Clearing fog 🧐
Deadline approaching, IT moves, and venture raises.
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Market summary: 📊
Indian markets had a lukewarm open Monday, with both indices losing ground in the final hours of the day. US markets made a surprising comeback setting stage for a solid week ahead.
US:
S&P 500 - up 1.27%
Nasdaq 100 - up 1.72%
India:
Nifty 50 - down 0.21%
Sensex - down 0.25%
Fundraising roundup 💰
There ain’t no thing called fundraising news without Mukes bhai getting a few more billion.
Global PE firm, Carlyle Group, becomes the latest in line to jump on the Reliance Retail bandwagon, looking to invest $1.5-$2 billion into the company. The deal, if gone through, will be Carlyle's biggest investment in an Indian company to-date and its first apparently in our retail sector. Carlyle is also looking elsewhere to put some more money to work in India — in online and offline businesses. Most likely, it will go to one of the big guys least likely to need it.
Next up, we have Alibaba,
The Chinese internet company is looking to deploy $3 billion into Southeast Asia’s biggest ride hailing platform Grab. Apparently Alibaba will also buy some Grab stock from Uber as part of the transaction. Remember, Uber had surrendered its Southeast Asian operations to Grab in March 2018, taking a 27.5% stake in Grab’s business in exchange. Read more.
While it's unclear what’s driving Alibaba’s strategy, a potential partnership with another Alibaba baby, an ecommerce company called Lazada may be in the works. Lazada has been losing ground in SE Asia to competitors, and Alibaba’s capital infusion could bring Grab’s last-mile delivery, food, and other businesses together with Lazada’s operations.
Finally, IT’s cloud shift continues swiftly — 💻
Infosys has entered into an agreement to acquire European firm GuideVision, a ServiceNow specialized consulting company, for upto ₹ 260 crores. GuideVision specialises in offering strategic advisory, implementations, and training and support on the ServiceNow platform, and has a strong portfolio of multiple proprietary tools built around the SN ecosystem, simplifying IT processes for 100s of global enterprise clients. Infosys has been actively spending on building vertical capabilities.
Bottomline: choked by an unprecedented slump in the IT business, consultancies are rapidly making a cloud shift to better serve clients’ needs of the future. Including this, easily more than 5 deals have gone through in the IT space in the past quarter alone. Infosys particularly has been spending aggressively on adding to its portfolio.
Seeing through all the fog 🎵
Many including us underestimated Oracle’s abilities, but maverick founder Larry Ellison proves that he’s still got it in him. Pulling the rug from under Satya’s (Microsoft) feet and taking TikTok home has left many baffled.
Some speculate an ad-exchange product in the making, others visualize synergies in the enterprise data management space. But you absolutely can’t ignore one thing — with the deal through, the fastest growing consumer social business in the world (TikTok) and the fastest growing enterprise software business in the world (Zoom), both now run on Oracle cloud. Who would’ve thunk! Hard to say if that moves the needle for their market share, but it's a chip on the shoulder for sure.
There is very little clarity on the structure of this deal — how much is Oracle paying, to what extent do they have control, what about global businesses of TikTok — nothing is known at this point. Also as if that confusion wasn’t enough, last night CTGN, a Chinese media outlet, put out a report that TikTok in fact isn’t willing to sell to Oracle at all. Yeah, FML.
The deadline of September 15 is barely hours away.
Amidst all the chaos, you can’t help notice and almost admire the audacity of the TikTok team that refused to give in to an outright sale. If you want to know more about the General holding TikTok’s fort in this war, check this out. 👏
Oooo…. Media money 💰
If you’re a tech buff, odds are you’ve come across CNET’s website at some point. ViacomCBS which owns the CNET media group is now selling the entity for a whopping $500 million to US based Red Ventures — a media conglomerate that owns thousands of websites and services in its portfolio.
Viacom will end up taking a massive loss on the transaction. CNET was founded in 1994, in the early days of the web, and Viacom had bought them for $1.8 billion in 2008. However, over the past decade or so, blogs and other media companies with an advertising-only model struggled to make a living which ate into CNET’s sales.
