Bold battery promises 🔥
Caffeine rush, bankruptcies, and capital glut.
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Market summary: 📊
Wednesday turned out to be another dud in India, although not as bad as the week so far. US markets however tumbled bigtime as investors tried to make sense of a prolonged pandemic and looming elections in a few weeks.
US:
S&P 500 - down 2.37%
Nasdaq 100 - down 3.16%
India:
Nifty 50 - down 0.20%
Sensex - down 0.17%
Who’s raising? 💰
A welcome D2C raise amidst all the fintech and edtech noise — mCaffeine, a caffeinated personal care brand, has scooped up ₹ 42 crores in a Series B led by Amicus Capital.
mcCaffeine runs a one-of-its kind marketplace, selling skin care products, scrubs, shower essentials — the whole menu, but laced with caffeine. It either sounds nuts or like a dream, depending upon how many coffee cups you’re down already by the time you opened this email.
Anyway, in under 4 years, the company has had a gross merchandise volume of over ₹100 crores, and leveraging the pandemic tailwinds for digital commerce, the company wants to 5x that in the next 3 years.
Why is this interesting: India’s D2C market is showing a LOT of promise, with innovative brands across the table vying for consumer spending and loyalty. End game for everyone looks like an eventual expansion into adjacent products and/or a makeover into becoming a marketplace. Expect tons of deals here in the coming days. 👏
Next up, fintech of course —
Make hay while the sun shines, goes the saying — and Robinhood is exemplifying it. At a time when fintech leaders are raising BIG (like Chime), and when volatility in the stock markets is at an all time high, the company pocketed another $460 million, closing its most recent raise at $660 million from Andreessen Horowitz, Sequoia, DST Global, Ribbit Capital and others.
Just last month had D1 Capital written them a $200 million check for the same round at the same $11.7 billion valuation.
The agenda is set to use the cash to support core products while lifting customer experience and increasing assault in banking and recurring investments. So far Robinhood has raised over $2.2 billion from VCs, $1.25 billion of which came in 2020 alone. What recession macha? 😴
Finally, in India —
Mumbai-based device lifecycle management platform, Servify, raised $23 million from existing investor Iron Pillar, with Blume Ventures, Trifecta Capital etc. pitching in. The company sells white-label after-sales support plans and device protection plans on phones and other devices to equipment manufacturers (including Apple, Xiaomi, and all the big players), and has seen sales quadruple since the pandemic hit and most demand shifted online. 👏
In no mood for bankruptcies 🥱
Back in March, as an inevitable economic devastation loomed, the government had taken a call to halt all bankruptcy proceedings for 6 months ASAP, to avoid foreclosing on assets of corporations that have defaulted and piling onto their issues. Now 6 months into the pandemic already, the finance ministry is looking to further extend the deadline by a few months more.
Banks on the other hand are not happy with the call, because in most cases banks are the ones lending capital to corporations here, and asset sale in case of non-performing loans is the only respite for banks to get some valuable cash freed up.
Not to forget, most banks are struggling with alarming debts on their books right now and could use any cash to bolster standing. Finance minister is apparently balancing arguments and a notification will be issued soon.
While we’re on the subject —
Rajya Sabha passed the Banking Amendment Bill 2020, in a small regulatory victory that hopefully helps keep a stricter check on cooperative banks across the nation. Proposed bill will bring cooperative banks under RBI’s purview for all banking regulations, while still keeping them under the control of Registrar of Cooperative Societies for all administrative oversight. The move will protect consumer deposits, hold these banks to stricter standards, and discourage rogue activities piling up and exploding. Everyone gets a good night's sleep! Read more.
Big promises 🔌
…. came out of the Tesla shareholder meeting, not uncommon for Elon Musk. While the rest of the auto-industry is going through a generational slump, Elon projects Tesla will sell 30 to 40% more cars this year than last, topping deliveries over 500,000.
Musk went into his entire routine — highlighting Tesla’s vision, praising its manufacturing prowess and its tech edge and its autopilot and its design… the full fare. Shareholders, happy from the meteoric rise of Tesla stock, had little to complain about either and they cheered along (more like honked — due to COVID, shareholders were invited in their cars).
The most watched updates however were about Tesla’s fledgling battery technology, an increasingly sharp edge the company holds in the market. You see, anyone can make decent electric cars, but making electric cars that are cheaper, at scale, and such that they’re well optimized for performance and driving range? So far, only the boys in Musk’s club seem to have nailed that optimal combination.
Notable highlights from the event —
Beta rollout of a “full self-driving” solution in the coming months
Promised a under $25K, full autonomous vehicle in 3 years
Announced next-gen battery tech, based on a “tabless” design with cells dubbed the “4680”
These battery packs will have 5 times more energy density, will hold 6 times more power, and increase range of the car by 16%
Will install a new cathode making plant, estimated to reduce cost by 76%, and eliminate use of Cobalt in cathodes altogether
Nobody has ever accused Elon of being under-optimistic, so take these projections with a grain of salt. Also, here’s a picture from the event. So damn cool!
KKR comes back for more 🙄
Mota bhai’s never ending fundraiser got another boost yesterday with old friend KKR plonking ₹5,550 crore into Reliance Retail, scooping up some 1.28% in the entity. Previously, KKR had invested ₹ 11,367 crore in Jio Platforms for 2.32% of it.
Believe me when I say we’re excited about Reliance’s prospects but at this point it just appears like capital-hoarding — money that perhaps would have otherwise chased a multitude of other smaller ventures in India. Moreover, India’s consumer spending is weak, despite that Reliance and the other top leaders are continuing to gain share. Where from? Well, it's the fragile small businesses and vendors who are losing ground each day.
By far we’re all convinced Ambani can raise and keep raising more aggressively but we’re unsure how this capital glut reflects positively in the market.
While we’re on this subject —
Jio announced a slate of post-paid plans yesterday, all of which come with unlimited texts and calls and alluring deals including subscriptions to Netflix, Amazon, etc.with no cost. How does anyone else mount competition in a market like this?
What else are we snackin’ 🍿
👕 Prepping for the holiday season - Flipkart has partnered up with Max fashion to expand its fashion portfolio for its upcoming festive season. With competitors armed up to the teeth with retail assets they purchased or similar partnerships, Flipkart is doing its bit to stay relevant.
🍎 Apple goes live - time for the kidney jokes to come out of the closet! Apple has launched its online store in India, selling the full range of Apple’s global products and devices along with direct support to customers across the country. The homepage is gorgeous.
🛒 Regional turn - Amazon has introduced 4 new regional languages on its platform in a bid to capture more new customers from the Southern states ahead of its festive season. The company estimates nearly 200-300 million online consumers could be attracted by adding the ability to shop in their native language.
🖥️ We need more - Bharti Airtel has picked up a stake in a tech startup Waybeo in a bid to scale up its cloud offerings. The company’s solutions help sales teams with call tracking, analytics and automation and it will apparently join Airtel’s startup accelerator programme.
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