Final assault 😎
Venture raises, more IPOs, and state of the Cloud.
Hi 👋, Tanvi here.
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First things first… ☕
✅ Hardware is hard—Apple will be discontinuing its HomePod speakers, a device range that was supposed to lead the company’s assault on the smart home opportunity. Thanks to an exorbitant $349 price tag that served no purpose other than maintaining pricing consistency with the rest of the Apple product portfolio, the device failed to warm even the most loyal of Apple fans. Not to mention, the average sound quality combined with Siri’s dumb wits, all of which could be replaced easily by a $50 much-smarter Alexa equipped Echo. The failure is a sweet reminder that even the foremost hardware company sometimes can't get it all right.
✅ Amping up domestic air travel—in a bid to improve domestic air connectivity across the nation, particularly in tier 3-5 cities, and make flying more affordable for the average semi-urban consumer, the government is opening up 392 more air routes, inviting new operational bids from airlines. Operating airlines will be offered special taxation benefits and other financial doles to figure out a way to connect smaller cities and tiny airstrips, which also includes some helicopter routes, and unique seaplane routes. However, given COVID led devastation of the airlines sector, odds are high that the airlines aren’t as cheerful about the bids as the government.
The final assault 💻
Netflix is close to drawing a full circle on its disruption of the legacy media industry.
After scaling to 200 million solid subscribers, and then spending most of that money (nearly $15 billion each year) in making its own content, the company is now eyeing supplementing its revenue streams by licensing its content library out to other old media platforms and TV companies.
The decade-long execution of this industry disruption campaign by Reed Hastings and his boys and gals has been nothing but remarkable, powering through years of skepticism from some of the finest investors, analysts, and the media, criticizing the splurge on making their own shows. How can you do it better than Hollywood was the common sense argument.
But Netflix prioritized a data-driven spending approach that suited the high-volume and wide-selection demanded by consumers of the internet. And now when the consumers have finally begun abandoning traditional TV and expensive cable connections in favor of streaming altogether, Netflix’s position has suddenly started to appear insurmountable.
Neither do the old guys have the loyal subscriber base, or an expanding revenue base, nor the data and tech chops necessary to spin out a high-volume content operation overnight, which makes their “library” look empty, and as a result causes consumer churn.
For Netflix, licensing out its shows like the Queen’s Gambit, the Stranger Things, or even House of Cards could help spread the word about Netflix in places where the company’s marketing does not reach. A “brought to you by Netflix” mention at the bottom could mean people realize that “Netflix” is now the default platform, while everything else is second class.
Bottomline: while the old media companies may be the ones interested right now, perhaps Facebook, Snapchat, TikTok etc. are a better match to license Netflix’s deep library of quality content. They have the distribution advantage right now, which naturally Netflix could benefit from, while Netflix has the content fuel that the social media platforms could use to drive engagement. The optionality at the company’s disposal is truly admirable. And if you’re an investor, well…
Quick robotics raise 🤖
Nimble Robotics, a warehouse robotics company, raised $50 million for its series A round led by DNS Capital and a bunch of high-profile investors.
Nimble basically helps warehouses embrace automation. The company’s AI-powered robotic installations help with picking, sorting, and packing of merch to deliver the fastest, and most affordable on-demand order fulfillment setups. The system is capable of learning slowly from human workers, and then trains its own algos to replace them in action.
The company is one of the hottest AI startups out there, run by a team of experts from the finest AI labs at Stanford and CMU, and fresh funding will be utilized to accelerate hiring and go to market efforts for early testing.
Key takeaway: the ecommerce boom after COVID has made fulfillment one of the largest hurdles to mass adoption of digital commerce. The systems have to be optimized for lightning fast speeds, and the costs HAVE to go down. None of that is possible without widespread automation in how goods are handled in transit. This space will be extremely hot in the near future as the world rushes to adopt the tech.
IPOs for every taste 😎
The epic bull run in the markets is drawing more and more companies to test out their luck with IPOs, making this one of the hottest years on record for a public listing. 5 more companies are set to list themselves this week in India:
Quick rundown for ya...
On Monday, industrial contract manufacturer and equipment supplier Craftsman Automation will try to raise ₹824 crore with plans of clearing debt and streamlining general corporate operations with the cash. The old-school vendor of heavy machinery has solid contracts with Daimler, Tata, and other biggies in the game, making ₹1.5K crore in revenues last year, with profits growing 15%+ rates.
The same day there’s Laxmi Organics, which is one of the largest manufacturers of specialty chemicals, trying to raise ₹600 crores. The company owns dominating market share in producing chemicals that go into everything from paint to printing and packaging to adhesives. Last year they made about ₹1,500 crores, with revenues growing at steady 5%+ rates.
Then, there’s Kalyan Jewellers looking to raise about ₹1,175 crore to gather additional working capital and fuel for growth and pull off the magic run that Titan & Co. has seen to date in the jewelry product segment. With India’s ever expanding consumer class, and looming post-COVID recovery in demand, this raise will be watched for most favorably.
Then representing financial services is Suryoday Small Finance Bank seeking to raise ₹582 crores for future working capital needs. Only the bold hearted are excited about banks in this environment.
Finally, adding a digital flare to the lineup is online gaming platform Nazara Technologies, one of the few among the Indian internet 1.0 era platforms to go public. The bid should see growth investors piling on looking to gain exposure to India’s emerging esports, online and social gaming scenes.
In total, all these names will raise nearly ₹3,764 crore from Indian investors over the week or so, and each brings a diverse profile to the markets. Have your pick...
While we’re here,
First 3 months of 2021 is one of the hottest quarters that the global IPO market has EVER seen! A total of $160 billion has been raised across the world in about 600 different issues, with Bumble, Coupang, and Kuaishou being some of the biggest. That’s easily almost 4x more than the average that was raised each year for the last 5 years!
Closing out—2020 and the game of Cloud 👋
Bessemer Venture Partners, one of the most revered venture platforms in the enterprise software game, released their annual State of the Cloud report last week, giving a peek into how the cloud game has grown and matured on the back of the pandemic enforced digitization.
It’s a goldmine of information but here’s a few things that stood out to us:
Record breaking acquisitions in the cloud space in 2020, and Slack’s purchase by Salesforce was the most expensive deal
All of public cloud companies topped a market cap of $2 trillion, up 120% in the past year, thanks to the EPIC stock rally
Snowflake crushed records to become the largest software IPO in history (beating VMWare by 3x)
Cloud companies have an average revenue multiple of 23x, the highest it has been, but “growth endurance” is higher than ever, that is, the cloud companies are growing faster as they’re picking up scale
Here’s a thorough look at the report for all you cloud fans.
Tweet of the day 🐦
What else are we snackin’ 🍿
💻 Stickiness via upskilling- Google is pushing its career advancement certificates in data analytics, project management and user experience (UX) design as part of its broader agenda and commitment to upskill and digitize India. Partnerships are being formed, and many many certifications are being offered for free. The hope is that training more people for free helps dissipate the skills necessary for wider adoption of Google Cloud Suite in workforces, a strategy that has worked very well for Microsoft and Amazon in the past.
Hit that 💚 if you liked today’s issue.
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Quality stuff! Made me curious about many things :)