EV battle is ON 😎
Uber gives in, FB's copy machine, and Google agrees to pay
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Market summary: 📊
Another soft day in India despite IPO fever gripping the street. US stocks saw some respite as tech names particularly continued to show some strength.
US:
S&P 500 - up 0.29%
Nasdaq 100 - up 0.38%
India:
Nifty 50 - down 1.27%
Sensex - down 1.12%
What’s hot bruh? ☕
✅ Subscribing to the newsletter biz—incorrigible copy-machine Facebook is apparently luring small and independent writers to participate in testing out its own unnamed product, unable to sit with the success of Substack and the rise of newsletters. Zuck’s master plan is to pay a bunch of writers beforehand, help them set up their own websites, and then assist them in chasing audiences on Facebook. Ummm…. well, FB has had a handle on the creator economy for years, yet effectively did very little to empower people directly around monetization and audience building, and it's kinda surprising that they believe throwing a bunch of money at writers is gonna solve that problem, on an increasingly crowded platform where meaningful engagement has gone to zero and users can’t tell the top from the bottom any more.
✅ UK Drivers score over Uber—Uber continued to downplay the impact of the UK Supreme Court's ruling, and as expected, the escape doors have finally closed. The company, in the decade of its existence, will for the first time be forced to give 70,000 drivers in the UK holiday pay, enroll them in a workplace pension scheme, and classify them as “workers” instead of contracted professionals with other benefits. Disputes over the technicalities and implementations are sure to follow, and a similar demand from other drivers elsewhere globally will be inevitable. Those slim margins are gonna go down even more. And well if you’re an Uber investor...
Your time is up, my time is now... 🔌
Volkswagen is taking a nosedive into the electric vehicle battle arena, directly challenging Tesla’s supremacy with promises of investing aggressively in battery research, new production facilities, and a global charging network.
Quick summary of the new plan announced:
Make batteries 50% cheaper by 2030, and will drop charging times to under 15 minutes by then. Ready before your Starbucks coffee.
Massive infrastructure campaign in Europe, including 18K charging stations, and 6 big battery making facilities. Other regions will follow.
Hiring 10K new software developers. Will double EV car sales by 2025
Total spend = $29 billion
Tesla investors definitely don’t like the news and stock has been trading down nearly 20% or so from all time highs now. While Volkswagen stock jumped 10% yesterday.
And while the news sure looks promising, taking on Tesla is no easy joke. You’re comparing a company that already pretty much operates like a tech firm straight out of Silicon Valley, holding control over key innovation in processing hardware, software, to sensing. But Volkswagen got a deep cash trove and global operating experience to make up for its deficiencies.
More than meets the eye—in a few days ex-VW CEO is going to stand trial for the company’s involvement in the Dieselgate, where management had blatantly lied to regulators about the company’s emissions rate. The timing of this news could very well be a PR move to massage public sentiment.
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Innovation is the name of the game 💪
Honey, make me a protein shake—Zomato made a sly entry into consumer packaged goods, launching its own self-branded health & dietary supplement products to be exclusively sold on the platform.
CEO Deepinder Goyal went through the complete checklist, launching directly on LinkedIn and Twitter first, and then the mandatory “atma-nirbhar” makeover, promising to deliver nothing but fully “made in India” products, within 15 minutes of your order. No cheat day excuses no more.
But why functional foods—for starters, it's a product category that appeals to India’s increasingly health-conscious urban consumer base. Secondly, selling self-branded products with end-to-end control over branding is a great way of boosting margins, without much heavy lifting.
One of the biggest problems with D2C products is that you end up spending millions in building initial distribution. But when you’re already running a marketplace with traffic in the millions each minute, all you gotta do is find the right “upsell” and functional foods are ideal—thick margins, long shelf life, and in a market where leading brands don’t hold as much market power.
Bottomline: demand for health supplements has surged ever since COVID, with the market expected to top $8.5 billion by 2022. The platforms controlling the pipelines to delivery are in an ideal position to thrive here.
Meanwhile, all you damn global food-delivery companies struggling to turn a profit, gotta learn from the Indian ventures on how to play this game.
Learn when to fold 🤝
Tech companies have a habit of routinely over-estimating their bargaining power, while analysts have the poor habit of cheering them on.
After holding out for as long as it could, Google finally capitulated, blindly following Apple in agreeing to half the commission it charges developers selling in-app goods and services on Playstore. New rates will drop from 30% to 15%, albeit only for developers earning $1 million annually.
Anyone earning above that will continue to attract the current 30% rate, but both giants have argued that that includes 99% of the world’s developers using their services. But that’s not the main problem now is it fellas...
The fact that the Netflixes, and the Snapchats, and the Spotifys, and the Amazons end up paying tens of billions each year to two companies, with no sight on an upper limit is the core of the issue after all, and what Google and Apple have done masterfully right now is break the protesters into two groups. Straight outta Art of War.
Regardless, Indian startups deserve considerable credit for joining hands and mounting heavy pressure on the company’s policies last year.
Closing out—IPO fest’s darling pick 👋
Tons of companies opened early bids this week but none was welcomed as ardently as gaming firm Nazara Tech, which saw its bid oversubscribed by nearly 3.8x on day one alone. The company owns a range of gaming and media properties, with exposure to multiple emerging technologies around esports, online betting, fantasy gaming as well as AR in games.
The business is on its way to make more than ₹400 crores in revenues, and saw growth expand to almost 75%+ rates after COVID forced everyone glued to a couch with a smartphone, and valuation of about 8x revenues doesn’t seem too ridiculous.
BTW, we compiled a quick thread yesterday on the company’s epic ride to the top...
What else are we snackin’ 🍿
🙌 Tinder making it easy- Tinder is giving out 1,000 free COVID tests to couples to encourage them to go on dates without worrying about the Virus. Users in the US will be able to reserve two tests directly via the app, one for them, and one for their match. The times we live in.
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