FB vs AAPL 💪
Bitcoin soars, SaaS on fire, Upgrad looking to expand.
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Market summary: 📊
Another day of straight gains as investors slowly start to process the post-vaccine opportunity. Global stocks continued a similar march upwards.
US:
S&P 500 - up 0.58%
Nasdaq 100 - up 0.66%
India:
Nifty 50 - up 0.42%
Sensex - up 0.48%
First things first ☕
1️⃣ Currency manipulator watchlist—India along with Germany, Japan, Italy and several other leading nations has been put on the currency manipulator watchlist by the US govt., basically because the RBI began purchasing foreign currencies to hedge against the increasing capital inflows into India, as foreign investors keep plowing capital here. The US judges currency manipulation on 3 factors, one of which is how much of a trade-surplus a country maintains with them, and then how much foreign currency a nation buys each year (less than 2% of GDP is okay).
India purchased a lot more foreign currency, nearly 2.4% of GDP this year—giving the impression that we’re flooding the local markets with cash liquidity. Then our current surplus stands at $22 billion, which the US doesn't appreciate. It's bonkers how these things work, especially given how the pandemic and the recession in its aftermath has affected every country differently, with everyone using their own measures in the intermittent to barely get by. Overall, the RBI will get some pushback from the US Treasury over its moves near term, and that’s likely the most far this thing will go.
2️⃣ Big boys piling into BTC—Bitcoin soars to all time highs again, crossing $23,000 by mid-day yesterday and this time the rally seems to have a lot more juice than before. Literally every big financial institution has gotten some exposure to the asset class via direct purchases, buying ETFs, or by buying into entities that run massive mining rigs. Just last week, a big insurance player, MassMutual made a splashy $100 million buy as a “hedge” against the future. The common sense argument is—“if this thing’s gonna go to the moon, or crash, either way why not allot a tiny 1-2% to it and see how things pan out?”. In other words, while the music plays, you dance.
Hottest from Venture Street 💰
Riding high on industry wide momentum, ed-tech firm upGrad acquired recruitment and staffing solutions player, Rekrut India. No deal figure was announced, but it appears Upgrad is quite serious about expanding horizontally, to add more value to its users, and create a sticky offering.
upGrad basically is like a Coursera, but for India. The company ties up with notable global universities and launches an online program with them, leveraging their brand and teaching skills, giving students locally a low-cost, remote experience of upskilling.
And they’ve been expanding offerings for some time now—recently acquiring test-prep company Gate Academy, ensuring students get the training to “crack” exams after they’ve learnt on the platform. Now Rekrut India will further stretch their value-add, bringing placement competencies in-house, working with corporates in India and helping students find a job. Simple, clever, and effective strategy to differentiate from the run of the mill competition—and in the same time built a lasting business vertical.
Anyway, so far the numbers seem promising. Company is reporting an annual revenue run-rate of ₹1,200 crores, with nearly 1,000 students making successful career transitions with an avg. of 44% salary bumps. The team is expecting to continue to make more acquisitions near term.
Bottomline: the marketplace is crowded, there’s tons of competition. Vanilla ed-tech without any special juice is likely not going to get you too far. Differentiation matters more than ever and the resourceful players will continue to scoop up smaller players to extend and improve their offerings. Increased deal activity could be great for emerging builders in the arena, but it also means the gap between winners and laggards will only accelerate going forward.
While we’re here,
As we said before, Indian SaaS is on FIRE. LeadSquared, a BLR-based sales automation platform, bagged $32 million for a Series-B round led by PE-firm Gaja Capital. Existing investors Stakeboat Capital and Jyoti Bansal pitched in too.
Founded way back in 2011, Leadsquared is finally coming of age due to the recent cloud boom. The company sells tools to simplify sales operations, helping sales departments with execution, marketing automation and field force management. More than 1,000 of the most notable Indian giants use their services including BYJU’S, Acko, Amity University, OLX, Dunzo and Practo. Fresh funds will fuel wider growth, product improvements, as well as expansion into deeper verticals like education, financial services and healthcare.
FB vs. AAPL—nobody asked for this 💪
We’ve gotten free tickets to another tech-land drama. FB and Apple are dishing it out over who should have how much control over users’ data, with Apple’s new iOS 14 update threatening to deflate Zuck’s carefully crafted profit balloon.
Some context—for some years now, the internet-economy which is literally powered by digital ads, had been wary of the eventual move by Apple to give privacy control in the hands of its users. That day is finally here, and with continued updates to iOS 14, Apple is putting cautionary labels around how apps are harvesting data and tracking usage, in a bid to make things more transparent for its billion+ users. Seems fair right?
That’s an attack on the bread and butter of FB and other giants living under the patronage of data harvesting, and the precisely targeted digital ads they allow. On FB’s side, they’re arguing that users LOVE good experiences, and good customized experiences are impossible without specific information on the users. Mixed feelings.
Anyway, now the battle has spiraled out of hands. And FB is spinning the narrative by alleging Apple is hurting the chances of small businesses and other tiny vendors to buy meaningful ads on the internet by blocking use of customer data. To broadcast its thoughts, FB took a HUGE ass ad in the world’s biggest newspapers this week.
FB’s reputation around the subject of privacy sucks anyway, and there’s barely any more damage that can happen to them so they’re going all in. But for Apple, considering their recent misdeeds and aggression with the App Store recently, chances are they will end up further hurting themselves in the eyes of the public if they don’t respin this in their favor. Hard to read an outcome just yet but given Apple’s stubborn stubborn attitude, our money is on Apple not backing out either.
What else are we snackin’ 🍿
💻 Odd way to expand share - Google is pushing hard with the Chromebooks and in the most recent bid the company acquired a software startup called Neverware that sells tools to convert an old windows based PC into a Chromebook by installing the requisite software. The company will join the Chrome team and work on similar projects.
Otherwise not a very happening news day. Perhaps the holiday fervor is setting in or people just sleeping off the rest of 2020… Very well deserved.
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