Big gaming exit 🤯

Billionaire infighting, HOOD’s bid, and things from the week before.

Jul 03, 2021

Hi 👋, Tanvi here.

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Let’s go ahead and get started:

Market summary: 📊

After 4 straight days of decline, India finally ended the week with a positive day. US investors had a great session as well, leaving on a high note to enjoy a long weekend.

US:

S&P 500 - up 0.75%
Nasdaq - up 1.15%

India:

Nifty 50 - up 0.27%
Sensex - up 0.32%

Weekend shot of espresso? ☕

✅ Battle of the billionaires — Virgin Group founder Richard Branson will be shot into space by his company Virgin Galactic on July 11th, landing him ass-first on Jeff Bezos’ plans of making history by being one of the first civilians to go to space on July 20th! Branson will bring 5 more people with him, while barely hours before Bezos declared the 4th person on his flight will be aviation pioneer Wally Funk. These “races” either become a spectacle worth watching, or an expensive and dangerous lesson in space travel.

Quick look at a gaming acquisition 🎮

What happened —Modern Times Group (MTG), a Sweden based gaming giant, acquired India based game developer PlaySimple for $360 million — in one of the largest exits for an Indian startup ever!

PlaySimple makes free online casual games across categories like trivia, word and puzzle — with Daily Themed Crossword, WordTrip, and Crossword Jam among its most popular properties, all of which cumulatively got 75M downloads to date, and get 2M daily active users.

The company was making $80M+ in annual revenues, growing 140%+ YoY, thanks to the gaming hysteria post lockdowns, and with barely $5M in VC capital raised, gotta be a sweet payout for founders.

Bottomline —big money chasing Indian gaming creative is new, and a major vote of confidence in the nascent industry here. Bravo!

While we’re here, 💰

Articulate, a software company that helps enterprises make internal-training curriculum, raised a mammoth $1.5 billion Series A round, apparently the largest ever, at a $3.75 billion valuation. Quite a chunk of capital and dilution, for a company that has been in business for 20 years, and has grown to 100K+ customers, barely bringing in $50M in revenues.

Robinhood, all set to meet his fate 🧐

After an epic year in the markets, which saw its systems jammed, reddit coups organized, fines slammed, and a near-fatal bout with bankruptcy, Robinhood managed to stand tall, and is now ready to go public!

The company’s S-1 dropped last night — with Vlad and gang shooting for a mammoth $40 billion valuation, with 2020 being the first fully profitable year.

Quick look at numbers:

2020 revenues of $986 million, up 250%+ YoY
Made $7 million in profits for the year, barely breaking through
Most recent quarter is growing even faster — at 300%+ rates
Total of 18 million users, grew 150%+ in 2021
$80 billion assets under custody
9.5 million crypto users, who bring 17% of total revenue

Here’s the S-1 doc if you’re looking for a Sunday read.

As long as the government cash-printing funded bull rally and the meme-fication of the markets continue, prospects for the business look bright.

Big picture —stock however remains threatened by Redditors who, if short the shit out of it (chatter is already building), could create massive problems for the company. Traditional IPO-investors will be concerned about this.

Oh, btw ticker’s gonna be “HOOD” — gotta hand it, supercool.

And that’s a wrap. Quick look at all things that dominated the news this week

🛍️ Great comeback — Nike recovered strong from the pandemic, blasting 96% growth in the most recent quarter, as consumers start to return to in-store shopping. Revenues topped $12 billion, with $3 billion in e-commerce sales, up 41% YoY. Brands that survived the retail apocalypse, and now COVID’s assault are looking at a great run as post-pandemic revenge spending picks up, and retail stocks were favored all week along by investors.

🤑 Mobile spending boomin’ — markets were chewing on App Annie’s State of Mobile this week, which showed consumers spent $34 billion on in-app purchases during Q2 2021. Gaming continues to attract a disproportionate spend, but Streaming, Business (WFH tools), Fintech, and Medical and Fitness apps were other hot categories. And, TikTok displaced YouTube as the global king of engagement, attracting ~24.5 hours each month in average user time spent on the app.

🔥 Who’s going Public?

In India, Healthium Medtech, the largest manufacturer of surgical needles and consumable medical goods will try to raise ~$300M at a $1B valuation. The biz has been around for 30 years, supplies syringes and other disposables to 18,000+ hospitals across 70+ countries, and with COVID’s boom to health services, this will be a tough one to get in.

On Wall Street, we have language learning service Duolingo, looking at a ~$3 billion listing on the Nasdaq. Revenues of $162 million are growing at an attractive 129% YoY, with subscriptions driving 73% of revenue. 40 million monthly active users use the service, and Duolingo’s tiny edtech pivot is showing ample promise.

From the India growth venture list, we heard insurance giant Policybazaar is preparing to join PayTM and Zomato for a Dalal Street listing by the end of the year. PB will be raising $500 million, at a $4 billion valuation. With 4M+ policies sold each month, to 100M monthly visitors, and revenues of ₹515 crores, shouldn’t be a hard sell.

🚗 Signs of recovery — while May was a brutal month for India’s automotive industry, June data hints at a resounding comeback. Maruti Suzuki sold 1.47 lakh cars, 3x’ing its volumes for the month, MG doubled volumes, and Mahindra grew by 89%. In the commercial segment, Ashok Leyland as well as Mahindra’s farm biz is blasting 100%+ growth rates! Great not just for auto stocks, but for downstream financial services, suppliers of parts, service providers, while signaling some consumer strength.

💻 Satya won’t rest at $2T — Microsoft is building a developer tool for Github that will use AI to auto generate blocks of software code, as a way to help programmers improve throughput and become more productive. Joining hands with OpenAI, the guys behind the GPT-3 language model for this project, the tool will work tightly with Github and be called Github Copilot. At scale, the product could help save billions of dollars in developer productivity, and who better than Microsoft to bring it to millions of its existing enterprise customers.

💰 Amazon wants more —AWS acquired Wickr, which is basically a more secure and safe Zoom look-alike, selling a suite of encrypted video conferencing and messaging services to government and military clients. Deal's valued at ~$50 million, and we’re guessing with its recent government cloud contract wins, AWS is looking to double down on the segment.

💩Vi is screwed — Vodafone-Idea posted a horrible quarter, with losses piling up, revenues declining, and debt mountain looking scary AF. Total revenues dropped 12%, while expenses were nearly 85% above market’s expectations, and management’s hints of a possible need to go out and raise some more cash, further soured mood. Failure to pull off a turnaround could leave India’s telco market at the mercy of just 2 top players, Jio and Airtel — a disaster for free markets. Folks holding’ the bag on the ₹8 stock are now praying for GOI’s intervention!

Hit that 💚 if you liked today’s issue.

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