Community power 👊
Defense win, edtech raise, and weakening of education.
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Market summary: 📊
Indian markets opened up weak, showed some promise through the day, but ended up giving most of Monday’s gains. US markets ended the day in a bloodbath, continuing last week’s decline. Watch-out for India open today.
US:
S&P 500 - down 2.78%
Nasdaq 100 - down 4.77%
India:
Nifty 50 - down 0.33%
Sensex - down 0.14%
Breaking news…
1️⃣ British pharma AstraZeneca, which was running the most promising COVID-19 vaccine research program, has stopped its clinical trials after a patient was found sick with an unexplained illness.
2️⃣ Goldman Sachs has come out with a new, disappointingly lower GDP forecast for India. The bank expects India’s economy to contract 14.8% in this fiscal year.
Now onto the other major happenings of the day…
Scaring the crows off 👏
Monday was good for India’s defense research ecosystem. DRDO’s tests for in-house developed hyper-sonic missile tech went through successfully, and we joined an elite group of nations capable of building these systems internally.
Essentially, DRDO sent a hyper-sonic cruise missile, mounted on a rocket, about 30kms above ground, and then monitored for aerodynamic heat shields separation and other launch related progressions at extreme speeds. As expected, the missile separated from the launch rocket and continued on the test path at speeds six times faster than the speed of sound. In all, it was a true success and another feather in the government’s defense improvement cap.
Pundits however believe the timing of the test is interesting, and that these operations may have been a backhanded show of aggression towards Chinese incursion on the northern borders.
Key takeaway: India’s defense systems are steadily progressing towards self sufficiency and that is a good thing. We still have a long way to go, but the mindset shift is here, and that’s all that matters. For now.
Yearlong Diwali for edtech 🧨
Investors’ passion for India’s edtech is showing no signs of slowing. Most recently, Byju’s has been showered with another $500 million in at a valuation of $10.8 billion from Silver Lake, the Menlo Park based Private Equity group, with existing investors Tiger Global, General Atlantic and Owl Ventures also pitching in.
The lockdowns changed the course of India’s education market as schools and offline tutoring businesses basically vaporized overnight. ALL of that attention and spending went to the tech platforms.
Since the lockdown, BYJU’S has seen over 20 million new students use its platforms, with total user base topping 64 million. 4.2 million of those are paid subscriptions. The company doubled revenue from ₹1,430 crore to ₹2,800 crore in FY19-20. Beat that!
While we’re on the subject, 📢
All you podcasters need to check this out! Deepsync Technologies, a company that builds audio augmentation technology to help creators record with nothing but a standard laptop mic for example, has raised about $300,000 in an angel round.
Founded in December 2018, the company believes it has the right technology at the right time in the market, just when barriers to “creation” are being lowered each day. Funds will go towards product development and expansion. Exciting stuff.
Switching gears into logistics, 📦
Domestic drone delivery startup TechEagle has taken an African flight. The company partnered with Ethiopian ecommerce marketplace Addis Mercato to deliver healthcare products and essentials using drones in the nation’s urban and suburban areas. The partnership is the first commercial drone delivery service to be launched in Ethiopia, and inaugural test flights will be conducted within the next three months.
Koreans want to come clean 🎶
The PUBG story has an interesting twist. Although the game has been distributed in India by Chinese internet company Tencent Games, which led to the Indian government banning them, the creator of the game is actually a South Korean company called PUBG Corp.
And now apparently PUBG Corp is dead pissed because it lost millions of users in this fiasco, and the company is trying hard to do everything it can to fix this.
Quick refresher: just like how movies are made and distributed by different entities, games are made by developers or game studios, who then licence it out to distributors to sell them across the world, often in a revenue share arrangement. Sometimes different distributors buy rights for different regions or ecosystems. In this case, PUBG Corp, owned by a South Korean game company Bluehole Studios, makes the game while Tencent distributes it in India.
