Everything's hot
AR promises, Dukaan tech future, and Dropbox saving face.
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Market summary: 📊
India saw a decent rebound during the day, but choppiness still persists. US saw a decisive comeback with tech adding a massive amount in a single session.
US:
S&P 500 - up 1.42%
Nasdaq 100 - up 4.03%
India:
Nifty 50 - up 0.95%
Sensex - up 1.16%
Fresh from the oven ☕
✅ Apple loving what its gettin—Apple’s fallen in love with the government’s manufacturing incentives schemes, and will now be shifting the production of iPhone 12 here too. That’s their flagship phone right now, and was solely responsible for helping the company post a kick ass business quarter towards the end of 2020. FYI, until today Apple’s been manufacturing its iPhone 11, XR, and SE models in India. Substantial part of the iPhone 12 made here will be sold in the domestic market, supplementing the company’s newly formed retail strategy. Lastly, the fact they’re confident making a flagship product here signals the confidence the company has in its newly formed local supply chains, manufacturing quality controls, and other processes, which tells us a lot more is yet to come.
✅ Saving face—Dropbox, the cloud storage platform, spent $165 million to acquire DocSend, the popular document sharing platform used by folks especially in the venture industry. Some 17K of DocSend’s enterprise customers will now be migrated onto Dropbox’s setup, and both platforms will be tightly integrated. Dropbox ($DBX) has had a horrible run since its IPO as the storage-only platform has struggled to find a unique hook amidst rough competition by Google Drive and iCloud. But the company’s renewed focus on now selling to enterprises is giving investors some hope. Lastly, those left behind in the SaaS wars are expected to step heavily on the acquisition gas pedal to make up for deficits.
Wearables aren’t just for tech companies 🙄
Pepsi owned sports drink maker Gatorade is launching a new wearable device—a tiny patch that sticks to your skin, and then measures and analyzes your sweat to understand how your fitness levels are trending.
The patch connects to a smartphone app that’s capable of reading the input data collected, and then over time builds you a unique sweat profile… that’s apparently a thing. The fluctuations are then churned to give you hints into nutrition, sleep patterns, exhaustion and all the fancy stuff.
The product launch is in line with increasing attempts made by consumer brands to leverage technology to form a deeper connection with their users and build a sticky product experience around a particular activity. Here its sports, performance drinks, and personal measurement.
Gatorade owns nearly 70% market share in the US, and 50%+ worldwide, making it a dominant player in the extremely competitive performance drinks space. You can count on Coke and other beverage makers to follow suit and launch similar gizmos.
Bottomline: consumers’ interest in understanding their own body’s operations is quickly becoming an intriguing theme. DTC products in sleep tracking, odor measurement, living space analysis, in addition to countless apps connected to your digital watches 24x7 are increasingly consuming user attention. Expect more and more old brands to cater to this trend.
Quick look at a gaming deal 🎮
Krafton, the parent company behind the mobile game PUBG, is investing a sizable $22.4 million for a minority stake in Indian e-sports venture Nodwin Gaming.
Nodwin runs a simple operation conducting live gaming events in partnership with global game publishers like Blizzard, Valve, Riot Games etc. whose content it licenses. The company then provides marketing, organization, and sponsorship management services for these events. The company also owns a bunch of other media properties related to gaming and operates events in foreign markets as well, including Africa, Middle East and South Asia.
You’d think Krafton would be done with India after the government had banned their operations along with scores of Chinese apps, overnight snatching one of the most lucrative markets the company had cultivated painstakingly.
But then the Indian e-sports and online gaming scene is too lucrative to hold grudges. An investment now and probably a close tie-up to work together in the future, or who knows maybe even buy Nodwin once the anti-China sentiment smothers a bit.
What went down on Venture Avenue 💰
Insurance startup Turtlemint wrapped up its $46 million Series D, with the last check coming from Jungle Ventures. Sequoia, Blume Ventures, and Trifecta Capital also pitched in. This would be Jungle’s first insure-tech investment in India, as the space suddenly turned lively in the aftermath of COVID.
Turtlemint basically runs a marketplace that connects insurance online shoppers with regional brick and mortar insurance advisors, while pulling in insurance companies in the equation to supply and underwrite policies. Over 100,000 advisors service about 1.5 million+ customers on the platform, and the company even reported a modest profit for 2020.
COVID had nearly frozen their business mid-year, much like the rest of the insurance market, but a decisive rebound as the economy opened moved the scale disproportionately in favor of digital platforms, in addition to bringing millions of first time consumers online. Platforms like Turtlemint turned out big winners.
Key takeaway: despite the insurance market being on fire lately, consumer penetration at best remains under 5%, and that makes this one of the most lucrative segments to venture into. It’s still day 0.
Closing out—the horizontal expansions are coming 😎
Dukaan-tech leader KhataBook, which supplies millions of small merchants across India with the application tools to manage their operations, disclosed plans of rolling out insurance and credit products later this year. Nobody is really surprised.
The demand pull coming from merchants in favor of digitization is extremely strong. Merchants are perennially underserved by banks and traditional insurers. Khata-apps can add value by providing these services while solidifying their own standing via these sticky, long cycle products. It could be a win win.
Anyway, KhataBook reports some 8.5 million active users, and competes with Paytm, OkCredit, and a host of others. Expect the move to clearly help them differentiate, but also expect the others to quickly follow with similar services, further heating up the space.
Worth mentioning: for decades banks and card processors have failed to sell payment processing systems to Indian small merchants because of prohibitive installation and upfront costs associated with such tech. The old guys had written SMEs off as “not worthy of business”.
The Khata guys managed to crack this conundrum though—by jumping the additional hardware need altogether, and directly capitalizing on the wide penetration of smartphones, the “apps” found themselves in a lucrative position in the merchant acquiring value chain. You could quite literally sell anything you want from here.
To look at the kinda lucrative empires these businesses can build with back/forward integration in the future, you’ve gotta pay more attention to Jack Dorsey’s Square.
What else are we snackin’ 🍿
📹 FB bringing Reels to the blue app, time to leave - Facebook will be bringing Instagram reels to its old blue platform this year, starting with India. The company is saying demand and consumption patterns indicate the product could be a huge win, and currently a beta is being tested with a few creators. I mean, unless you’re into watching unkills sing Kishore Kumar tracks, be surprised if you’re too excited.
👍 Brands waking up to the mood - Unilever will be removing the word “normal” from packaging and advertising of all its beauty and personal care brands in order to make the products feel more inclusive, and stop selling the image of perfection that obviously fails to appeal to the modern consumer.
Hit that 💚 if you liked today’s issue.
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