Bloodbath 🔪

AirBnB recovering, Twitter on fire, and more stuff from this week.

Feb 27, 2021

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Indian markets took a major dump as concerns of overvaluation and inclinations to take some profits dominated sentiments. US markets recovered a bit after a brutal week. All said and done, still far from the lows we’d seen during March 2020. Sit tight.

US:

S&P 500 - down 0.48%
Nasdaq 100 - up 0.63%

India:

Nifty 50 - down 3.76%
Sensex - down 3.80%

It’s a unicorn fest out there 🔥

Infra.market, a construction and real-estate sourcing marketplace, raised $100 million at a billion dollar valuation from Tiger Global and a bunch of investors. This is the second startup so far this week to be knighted, and Tiger’s on both the cap tables.

Infra.market basically runs an elaborate construction marketplace that connects developers, manufacturers, and construction service providers, over a platform that simplifies procuring materials and handling of logistics. Independent contractors and engineers can outsource construction, find service partners for offsite manufacturing and material production, and easily monitor delivery of service real time.

Compare that to how the construction industry operates today—with zero room for wide price discovery, little scope for quality control when choosing vendors, and absolutely no chance for data driven monitoring of your supply chains, and delivery.

The company had in fact raised a big round at a $200 million valuation in December 2020, which is indicative of how fast they’re really growing. Ashoka Buildcon, L&T, Tata Projects are all customers.

Key takeaway—the idea is refreshingly innovative, and we’re guessing involves a lot of bespoke human support in connecting vendors, but regardless has potential to add a lot of standardization and efficiency to India’s fragmented construction industry.

Twitter got grand plans 🐦

For years Twitter investors have been pissed with the company’s lethargy to innovate and make money hand over fist for a product that visibly has millions addicted to it.

And then one fine morning Jack Dorsey and TWTR management finally listen, and shove the entire roadmap down investors’ throats in one go—quite literally.

Quick look at the big product moves:

Launching a new feature called Super Follow—a list of loyal followers, making it easy for creators to better monetize their content through premium tweets and subscription newsletters
TweetDeck, the portal that allows highly engaged users manage interactions through multiple screen views will be served as a paid product—kick starting a modest subscription SaaS business line for Twitter

Hit the gas hard on Twitter Spaces, the Clubhouse clone that Twitter currently has in Beta testing—so far reviews say it kicks ass

With these launches in mind, the company’s set some ballsy growth targets:

Grow daily active user base of power users to 315 million by 2023
Double revenue by 2023, to over $7.5 billion

All the acquisitions that Twitter made in and around here in the last 6 months or so (Revue, Squad, Ueno, Breaker etc.) are finally starting to make sense.

Markets had begun picking clues, and Twitter stock’s been up nearly 60% over the last month alone, the highest it has traded ever since its IPO 8 years ago.

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Airbnb humming along despite COVID 📈

Airbnb reported its Q4 numbers and surprisingly, although low, they are far better than what investors had been expecting.

City hopping remote workers booking extended stays in chic bed and breakfasts are making up for the deficit of travel demand, and becoming life savers for the company.

Quick look at quarterly numbers:

Revenues down 22% YoY, to $859 million
46 million booking in the quarter, down 39% compared to 2019, but still quite better than earlier in 2020
Losses shrunk, while investors had been bracing for bloodshed

Brian Chesky and team were in fact quite confident that demand will only recover going forward, and that 2021 was already looking far better than imagined.

BTW, Brian Chesky told investors—”Airbnb would have 95% of the traffic levels it gets today if it had not spent a single penny on marketing”, which is why the company expects to slash majority of its marketing spend, and stop some bleeding. Quite a powerful advantage!

Bottomline: from a near death freeze in March 2020, to raising billions in emergency capital while laying off thousands, to seeing demand recover as people bored during lockdowns skip town, to pushing with a record IPO and sealing $125 billion in market cap—if your business is that resilient, it’s likely going to keep winning against all odds.

Aight, that’s it for today, and a quick look at the hottest stuff this week…

📸 Influencers reign supreme—David Dobrik’s camera app Dispo has reportedly closed a round of $20 million at a $200 million valuation, in what appears to have been a bidding war among VCs that saw valuation swell nearly 100%. The deal is absolutely revolutionary on so many levels—the founder of the company is a YouTube entertainer with a cult-like following, with no tech skills whatsoever, attracting big money from mainstream investors for a consumer technology product he’s single handedly making popular by leveraging his personal distribution. A perfect case study on how influencers have become solo media corporations.

