Apple's audacity 😎
Regional commerce, PE deal, and IPO galore.
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Market summary: 📊
Another decent day, with both Nifty and Sensex rising, as Vaccine progress is helping investor sentiment. S&P and Nasdaq clinched all time highs.
US:
S&P 500 - up 0.28%
Nasdaq 100 - up 0.31%
India:
Nifty 50 - up 0.95%
Sensex - up 0.40%
Shakespeare gets a shot 💉
One of the first human beings to officially get a shot of Pfizer’s recently approved vaccine is an 80 year old man from the UK by the name William Shakesphere. (yeah, not that one, but how poetic!)
FYI—another older lady received the first dose, in addition to volunteers in testing. UK will start vaccinating its front line workers and older, at-risk population ASAP. Other nations are expected to green light the drug coming week.
Who gots the cash baby? 💰
Dealshare, an e-commerce venture that focuses exclusively on low-income and Tier 2 cities, refilled its coffers with a $21 million Series C round, led by WestBridge Capital, with Alpha Wave Incubation, Z3 Partners and a few other investors pitching in.
While India’s leading e-commerce giants (Amazons and the Flipkarts) almost exclusively market to the urban consumer, Dealshare differentiates with a regional look, with a default-Hindi platform that’s marketed to the lower and middle-income consumer base—filling a gap that had been left open for too long. Like most ventures that attack this particular segment, the company originally launched its first offering via Whatsapp, slowly bolstering its presence with a website and an app. Today they operate in 25 cities across 5 states.
Growth had been humming along quite nicely, and then with COVID blessing literally all digital ventures in 2020, management now claims profitability is in sight. 🙌 Then with COVID blessing literally all digital ventures in 2020, management claims profitability in sight.
Fresh capital will be put to expand in 100 more cities over the next 12 months, with an audacious target of reaching 10 million customers and an annual GMV of $339 million. Super exciting!
Bottomline: The Indian consumer retail market is magical—diversity in consumers and fragmented market structures offer segments hidden within segments, serving which allow startups to build respectable franchises in no time—one of the primary reasons why global investors love India so much.
E-commerce obviously is a ripe opportunity, but over time financial services, insurance, banking, healthcare, pretty much everything at the application level can be peeled and delivered as an individual service to these unique segments. Just getting started baby.
Quick look at PE deal 🤝
Private equity player Everstone Capital purchased a controlling stake in specialty chemicals manufacturer Calibre, for ₹1,000 crores.
Calibre, HQ'd in Mumbai, makes specialty ingredients for pharmaceutical, nutritional and personal care segments—primarily iodine derivatives, persulfates and perchlorates through its production facilities in Gujarat. Most of their stuff is then sold in the international markets, with 67% of sales in US, Europe and Asia. Last year, they made just under ₹400 crores in revenues, posting a profit of nearly ₹50 crores.
Everstone is on a spree to beef up its speciality maker portfolio, having invested in another nutraceuticals firm OmniActive just four years ago.
Bottomline: hard to say what drove this particular acquisition, but expect such consolidation to generally be high in the aftermath of a recession. Companies that couldn’t afford to keep lights on will look for buyers, others will get scooped up because a particular market segment heats up. These tumultuous market conditions are god sent for private market investors.
Apple teaches how its done 🎧
Apple's out with a new set of headphones called the AirPods Max. This time instead of hanging in your ears they’re going old school—over your head. Boom, innovation, price tag = $500. Lines outside the stores stretch along the highway. 🙄
Jokes aside, the number of lessons one can pick from Apple’s product launches, positioning, genius timing. and marketing efforts are phenomenal—in addition to creating an imposing, class leading experience, they’re getting users to come in every 2 years to spend $1000 more on a phone, and then forcing them to upgrade with outrageously priced accessories to keep up. It's so ridiculous that it's freaking genius!
We hold little doubt this product will be a hit, and it further underlines Apple’s commitment to personal audio experience and to the airpods-as-a-platform opportunity.
While we’re on the subject,
Working-out at home has caught people’s fancy, with companies like Peloton breaking through the roof, and workout-hardware startups like Mirror, Tonal killing it with engagement. Apple doubled down on the game with its renewed Fitness+ membership program—combining analytics, music, vitals information to deliver custom exercises and health regimens. The offering costs some $10 a month and goes live in a week.
Takeaway: Apple’s device base runs into the billions and it's hard for the company to find more growth selling phones or computers. Everyone who wants one, has one already. Wearables, accessories and services are now the fastest growing verticals for them. Moreover, an aging millennial base is demanding more—to deal with health, money, privacy etc. Apple inevitably plays into that demand. Expect a LOT more to come.
Tech set to rock Wall Street 🤩
Both AirBnb and DoorDash IPOs will hit the street this week, coming in at a much higher valuation than anticipated, putting a nice finish to the roller coaster of a year 2020 has been.
Both businesses were near decimated when the lockdown frenzy hit. Although DoorDash (~$39 billion valuation at open) promptly knew its fortunes were about to turn with consumers locked in place, Airbnb pulled off a much daring comeback later in the year, to take pole position eventually (eyeing $42 billion valuation at open).
What else are we snackin’ 🍿
😞 Layoffs in travel continue - OYO laid off another 300 employees from renovation and operations departments, as demand for the company’s properties remains muted. Management claims “technology-enabled synergies” to justify the move.
🗼 RIL sets eyes on 5G - Jio 5G services are set to roll out in the second half of 2021 says Mukes bhai, combined with low-cost Android phone the company has been working on with Google. Next year will see some serious face offs in the hardware + telco markets.
Hit that 💚 if you liked today’s issue.
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