Chip gang

BTC got competition, fintech on fire, and watch out for Roblox.

May 12, 2021

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Gonna be a bouncy week in India, with markets crawling back yesterday, after a rather positive Monday. US had a similar day, but oddly tech stocks, which were being hammered lately, seem to have found a floor.

US:

S&P 500 - down 0.87%
Nasdaq 100 - down 0.058%

India:

Nifty 50 - down 0.61%
Sensex - down 0.69%

What’s brewing hot? ☕

✅ Dog race has a new top contender—Ethereum’s momentum is putting Bitcoin to shame. $4,000 levels were breached on Monday, barely a week after broaching $3,000. And unlike the other coins which mostly pull in FOMO driven maniacs, the development activity behind Ethereum is in fact looking quite promising. Loyalists even promise the platform could take over Bitcoin’s dominance purely based on its utility—with applications stretching decentralized finance, tokenized art, smart contracts, etc. etc.

Meanwhile, if you’re looking for a primer on ETH, here you go. And James Wang’s current analysis on the space is quite amusing.

Rally up boys, lets get those chips 😎

The semiconductor shortage is causing a pain in the butt for global corporations, from those making cars, to healthcare equipment, to smartphones, to missiles—everyone’s running low.

Silicon Valley giants are done waiting around, and are joining hands to form a lobbying group to pressure Biden into some juicy subsidies to accelerate setting up on massive new chip manufacturing facilities on US soil itself.

Because the situation is slowly getting out of hand...

Apple is losing $4 billion this quarter in revenues, because it can’t fulfill orders
Ford (and other car makers) are literally cutting production in half, with the entire auto space looking at a yearly $60 billion loss.
Yest, we saw Sony create a mess with its PlayStation 5 deliveries

Basically, US companies are pretty set on making the best use of the crunch and the destability it has created to cut reliance on foreign manufacturers, especially China, as an increasingly hostile cold-tech war makes risk of repeat problems pretty high.

Intel, Nvidia, ARM, and other chip makers are leading the pack, and they just got Apple, Amazon, Google, and other MAJOR chip consuming tech giants to the table, drawing massive weight to the demands.

Bottomline: hard to believe semiconductor procurement around the world will be the same after this period, and we wouldn’t be surprised if India doles out multi-billion dollar incentives to get chips manufactured within our borders too.

Zooming into Venture Avenue 🧐

Walmart’s baby Flipkart is dialing up investors for a big raise, at least a $1 billion we hear, at a $30 billion valuation, meant to be its last private raise before the US IPO.

We’re guessing preemptive raises like this are going to be inevitable for Indian growth ventures, especially those who had plans of going public over the next few months, as operating conditions change with COVID, timelines get stretched, while coffers clearly run dry. Barely days ago we had Grofers on the run pitching investors, including meeting with Zomato.

In any case, considering COVID’s fortune altering blessing to the entire ecommerce space, hard to think convincing new investors would be a hassle.

Last we checked, Flipkart was valued at around $24.9 billion when it raised $1.2 billion in a round led by Walmart itself—so a 20% valuation bump here doesn’t seem too outrageous.

Meanwhile, fintech comes of age….😎

YC backed investing platform Groww, one of the leaders in the investing space, made a bold acquisition—buying out the mutual fund business of legacy financial services house IndiaBulls, for ₹175 crores.

That’s a 5 year old Indian startup buying out the business of one of the OGs of mainstream financial services giant, which should tell you how far India’s venture industry has really come in recent times.

Groww’s motivation is simple—the platform which has so far acted as a distributor of mutual funds gets to now hold a licensed end-to-end mutual fund operation, with existing customers, industry expertise, and regulatory approvals, to accelerate go to market options and keep larger portion of the margins on MF products being sold.

Bruh, we just wanted some dough… 🤷‍♀️

DarkSide, the group behind the pipeline hack in the US, which is threatening to shut off gasoline supply to hundreds of millions of people, disclosed its royal motive… “just make some cash”.

“We didn’t mean to create problems. We are apolitical, we do not participate in geopolitics, do not need to tie us with a defined government and look for our motives. Our goal is to make money, and not create problems for society.”—ducked the goup in a public statement, after public fury and 24x7 news backlash pretty much tainted them as the destroyers of peace.

Not just that, but DarkSide has now enforced its own moderation policy apparently, “From today we introduce moderation and check each company that our partners want to encrypt to avoid social consequences in the future.”

DarkSide has a quite amusing business model—the group works with a bunch of vetted independent hackers to steal controversial info on corporations, and then demands ransom to not leak it—between $200K to $20 million.

this time however, kids clearly overstepped their league.

Closing out—watch for signals 🔥

Roblox, the gaming platform popular among kids, which actually had gone public barely a month ago, reported an outstanding quarter—offering hints into just how fast it is growing within its core user base.

Quick look at numbers:

Revenue up 140% YoY, to $387 million
Spending on the app up 161% YoY, to $650 million+
42 million daily active users, up 79%!
9.7 billion hours spent on the platform in the last three months, up 98%!

Roblox basically provides independent developers a gaming engine to create and distribute simple games, mostly to a user base that’s under 18, while also allowing for a singular user-identity (an avatar) which can be used across games, to compete, and earn coins, Robux.

Kids love it, it's all school-hall conversations are about in the western world, and if anything the app is the most potent threat to the leadership of social platforms like Facebook, Twitter, and even Snapchat, who are anyway struggling to keep the younger base excited.

So no doubt that, Wall Street loved what was printed, and stock popped by 5% in this mayhem.

Bottomline: the future of social will be personal, one-on-one, and tied into elaborate digital identities that will be nurtured online and perhaps carried across services. Roblox is viewed as a HUGE step in that direction, as gamification, AR, mixed reality, virtual currencies all get added to the mix, so far with promising results.. Watch the kids for signals on the future…

What else are we snackin’ 🍿

💉 Line em up - Pfizer-BioNTech's coronavirus vaccine has been approved for use in the 12 to 15 year old age group in the US, making it the first shot to be used in younger teenagers.

👏 Curbing that fake news- Facebook will be making it hard for users to reshare links without actually reading them, to curb fake news. Sorry unkill, no more read headline, blast broadcast...

Hit that 💚 if you liked today’s issue.

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