Dirt cheap ⚡

Twitter delivers, Mahindra holds up, and fintech stays hot.

Feb 10, 2021

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Indian markets crawled back a bit yesterday, but given the rally for the past whole week, nobody is complaining. US markets had a mixed day too, with growth stocks gaining, and the rest of the market receding.

US:

S&P 500 - down 0.11%
Nasdaq 100 - down 0.058%

India:

Nifty 50 - down 0.043%
Sensex - down 0.038%

What’s brewing hot? ☕

✅ Shooters gonna shoot—Adani Ports is unstoppable. Even as India’s total port traffic remains down with lockdowns denting imports, the Adani Ports enterprise reported a breakout quarter, growing revenues by 29%, profits by 15%, and cargo volumes up nearly 28% for December. A key port acquisition, and share gains against competitors helped the beat, and the numbers again highlight how India’s leading companies have leveraged the economic downturn to get much stronger, and leaner.

✅ Twitter spaces incoming baby—Twitter’s a bit rattled by the growing popularity of Clubhouse, and will be pressing hard on the gas with its audio-social service Spaces, expanding beta testing to total 4,000 users. No official launch date has been announced, but by far it's pretty apparent the app is losing “attention” share to people tuning in for conversations elsewhere. Dorsey and team are on the clock here to put up a formidable defense.

✅ You don’t belong in this relationship—the Delhi High Court gave Future Retail some relief by lifting an order that stopped Future from proceeding with the completion of its merger with RIL. The courts basically told Amazon that you’re not a listed party in the transaction between RIL and Future and that your problems should be limited to Future Coupons, and not the entire Future Retail entity that’s merging with RIL. Slim “legalese” defense, but Biyani should be relieved for now, until AMZN runs to the Supreme Court of course…

Big Brother Pop GIF by Big Brother After Dark

Mahindra did okay 🚗

Auto demand bouncing back strongly helped Mahindra put up a phenomenal final quarter of 2020, with strong growth in profits and revenues. But investors didn’t seem too pleased because the company’s numbers slightly fell short of market expectations.

Quick look at the quarter:

Revenues grew 14% to ₹14,056 crores
Profits grew 40% to ₹530 crores
Profits fell a tad short of estimates due to a one time financial expense

Operating in the pandemic is no joke, and Mahindra's supply chain had been facing some issues with semiconductor components from supplier Bosch lagging on delivery times, which was further delaying Mahindra’s tractor deliveries to end customers.

Mahindra had in fact been struggling with these issues for a few months now, so investors weren’t gonna take any excuses for the problems persisting. The markets promptly took stock down like 4% yesterday.

In any case, going forward their prospects seem quite promising. The latest budget and government’s incremental focus on boosting capital expenditure in rural areas should drive a solid consumer purchase cycle of farm equipment and other vehicles. Also, products like the latest Thar are expected to see high demand near term.

Reddit raises, at a hilariously low valuation 💰

Reddit raised nearly $250 million in fresh capital, in a round valuing the company at a “paltry” $6 billion. Well, $6 billion isn’t less money by any measure, but if you’re even remotely keeping a pulse on the market lately, you can sense they probably shoulda been up a lot more.

This is one of the most recognizable social platforms out there, and is in fact quite unique in its offering. And its capable of big things—the platform singlehandedly fertilized a plan to stage a “coup” on the global financial system. Heck, even WallStreetBets alone would be valued more than $6B with those credentials. SMH.

But the fact of the matter is, all those characteristics that make reddit great (anonymity, group based interactions, user moderation etc.) also mean it's hard to monetize such a platform solely based on ads, which is the only model the company has chased until now, and that’s probably why investors are a bit shy, we guess…

Anyway, the round has doubled the company’s valuation from about a year ago. Fundamental growth on the other hand has been nothing short of stellar—nearly 52 million active users use the platform everyday, up 44% YoY, while ad revenues grew like 90% YoY in the most recent quarter.

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Fintech wildfires are unstoppable 🔥

Progcap, an emerging SME financing platform, raised ₹10 crores from venture debt fund Stride Ventures to finance security-free loans to small merchants and retailers nationwide.

Much like the thousands of other SMEs financiers that have emerged across the nation, Progcap leverages supply chain and operational data of small business, looking past dated financials typically used by banks, to underwrite loans at rates better than traditional banks do.

So far the company claims to have worked with over 2 lakh retailers, and post COVID’s lending volumes have spiked nearly 5x. Sequoia has been an investor in them in the past.

While we’re on venture updates, ☝️

Barely weeks after acquiring a promising AI based consumer fitness company, Curefit has made another acquisition—buying out Fitternity, an online aggregator of fitness facilities.

Fitternity basically allows consumers to find fitness centers of different types, and then book sessions with trainers, make payments, etc.—with more than 5,000 facilities listed on their platform. Curefit is hoping this directory would beef up their subscription product called Cult Pass which basically allows members unlimited access to gym facilities. No price tag was disclosed, but Fitternity has raised some $7.5M in VC money in the past.

Bottomline: India’s nascent digital fitness industry is off to an explosive start on the back of broad digitization, and it's going to be a long drawn out game with consumer penetration still at less than 1% of the total base. Great time to be building, and these acquisitions will further pull investor interest towards the ecosystem.

Closing out—stonk bois save Twitter 📈

Twitter reported pretty solid numbers for its December quarter, with revenues growing, profits increasing, and engagement holding up against high expectations.

Quick look at the key numbers:

Revenues grew 28% to $1.3 billion—as digital advertising continues to make a strong recovery from the worst of lockdowns
Net profits grew almost 88% YoY
Daily monetizable active users came in at 192 million—its a metric Twitter uses to understand how many power users use the platform everyday

Investors were actually hoping for user engagement to disappoint, particularly as US elections had ended in November 2020, and most political spending and infighting had crawled back by the end of that month.

But it appears the declining political noise was promptly replaced by our brave stonk bois pumping their schemes and coins, which helped carry the engagement baton through.

Stock was up almost 4% the numbers were disclosed, and markets also seem to be loving alternate monetization and product innovation moves (newsletters, spaces, etc.) the bird app is making. Lookin’ good Jack!

What else are we snackin’ 🍿

🌱 Supporting farm infra with innovation - A research team at IITK has developed an energy efficient pest control device, to help farmers of smaller agri-tracks spray pesticide. The sprayer runs on solar energy and is aimed at increasing capacity of deployment, saving costs on labor, and bringing some uniformity, directly boosting crop yield.

💬 Aight, this is getting too far - after moving the IT ministry, and half of its white collar officials onto Koo, the Government is now keen on trying out a Whatsapp replacement app called ‘Sandes’. Tests are on, and Government employees and officials will be migrated over to these services as part of that to reduce any potential security risks. Ok we get that, but who TF is in charge of naming these apps? Imma Sandes you sounds oddly out of tune.

Hit that 💚 if you liked today’s issue.

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