Market summary: 📊
Indian investors returned from the mid-weak break to drag markets down another percent. US finished lower too, despite stellar earnings from tech giants.
US:
S&P 500 - down 0.54%
Nasdaq - down 1.20%
India
Sensex - down 1.00%
Nifty 50 - down 0.97%
What’s brewing hot?☕
📈 Growth on steroids — Tesla is doing a great job of growing into its mammoth $850 billion valuation. For the last 3 months of 2021, the company grew revenues by 65% YoY to $17.7 billion, delivering 300K+ cars, with profits jumping 8x! That’s just a ridiculous pace of growth for a car business of this size, if you can call it that! Persistent chip shortages took some fizz out of the performance, but given how badly other auto rivals are affected, Tesla seems in much better shape.
🏦 Innovation, FTW — Apple made the payments space wet its pants after disclosing it’s working on technology that will turn iPhones into payment-processing terminals for small merchants. No extra hardware. No plugins. Just touch the card, money in! Merchants usually pay through their nose to keep their POS terminals running — with lengthy contracts, extra fees, and what not, which could all be saved. The move could also deflate ambitions of a host of young startups looking to make a mark in this arena.
boAt sailing to an IPO 🤙
What happened — boAt, the homebrewed consumer electronics brands, filed its docs with SEBI to raise $266 million from public investors — at a $1.5 billion valuation, joining a sizzling roster of companies lining up for an early 2022 show!
boAt flipped atleast a dozen competitors to get into the top 5 wearables brands worldwide last year alongside Fitbit. Besides, it comes hot off of all the Shark Tank fame, so the timing couldn’t have been any better!
Last year, the business made $200-odd million in sales, 2x from the year before — owning a 30% share of the wearables market in India. The business is also profitable, pulling in ~$10-15 million in profits annually.
The market is shaping up nice too — a device-boom amidst COVID where everyone rushed to upgrade their hardware for work-from-home and other entertainment needs, coupled with the rise of digital commerce (boAt makes 80%+ of its revenues through online channels), offer strong tailwinds.
Anyway, IPO money will be put to close out any debt owed, and fuel growth.
Big picture — recognizable brand, profitable operation, capable leadership — little to complain about! However, its a hardware business with hardware-like margins — do expect investors to remain “measured”.
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What’s popping in India’s startup town? 💰
ShopKirana, a B2B digital commerce platform, raised $38 million for a Series C from Info Edge, Oman’s India-based investing arm, and a bunch of other investors.
The 7-year old business works with large FMCG-giants like Dabur and ITC to directly sell packaged goods to kirana-store owners across Tier II cities — essentially cutting out distributors from the equation. Products are sourced and directly shipped to the retailers’ doorstep.
50K retail stores across eight cities use the platform, which has processed $2 billion+ worth of goods to date.
Worth noting — countless startups are pioneering this model, but distributors nationwide have begun pushing back, even threatening to cut off brands who play to tech’s advantage.
And then just when edtech was looking a bit sleepy, 📚
Growth School, which partners with subject-matter experts and influencers, to teach skill-specific curriculum to cohorts, closed a $5 million round from Sequoia, Owl Ventures and 80+ Angels. Here’s Your Story.
Started during the pandemic, GS offers programs in UX design, performance marketing, investing and other areas — serving 200K+ users to date through its extensive catalog of content.
Software kicks off 2022 on a strong footing 💪
Up until yesterday, global markets were literally burning every “growth” stock it could find.
That was until Satya Nadella made a stop on Wall Street — Microsoft absolutely crushed its quarterly earnings, continuing its streak of outperformance, underlining just how strong the software market is.
The $2.2 trillion empire grew its revenues by 21% YoY to $51.7 BILLION for the last 3 months, with an absurd operating margin of 42%. LinkedIn, Xbox, Advertising, all grew more than 30% during the quarter.
Microsoft was quickly followed by other top SaaS companies — ServiceNow, Qualtrics, Atlassian, all growing at 30%+ rates, and revising their outlook for 2022.
Heating up cloud — COVID exposed large enterprises of all their glue-taped make-shift IT systems and vulnerabilities, so now billions are being spent on buying state of the art software — which is faster, efficient, and cloud-hosted. These tailwinds are expected to hold strong through the year, quickly making software a favorite category for 2022.
Bottomline — leading SaaS stocks jumped 7-10% yesterday. The BVP cloud index put up a positive day after dropping 25%+ this year.
Closing out — Meta got no time for anything else 📉
What happened — after burning hundreds of millions, countless lawsuits, congressional hearings, high-profile hirings and firings, Facebook is finally shutting its cryptocurrency project Diem, selling assets to SilverGate bank for $200 million!
Earlier called Libra, Facebook wanted to leverage the stable coin project to launch a digital-wallet and power payments across its platforms — including creator services, marketplaces, shopping, remittances, you name it.
But the financial implications of having billions of people on the hook using some half-baked unmonitored financial system got regulators worldwide roiled up, multiplying problems for FB leadership.
Anyway, SilverGate, which is primarily a bank serving crypto companies was happy to buy the technology for its own R&D initiatives.
What else are we Snackin'🍿
💰 In for the long haul - Ola Electric will spend $100 million to set up a state of the art EV design center called Future Foundry in the UK.
🖼️ New photo, Who dis - Reddit is testing a feature that’ll allow users to set their NFTs as profile pictures, following a similar move by Twitter a few days ago.
☝️ Clear direction - US Federal Reserve will start raising interest rates in March, offering investors its clearest guidance to date. Markets loved the certainty.
Hit that 💚 if you liked today’s issue.
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