Apple of my eye 🍎
RIL raise, Government's prudence, and more edtech.
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Market summary: 📊
Things looking good so far this week in India, with both indices turning to gain ground Wednesday. US markets followed a similar trend, turning around from Tuesday’s decline to end day on a positive note.
US:
S&P 500 - up 0.83%
Nasdaq 100 - up 0.84%
India:
Nifty 50 - up 0.22%
Sensex - up 0.25%
First things first… 🙄
Yesterday, the first US presidential debates took place. And quite frankly… if I were to use the exact words of a commentator on CNN, it was a shitshow. Name calling, talking over each other, incoherent statements… it was like a 4th standard classroom at lunch time. And the Americans seem to unanimously agree.
Neither citizens nor global political junkies got any insight whatsoever into what world policy might look like or how the mightiest nation would prioritize technology or anything that matters to the rest of us otherwise. In case you’re a political nerd and still interested, here’s a link handy.
Onwards now...
India, will you be the Apple of my eye? 🍎
With the launch of the new digital store, Apple’s renewed India strategy is getting a lot of interest. Apple had tried cracking the India market several times in the past, yet India’s value oriented consumers couldn’t understand or appreciate the toll-paying exclusivity of this ecosystem and stayed away.
However, back with a new look, a slate of new devices, that too right in time for Diwali, Apple thinks consumers may finally be ready.
What changed? Well, first of all, India’s GDP per capita has considerably improved since the last time Apple came knocking, which means more disposable income to throw around on fancy devices. Secondly, smartphones matured from a luxury to a necessity, and now particularly with Apple’s cheaper iPhone SE line ups, who knows maybe a few million consumers here, bored of their Androids, may be yearning to get something other than a One+ on their hands.
Lastly, Apple’s renewed approach with its Services segment could surprise in India, especially now that they have introduced a bundled plan at extremely cheap rates. We’ll see how this pans out but Apple is testing the market and expectations are set high.
While we’re on the subject —
From a manufacturing side, Apple is again massively bullish on India. Early reports suggest that, thanks to GOI’s production-linked incentive scheme, Apple’s key global assemblers and suppliers — Foxconn, Wistron and Pegatron, plan to invest almost $900 million into India's manufacturing sector.
The investment is expected to create close to 10,000 jobs and rings in quite a commendable victory for the government, whose plans of luring manufacturers with $6.65 billion worth of incentives, spread over 5 years are starting to shine. If you’re remiss on the details, the folks over at Invest India have a thorough breakdown.
Anyway, Apple is pumped and they’ve already begun ramping up production for iPhone SE’s, boosting output from making about 2 Lakh iPhone SE’s a month in India, to twice that by the end of this year. 👏
In all — India could be a solution for two of Apple’s problems — de-risk its supply chain from China, and find some of that sales growth by selling into a relatively untapped market.
Got more edtechs hidin? Now is the time 👀
Sunstone Eduversity became the latest of the pack to scoop up ₹24 crore in a Series A round led by Saama Capital. A bunch of HNIs, notable Angels and existing investors Prime Venture Partners, Purvi Capital pitched in too.
The company sells business certificate courses and employs a Lambda School like pay-after-you get a job model to make the deal sound appealing. The program lasts 2 years — and the company hopes to bring it to the equivalent of an MBA in terms of value added to the students.
So far, 1,000 students have been enrolled in this year, marking a 3x growth, and the company has been able to keep a 10% acceptance rate. Fresh funds will go to hire, add more tech capabilities and to fund growth initiatives.
Takeaway: well, sounds very much like your regular for-profit university. Perhaps a bit cheaper and the pay after placement is quite attractive. Anyway, it's very clear at this point that India’s education landscape is being disrupted on all fronts, and the investors are wholeheartedly onboard, so expect to be surprised by the ideas coming out of here for a while. It remains to be seen who stands tall after the dust settles.
Moving to a media raise — 💰
Our boys at Inshorts scooped up a whopping $35 million from ‘Addition’ — a new venture firm from former Tiger Global executive Lee Fixel. Tanglin Venture Partners and SIG Global pitched in as well.
