Future sold 🤑
Qualtrics IPO, Med-Tech win, and TikTok alternatives shine.
Hi 👋, Tanvi here.
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Stock market summary:
US - S&P 500 - up 0.74%
India - Sensex - up 0.54%
End of India’s retail icon 👣
Managements of Ambani’s RIL and Kishore Biyani’s Future Group are almost in the final stages of working their deal that will sell Future’s retail, supply chain and related businesses to RIL. The sale will mark the end of Kishore Biyani’s pioneering era in India's modern retail while offering RIL useful assets to beef up its battle with Amazon, Flipkart and others.
The deal will be finalised in a few days and will be financed through a mix of share swap and cash. Biyani will end up retaining Future’s FMCG and remaining residual businesses.
Future group’s problems had been going on for a while when the company failed to make payments to lenders. Then the pandemic took a serious toll on its earnings which forced them to hunt for an acquirer. The market value of Future plummeted nearly 74% to Rs.10,464 Cr in a year and debt exceeded Rs.12,000 Crore. We had previously written about the deal.
Biyani was initially not too enthused about selling to RIL but finally caved in. Announcements of the deal promptly helped stock gain almost 5% on Monday.
Takeaway: the deal puts BigBazaar into RIL’s pocket, offering them a good opportunity to further strengthen brick and mortar operations, while expanding their product catalog for online sales. Watch out AMZN, Flipkart. Read more.
Putting TikTok to shame 😝
Indian video sharing apps are seeing mind blowing growth in TikTok’s wake. Roposo, Zili and Dubsmash have seen first time installs grow 155% in 3 weeks versus the weeks before the ban.
So far, the apps have generated almost 22 Million downloads, reaching nearly 13% of TikTok’s installs in the first half of 2020. Roposo, owned by InMobi, took the pole position with 71 Million all-time installs, followed by Chinese publisher Xiaomi developed Zili, at 51 Million and New York based Dubsmash at the third with 30.4 Million.
Per app intelligence provider Sensor Tower, TikTok had captured most of the market originally in 2020, generating 164.5 Million downloads in the first half of 2020 across both App Store and Play Store.
Users however complain of content quality not being at par on the Indian clones. Perhaps this is an amazing gap for content creators to capitalize on.
In similar events:
Regional language social media platform Sharechat has raised $35-$40 Million from existing investors in a bridge round to push its platform Moj as a TikTok alternative.
Takeaway: in addition to a large addressable user base, India’s unique regional and cultural diversity offers unparalleled depth to create vernacular content. The creators and platforms that nail the right mix will likely be the winners in this space. Read more.
Google in hot water 🤯
The Aussies are locking horns with Google over alleged misuse of user data. Australia’s competition regulator has accused Google of misleading users about how it used their personal data and of not informing them of a 2016 move to combine personal information in Google accounts with browsing activities on non-Google websites.
The ACCC also alleges that Google explicitly kept policies secret to use data from millions of users for targeted advertising - surprise surprise. Google obviously denied the accusations and also said that the change was optional and consumer consent was taken through easy to understand notifications.
Situations like these are not new for the company. They lost a similar battle in France and were fined $57 Million for not explicitly telling Android users on how it uses its data. Also, the state of Arizona sued Google for similar issues in May 2020.
Even the competition commission in India is eyeing Google for the misuse of its standing in the market to promote its own payments app. By now, the company must have a book of guidelines to deal with this.
Bottomline: While Google might walk away again with an inconsequential fine, the antitrust heat across the world is rapidly rising and threatening Google’s bread and butter advertising business. On the other hand, investors are pissed because growth is slowing. What magic tricks does Sundar have up his sleeve to change direction? Read more.
SAP to offload Qualtrics 🤝
Software giant SAP will sell some shares in Qualtrics on the public market, hoping to raise some cash. The company had acquired Qualtrics back in 2018 for a whopping $8 Billion in what was then one of the largest software acquisitions of the year.
