Byju's going to Wall Street 👋
Crypto fortunes, Reddit’s IPO, and ShareChat's big raise.
Market summary: 📊
India gained a tiny bit on Thursday after 3 straight down sessions. US stocks can’t catch a break — with tech again flogged, as looming interest rate rise weighs on investor mood.
US:
S&P 500 - down 0.87%
Nasdaq - down 2.61%
India:
Nifty 50 - up 0.16%
Sensex - up 0.20%
Weekend shot of espresso ☕
1️⃣ Fortunes of a bull cycle — despite uncertainty in the local crypto markets, WazirX says trading volume on its platform jumped 1,735% YoY to over $43 billion, for the full year of 2021! Some other interesting stats reveal 65% of users on its platform are apparently below 35, litte surprise there, and that female active traders jumped 10x during the year. For comparison, Coinbase does about $330 billion in trading volumes annually, and is valued at $65 billion.
2️⃣ Rate hikes are coming — the US Federal Reserve (central banking guys) took their last meeting of the year and hinted at rising interest rates for next year. Specifically, rates will be increased over 3 scheduled terms, snatching all easy money on the table in times of COVID. If you’re clueless, these are rates at which the government loans money to banks, and then banks in turn pass on to us — from housing to cars to business loans. When rates go up, it costs more to borrow money, slowing the economy down. Global stocks are expected to stiffen up going into 2022.
Byju's buying a ticket to New York 👀
What happened — India’s most valuable startup is ringing Wall Street to go public in the US, that too via a SPAC merger.
NYC based Churchill Capital came forward with the most exciting bid — offering Byju’s a $4 billion war chest at a whopping $48 billion valuation!
If you’re lost on SPACs, quick refresher… they’re holding companies that own nothing, but go out and raise a bunch of capital, and then list themselves on the exchange. Then they look for potential acquisition candidates, merge with them and absorb them, effectively taking them public. Benefit? Hyper-growth, early stage ventures love the reduced financial scrutiny, lack of prying eyes of bankers, and a simpler process.
Anyway, Byju’s had apparently been finding a suitor since September. Even Dell founder Michael Dell's MSD Acquisition Corp tried to make a run.
How’s the business looking? — Last known, Byju’s made some $1.5 billion in annual sales, now aiming for $3.2 billion by 2023. That’ll value the company in over 20x revenue range — a stretch for current times. Just ask American edtech stocks Coursera, 2U (owns EdX), Duolingo and others.
Besides, the SPAC boom is fizzling out too — performance in public markets have mostly been a hit or miss — with most high profile SPACs trading at 50-60% discounts to opening prices.
But Byju’s perhaps believes that that’s still a better outcome than getting flogged by conservative investors on D Street — especially given how critical mainstream business media has been of the company’s “grow at all costs” principles.
However… Byju’s has had a “built from India, but for the world” approach from the get-go, spending over $2 billion on 12+ global acquisitions recently, with wide reaching businesses — which could appease western investors.
What’s poppin’ on venture street? 💵
Local social platforms are killing it. Sharechat raised a massive $266 million from Alkeon Capital, Temasek and a few others — at a $3.7 billion valuation.
While Sharechat’s OG content-platform is growing nicely, it's the short video platform Moj that’s driving most of the value… now reporting 160 million users, making the most of the TikTok ban. Besides, Google’s recent backing to the business acted as a strong signal pulling a ton of follow on foreign investment interest.
Worth calling out — Sharechat has raised over $1 billion to date. 91% of that has come this year alone.
Meanwhile, a quick fintech raise ☝️
YC-backed Stack Finance raised a $4.5 million seed round from YC, Harvard Management, Goodwater Cap, and serval other venture houses.
Stack is building a Vanguard like passive investment platform for millennials and GenZ — offering folks custom, globally diversified portfolios based on individual risk appetite and goals.
Reddit lines up its own bid 🤙
What’s popping — Reddit is finally going public, thanks to the meme stonk-rally, that changed the platform’s fortunes.
Despite being founded like 16 years ago and widely loved by core user base, up until 2019, the platform was valued at a meager $3 billion — pennies compared to the gigantic valuations of Facebook, Twitter, Snapchat. Weak monetization and poor management compounded problems.
Then came the 2020-meme-stonk frenzy that changed things. Reddit doubled down on advertising to pay its bills, multiplied ad formats, placed bets on short videos, and raised a few mega rounds to accelerate things.
How them stats look?
Last valued at $10 billion in August 2021, a 3x jump from 2019
Reports $175 million+ in annual revenues, mostly ad-driven
Has 50 million daily active users
Verdict — strong tailwinds supporting digital advertising, and then Reddit has virtually no censorship either (which means lower overhead). Investors gotta love all that.
Closing out — rank shuffle at a16z making waves 👋
Katie Huan, a hotshot crypto investor at Andreessen Horowitz’s crypto fund, is leaving the company to kick off her own VC fund, taking a bunch of staffers with her.
a16z has been at the forefront of VC investments in Web3 and crypto, recently raising a $2.2 billion mega fund, making some sizable bets in the space. Katie signed off on most of those deals — total of 50+ in a16z’s history.
Silver lining — Marc Andreessen, Ben Horowitz, and Chris Dixon, all 3 hotshots at Andreessen are mega investors in Katie’s fund, so no bridges burnt. ✌️
Why care — global VC chasing crypto is expected to 4x in 2021, to over $20 billion. New funds continue to paint a rosy outlook for the trend.
What else are we Snackin’ 🍿
🗣️ Don’t come back - Apple shelves plans for employees' return to office indefinitely. Each employee worldwide is also getting a $1,000 bonus for WFH needs.
💸 War Chest - Ola lined up $500 million in debt facility to fill the gaps as its struggles with poor ride hailing demand, while needing to push its EV business.
🖖 Sue their ass - Tax prep software player HR Block sues Jack Dorsey’s Block for trademark violation. SMH.
Hit that 💚 if you liked today’s issue.
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