BTC shakes up 🤯
Major raises, Big Basket gets sassy, and Coinbase wow.
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Market summary: 📊
The sell off that had started to feel like relief is quickly turning painful. Indian markets reversed, and US took a similar hit, with tech especially hurting bad.
US:
S&P 500 - 0.77% down
Nasdaq 100 - 2.63% down
India:
Nifty 50 - 2.04% down
Sensex - 2.25% down
What’s hot bruh? ☕
✅ The curious case of Apple’s car—Apple keeps denying the makings of its self driving vehicle, but now Bloomberg is reporting that the company is in talks with LiDAR suppliers to buy sensing equipment for this “non-existent” car. LiDARs are basically light based radars, a set up of sensors that beams a stream of laser light in all directions, captures the reflection of the light off of surfaces, and then uses that information to build a thorough 3D map of the surroundings. What’s even more amusing is the fact that Apple in fact already uses a miniature LiDAR in its iPhones, which is quite revolutionary, why then talk to sub-par vendors outside? Investors are counting on clues to balance expectations against the entire autonomous industry over Apple’s stand.
✅ Team Bezos scored a big one—we’re just as sick of writing about the Reliance-Future deal as you’re probably of reading, but in a consequential verdict in the case, the Supreme Court heeded to Amazon’s plea to block the transaction and asked regulators to not proceed with the deal until the court greenlights it. Biyani has been given 3 weeks to file a response, and the court will look at evidence then. The worst of the prolonging drama is being faced by Future’s thousands of employees, suppliers, vendors, and debtors who are basically stuck in a party they never wanted to visit in the first place. Also, investors are clearly losing patience, and Reliance stock was down like 2% on the news.
Aight, onto the important stuff…
Digitizing restaurants is big money 🍗
A prominent US based payment processing company called Toast, that helps restaurants process payments from customers, is planning an IPO at an eye-popping $20 billion valuation.
The decade old startup basically provides a sleek terminal for restaurants to process cards and all sorts of payment options, combined with a host of cloud-based software solutions to manage operations, process payroll, create websites and online marketing campaigns as such. Another arm of the company even extends cash flow based loans.
But $20B at a time when when half the restaurant industry has its shutters down? Seems egregious. Toast itself saw business crater nearly 80% last year when the lockdowns hit, and has barely recovered since then to level off at ~50% of 2019 levels.
Betting on the future—well the markets are betting that even though the payment processing arm may be bleeding right now due to low customer footfall, the online ordering and website creation business will continue to boom, and investors are counting on aggressive digitization of restaurants, especially with marketing, ordering, and back office operations management, to continue to drive the needle.
Key takeaway: Toast offers interesting parallels for India. Domestic restaurant industry is easily a $120 billion+ gambit, with nearly 85%+ of the market unorganized and fragmented, which makes it ripe for digitization.
Today the market is mostly serviced by UPI processing apps, or Dukaan-tech apps, or services like Swiggy and Zomato, but it's not unlikely that the niche ends up being served by dedicated players specializing here.
There are new use cases, including making websites, ordering systems, back office tools etc. with ample room for more innovation. And as the lockdowns ease, this category will inevitably explode.
Big Basket gettin’ all sassy 🛒
Big Basket is taking some heat for bullying a smaller local commerce platform called Daily Basket, sending Daily Basket a legal notice for copying Big Basket’s look and trying to market itself as the company’s clone.
In a strongly worded letter to the Daily Basket team, Big Basket not only demands the service be stopped, but is also asking Daily Basket to transfer the domain and all digital assets over to Big Basket, at their own expense, which threw off some people, who openly took to social to chastise “Big’s” big ego. Daily Basket obviously rejects the accusations.
Too many baskets—Daily Basket is a grocery delivery service that operates in the Coimbatore region only, and as far as we can tell, beyond a basic look that you’d find with any marketplace of today, and of course, a “Basket” in their name which isn’t a crime, there’s barely any resemblance between the two.
But we like Daily Basket’s cool headed response to the situation—the team has now put up a funny website refuting each one of the claims made by BB. Points to wits!
The situation has a lot of vibes similar to the Freshdesk vs. Zendesk story, where global SaaS giant Zendesk had started demeaning Freshdesk, calling it a rip off clone. Freshdesk put up a website detailing abuses hurled at them, and used the opportunity to actively market their product against competition, winning share. We had done a thread on this.
Kooing all the way to the top 🐥
Koo, the swadeshi clone of Twitter, is raising another $4.1 million in a Series A round at a gargantuan ₹200 crore valuation (~$28 mills)—cashing in all the recent buzz they caught for some fresh fuel for growth.
3one4 Capital led the round, with Accel, Kalaari, and Blume pitching in. So far, the platform works in 13+ local languages, and reports nearly 4 million+ users on the service—majority of which we suspect are folks on the right side of the aisle.
Fresh funds will be deployed to capitalize on the ongoing buzz, and to further make the most of the anti-Twitter sentiment that’s forming—if you can feel one.
What matters: so far we’ve seen countless clones emerge—to replace Whatsapp, TikTok, PUBG, and literally every foreign service out there. Most just fizzle out in due time. Converting the initial momentum into scalable network effects, and then monetization is harder than it seems, and will be the ultimate test for Koo. Especially when Twitter itself is still struggling to monetize well.
Meanwhile, quick look at another startup, 🚗
Online car-portal CarDekho is raising funds to push further in the used car business, looking to own more retail locations across the country.
The company’s plans to run over 250+ locations nationwide by the end of last year were dented by COVID, with investors shying away from committing capital. But autos have been one of the most resilient segments in recovery, and the timing for another attempt couldn’t have been better.
Key takeaway—selling used cars is a tough business in India, but that forms the core of the opportunity, where a lot of money can be made with a little bit of standardization and quality control. But our hunch is that these companies (including Cars24) are sowing seeds for eventually entering the brand new automotive game too, pulling off a thorough vertical integration where they own the digital experience as well as the ultimate transaction.
Closing out—BTC starts shaking a bit 📈
The crypto rally finally saw some cracks appear, with Bitcoin plunging nearly 15% or so in a matter of 2 hours. The price instability is often cited as the main reason why the currency can’t scale beyond merely being a store of value.
However, one thing for sure, this time the momentum and the energy of the rally seems nothing like that from the past. 2017 peaks for example would be abandoned for months, while yesterday’s 15% drop ($7,500 or so gap) was filled inside of hours.
Meanwhile, Coinbase, the most promising crypto exchange, is planning to go public via a direct listing at a valuation of over $100 billion.
Made $700 million in revenue for the first 9 months of 2020, so expect $1B+ for full year
Is still unprofitable, of course huh
Revenues are growing at 90%+ rates
Has nearly 43 million users, and $90 billion+ in assets—nearly 75% of which were acquired in the last 6 months alone!!
That tells you why the valuation is craazzyyy high—now wait until those Robinhood numbers to pop before IPO.
What else are we Snackin’ 🍿
💪 Doing their part- it's not just the startups that are pushing for change. Tire maker CEAT is opening an all women operated customer service center in Punjab as a pilot, with plans to roll out many such centers across the nation over the next few months. The centers will include an all women crew for all types of assistance, right from manual tire changing to balancing and operating various machinery.
🗼 VI is trying in its own way - desperate to appeal to users and gain some market share, VI will be partnering with Hungama Digital entertainment to roll out pay per view OTT video services on its app, using Hungama’s content library. This is the first time a telco has launched pay per view, and some users will also be allowed to watch content at no extra cost based on their recharge plans. Do everything to keep em from churning.
Hit that 💚 if you liked today’s issue.
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