Buyout the rebels
Bezos off to Space, Apple drops some bombs, and bad loans trouble brewing.
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Market summary: 📊
Decent open to the week in India, with markets drawing strength from the free vaccination plan announced. US mostly circled in place, with tech making a tiny move upwards.
US:
S&P 500 - down 0.080%
Nasdaq - up 0.23%
India:
Nifty 50 - up 0.52%
Sensex - up 0.44%
What’s brewing hot? ☕
✅ Decentralized, you wish—US government had to swallow a hard pill when the Darkside hacker network had successfully managed to swindle $5 million in ransom by hacking the Colonial Gas Pipeline. Not for long though, it was revenge time yesterday when the FBI managed to seize a Bitcoin wallet that held the EXACT same ~$4.5 million of the ransom money in it. Decentralization? Out the window. Never screw with Uncle Sam.
✅ Bezos’ post retirement travel plans—on July 4th, the Amazon CEO hands over the keys to his office to his buddy Andy Jassy, and 2 weeks later Jeff is off to space, on a suborbital mission with his brother Mark Bezos on a Blue Origin rocket. The duo will be accompanied by a random passenger picked via an auction by Blue Origin, for a seat that’ll cost about $2.8 million. Sure your average billionaire got his fancy boats and fashionable F-1 seats at the Monaco Grand Prix, but investing and building out a space program for a decade plus to fly you around the earth? Next level!
Quite an odd news day—nothing too big happening, but a bunch of lil things worth covering. Let's run down real quick!
Things you can do with actual “profits” 📋
like buying into your emerging disruptive competitors.
What happened—State Bank of India, representative of the worst of the Indian legacy financial system, invested a sizable check into online payment gateway Cashfree, securing itself a front row seat to the digital payments races.
Cashfree basically provides an API-first payment gateway for digital businesses, along with a host of other tools for merchants that makes mundane payment operations like subscriptions, auto-pay, mass refunds, super easy. 2020 was obviously a watershed year for the business, which grew to serve 100K+ customers, processing $20B+ in annual volumes.
Anyway, deal size here is unknown, but last we know, Cashfree had raised $35 million for its Series B at a $200 million valuation.
Big picture—while startups do the heavy lifting of early growth, incumbent banks with their fat cash troves will increasingly be found waiting on the sidelines, investing in or even buying out winners when it's time. Disruptors get instant access to wide distribution, while banks get to insulate against mundane disruption.
Already a winning strategy for the Tatas and the Ambanis in commerce…
While we’re on venture street, ☝️
Swiflearn, an edtech platform offering personalized tutorials for students, raised $3 million in a Pre-Series A from Stellaris Venture Partners, and Venture Highway.
Swiflearn basically runs personal coaching sessions for a tight group of students (upto 6), matching them with a leading teacher for any subject nationwide, with a software driven measurement approach that tracks progress. Fresh funds will be put to hiring and improving tech chops.
Apple drops some big bombs 💣
Last night was Apple’s annual worldwide developer conference, where the company usually shows off its software chops, and this year turned out to be quite a performance….
Quick rundown:
Facetime is getting an “entertainment” upgrade, with users able to screen share music and video when they call others
Apple Health got a HUGE set of upgrades—including family health logging that allows family members to get insights into each others’ health metrics
New iOS will be able to monitor how steady you walk, to prevent falls in older adults—quite a mind blowing feature especially for millennials with older parents
Privacy taken a step further—email and browser tracking tightened, which would make it harder for newsletter businesses to track opens, analytics. FML.
New Mac OS called Monterey, designed around productivity and functional shortcuts
Finally, for the first time Apple’s software is coming to non-Apple devices—specifically Siri, as Apple tries to broaden its tentacles inside the smart home
Here’s the list of the most significant changes announced if you’d like to dive in.
What matters—writing on the wall is loud and clear in Cupertino, double down on blind spots ignored by other big tech—user privacy, worker productivity, and family health, things that the core base will never take for granted.
Quick look at some software acquisition theater 👀
What happened—3D design software vendor Autodesk, made an uninvited acquisition offer to PCB (print circuit board) design software company Altium for about $5 billion. By evening, Altium told Autodesk to bugger off, claiming the company wasn’t interested in such a low-ball valuation.
Autodesk makes bulky modeling and engineering design software mostly used by architects and engineers—pretty much running a monopoly on the global professional design software market.
With Altium, the company is hoping to plot an entry into the adjacent electronic design market, which as we all know is winning from global semiconductor shortage led tailwinds.
Big picture—Autodesk, the $65 billion giant, although not as sexy as some of the other SaaS stocks, has returned 400%+ in the past 4 years. But organic growth is becoming harder to come by, and with shareholder pressure building up, management is running a bit rattled — eager to boost share by acquisitions.
Closing out—Bajaj Finance sounds the bugle, too! 😕
Last week, we saw HDFC’s management caution the markets about rising bad loans from the COVID mess. Yesterday, Bajaj Finance echoed the sentiment, asking investors to brace for a horrible couple quarters at least as it struggles to see past all the haziness.
Flurry of downgrades from analysts followed—with many expecting a 10-15% drop in profits over the next couple quarters. Investor mood was promptly spoiled, and Bajaj Finance was dragged down 6% by the end of the day.
Bottomline—that's two of the most well managed financial services giants in India offering a pretty bearish view on the near term state of affairs. What’s worse is that all of that’s running extremely counter to the market’s current unfettered exuberance.
What else are we snackin’ 🍿
💪 Expansion continues - YouTube is bringing Shorts to more countries, including the UK, Canada and Latin America. Shorts already clocks over 6.5 billion views daily and is primed to give TikTok a run for its money.
💉 Vacc ‘em all - Centre is making COVID vaccines free for citizens above the age of 18 starting from June 21, reversing a previous policy that had left states to figure out their own distribution.
Hit that 💚 if you liked today’s issue.
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