Bappi’s magic ✨
Slack sold, IPO revised, and HUL wants values.
Hi 👋, Tanvi here.
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Market summary: 📊
Decent bounce back on Tuesday in India, with both indices gaining. Tech stocks particularly shining bright yesterday in the US.
US:
S&P 500 - up 1.13%
Nasdaq 100 - up 1.52%
India:
Nifty 50 - up 1.08%
Sensex - up 1.15%
CRED’s war chest nets $80 mil 💰
The risky IPL ads paid off, buzz for CRED is at an all time high, and the company cashed in the freshly acquired “digital capital” for an $80 million Series C check from DST Global, Ribbit Capital, Sequoia, and Tiger Global to further scale up assault in the fintech arena.
Valuation now stands at $800 million—a 77% bump from the $450 million levels the company had raised at just last year. COVID’s push for digital commerce and for digital financial services shows just how much has changed for the company in under 12 months.
CRED played the game like a master so far—devoted to building hype, leading with an invite only model to filter customers early on, avoiding broad credit default risk by acting as only a “discovery” marketplace and keeping a high credit score as a qualifying bar. Despite the artificial barriers, they managed to pool an impressive 3M highly credible, high-income users that traditional banks can only dream of ever segmenting.
And, all of this helped reduce a ton of problems traditional lending startups grapple with in early days, opening them up to milk the base with a WIDDDDEEE range of adjacent offerings. Self-underwitten credit will be the first step, but expect banking, savings etc. to follow on over the next years. Quite a lucrative operating position.🖖
While we’re on raises,
Vistaar Finance, a BLR based MSME lending player scooped up ₹225 crore from Dutch Entrepreneurial Development bank-FMO, through external commercial borrowings.
The company leverages an online and offline model, servicing lending needs of small business customers digitally and via 200 locations, and has built up a portfolio of nearly ₹2,000 crore assets under its management. This is an increasingly common trend where private enterprises are finding huge success in supporting SMEs, offering services in the gaps that regular banks fail to recognize—only accelerated in the aftermath of COVID and board digitization.
Anyway, management says the funds will be put to recognize and support particularly those ventures that are recovering from the ongoing disruption.
Worth mentioning: there is no way government support alone can help SMEs recover from the death blow the pandemic has landed on them. A robust private lending ecosystem and access to credit at affordable rates has never been more critical. This segment will continue to remain fertile.
Uber’s EV push 🚕
Uber is planning to have a 3,000 electric-vehicle fleet running in India by the end of 2021, in line with the company’s broad global mandate of adopting green technologies worldwide.
If you remember, the company had pledged to make its fleet 100% green in developed markets by 2030—an audacious bid that charged a debate on who will bear the cost of the transformation. On one hand, Uber is battling to shave costs while demand limps along due to the pandemic, while on the other hand drivers revolt over thin pay. Amidst all that, forcing new drivers to buy electric cars? Seems pretentious.👀
Anyway, in India, Uber intends to closely work with original equipment manufacturers, EV infrastructure firms for charging and battery swapping, as well as with financial players to seamlessly connect parties, to make vehicle ownership and infrastructure deployment easy.
So far, Uber added 100 e-rickshaws in Delhi and 500 in Kolkata in November and also has plans to reach 200 cities by December-end, and several other attractive partnerships in other cities are in place.
The valley boys want more for their genius 📈
Rumors are that AirBnb and Doordash, two of the most anticipated IPOs of the year, if not the decade, are planning to seek valuations higher than the previous estimates outlined during regulatory filings.
Airbnb is eyeing for ~$30B to $33B, marking about a 5% upward revision to their estimate from a couple weeks ago, while DoorDash is expecting a tag of ~$25B to $28B, a 6% bump from earlier anticipated levels.
Reasons cited by management at both companies are the same—faster than imagined recovery coming out of COVID, with demand bouncing back strongly, and with a post-vaccine boom seeming like an inevitability.
Interesting insight—thanks to tech boom post COVID, 383 IPOs have raised over $140 billion this year in the US. That's the most IPO capital raised in a year ever, since the dot-com boom in 1999. Make what you wish of that!
Slack finally picked up by Salesforce🤯
The rumored deal between Salesforce and Slack will be closed for $27.7 billion—nearly a 70% premium to Slack’s market cap before news of the transaction broke out.
We had written about how Slack got here. Basically, even as the pandemic significantly buoyed other collaboration and communication service players (freaking Zoom), Slack’s growth failed to catch wind, partly due to assault from Microsoft Teams, or perhaps because of a broken sales and distribution strategy internally that failed to deliver.
Whatever it was, odds are Salesforce has the answer to the problems. Salesforce has been selling software for 2 decades, has deep ranks with the talent to neutralize most strategic issues, and powerful distribution channels that could plug Slack in and drive meaningful engagement and revenue growth in no time, while cutting costs down.
For Salesforce, owning slack essentially gives them access to perennial engagement from customer employees via a “homepage” application where developers, business folks—literally everyone hangs out to get shit done, sharing files, searching docs, cracking dad jokes all the time. It's much easier to bundle more software and drive more revenue upselling tiny tools here and there.
Case in point—see how Microsoft sells more tools bundled and integrated via Teams, and the network effects have helped the platform soar to capture 115 million daily users in absolutely no time. Anyway, the deal seems like a win for Salesforce.
Interesting fact: In 2001, Stewart Butterfield (Slack CEO) had sold his then startup Flickr to Yahoo for $25 million. 15 years later, he booked a modest 1000x exit. Good enough to retire finally, I guess.
What else are we snackin’ 🍿
💪 Canadian twist - HUL thinks Akshay Kumar can get you to drink more Horlicks, hiring the actor as the brand ambassador for the product. HUL claims the actor will “represent the core values of the brand” and focus on encouraging urban Indian adults to fight protein deficiency everyday. Hmm.
🤝 Sassy Wendy coming to India - Wendy’s company has struck a partnership with Rebel Foods which is a cloud kitchen business to launch 250 cloud kitchens across India. Rebel Foods will partner with Sierra Nevada Restaurants, which holds the India master franchise for Wendy's, to develop and operate Wendy’s cloud kitchens in the country.
🎵 Everyone gets a story - Spotify is the latest casualty to the Story pandemic, bringing one-sided consumable video content inside the app. Feature is currently being tested with limited users, and it shows celebrities talking about their favourite Christmas playlists. Potential hai.
Hit that 💚 if you liked today’s issue.
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