Deadpool's payday ⚔️
Venture deals, Ecommerce buys, and lending surprise.
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Stock summary: 📊
US:
S&P 500 - up 0.27%
Nasdaq 100 - up 1.11%
India:
Nifty 50 - up 0.61%
Sensex - up 0.46%
Dollas flow into India’s video social 👛
Another short video app Trell, which focuses on lifestyle content, has raised $11.4 million in a Series A from KTB Network, Samsung Ventures, and other notable investors, joining Chingari and the rest of the desi short video gang that’s winning in TikTok’s wake.
Trell’s content is skewed towards beauty, food recipes, fashion, personal care, movies, electronics etc. and has a regional angle to it with users generating content in over 20+ languages on the platform. The company has garnered 75 million installs with 25 million monthly active users so far, and has grown 27x in the last twelve months alone. What!
In other video social deals,
We had mentioned that Sharechat was looking to raise about $200 million to fuel growth of its short video app Moj. Apparently the company is in early talks with Google to contribute to that raise.
While details of the raise are not out yet, the funds will come from Google’s $10 billion India digitization fund. Reports suggest several tech companies including MSFT could be part of the raise as well as other big names investors like SAIF partners and Lightspeed Venture partners. Read more.
In more fundraising news,
Captain Fresh, a supply chain software company that serves the seafood and fishing industry, has raised $2.3 million in a funding round led by Ankur Capital and other notable investors, as it looks to expand into new markets.
The company sells tools for demand-supply matching, e-sourcing, and other operational tasks in the fishing trade that adds a ton of visibility to stakeholders involved.
India being one of the largest seafood exporters in the world, the future looks very promising. Read more.
Vaccine King to tech-enabled Lender 💉
Few days ago we highlighted how India’s Serum Institute, owned by billionaire Adar Poonawalla, is at the center stage of the world’s attempt to vaccinate 7 billion people. Turns out, Poonawalla’s dreams extend beyond just biotech.
The billionaire has quietly been building a tech enabled lending service under the Poonawalla Finance brand, applying lessons pioneered by tech-enabled lenders to undercut banks in India. And big ambitions lay ahead as it appears.
The 1-year old company has apparently disbursed over ₹1,500 crores in capital so far, in unsecured personal loans in the 2-30 Lakh range, and has plans to scale upto ₹2,000 crores by the end of this fiscal year. Management believes they are taking on the banks by eliminating fees or hidden costs but at the same time are willing to assume more risk than the banks would for fair rates.
Moreover, leveraging basic tech to onboard, perform KYC processes, underwrite etc. is helping the company scale even during times of a pandemic when most banks struggle with offline operations. Refinancing higher cost loans is also part of the core strategy to expand share.
Plans to expand into other categories including mortgages, credit cards, and other types of loans are on the horizon. Read more.
Takeaway: Poonawalla is flush with cash, and old school cash rich empire with a good understanding of the regulatory environment especially can cut lines and quickly build enviable businesses that startups can only dream of. See RIL for example. Far as Poonawalla goes, this success could very well pave the way for further enterprise. Edtech? Ecommerce? Short videos, anyone?
Undying ambition 💪
With $20 billion from the Jio sale in its pocket, and big tech players by its side as partners, Reliance is now out on a crusade to beef up its portfolio of digital services to step up competitive heat on Flipkart and Amazon. Its latest foray has landed it at the doorstep of two of India’s famed ecommerce upstarts - Urban Ladder and Milkbasket.
Talks to buy online furniture seller Urban Ladder apparently are at an advanced stage, and a deal could be pegged at around $30 million (says ET)- a considerable discount to current valuations since the company has raised over $115 million to date. The business might’ve been a casualty of COVID as consumers mostly postpone big ticket purchases.
As far as Milkbasket goes, the company providing doorstep service for Milk as well as other staple items previously has held talks with Amazon and BigBasket too, but no deal mushroomed thanks to mismatch in valuation expectations.
Bottomline: upstarts could win big from operating under the banner of their cash rich buyers. But also, innovation could be a casualty here if these deals give rise to a sentiment that you can no longer compete and win against the big 3 as a small player. Regardless, investment activity in the ecommerce space will remain hot near term. Read more.
Payday for Reynolds 🤑
Guess who’s walking to the bank with a fat cheque to cash in? Deadpool star Ryan Reynolds.
In one of the biggest celebrity deals of this type, Reynolds’ Aviation Gin alcohol brand will be bought out by global alcohol conglomerate Diageo in a $610 million deal. Diageo, the company that owns the famed Johnny Walker and Smirnoff brands has seen its revenues and profits decimate due to the pandemic, but that hasn’t stopped them from making plans for recovery.
Reyonold’s bet with Aviation has been nothing short of amazing either, highlighting a growing trend among celebrities who leverage their appeal to build a burgeoning consumer empire. Look at Jordan or Kanye with sneakers, Kylie with cosmetics, or Virat’s partial ownership of Wrogn for other examples. Before the pandemic, Aviation volumes had grown almost 100% in 2019, and the brand held 40% market share in the super premium segment. Thanks to Ryan’s Insta.
Diageo on the other hand is no noob to scooping up such brands either. Few years ago the company had paid up a billion dollars for George Clooney’s Casamigos premium Tequila brand. Read more.
Bottomline: the rise of one-man multi-million dollar businesses is real. And the acceptance of cash rich corporations of brands built like this is an indicator of many more to come. It's basically the creator economy on steroids.
Tweet of the day -
What else are we snackin’ 🍿
👏 Corporate action against racism - Knorr, the German condiments brand, is set to change the name of its famous “Zigeunersauce” sauce because of the racist connotations associated with it. The company joins a range of other food companies that sought to detach themselves from their racist past.
🤞 Politicos lock horns over FB - Indian politicians took shots at each other over a media report that Facebook’s content policies favoured Prime Minister Narendra Modi’s party.
🧐 GOOGL vs. Australia - Google claims the proposed antitrust law in Australia forcing tech firms to pay for news will hurt individual content creators and channel operators. The company said that media firms could artificially inflate their search ranking, luring more viewers to their platforms and giving them an unfair advantage over small contributors, ruining product experiences for end users.
🔍 Amazon takes heat in Germany - Germany’s antitrust authority has launched an investigation into Amazon’s relationship with third-party sellers selling on its site. The regulator wants to understand how Amazon influences the process traders follow to set prices on its marketplace.
☹️ Digital joblessness - LinkedIn stated that competition for jobs has doubled compared to six months ago, with the average number of applications per job posted on LinkedIn increasing from around 90 in January to 180 in June.
👀 Oops, can I have my $900 million back? - Loan operations staff at the Citigroup in NYC, wired $900 million to the lenders of cosmetics company Revlon Inc. What’s worse? The company had a troubled relationship with the lenders and now they won’t return the money easily, using it for debt payments instead. This marks one of the silliest gaffes on wall street recently.
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