Building a rocketship 💰
Partnerships, EV raises, and Enfield's dreams.
Hi 👋, Tanvi here.
Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.
Sign up below for free. 👇
Let’s go ahead and get started:
What’s going on? ☕
1️⃣ Biden’s victory—they’re done counting the ballots and President-elect Joe Biden has been called the winner of the 2020 US Presidential Elections. The Donald hasn’t conceded yet, and is still tweeting about his valiant performance in the elections, getting BIG 71 million votes! This will likely get a lot uglier with lawsuits, interventions, and even protests, before it gets any better.
Oh, and meanwhile our brothers in Bihar might have cooked up a setback for the saffron agenda, voting for change as well as per latest exit poll numbers.
2️⃣ BigBasket’s nightmare—the online grocery store woke up to some ugly news that a potential data breach could’ve leaked the information of some 2 crore of its users, and that the information was on sale on the dark web for a rather paltry sum. Pretty damning, if true, and definitely an overhang that could weigh on their blossoming relationship with the Tatas.
3️⃣ Spoilt brats—the warring Future and Amazon have now landed at the doorsteps of the Delhi High Court, with Future Retail seeking to block the Singapore Arbitration Authority’s order stopping Future’s sale to Reliance. We wrote about what the conflict was all about a while ago.
Royal Enfield’s glorious ambitions 😎
The Bull’t maker has announced ambitious plans of launching at least 1 new motorcycle model every 3 months over the next 7 years, as the company looks to further solidify it’s standing in India’s mid-level motorcycle market.
Enfield is looking to open a new chapter, pushing for growth in both domestic and international markets -- with plans of opening an assembly plant in Thailand over the next year, and then in Brazil. As part of the growth strategy, the company’s product catalogue will see these 28 new bikes launched, particularly in the 250cc to 750 cc category.
Although Enfield has managed to float above the competition with its distinct appeal for a long long time in the Indian market, they increasingly face competition from Hero, Honda, and other players in India’s hot mid-sized bike segment lately. We can understand the benefits of international expansion, but hard to say how stuffing the line up with more products will help them attack their problems.
What matters: Enfield enjoys an envious position in the Indian markets, with passionate consumers clearing out products before they hit showrooms. But how will the same consumer base react with massive dilution of the product portfolio?
Securing base with partnerships 🛒
In its latest move, Flipkart has invested in direct-to-consumer youth-focused fashion brand house Universal Sportsbiz (USPL), which operates brands like Wrogn, in a bid to strengthen its fashion product portfolio.
Just a couple weeks ago Flipkart had invested in more retailers, including ₹1,500 Crore in Aditya Birla’s Retail arm for a 7.8% stake, and had acquired a stake in Arvind Youth Brands for Rs.260 Crore before that.
What’s happening—for years Flipkart counted on commodity brands or even self-owned merchandise to appeal to cost effective consumers shopping online. The game is changing now though, as Reliance swings with its dense premium brand-portfolio (via Reliance Retail), further bolstered by the acquisition of Future Retail, and as Amazon plays with similar partnerships in place. Flipkart has to act to differentiate or atleast match up.
USPL gives them easy access to a popular product portfolio endorsed by some of the most popular personalities in India. Moreover, they operate 750+ offline stores across 100 cities in India which in time could even double up as Flipkart pickup/return centers.
Bottomline: such partnerships help Flipkart keep their product portfolio wide and active, while brands like USPL, Birla get much needed expertise and a ready made platform to make the most of India’s ecommerce boom.
Anyway, Flipkart’s check will go into USPL’s Series F which also has Accel Partners pitching in.
Building a rocketship in 8 years 💰
Shrugging off the bans put in place in key global markets, ByteDance (the parent company that owns TikTok), is in talks to raise $2 billion at an eye-popping $180 billion valuation!! The move comes as Bytedance prepares to soon list some of its businesses on the Hong Kong Stock Exchange.
To put that in perspective—there are barely 54 countries in the world with a GDP more than $200 billion. Although that's not an apples to apples comparison, it goes to underline how Bytedance which was founded barely 8 years ago in 2012 created a rocketship out of thin air, delivering massive shareholder wealth in no time.
Anyway, Techcrunch says Bytedance is on its way to make about $29 billion in revenue for 2020, so the valuation doesn’t really seem outrageously expensive. Last year, the company made 67% of its revenue from selling ads on a domestic version of TikTok, 17% from live streaming, and the rest from gaming businesses, ecommerce and TikTok. Crazy!!
For the current fundraise now, talks are being conducted with existing stakeholders including General Atlantic and Sequoia Capital. No doubt the round will be oversubscribed. Also, no more Trump so….
While we’re on audacious fundraises,
Just last week we mentioned how India’s EV game is piping hot right now, and Ather Energy’s latest raise further underscores that trend. For its Series D led by Flipkart co-founder Sachin Bansal, the company scooped up a massive $35 million, with Sachin himself writing a $23 million check, and Hero MotoCorp plowed the rest of the $12 million. Crazy!
New capital will go to fuel expansion in nine new markets, including Pune, Ahmedabad, Mumbai, Delhi, Coimbatore, Kochi, Kozhikode & Kolkata and to speed up deliveries of Ather 450X.
Bansal is well known for his conviction and Hero doesn’t play to lose, so we think Ather is in great company to capitalize the most on this imminent disruption of two-wheelers in India. At least the early-mover advantage disproportionately seems to favor them.
What else are we snackin’ 🍿
📱 Too little too late? - Smartphone company Vivo is planning to make its new smartphone V20 SE in Greater Noida, India to stay committed to its Make in India initiative. The Greater Noida unit currently employs around 10k employees and Vivo had invested ₹7.5K Crores in the facility recently.
🍸 Some marketing lessons for ya - a couple years ago Musk announced a Tesla themed Tequila on Twitter. Tesla filed for a patent and then rolled out the Teslaquila yesterday for $250 a pop. Result? Sold out in a couple of hours. Harvard Business School case study right there.
Hit that 💚 if you liked today’s issue.
You can forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