Fuel in the tank ⛽
Stuff from the week, Square's win, and EV infra boost.
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Market summary: 📊
Another solid day in Indian markets, with the Sensex now a stone’s throw from hitting ALL time highs. US markets circled in place, closing out a decent week.
US:
S&P 500 - down 0.029%
Nasdaq 100 - up 0.11%
India:
Nifty 50 - up 1.18%
Sensex - up 1.34%
Round up of some quick stuff ☕
1️⃣ WhatsApp’s victory—irrespective of whether people in India are comfortable texting each other money on Whatsapp right away, pundits have written in a big victory for Zuckerberg and team, for delivering on the vision of turning Whatsapp into a financial super-app overnight (well, took 2+ years of haggling, but worth it).
Hard to believe that UPI is the end game for FB though. They’re after the associated commerce opportunity, looking to earn commissions by rolling out tools for merchants and capturing transactions. Within no time the company could spin up a $1B+ revenue business on this. 🔥
2️⃣Voltas’ will restructure—AC maker Voltas grew its revenues by 13% in the last 3 months, as idle consumers looking to renovate their homes and workspaces, opened their wallets to buy more ACs. But profits declined nearly 26% for the company, as operating a bulky-product business during these disruptive times can be expensive. Anyway, the most important news was that Voltas will spin off its B2B focused heavy ventilation and machinery business into a separate entity, narrowing focus on selling ACs directly to consumers.
3️⃣Finally, India’s pharma wins continue—Cipla reported record business in the last 3 months, growing profits nearly 41%, with surprise growth in business from Africa and other emerging markets. As you know, Indian pharma has been a big winner of the global boycott of China for pharmaceutical manufacturing post COVID.
The pre-IPO raise 💰
Zomato will scoop up another $147 million from Mirae Asset Management, Steadview Capital, and a bunch of other global investment houses in its ongoing Series J round, as the company looks to fill up enough fuel in its tank to get past next year’s IPO.
The entire round is likely to be about $363 million, and will see the company valued at roughly $3.7 billion. Just last month had they bagged $52 million from Kora Investments and since August they’ve raised over $221 million across four tranches from numerous other buyers. Enjoy your VC sponsored free coupons while they last 🤭
Turning heads to India’s lit EV game,
TecSo Charge Zone, a startup that operates electric vehicle charging stations raised $3 million in pre-Series A round led by Venture Catalysts, clinching another sweet win for India’s nascent EV infrastructure. 👏
The company basically runs charging stations in key urban locations and connects EV drivers with one-stop-centers for their issues including pre-booking via a mobile app. Simple concept, but a massive addressable opportunity!
Currently they operate about 120 charging points across 7 cities, catering to more than 500 vehicles daily and fresh funds will go directly to scale wider.
Some perspective: India has nearly 70K petrol pumps today. Last year, the government announced it wanted to nearly double that number. To support EVs across the nations, we’d probably need a LOT more stations than that, considering EVs take longer to charge, which makes this a HUGE opportunity for startups. Robust infrastructure is the first step to drive consumer adoption for EVs. 🙌
AWS bets on Hyderabad ☁️
Amazon Web Services will pump about $2.8 billion to build its 2nd cluster of data centers in India, in Hyderabad with the aim of getting them up and running by 2022.
What’s driving Amazon—first of all, India is a hot emerging public cloud market for ALL of the leading cloud vendors. Digital transformation has barely begun in India and corporate India’s IT operations offer tons of growth for these leading cloud players.
Secondly, Amazon is securing its base to ensure it gets no surprises with Government of India’s data localization rules and regulations. With alleged bad actors like China distorting the global technology-security debate, no smart government can afford to have data of its citizens irresponsibly dispersed on global servers outside of its legal purview anymore. India is wise to understand that. ☝️
Although GOI has not issued any strict data localization compliance guidelines as of yet, tech companies are not dumb to read the mood. Presently, Microsoft has 3 data center clusters around India while Google has 2. AWS had to beef up its assets.
Takeaway: India’s public cloud market is estimated to be well worth over $7 billion by 2024, growing at a much faster rate than global average. Expect heavy infra investments from the big players and heating competition to last for a while.
Disrupting mainstreet commerce 🛒
We have plenty of disruptive tech companies building for small merchants here in India, but the fintech/commerce-tech world has always looked up to Jack Dorsey’s Square for inspiration on disruption.
In that spirit, we think Square’s ABSOLUTELY FIRE quarterly performance needs a special mention. The company crushed it, blowing past all expectations investors had set eyes on. Quick look at the crazy numbers:
Total revenue of $3 billion, up 403%!! 🔥
Payment volumes of $32 billion for the quarter
Revenue from Cash App (its like PayTM for the US) up 574%, to $2 billion
Square originally started about a decade ago selling a small matchbox size device that would connect with the AUX port of a smartphone, and allow merchants to swipe cards and collect payments. Small vendors selling at fairs and by the street side rushed to adopt it. From there, the company quickly expanded to full set of low-cost payment processing solutions for small vendors, offering merchants simple digital tools like building websites, creating an online store—the full menu needed to survive today. Also, they own a consumer super-app that facilitates P2P payments, BTC purchase, investing etc.
Anyway, yesterday their market cap hit $87 billion, jumping 7x in the last 3 years alone, underlining how rapidly the wildfire of digital commerce is spreading on mainstreet!
What else are we snackin’ 🍿
🛰️ Launch scheduled - ISRO is gearing up to launch its first set of 10 satellites of 2020 on November 7 from the Satish Dhawan Space Center in Sriharikota. The batch includes 9 customer satellites and India’s Earth observation sat. Indian Space Agency’s workhorse rocket will be carrying the load into orbit.
☀️ Alternative energy keeps moving - Greenko has tied up with Italy’s Snam SPA for setting up a joint venture to develop green hydrogen in India. This partnership comes as India is looking to shift production towards renewable energy sources.
👏India is the new manufacturing hotbed - Japan is planning to offer financial assistance to 2 companies, Toyota, Tsusho and Sumeda to move their manufacturing base from China to India, marking a big win for India’s manufacturing industry and India’s relations with the Japanese.
Hit that 💚 if you liked today’s issue.
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