Departing soon
Warren's out, Seed raises, and RIP John.
Hi 👋, Tanvi here.
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Market summary: 📊
After a solid run up for the week, markets turned around on Wednesday. US' bull rally saw a mid-week pause too.
US:
S&P 500 - down 0.11%
Nasdaq - up 0.027%
India:
Nifty 50 - down 0.54%
Sensex - down 0.54%
What’s brewing hot? ☕
✅ Warren no like family drama — Warren Buffett resigned as a trustee of the Bill and Melinda Gates Foundation, as the founders remain engulfed in a divorce mess. Bill’s wealth-giving crusade had drawn significant legitimacy from Warren’s participation, after Warren had handed a large portion of his wealth to Gates to give it away. Buffett says he’s stepping down to make room for “better governance”, but in times when Gates’ legacy is threatened by rumors of affairs and misconduct, Warren’s distancing is sure a gut punch.
✅ Trouble in Kim’s kingdom — North Korea is witnessing a food crunch, with prices rising and currency falling, as COVID-enforced trade restrictions by China are starting to hurt. Exports from China to North Korea fell to a petty $3 million in May, from ~$29 million in April, worsened further by a fall in agricultural output due to the onset of Typhoons last year. Lack of clear data from NK is further complicating the mess. And without Kim’s friend Trump no more in office, nobody seems to give a damn...
Departing gate 5A in a few mins... ✈️
What happened — National Company Law Tribunal, GOI’s muscle that handles corporate resolutions, has finally signed off for new owners to take over the kneecapped airline Jet Airways, clearing the way for the company to start running flights after a 3 year pause.
To remind ya, Jet, operating in India's brutally competitive and over-regulated airline industry, was essentially run into the ground by its previous owners, with the barely-profitable airline (even on its best days) amassing a debt pile of over $3 billion.
Jet’s new owners will now be a joint consortium led by little-known ex-paper trader businessman Murari Lal Jalan, who runs a diversified empire through the Middle East, along with UK based advisory firm Kalrock Capital.
Going forward — Jet Airways will have to figure out its operations over the next few months — including sourcing fuel, staffing, distribution of fleet, and securing itself routes to make “round 2” worthwhile.
Big picture — for the year before COVID, Jet had lost nearly $350 million, and 2x the amount for the year before that. Clearing out the $3 billion+ debt pile is going to be an excruciatingly hard job at the disposal of new owners — with just a single tailwind in their favor, India’s growing middle class wanting to travel more frequently.
Seeds were planted on Venture Street 🌱
Bunch of major seed stage deals kept the news mills busy last night. Quick rundown...
Our friends at BimaPe (certified Filter Coffee fans BTW), raised a promising $545K pre-seed with LightSpeed leading the bid, and Titan, Gemba, and iSeed India pitching in. BimaPe’s insurance tools help decipher a convoluted asset class for young emerging consumers and families in India — simplifying discovery of hidden benefits and claims. 13K+ customers rely on the platform’s tools.
Next in fintech, aspiring neobank for blue-collar workers, Bueno Finance, raised a $3 million seed round from Goat Capital, and other angel investors. Currently, Bueno runs a lending service for low and middle income households that are woefully underserved by legacy institutions — in addition to allowing the user base build their credit score for a fee. Fresh funds will go for hiring, and growth.
Then in ecommerce, CommerceIQ, an e-comm management platform, closed a $60 million Series C from Insight Partners. The company offers a suite of tools that allows online sellers to automate a range of mundane tasks — from management of supply chain, to marketing and sales. Over 2,220 brands use the service, which has helped Indian brands scale rapidly amidst COVID’s boost to the segment.
Bottomline — a total of $9 billion has been deployed in Indian startups so far this year. If you think this train is stopping, bruh...
Quick look at households’ depleting savings 💰
What happened — household savings continue to run dry, down to 8.2% of the GDP at the end of 2020, while total indebtedness (i.e. money borrowed) spiking to over 37% of the GDP, the highest it has been in recent years.
Why is this happening — obviously joblessness due to COVID as well as rising prices, emptying of safety nets to provide for healthcare expenses are primary reasons. Also, a spike in revenge spending after the first wave, intermittently emptying consumers’ pockets couldn’t be ruled out either. Wish the data was a bit more current though.
Going forward — alternative data points that are more current have continued to show a similarly undesirable picture. Several big banks and financial institutions have already sounded the horn of brewing bank loans and bankruptcies.
Big picture — these stats will be an overhang on investor mood as we slowly enter next quarterly earnings season.
Closing out — John McAfee is dead ⚰️
Maverick billionaire, outlaw, felon, fraud, computer genius… John McAfee was quite the personality. Best known for founding the McAfee Anti-virus software giant which made him billions!
Over the past few years though John had gone total rogue — leaving the US to go live in Belize, where he spent his billions to build a guerilla camp, own extensive property, pitch an anti-government agenda, and even shoot his neighbor dead!
Anyway, John was arrested in Spain last year, and this afternoon, barely hours after a Spanish court accepted the US government’s request to extradite John to the US on some fraud charges, news broke out that he killed himself in the prison cell.
Tragic, and Crazy AF! RIP.
What else are we snackin’ 🍿
💰 Mission complete - ED transferred $967 million to banks defrauded by Vijay Mallya, after selling his stake in United Breweries. That recovers 40% of banks’ losses.
📈 Issa giant - Microsoft shares briefly touched $2 trillion in market value yesterday, making it the second and only other company to achieve the feat after Apple. Hail lord Satya!
Hit that 💚 if you liked today’s issue.
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