Clean energy FTW 🙌
Ransom calls, D2C profitability, and IPO festival.
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Market summary: 📊
India kicked off the week on a high, with positive guidance from FMCG companies lifting hopes. US investors were seeing chillin’ by the beach on Monday, grilling leftover BBQ.
India:
Nifty 50 - up 0.71%
Sensex - up 0.75%
What’s brewing hot? ☕
✅ We ain’t done — China isn’t satisfied nailing just Didi. Fresh probes are being launched into 2 other major startups, a truck-hauling company Full Truck Alliance, and a recruiting platform Kanzhun, over similar allegations — storing data on Chinese citizens on foreign turf, where western countries could access it. All serious investors playing in Mainland China gotta be calling their advisors for alternatives by now…
✅ And here comes the call — guys behind the ongoing Kaseya ransomware attack are demanding $70 million to be paid in Bitcoin, as the infection keeps spreading through corporate channels, now reaching thousands of companies and a million+ end consumer devices. Last time the Colonial Pipeline hackers asked for Bitcoin, the FBI had sniffed them out in 3 weeks, so not sure the new guys can last much longer… that too on Uncle Sam’s birthday weekend? Bruh!
Clean energy is on FIRE 🍃
What happened — Mytrah Energy, a Hyderabad based renewable energy company, is looking to sell its assets and the bids rolling in are off the hook — with Adani Green, Renew Power, and even private equity guys like KKR, looking to bag the deal.
What do they do — Mytrah runs a sizable portfolio of clean energy assets, primarily in solar and wind, which churn 1.7 GW of energy, spread across 9 Indian states. Mytrah generates about $370M in revenue, and expects to be wooed for a price tag of around $2.2 billion.
Big picture — GOI’s aggressive push to move India away from a heavy coal-powered energy economy has LIT up a party downstream.
Couple major happenings in the segment lately:
Adani Energy stocks running 8x in the past year
Adani acquiring SB Energy’s India assets from Softbank for $3.4 billion
Renew Power, one of the largest pure play here, going for a US IPO soon
Reliance bringing bazookas to the party with its ₹75,000 crore commitment
It takes YEARS to build and deploy a viable clean energy portfolio — hence in the meantime scarce existing assets will likely be valued at a much higher multiple, as demand for clean power from end markets like electric vehicle infra buildout for example, keep spiking.
Going forward — expect tons of consolidation, because there’s large fixed costs associated with running clean energy farms. If you’re not growth obsessed, you’re better off selling to the highest bidder with braver ambitions. Adani, KKR, Renew are just the guys.
Bottomline — “India’s transformation to clean energy” is a long term thematic opportunity one can’t afford to not have exposure to.
What’s cooking on Venture Street? 💰
Work-from-homers are busy upgrading their interiors, and furniture rental player Furlenco is making bank! The company raised $140 million in a Series D, led by Zinnia Global Fund, while CE Ventures and Lightbox pitched in.
Running a simple subscription service, the startup allows customers to rent furniture items, fitness equipment, electronic products and even two-wheelers for a monthly fee. The service operates in 13+ cities, making ₹100 crores in revenues in 2020, and about ₹7.5 crores in profits last year, says TOI — a rarity in the D2C biz.
Fresh capital will help double down on growth, international expansion, and making true on a $300M run-rate in 5 years. Tough market, but good prospects.
Quickly looking at a promising seed raise, 🌱
Locad, a logistics and supply chain management startup, closed a $4.9 million seed from Sequoia, Antler and a bunch of angel investors.
Locad offers flexible, on-demand shipping and fulfillment services to enterprises as well as Day 0 ecommerce startups — along with a bunch of SaaS tools that seamlessly integrate with Shopify or Amazon stores. So far 30+ brands use the platform, processing 600K items.
Weekly reminder to not sleep on gaming 🤷♀️
Gaming has seen nearly $60 billion of major deals taking place for the first half of 2021 — primarily mergers and acquisitions, as old school companies defend their moats, and as disruptors expand their nets.
Total of 635 deals were announced — including IPOs of Roblox, Unity, and acquisitions worth $15B+ by Microsoft, EA Games, Take-Two, Facebook, Bytedance — spanning tech that includes facial recognition, game engines, social gaming, and specialized studios.
Why care — M&A is generally a sign of a segment stopping for a pit stop after a hot lap, waiting for another lap of aggressive competition. Add 5G on the horizon, and frontier tech like AR, Crypto in the mix, and you’re looking at some major fireworks soon.
Closing out — 2021 will be a FAT bonus year 😎
Last week was apparently the busiest week on Wall Street for IPOs — since 2004, as extreme liquidity in the markets keeps investors busy foraging for new ideas.
Some interesting stats worth pondering:
14 companies raised over $100 million
Banks made over $600 million in fees in just 1 week
Goldman Sachs and Morgan Stanley earned the biggest pot — $89 million and $64 million thanks to IPOs of Didi and cybersecurity guys SentinelOne.
Other major bids? D-Market (ecommerce), Krispy Kreme (Donuts), and LegalZoom (online legal services)
Why care — public markets flush with liquidity is also a good sign for the venture ecosystem. Hopefully, the Indian party kicks off towards the end of year with Zomato, PayTM, and Policybazaar lined up — and the proceeds impregnate some more unicorns downstream.
What else are we snackin’ 🍿
🤙 Holding the bag - Zomato’s largest investor, InfoEdge, will sell only ₹375 crores worth of shares, almost 50% less than earlier planned during the company’s IPO. Long term hodlers!
💰 Got it - Softbank’s internet division will pay Verizon $1.6 billion to secure the trademark license of Yahoo in Japan. Billion with a B? For Yahoo?
Hit that 💚 if you liked today’s issue.
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