Art of the deal 🎵
Retail boost, defense push, and getting over banks.
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Retail gets a small boost 🛒
It is endearing to see investors enthused about India’s consumer recovery. The latest capital allocation here comes from Amazon and private equity firm Samara Capital — who have jointly invested an additional ₹275 crores in Witzig Advisory Services, the holding firm of the More supermarket chain.
More Supermarkets, erstwhile part of the Aditya Birla Group, was sold by Birla to a group of investors led by Samara and Amazon for about ₹4,050 crores back in 2018. While Amazon’s stake is unclear, the fresh funds bring Samara’s ownership up to 51% now.
The investment is a vote of confidence and another data point highlighting Amazon’s grand plans. It is also possible that the move may have been driven purely by the recent solidification of Reliance Retail — which in addition to acquiring several of Future Group’s businesses, scooped up billions from big-league global investors.
Takeaway: gotta notice how Amazon’s expansion strategy in India is in stark contrast to its early days in the US. Then, it was a laser sharp focus on digital-commerce in the early days. In India, now it's a two-footed war, prioritizing omnichannel commerce.
Decentralizing R&D in defense 🔫
Defence Research and Development Organisation (DRDO) has set up eight new advanced technology centres to carry out research on futuristic military applications, across the country.
The government promises support to academia via these centres to pursue research on new technologies in niche areas for military use, disclosed the Union Minister of Defence (MoS) Shripad Naik in Rajya Sabha. The centers will bolster the 50+ labs DRDO manages across the country pursuing R&D in aeronautics, armaments, combat vehicles, engineering systems, missiles, advanced computing and naval systems
Moreover, a committee headed by Prof. V Ramagopal Rao, Director of Delhi IIT, has been appointed to suggest measures to improve efficiency of the DRDO laboratories across the country with an aim to boost the domestic defence production.
Takeaway: don’t sleep on the quietly mushrooming domestic defense-tech sector. DRDO’s (and even ISRO’s) recent wins in high-tech endeavors has elevated investor enthusiasm as well as the interest of local startups and talent in the opportunity like never before.
Fintech bros cheer 🙌
Global fintech is on fire and that would be an understatement in light of Chime’s recent raise. The no-fee, digital-only bank in the US, raised a fresh round of funds — adding $485 million to its coffers, at a whopping $14.5 billion valuation.
Tiger Global, General Atlantic, ICONIQ, DST Global — all the biggies pitched in. Surprisingly, Chime claims EBITDA profitability — simply put, the company makes profits before considering any interest payments on loans, asset depreciation, or paying any taxes, which is a good operating position for any company to be in, and even better for a high-growth consumer startup. Chime will also aim for a 2021-IPO.
COVID has altered the trajectory of banking forever. People are no longer walking into bank branches, accelerating the exodus of old banks, and in that process challenging the business model of traditional banks. For example, any “fees” charged by your bank essentially look like daylight theft now, particularly more so when you don’t see a sweet talking bank employee trying to justify them.
Young people especially are not having it and quitting old banks for digital first natives quite passionately. The wind is already shifting away from big banks and in the direction of fintech, and the charts below say everything about the times we’re in.
Bottomline: Chime is the flagbearer of the no-fee revolution in the US, and a driver and inspiration for countless startups here in India. The fundraise, and the 10x bump in valuation in 16 month, will be a gigantic confidence boost for all fintech builders worldwide.
The Art of the Deal — Donald John Trump, Queens NY 🎵
Trump has conditionally signed off on the TikTok deal and Bytedance has been given a week’s extension on the ban. Here’s the terms and conditions —
TikTok will be incorporated in cowboy country Texas
Maintain HQ in US, create 25,000 jobs in the US
Oracle will be TikTok’s cloud host
Oracle + Walmart will own 20% of TikTok
TikTok will give $5 billion to US education fund
Both TikTok and Oracle will take part in pre-IPO financing if needed to keep their stake at upto 20% levels
TikTok will IPO in a year’s time
Here’s a thorough coverage from CNN.
Things that are still looming include China’s retaliation to strong-arming their baby and a possible citizen backlash against the deal, especially from users and creators with different political leanings.
Regardless, Trump has already done the victory lap and the passage of the deal has been a major election rally topic for him nationwide.
Takeaway: to many watching closely, the US acted like a bully. To others, China’s unchecked expansionism needed to be flagged down. All we can say for sure is that this is no longer about just business. Technology enterprises that cut through boundaries will be the new pawns in the global power struggle between powerful nations.
And… as an everyday newsletter writer, I thank God this is done.
What else are we snackin’ 🍿
👍 Low cost test approved - The TATA group has received approval from the Drug Controller General of India for the commercial launch of India’s first-low cost COVID-19 test “feluda”. The test uses an indigenously developed technology for the genomic sequence of SARS-CoV-2 virus.
🍎 Apple’s online debut - Apple will launch its online store on September 23. The online store will let Indian customers shop Apple’s full range of products and get expert advice and support from Apple specialists.
😱 Bankrupting over COVID - Britain will now levy upto 10,000 pounds as a fine from people who break the new rules which require them to self isolate if they have come in contact with a COVID positive person. The rules will apply from September 28 as the country readies for stricter lockdowns again.
😷 No respite - India’s COVID-19 tally has crossed the 54 lakh mark after reporting 92,605 new cases in a day. With the recent spike the tally of cases now stands at 54,00,620 out of which 10,10,824 are active cases with death toll rising up to 86,752.
💉 Moving forward - DCGA has given a go ahead signal to Serum Institute of India to conduct the phase III trials of Oxford-Astrazeneca’s Covishield vaccine. The trial will begin in Pune next week with around 150-200 people participating.
🚗 Driverless testing permitted - California state authorities have given Zoox Inc. a permit to test its self-driving vehicles without an incar backup driver. This comes as a huge win for e-commerce giant Amazon who acquired the startup in June and put cash in it to continue R&D.
👏 Women’s safety - The Central Government has launched the 112 Emergency response support system and app to give safety and assistance to women in distress. The emergency response system can be accessed through the 112 India Mobile app from any smartphone.
☁️ Accenture’s big bet - following its peer IT consulting giants, Accenture has committed close to $3 billion to building cloud capabilities from within - spanning talent, infrastructure, capability building and upskilling etc. - all that takes to retain clients and keep delivering value in the new world.
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