📋 SaaS unicorn list extends—Healthcare SaaS company Innovaccer, became the latest to join India’s unicorn club after a Series D round set the company’s valuation to $1.3 billion. Innovaccer sells an end-to-end SaaS platform that helps hospitals, insurance companies, and other enterprises in the healthcare value chain bring distributed datasets together and generate insights on improving care delivery. Tiger Global led the bid.

💪 Xiaomi gunning for that Atma-Nirbhar cleansing—the device maker will be setting up two smartphone manufacturing plants in Haryana and Tamil Nadu, followed by another TV making unit in Telangana as well, looking to locally make the majority of the smartphones and other consumer devices they sell in the Indian market. Xiaomi already owns close to 26% market share in the Indian market, and competition has never been this hot, and the sizable investment signals their confidence in the continued explosion of the consumer electronics market here.

💻 Zoom is planning round 2—After dominating the video communications game, Zoom is planning its next move in the contact center software game, basically supplying voice and video calling software that supports operations for millions of call centers on the planet. The contact center software segment is a $25-$30 billion annual addressable market, mostly dominated by old clunky systems, and the opportunity for cloud native tools like Zoom to enter and dominate, is BIG. Rumours are Zoom is looking to acquire a smaller startup to flag off the business.

😐 Bullies suck—Big Basket is taking some heat for bullying a smaller local commerce platform called Daily Basket, sending them a legal notice for copying Big Basket’s look and trying to market itself as the company’s clone. Big Basket not only demands the service be stopped, but is also demanding a transfer of the domain and all digital assets over to them, at the expense of DB. Daily Basket obviously rejects the accusations and has put up a funny website refuting each one of the claims made by BB. The entertainment we never asked for.

💰 Diversifying revenue streams—Airtel’s launching its own ad-tech platform with hopes of incrementally monetizing the hundreds of millions in subscriber base the company serves across multiple digital properties. The platform will basically work with brands, leveraging data that Airtel has on consumers, to deliver brand messaging and offers that are relevant wherever consumers interact with services. Between the Airtel mobile app, Wynk music app, and the million or so retail locations—we’re talking about 350 million or so total users. Surprisingly the beta is already ready, and Airtel’s claiming revenue bookings of over ₹100 crores by far.

🥻 Birla’s going big on ethnic wear—Barely days after spending ₹400 crores on acquiring a majority stake in designer label Sabyasachi, Aditya Birla Fashion is cutting a fresh deal with another private label owned by designer Tarun Tahiliani, investing about ₹67 crores in the endeavor. As part of the arrangement, the duo will be exclusively working on launching a new line of men’s ethnic wear, following which Birla will be rolling out 250 more retail locations across the country. Investors were promised nearly ₹500 crores in revenues from the initiative in 5 years.

😎 Square continues to DOMINATE—fintech giant Square run by Twitter CEO Jack Dorsey, which sells payment processing hardware to small merchants, and runs a P2P payments app called Cash, crushed it during the December quarter. Revenues were up 141% YoY, to $3.2 billion as mainstream merchants slowly recover, while on the other hand consumers pile into Bitcoin using Cash App. Cash App reported 36 million users, up 50%, while revenues grew a massive 502%! Square also purchased $170 million worth of Bitcoin for its own balance sheet. Global fintech analysts and investors closely watch Square to keep a pulse on how the fintech flagbearer is pushing for innovation.

🔋 Reliance eyeing EV batteries—days ago we jokingly speculated that Reliance might be venturing into EVs pretty soon given Tesla’s eventual entry here. Turns out the plans were already baking. RIL seems actively keen on transforming its energy empire into renewables, leading with supplying electric batteries. Most plans are under the wraps, but RIL could work with Saudi’s Aramco in co-investing $10-$15 billion in the EV space in India over the next 5 years, says Morgan Stanley.

🛑 FB and Australia cut deals—the week before, Facebook had banned all companies in Australia from using its platform, in protest against a law that demanded social platforms pay the news companies money for using their content. Surprisingly, Zuckerberg quickly reached a deal with the government of Australia, and the ban is lifted. The govt. granted FB some extended time to figure out a payment arrangement with the media companies, while Australia has promised to amend the law to create friendlier conflict resolution guidelines.

🤝 Saving big blue—IBM will be selling off its Watson Health AI business, as new CEO Arvind Krishna desperately tries to shepherd the company to growth, with eyes set on cloud software. Launched back in 2010, IBM's Watson program was in fact originally the company's flagship move for revival, but most of it was marketing fluff, that never delivered on the promises made. Clients bailed, refused to renew contracts, and yet despite that the healthcare focused vertical makes about a billion dollars in revenues each year. Negotiations are now on with a host of companies for sale, including private equity firms or a blank check company.

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