The sale will also include brands such as GameSpot, TVGuide.com, Chowhound, Roadshow, and B2B tech site ZDNet. The buyer, Red Ventures, owns and operates websites getting billions of hits, including services such as Bankrate, Points Guy etc. and believes the transaction will strengthen its content game, driving traffic to its wide portfolio of services and apps. Read more.
While we’re on the subject, 🗼
One of the largest mobile carriers in the US, Verizon will buy Tracfone, one of the largest prepaid phone-plan vendors in the US, for a whopping $6.25 billion. With more than $8.1 billion in revenue, some 90K retail locations, serving 21 million customers, the transaction bolsters Verizon’s retail strategy and offers it entry into the low-end value customer segment.
Analysts are a bit puzzled with the deal because 5G is looming and Verizon should be spending money on securing the future, as it continues to take assault from disruptors like T-Mobile in the market.
Pot secured 🏏
Once you’re on the IPL, you’re officially in the big boys league, and it's smart to use that momentum to get some more juice from investors. And that is exactly what Dream 11 did last night.
The fantasy gaming platform’s parent company has scooped up another $225 million from Tiger Global, PE firms TPG, ChrysCapital, and Footpath Ventures. The deal apparently has valued the company in the $2.5 billion range — over 100% premium to its 2019 valuation. Yuuuuge!
This IPL is going to be truly remarkable. Fans unable to go watch games are likely to drive all that engagement onto digital platforms — betting, chatting, and ranting through the series. The ecosystem of digital services serving this arena are destined to win big.
As far as the BCCI goes, that’s debatable. Analysts already believe that the franchise may be devalued by 10-15% due to COVID this year.
Sweetening the deal ✈️
The government is desperately looking to offload Air India, but no buyer is crazy enough to jump into the airline and its $3.3 billion debt mountain in the middle of an unprecedented plague killing the Airline business (FYI, the deal to buy ~75% of Air India mandated assumption of the airline’s ~25% debt).
So GOI is mulling sweetening up the deal a bit — amending previous guidelines, the buyer will not be forced to buy Air India’s debt at all. Basically, the government wants to get somebody through the door ASAP and do whatever it takes to stop the continuous funding of Air India using taxpayer money. Air India’s total debt stands north of $8 billion.
The airline hasn’t turned a profit since 2007, and keeping aside the feelings of nationalism for a bit, literally stinks of corruption and lethargic management. However, Air India has attractive assets including routes at key global airports and a deep bench of talent and connectivity in India’s hinterlands which minus the debt, now should appeal to a lot many. Read more.
What else are we snackin’ 🍿
🙌 FB adds to the ranks - Arun Srinivas has been named as the Director of Global Business group by Facebook. Srinivas will lead the strategy and delivery of the India marketing solutions which focuses on large advertisers and agencies.
💉 Pre-ordering vaccines - The UK has reserved 190 million doses of a potential coronavirus vaccine from Valneva, a French Austrian biotech company. The deal is worth €1.37 billion and the firm is expecting to start trials of the vaccine in December with vaccine delivery by the second half of 2021.
😷 India leads on - India recorded 92,071 new coronavirus cases which took the total number of cases to 48.5 lakh. There are now 9.85 lakh active cases and about 37 lakh patients have recovered with the death toll rising up to 79,722 in the country.
👨🦳 Piece of history - a lock of Abraham Lincoln’s hair along with a blood stained telegram about his assassination were sold at an auction which brought in more than $81,000. Gross.
🛒 The leaders keep adding - AMZN is planning to hire over 100,000 people in India to help keep up with the surge in online orders. The new hires will help with shipping, sorting orders, working in part time and full time roles. Diwali season is expected to be a huge win for online commerce in India.
🗣️ Computer Ji gets a makeover - Amitabh Bachchan will be the first Indian celebrity voice for Amazon’s Alexa. The feature will be available from next year. Amazon has been experimenting with celebrity voices and in December 2019, announced that Hollywood’s Samuel L. Jackson’s voice would be the first to be integrated with Alexa.
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