Coups and Raises 💰

IBM moving, Boeing fines, and things from last week.

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Market summary: 📊 

India had a phenomenal day, ending the new year’s first full trading week on a high. US markets, despite opening the week slow, ended it on a high note as well.

US:

  • S&P 500 - up 0.55%

  • Nasdaq 100 - up 1.28%

India: 

  • Nifty 50 - up 1.48%

  • Sensex - up 1.43%


Krishna slowly fixing IBM 🖥️

Last year a declining IBM hired Arvind Krishna as CEO to fix its slow-growth problems, and save the company from going obsolete in the modern cloud world. Krishna had made some bold moves right out of the gate, including forcing unsexy businesses like managed infrastructure and services (basically stuff that is not sold as a product) to be spun out into a new company. 

Now in its latest move IBM has appointed veteran Martin Schroeter as the CEO of that spun out, unsexy entity. Martin comes from a savvy tech-sales background, having led IBM’s Global Sales, client relationships, and functions like that for quite a while. Services are a lot about convincing clients to “trust” you and he seems like the right man for the job.

IBM is mostly a stock held by conservative investors and pensioners who ask for nothing but dividend yield and stability at the end of the day, and so far people seem happy with the new moves. 

BTW, it's almost becoming a trend at global companies to pull in Indian-bred tech minds to drive transformations that seem hard to pull off. 


Pay fo yo misdeeds ✈️

Boeing will pay up to $2.5 billion in fines and damages for the loss of life caused by the 2 crashes of its 737 Max planes. US regulators essentially claim that the company officials misled them, lied about safety standards, and strapped passengers on a mishap that could’ve been avoided—literally charging Boeing management with criminal fraud.

10% of the penalty is going to the regulators as a fine, while some $500 million is going to the bereaved families who lost a loved one. The remaining 70% is going towards a settlement charge customers have brought against Boeing for negligence.

Regulators stopped one step short of handing the company a criminal conviction, but they have put the company on a 3 year timeline to meet stipulated safety and testing guidelines.

Bottomline: Airline manufacturing is a capital intensive industry, and only a few companies have the chops to roll out aircrafts at a pace that the modern world demands. Loss of life is catastrophic, and irreparable, but the world is counting on Boeing engineers to use this moment as a key leg in upping safety standards across the industry.


Aight that’s it for today, and a quick look at the hottest stuff this week…

💰 CRED raked in $81 million—their latest Series C round was led by DST Global, and valuation stands at over $806M. The company liquidated about $1.2M worth of early employee stock holdings. Existing investors Sequoia Capital, Ribbit Capital, Tiger Global, and General Catalyst wrote fresh checks too. Riding high on the COVID induced digital boom, and an increasingly favorable fintech infrastructure environment in India (UPI, mass acceptance of digital payments) CRED managed to acquire some 6 million high-ticket spenders to use their services. The bold IPL ads, a well buttoned product experience, and a flawless marketing machine that was on 24x7 -- everything paid off. Expect new product launches to follow.

🔍 Jack Ma still missing—Ant Group’s conflict with the Chinese took a weird turn when news emerged that Jack Ma, the self-made billionaire and founder of Alibaba is missing. Ma was put under the lens when Ant Financial, his fintech venture, was looking to IPO a few weeks ago. He had been critical of regulators in the past, and the Chinese took him to task, slapping antitrust notices on Ant and shuttering plans on the IPO, citing reasons like lax practices around lending, governance and other petty stuff. So far nobody knows where Ma is or if at all he is missing.

🎵 Google to invest in Sharechat—Google and Snapchat will pitch in Sharechat’s $200 million Series E round, as global tech firms continue to sow seeds into the Indian vernacular-social arena. Majority of the capital is going to fund Sharechat’s short video app Moj, which has already garnered more than 80 million monthly active users catering to a large user base in small cities and towns in 15 Indian languages. Also, for Google, the series of checks it has written to vernacular social platforms in India seems like a hedge against any disruption coming from the Indian markets. 

🐦The audio wars are intensifying—Twitter has recently launched its own service to compete against Clubhouse (called Twitter Spaces) in the audio-social game. Now they’ve acquired another company called Breaker that makes podcasts more social. The company’s app basically allows users to see what their friends are listening to, which podcaster they’re following, and other basic social stuff like that. The Breaker team will be joining Twitter Spaces to accelerate deployment of features for that particular platform. 

🎧 boAt literally made history—it is not everyday that you hear hardware brands in India booking huge success. boAt, the low-to-mid range maker of wearables, device accessories and other lifestyle products got one of the largest PE giants, Warburg Pincus, to write them a $100 million check, valuing them north of $300 million. The company claims 100%+ sales growth rates for a couple years now, and they recently made waves when they got ranked at the 5th spot alongside Fitbit in global wearables market share by IDC. 

💄 Nykaa a step closer to IPO—Riding the COVID induced boom in digital commerce, online-cosmetic platform Nykaa is close to pulling the trigger on a $3 billion IPO by the end of this year or early next year. Fidelity writing them a check recently kinda gave it away that IPO plans may be looming. Anyway, Nykaa reported some ₹1,860 crores in revenues in the past year, with decent profitability, and is expecting to top this year with 40% growth in sales. The Indian cosmetics market is still in nascent stages, which throws a huge opportunity at the disposal of digital first category leaders like Nykaa.

😎 Nerds at the top—Elon Musk surpassed Jeff Bezos yesterday to become the richest person on the planet, after his net worth booked $190 billion with Tesla stock ripping through the sky for yet another straight day. The next day Musk added another $10B to his net worth and Tesla went up more. IT'S CRAZY out there. FYI, Tesla made $28 billion in revenue last year, and its market cap is $700 billion. Bezos’ Amazon made $350 billion, or 11 times more. Yet Amazon market cap is 2 times that of Tesla. That’s the game.


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