Qualtrics sells software that allows buyers to create employee feedback surveys, customer questionnaires, and a range of other experience management forms, competing with the likes of SurveyMonkey but in the large enterprise and mid-market arena. SAP had scooped up the company right before they were planning on going public in October of 2018.
Analysts believe that Qualtrics is a high growing product whose value is not well appreciated by investors as its financials remain locked behind SAP financial statements. Spinning them off in an IPO will offer investors more clarity and help its management enhance focus in dominating its market segment.
Bottomline: with Qualtrics offloaded, SAP management believes it will focus on acquiring more cloud companies. Investors are excited about them scooping up their favorites and heating up the cloud M&A environment. Read more.
Bengaluru’s med-tech win 🏥
A Bengaluru based org, De Scalene, has developed a device that is able to contain the airborne spread of the coronavirus and has successfully been approved by the US FDA.
De Scalene, a little known organization has been doing some pretty awesome med tech innovation right under our nose. Led by Dr. Rajah Vijay Kumar, the company had previously gained popularity for developing an anti-cancer kit approved by the US FDA, which essentially assists in tissue engineering of cancer cells by altering the regulation of specific proteins to stop infected cells from multiplying.
Now, the Scalene Hypercharge Corona Canon (Shycocan), which is like a small drum that can be fitted in public gathering rooms such as classrooms, offices, etc. can neutralize Spike-Proteins that are present in coronavirus, and sanitizes surfaces upto 99.9% accuracy.
By flooding an indoor place with hundreds of electrons, the device ensures protection even if an infected individual walks into the room. Approvals for mass manufacturing are through in the US and upto 9 domestic companies have also shown interest in India.
Closing thoughts: it is phenomenal to see indegenous med-tech innovation happening in India that is widely being accepted on world stages. Read more.
US admin takes on students again ☹️
In a fresh order, US administration says that it will now not allow any new foreign students taking online-only classes to enter the United States until their colleges are ready to conduct offline classes. This new order comes after the Trump administration had reversed course on a previous order to revoke visas of foreign students whose classes will move online.
The previous policy had been dumped after top institutions including MIT and Harvard as well as big tech companies had sued the government.
With the fall semester nearing, most colleges still haven't announced their plans for reopening but Harvard is all set to conduct online classes for the 2020-21 academic year only with some rare exceptions. Almost 500K international students and their families are in the bind now.
Bottomline: International students contribute nearly $50 Billion to the US economy and directly support over 400K jobs. Let alone the taxes they pay, companies they start etc. It's surprising that the US would block that stimulus as it scrambles for ways to revitalize its economy. Read more.
Tweet of the day -
A good read on how a consumer healthcare company grew to $250 Million in revenue in under 3 years after initially starting as a men’s personal care products seller.
What else are we snackin’ 🍿
💉 Moderna in Phase 3 trials - the pharma company has received an additional $472 million from the U.S. government’s initiative to support development of its novel coronavirus vaccine. The funds will support late-stage clinical development.
🎟️ Craving for a movie much? - MHA is likely to allow reopening of cinemas in the latest set of guidelines to be issued as part of Unlock 3.0 in August. Cinema halls have been shut since March now.
👀 Sticking it further to China - After the ban on 59 apps that were owned by Chinese companies, GOI has now ordered to ban 47 variants or clones of these applications. The ban includes applications such as Helo Lite, Bigo Lite, CamScanner advanced among others.
💪 AMZN’s unending ambitions - Amazon announced it would create an additional 1,000 jobs in Ireland, bringing its workforce in the country to 5,000. Ireland has a decades-old policy of attracting multinational jobs with a low corporate tax rate, making it a hub for U.S. companies. Most of Amazon’s jobs will be AWS related.
🖥️ Google to go work-from-home until July 2021 - the company extended work from home order until the end of next summer. With 200,000 employees, this won’t go unnoticed and will likely push other companies to follow. The commercial real estate market will skip a heartbeat on this news.
Hope you took a thing or two away from today’s edition. 😀
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