Choppy week
Instacart soaring, EV investments, and some stuff from the week before.
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Market summary: 📊
What a weird week. Indian markets finally ended lower on Friday but somehow managed to eke out a gain over the week. US opened down, swung back to green by afternoon, but ended the week down like 5%. Houston, we’ve lost control.
US:
S&P 500 - up 1.95%
Nasdaq 100 - up 1.64%
India:
Nifty 50 - down 0.95%
Sensex - down 0.87%
Let’s go through a couple things real quick…
Grocery delivery is here to stay 🔥
Online grocery delivery platform Instacart, one of the biggest winners of the pandemic driven boom in digital commerce, saw its valuation set to an eye-popping $39 billion, when the company raised another $265 million from Andreessen Horowitz, Sequoia Capital, and a bunch of other investors!
That’s a 2x jump from the $18 billion the company was valued at barely 3 months ago—thanks to a record holiday quarter for digital commerce, delivering all that Christmas cake, and the batter, and the wine, meant gross merchandise volumes continued to expand at 100%+ rates YoY.
The company’s been aggressively investing in expanding market penetration too, and so far is capable of servicing nearly 85% of US, and 70% of all Canadian households.
BTW—Aproov Mehta’s journey on how he started as a noob founder, failed countless times, and finally managed to find a meaningful hook is truly inspiring.
Key takeaway: people commonly dismiss online grocery as a category that’ll never really stick, especially as we finally return to stores post lockdowns. But so far growth hasn’t skipped a beat, and the overnight creation of a behemoth like this indicates that mainstream opinion has been far too negative on the space.
Meanwhile, Walmart flippin’ its baby via SPAC 😵
Walmart is now looking get the US-scheduled Flipkart IPO via a SPAC merger, seeking a valuation of about $35 billion. For those unaware, SPACs are holding companies that raise some money, and go list on the exchange with no purpose, and then merge with a private startup, absorbing it and taking it public, and in the process bypassing the traditional IPO process and all its checks and limitations.
This is the third big SPAC deal coming for Indian startups—Softbank is apparently eyeing a similar path for Grofers, while renewable energy company ReNew Power is set to merge with a SPAC that will give it an enterprise value of $8 billion. Even Chamath is into that particular deal, and something tells us we’re nowhere near done.
Lastly, EV game is unstoppable 💰
India’s emerging EV market continues to attract big money—Euler Motors picked up a ₹30 crore Series A check from existing backers Inventus India, Jetty Ventures, and Udaan co-founder, Sujeet Kumar.
The company basically makes electric vehicles for commercial and utility purposes, starting with a three wheeled vehicle deployed as part of the urban delivery fleet for companies like Big Basket, Udaan, and EcomExpress. A 250 vehicle fleet is running in the Delhi-NCR region right now, operating a 100 charging station network, capable of charging 200+ vehicles at a time.
Fresh funds will go to fund vehicle R&D, as well as to improve charging infrastructure.
And that’s a wrap for the day!
Quick look at the hottest stuff this week…
💰 Drool-worthy profits—Coinbase, one of the largest crypto exchanges in the world filed its docs to go public, showing that its not only blowing the doors off with growth, but is also massively profitable. For 2020, the company made $1.2 billion in revenues, up 140% YoY, while profits came in at $322 million. Total users stand at over 43 million, out of which nearly 3 million transact in crypto every month and hold assets of over $90 billion on the platform in total, which grew nearly 432% in the last year. The epic crypto rally paid off.
🚗 Gotta move where the puck is going—smartphone manufacturers are making bold moves into electric vehicle manufacturing. Huawei, Xiaomi announced plans to make and market their own models, while Foxconn will be launching dedicated manufacturing facilities to make EVs for other car companies. Most of the traditional automobile manufacturing processes are pretty commoditized by now, so the EV game is solely becoming about differentiated leadership in software, computing hardware, and battery technology—arenas where the electronics manufacturers score big points.
🦄 Tiger Global hustlin’ unicorns—Tiger Global seeded 3 unicorns this week. Mutual fund investing platform Groww got a $100 million check at a billion dollar valuation. The platform has managed to scale up to some 10 million users. The other two ventures are Innovaccer, which leads in healthcare SaaS, and then Infra.Market which operates in the construction procurement and bespoke services. All have been big beneficiaries of the pandemic enforced digitization in big pockets of the economy.
👑 Zoom puts up a monster—Zoom grew revenues by 369% YoY to $883 million for the December quarter, continuing to grow at ungodly rates even this far out since the pandemic began. Profits were up 2,327% to $256 million! 467K customers with more than 10 employees use the platform, up nearly 5x since last year. In order to keep the growth wheel spinning, investors are counting on the launch of adjacent products now, and so far Zoom has announced an email app and a calendar service, as well as the potential entry into contact center software.
🚀 Drones are hot—IdeaForge, a domestic drone manufacturing startup that supplies enterprise grade autonomous drones to the military and other defense, security, and agriculture applications, raised ₹15 crores in venture debt from BlackSoil—to strengthen working capital needs and service impending large orders. Meanwhile another drone supplier, Skydio, raised a solid $170 million in its series D round from Andreessen Horowitz. Drone companies are winning big as global nations seek to cut reliance on China manufactured drones over concerns of spying. FYI, China’s DJI owns 75%+ share in the drone market.
💪 No mo' cookies, the other kind—Google finally reaffirmed its plans of abandoning third party cookies on Chrome browsers by 2022, changing forever the way online platforms would mine users’ information to serve laser precise ads. Instead of tracking individual users, the company will now target groups of users with similar characteristics. The move is basically aimed at shredding the image that Google is profiteering from people’s personal information. The layer of abstraction is definitely going to make Google’s targeting abilities weaker, and the markets are beating all ad-tech stocks on the news.
🔥 Finally, Jay and Jack pull the trigger—Jack Dorsey’s payments company Square finally announced a $297 million deal for Tidal, the streaming platform owned by pop star Jay Z. The smartest minds have given up on figuring out the synergies here. Square could use its payment platform to help artists roll out merch, take bookings, sell concert tickets, or could enable tipping and subscriptions via Bitcoin, OR sell NFT based exclusive music. Considering the innovation riddled journey that Square has had to date, expect something kick ass.
Hit that 💚 if you liked today’s issue.
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