Started in 2013, InShorts led a disruptive storm in India’s news market, eliminating all fluff, jargon and theater out of print news, to show things as they were. Indians loved the format, and a generation of ventures, including yours truly were inspired in the later years. 👏
Anyway, InShorts has grand plans ahead, including ramping up their new social media app Public, which it launched in April 2019. The company wants to go after regional India, offering content job updates, classifieds and much more in countless other languages.
Lee Fixel had previously invested in InShorts back in 2015 and he’s clearly back for more, which is a solid vote of confidence in India’s media. Can’t say Filter Coffee ☕ is not excited…. hooo hooo!
No more no less please ✋
The Government of India reiterated its decision to limit borrowings for the fiscal year at its previously guided target — ₹12 lakh crore. Analysts and pundits were expecting otherwise — thinking that a weak economic environment, budget shortfalls and perhaps a need for additional stimulus, would drive the government to borrow more down the line to fix its problems.
Anyway, over the next 4 months or so, the centre will be issuing and selling bonds every week, raising some ₹4.34 lakh crore between now and March 2021. The rest of the ₹12 lakh crore target (some ₹7.66 lakh crore) has already been previously raised in the past months.
Markets are digesting what this means — for once it's good that the centre is showing discipline and is not overleveraging itself, sticking to its plan, which gives conservative investors some confidence.
At the same time, the government is divesting some of its holdings — like LIC for example, which is helping them fix shortfalls. Is more coming on that front? Lastly, this also means the government will be cautious about spending — hopes for generous stimuluses and packages will be dented a bit.
Ecommerce and logistics had an eventful day 🛒
Starting locally, Ambani flexed his arms a bit more, and General Atlantic came gushing with another thick wad of cash for Reliance Retail. The private equity firm invested a whopping ₹3,675 crores, in return for a 0.84% equity in the retail arm of RIL. The raise comes in the backdrop of the recent capital infusion from KKR and Silver Lake Partners.
Ok… at what point will this stop?
Turning heads to some real innovation —
Amazon’s Go Store, the ones where you walk in and walk out with whatever you want, without having to deal with a cashier, are getting a cool payments upgrade. In the latest, users can just wave their hands, pay contactlessly using their palm biometrics, and get out and about in under 5 seconds.
The first time around, the device will ask for your credit card information, which will be matched with your biometrics and securely stored for future uses. The next time you’re in, just wave to the reader and you’re done. Amazon has decided to call the tech “Amazon One”, quite ingenious as you can see. 🙄
Wait, did someone say privacy…..well
Anyway, Seattle, USA is testing this out and Amazon plans on selling to public theatres, stadiums etc.
What else are we snackin’ 🍿
🏛️ Google in hot water - The US Justice Department is planning to file a lawsuit against Google accusing the Tech Giant of looking to disadvantage rivals such as MSFT’s Bing by not providing them with data about users and user preferences. The lawsuit is expected to be filed sometime next week.
🎡 Massive layoff - Disney will cut 28k jobs from its US theme parks the company’s parks and entertainment business remains decimated by the pandemic. There is still little uncertainty around when the parks will reopen and Disney hoped this cut will help save cash drain.
🖥️ Coviewing is here - Disney+ has introduced a way for family and friends to watch movies and TV together when people are in different locations. The company will be testing co-viewing on its platform in Canada, Australia and NZ and has plans of expanding it to the US. Netflix you listening?
🚀 Amping up our artillery - India has test fired a supersonic cruise missile Brahmos. The missile has a range of around 400km and travels at a speed of Mach 2.8, nearly 3 times that of sound. The test was carried out by DRDO off the coast of Balasore in Odisha. Bravo boys!
💉 Big tech doing its part - Salesforce.com has adapted its business software to help health care organisations and government entities to distribute the COVID-19 vaccines once they are available. The offering will be called Work.com.
📦 Scaling up operations - Keeping the upcoming festive season in mind, Delhivery is planning to open 15k seasonal job openings across operations. The company is expected to handle 65-75 million packages during the period, a 100% jump over last year. Commendable!
Hit that 💚 if you liked today’s issue.
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