basis. Upon delivery, food needs to be heated or partially cooked just like a meal kit—but the service has been highly successful in bringing popular and celebrated local restaurants experiences to a wider consumer base.

Now there's a fair bit of criticism around quality degrading, like always, but overall it's been a 10 on 10 knockout. Through 2020, the business saw total users top 1 million, with order volumes up more than 300%—a clear indicator of the model thriving.

Airtel puttin’ up a good fight ⚔️

Indian markets aren’t short of exemplary businesses, but Airtel’s continued execution against Jio’s aggressiveness calls for some appreciation.

Earlier in the week, the company met with investors to discuss quarterly earnings, and things looked pretty smooth—with revenues growing, margins improving, and the subscriber base holding steady.

Quick look at the numbers:

Revenue up 12% YoY to ₹25.7K crores
Net Profit of ₹759 crores, vs. ₹5K crore+ losses last year
ARPU fell to ₹145, but that’s mostly a function of rising competition and industry wide price pressures
Margins improved by 3% as cost prudence pays off
Lastly, Africa business made a billion in the quarter

Meanwhile, Airtel is welcoming organizational changes, is buying spectrum, exploring adjacent businesses such as advertising and infrastructure services… all in hopes of reducing that debt pile, and adding some agility. Will be interesting to see how it pays off.

Big picture—we still have at least 100% more active internet consumers yet to step into the markets, combined with a looming shift to 5G technology, so the telco game is long from drawn just yet.

Closing out—P&G of the modern era 🧐

What happened—GOAT Brand Labs, a startup by ex-Flipkart execs, raised $20 million from Tiger Global, with Flipkart and Mayfield Fund pitching in.

GOAT essentially buys online brands that have had modest success on platforms like Flipkart and Amazon, and then makes them expand faster.

Brands of the future—as digital-only product brands scale on top of ecommerce platforms, often merchants are happy to walk away with a simple paycheck, instead of risking it all to keep growing. Also, the problems that come with scale demand operational excellence and rigor, often impossible with the “hacking” nature of young startups and SMEs.

That’s where platforms like GOAT step it, pooling in the talent, relationships, capital resources to drive brands using the best of management tactics, while building a “process handbook” that then can be repeatedly copied to acquire more brands and scale them.

Tons of holding companies are emerging that are taking this model forward—with billion dollar giants like Aterian, Thrasio raising hundreds of millions in the west and scaling brands on Amazon, Etsy, etc. bringing in hundreds of millions in revenues.

Big picture—this is a huge opportunity to create a Procter & Gamble-like behemoth of the future, which instead of thick relationships with distributors and supermarket owners, will actually thrive based on the benefits of the online world—that is unlimited selection, space, optionality, and targeting using data.

Still day 1 in this game in India.

What else are we snackin’ 🍿

🗞 One for India - Google has launched its News Showrooms platform in India, in partnership with 30 publishers to help publishers monetize, and at the same time cut down on fake news. Good luck.

💉 Vacc ‘em all - US will share 20 million more COVID vaccines with other nations by the end of June, taking total vaccine shared count for the country to over 80 million, nearly 5x more than any other country.

Hit that 💚 if you liked today’s issue.

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