Anyway, India loves South Korea. And there is little reason for us to block their games from being sold here. So Bluehole Studios has terminated its contract with Tencent and has decided to publish the game solo in India.
The company also says it is committed to doing so by sustaining a localized and healthy game-play environment for its fans.
But it's hard to believe they can pull this off without a local partner. Could a PUB-JIO be in the making?
Lasting blow to education 👊
It has been 6 months since the pandemic took us down. Almost a third of the school year is lost in that process, and the OECD believes that the consequences of this freeze on a generation of students will linger around for decades to come.
OECD says the disruption in learning around the world will inevitably cause a skill loss that could drop the global economic output by 1.5%. If the pandemic drags into another year, the losses only worsen. In the US alone, the damage is estimated to be worth $15.3 trillion.
Also, it is important to remember that school is not just about education. For millions of children around the world, schooling is the only respite from poverty or even domestic abuse. Schemes such as mid-day meals feed kids when parents can’t and teachers are often the first line of defense against abuse and harm. Not to mention, the friendships, social interactions and other positive benefits kids draw from each others’ company. The world is baffled on how to deal with this beneath the surface crisis.
The power of communities 💪
Microsoft has made some of the splashiest acquisitions in the past few years on its journey to become a cloud-first company. When quizzed on its strategy of buying companies by CNBC yesterday, the CFO Amy Hood made some interesting comments that read very positively for the future of communities.
“For the past five years, we’ve been incredibly consistent — buy communities, look for networked assets, look for growing markets, and look for where we’re a better owner.”
Amy was hinting at how LinkedIn connects professionals, Minecraft and Xbox connected gamers, and how Github connected developers — all hot acquisitions the company made recently. Microsoft believes the key to its expansion lies in identifying community first products in the future and doubling down on improving those.
Why does it matter: although communities had forever been at the heart of successful products (famous brands like Apple or Nike grew this way), their power was lost on the viral growth on the internet era. However, builders and entrepreneurs now are finding new meaning in the power of communities to build sticky products. Microsoft’s championing of this thesis is a massive vote of confidence for creators in the space.
Tweet of the day -
What else are we snackin’ 🍿
😷 COVID killing us, literally - India recorded a single day spike of 75,809 new COVID-19 cases and 1,133 deaths in the last 24 hours. After surpassing Brazil on Monday, India has now become the country with the most number of coronavirus cases outside of the US and has a total caseload of 4.28 million. Thanks Trump for saving us some shame.
💉 Resting Sputnik - Clinical trials of Russia’s COVID vaccine, Sputnik V, will be held this month in several countries including India. The post registration studies involving more than 40k people had started in Russia on August 26. International community is torn on the efficacy and safety of the drug.
👛 Emptying the coffers - TikTok owner Bytedance is set to give out cash bonuses to employees who are working towards helping them overcome challenges during these difficult times. Bytedance has over 60,000 employees worldwide.
🏛️ Cyber coverup? - PayTM Mall is threatening to initiate defamation proceedings against Cyble Inc., a cybersecurity startup, for a report the firm published alleging cybersecurity breach of PayTM’s databases. The notice gives Cyble 7 days to make public clarifications regarding the report.
👏 Literacy rates better - Reports suggest India’s literacy rate has climbed up from 65.38% two decades ago, to 77.7% on average in India. Kerala has again shown up as the most literate state in India with a literacy rate of 96.2%. Andhra Pradesh, Rajasthan and Bihar have the worst literacy rate.
🙁 Slap on the wrist - Standard Chartered has been fined $13.6 million after an 8 year old probe found that it violated the foreign exchange management act when it worked with a group of Investors to buy a stake in Tamilnad Mercantile Bank in 2007.
👊 More anti-trust pressure - Italy becomes the latest country to take on big tech with antitrust charges. The competition watchdog of the country will investigate Google, Apple, and Dropbox to determine if the companies sell commercial cloud services in the country and whether there are unfair clauses in the contracts.
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