Bollywood's failed job 🤞
Gaming maturing, roll ups hot, and Tesla delivers a big one.
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Market summary: 📊
Both India and the US opened the week soft, as investors tread cautiously amidst major earnings rollouts.
US:
S&P 500 - up 0.24%
Nasdaq - up 0.094%
India:
Nifty 50 - down 0.20%
Sensex - down 0.23%
What’s brewing hot? ☕
✅ Alright alright, we may have a ceiling — segments that blew up after COVID are now slowly maturing. For 2nd quarter 2021, total game spending grew barely 2% to $17 billion. Compare that to the first 3 months of 2021, when growth was holding up at 30%+ rates. Spending on specific hardware categories like accessories for example dropped 10%. Stocks from Roblox, to Nazara, to Logitech and Nvidia will be feeling some jitters.
✅ this train ain’t stopping — Byju’s wild “eat your neighbors” acquisition spree won’t bat an eye. 2 more players were brought into the fold — first, Great Learning, a Coursera equivalent which offers online upskilling programs from other universities for $500M, and second Toppr — a K-12 test prep service for $150M. With that, Byju’s acquisition bill for the last 6 months stretches over $2 billion. About time regulators wake up?
Bollywood ain’t saving yo ass 📺
What happened — PagarBook, an employee payroll and attendance management system, is apparently laying off nearly 80 employees — as growth fails to catch up while coffers run dry.
Founded less than 2 years ago, the startup basically helps SMEs manage employee time tracking and salary payments, and had raised its most recent round from Sequoia at a $100 million+ valuation!
Allocation problems — data is scant, but there were plenty of signs of excess, including a high profile marketing strategy that leaned heavily on celebrity power. For example, big bucks were spent on getting Akshay Kumar to push the product — which according to Moneycontrol’s sources “was useless and did not yield anything”.
Going ahead — majority of the marketing team has been laid off, while the tech teams stay put, tasked to spin out some product magic.
Bottomline — business is hard. And we’re sorry things didn’t work out best, but at a time when sirens of froth are at max, any speed bump on venture highway will be judged, and blown out of proportion.
Also, Akshay and Payroll? Come on bro 🤦♀️
Issa earnings time on Dalal Street 💰
Quick roundup of the major events helping, or bothering your portfolio!
Kotak Mahindra said its profits are up a solid 32% YoY, while ICICI grew its profits by 78% YoY. Consistent with other banks so far, Kotak’s asset quality worsened a bit too — with bad loans rising by a tiny 0.07%, while ICICI’s expanded by 0.2%, both leaving a bad aftertaste.
Meanwhile, in the auto world, Tata Motors managed to grow its revenues by more than 100% YoY pulling in ₹66K crores for the quarter. Margins dropped from 14% to 8% however — as rising chip shortages, operating challenges, and increasing raw material cost weigh things down.
Key takeaway — so far, performance across leaders of India Inc. has been so freaking consistent — revenues coming in through the door look solid, but internally, lower margins, soft profits, and bad assets (for banks) keep management sweating.
Who got the honey on Venture Street ✨
Mondays are always bright fundraising days for venture street…
D2C brand Mamaearth scooped up $50 million from Sofina and Sequoia, at a $730 million valuation. The company sells a broad portfolio of self-branded beauty and care products through a offline + online model, servicing over 5 million customers across 500 cities. Revenues hover around ₹500 crore, and management is eyeing 100% top line growth this year! 👏
we were almost starting to miss rollups — Goat Brand Labs, which is in the business of buying out and consolidating e-commerce brands, got another $36 million from Tiger Global and Flipkart for its Series A. Metrics are elusive, and considering Goat just got started, there’s a lot of “pray to the lord” happening here, but we’re guessing some acquisitions and letter of intents may already be baking.
Lastly, Veera Health, a digital healthcare for women focused on making fertility care better, raised $3 million from Sequoia, Y Combinator and a few others. Veera offers a customized treatment plan and follow on nutrition therapy, lifestyle coaching, and medical support via a subscription service to women battling polycystic ovary syndrome (PCOS). Bravo!
Closing out — Tesla shows why its a $650B giant 👏
Musk skeptics had to stfu after Tesla nearly doubled its revenues, and for the FIRST time ever reported a profit, without the help of governments’ emissions credits. Quick nuggets:
Revenues up 98% YoY to $12 billion
Profits grew 250% YoY
Delivered 200K vehicles — smashing expectations
Best part? Musk told investors Tesla has a good grip over semiconductor shortages, and all supply chain problems have more or less be resolved.
Here’s the shareholder slides if you’re in a mood to nerd out.
Big picture — here’s a company selling the best damn EVs on the road right now, and is actually turning a profit, while the others haven’t even meaningfully started deliveries yet. The optimists are being proven right!
What else are we snackin’ 🍿
💰 More incoming - SEBI is set to give CarTrade a go ahead to launch its ₹2,000 crore IPO on August 2nd.
🔌 Maruti throws hat in - king of budget cars is ready to heat up the EV race, with a ₹10 lakh price-range EV planned for 2025. Mass market finally incoming!
Hit that 💚 if you liked today’s issue.
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