Edtech pawri ⚡
Acquisition galore, more IPOs, and bullish on India.
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Market summary: 📊
Relatively flat day yesterday in India, as investors display caution. US markets returned from a three day weekend to pull major stocks down an inch.
US:
S&P 500 - down 0.057%
Nasdaq 100 - down 0.25%
India:
Nifty 50 - down 0.0082%
Sensex - down 0.096%
What’s brewing hot? ☕
✅ Straighten out your dues—the banks who’d loaned to Future Retail are getting squeamish that the never-ending acquisition by Reliance may ultimately collapse, and the money that Future owes them, some 80% of the deal value, may never come through. A financial plan is now being put together, demanding timely payments from Future, while offering the company a one time final loan to keep funding operations. Nearly 5 leading banks are exposed to billions in default risk. Mess could get really ugly if Amazon gets its way.
✅ Meanwhile, AMZN pandering to the local sentiment—Amazon will be making some of its devices (Kindle, Echo speakers, other Amazon basics stuff) at an India manufacturing facility, trying hard to manage its “for-India” image and play right into GOI’s agenda. Global electronics maker Foxconn’s subsidiary in India will make the parts for them in Chennai, with production expected to kick off later this year. GOI seemed approving, but with the Future Retail mess looming, it's going to take lot more than just a few manufacturing deals to do a full atma-nirbhar cleansing act.
✅ Bitcoin blew past $50K—like a walk in the park! Total market cap for the currency is close to $1 trillion now. Participation by companies like Tesla, relentless cheerleading by Musk and his pack of billionaire influencer bois, and slightly wider consumer awareness around the promise of the currency this time around—all played a part. With global fiscal policies in shambles after the pandemic, the fan bois seem confident of breaching $100K by end of year.
Quick look at the IPO season 🙌
RailTel, a railways-sponsored telecom infrastructure operator, kicked off its IPO bids yesterday morning, with the raise already subscribed 1.57 times by lunchtime. Expect nothing less in these markets.
The public sector enterprise runs broadband and telecom networks alongside thousands of kilometers of railway tracks in India, providing connectivity for signals, control systems, and monitoring including exclusive rights to supply railway stations as well as trains internet connectivity. Railways heavily relied on these services for most of their digital transformation efforts, connecting over 5,000+ stations.
For the year of 2020, RailTel made about ₹950 crores in total revenues, up 8%, while profits grew about 10%. Valuation doesn’t seem too ridiculous either, and most investors piling in are likely going to be serious long term holders in for a steady ride.
Bottomline: the IPO is part of the government’s mandate to sell stake in public sector companies, and use the money to fill budget short falls. GOI is also hoping to bring some accountability in these corporations by leveraging the power of the public markets.
Edtech consolidates at the top 🔥
Unacademy made its 7th acquisition since last year, paying up ₹100 crores for networking and contracting-services platform TapChief, that connects skilled professionals in design, content, software, product and other functions with businesses looking to hire them on a contract or freelance basis.
Operating since 2016, and having raised over $2.5 million, TapChief had accumulated robust relationships with scores of Fortune 500 giants, unicorns, and SMB players—with close to 150K professionals using the service.
In a tweet thread, the CEO of Unacademy mentioned that TapChief will now form a core part of a new product called Unacademy Pro, which will basically build a service at then end of the value chain, that’ll focus on getting learners equipped with job ready skills, and then connect them with credible employers.
While we’re on venture updates, ☝️
KreditBee, a personal lending platform, raised $75 million for its Series C round from Premji Invest, Mirae Asset and a couple others, as fintech continues to attract growth dollas on the back of the COVID induced boom. 💸
Like countless other ventures in this space, KreditBee essentially provides short term, low-value and flexibly repayable loans, leveraging data and a digital-first experience to carve out a service in the gaps that traditional banks usually tend to ignore. So far, they’ve scaled to a promising 20 million users, primarily salaried employees.
Unsurprisingly, the company’s Chinese investors booked an exit during the round—the unwelcoming attitude, and GOI’s pushback on Chinese owned lending platforms in India is becoming too much to bear. Good riddance.
Essential is Nothing 💰
Quick device update for ya—the newly launched hardware brand “Nothing”, from Carl Pei, one of the co-founder of OnePlus, has acquired another disruptive hardware company called “Essential”.
Essential was founded by the “Father of Android'' and Google veteran Andy Rubin, with a similar promise of disrupting the hardware game by launching sexier smartphones.
Well, hardware is hard, and the promise failed big time, with consumers in the western market not giving a damn about anything that doesn’t have a half-eaten white Apple slapped on it. Not to mention, Andy’s shenanigans with women and series of harassment lawsuits meant Essential was close to bankruptcy.
Anyway, Carl Pei gets all of their patents now, and with the blessings of prominent investors including Google Ventures, the stage is set for a good performance. On a more serious note though, what is wrong with the people naming these companies? “Nothing”, “Essential”, eww.
Closing out—Tata finally pays up 🛒
Tata Group is close to acquiring 60% of Big Basket for $1-$1.2 billion, ready to take-on and put a check on the free run of startups as well as the formidable giants (Amazon, Reliance, and Flipkart), in the digital commerce arena.
The acquisition is step one in the direction of Tata’s grander ambitions to transform its empire into a digital-first entity. Big Basket can be a shrewd test bed before they go all guns blazing with the proposed gazillion dollar super-app.
Anyway, congratulations to the Big Basket leadership, who for once can have a good night’s sleep knowing they have the absolute backing of a cash rich partner in this bloody bloody cash-drain of a war for dominance in digital commerce.
What else are we snackin’ 🍿
💸 Don’t bet against India - global banking giant and wealth manager Credit Suisse just slapped an “overweight” rating on India—which in investing-speak basically means we’re as bullish as we can be on the country’s prospects near term. Dalal Street roaring, corporate profits booming, consumer spending recovering, enthusiasm at an all time high—what’s not to like? Expect serious $$ inflows if a few other banks reciprocate Suisse’s sentiment.
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