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Market summary: 📊
Ouch! Major indices took another haircut with fears of rising cases seeping in. Old school companies in the US had some relief, but tech took a major beating.
US:
S&P 500 - up 0.52%
Nasdaq 100 - down 0.14%
India:
Nifty 50 - down 1.54%
Sensex - down 1.51%
What’s brewing hot? ☕
✅ For the love of fried chicken—Jubilant Foodworks, the company that runs Dominos and Dunkin’ Donuts in India, hit another jackpot, and will bring Popeyes to India, as well as other South Asian countries of Nepal, Bangladesh, and Bhutan. The 50-year old brand has a cult-like following for its fried chicken, and operates over 3,400 locations in 25+ countries, competing closely with the menu of KFC. Sorry vegetarians… but, you can choose to feast on the Jubilant stock, which is already up 2x since last March!
✅ Party over, time to pay—the SPAC mania on Wall Street has finally thrown off the regulators’ sirens, with the SEC demanding that all major banks disclose details on how they’re managing risk. Simultaneously, markets have handed investors a memo in its own style, with all high flying SPACs taking epic beatings, now trading 25-40% below all time highs from just a month ago. To put things in perspective, last year SPACs raised a record $157 billion, but barely 3 years into 2021, the markets have already cobbled together $175 billion+ for this party. Scary, but…
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Creators support creators 💪
YouTube star Mr. Beast announced a $2 million investment fund to support fellow YT creators, offering to write $250,000 checks to about 8 makers in exchange for a stake in their channel, in what we see as one of the first initiatives that’s formally investing in building and scaling a YT channel with outside capital.
For those of us who couldn’t care less for YouTubers, Mr. Beast is kind of a big deal. His reach on the platform spans 56 million, with each video easily clocking 10 million views, making him one of the highest paid creators there.
While access to cash is fun, Mr. Beast is pitching a grander plan—including providing creators with the tools and software to monitor performance across all platforms, which throws some light over the potential of building software exclusively for this emerging game, as well as the optionality ahead of top creators to capitalize on their distribution with similar tech products. Surely gotta pay a whole lot better than just ads…
Bottomline: the promise of the creator economy is limitless, and much like the business of scaling Amazon stores professionally, it's not too hard to imagine that building a YouTube empire is very well going to be a formal industry pretty soon!
But it's going to take more creators to step up, identify talent, and allocate money, much like the movie business. Traditional investors are disadvantaged in a game where they’re not used to playing much, else you very much risk ending up with a Dobrik-like situation
Sequoia pulls in more dough 💰
Ammo incoming—those thinking the early stage markets have gotten frothy, you haven’t seen it yet. Sequoia India raised a fresh $195 million seed fund, all going to fire up things for its seed stage accelerator Surge that was launched a couple years ago.
Ground is fertile—it’s a foundational coming of age moment for India’s early stage landscape with a digitally fertile consumer base eager to be tamed, further warmed up by COVID-driven adoption of online services, combined with cheap data and better infra, all delivering decades worth of growth in a couple years. There’s just plenty to be done, and plenty to be funded.
Sequoia put in nearly $172 million through 69 startups in Surge over the past 2 years, many of which have been breakout winners raising close to $400 million in follow on money. Doubling down was a no brainer.
Bottomline: the thriving early stage market here is also becoming a “must-have exposure” checkbox for big ticket global allocators, increasingly looking to diversify and chase growth. If you think the access to capital locally has peaked, wait for a couple more years… or atleast one can hope.
Quick peek at Venture Avenue 📉
Dukaan-tech platform Khatabook spent $10 million on a SaaS startup called Biz Analyst, which helps merchants and SMEs with record keeping.
Biz Analyst's tool basically simplifies self-accounting of business metrics for SMEs, so that merchants are able to have a quick look at the business’ financials without pulling an accountant in. It’s a simple SaaS solution which apparently serves 85K+ customers, and is cash flow positive.
The acquisition offers Khatabook a basic yet essential set of software tools that would fit nicely with their existing product, while building a sticky relationship with 10 million+ merchants the company serves, and assuming a deeper role in serving the daily operational needs of customers.
What matters: the merchant-tech space has gotten increasingly competitive, and one of the primary ways for platforms to differentiate and build lasting relationships and possibly even capture a profit is to lure merchants in with adjacent services they’re willing to pay for, in the name of convenience. Expect a lot more SaaS consolidation in this space around the market leaders.
Oh while we’re talking about raises,
IvyCap Ventures invested ₹15 crores in AI-powered energy analytics firm Bidgely. The company leverages AI to turn utility meters and customer data on energy consumption into actionable insights for energy retailers, helping energy firms understand consumption patterns and make better asset allocation decisions.
FYI, IvyCap Ventures had turned a tiny check into Purplle into a 20x return when Purplle raised a big round last week from Sequoia.
Closing out—$GME laid an egg 📉
...but this game no care about business fundamentals.
Gamestop’s quarterly earnings call was a 20-minute disaster. The company saw revenues drop 3.2% YoY, flopped on expectations set by Wall Street, while profits again lagged estimates. Not cool, especially since this was a record holiday season for retail, just ripe for change.
u/DeepFuckingValue and his friends were holding out for hints of promised digital transformation, but hopes were crushed when the company gave 0 clues, except for one of course that GameStop grew e-commerce sales by 175% YoY in the last quarter. For all we know, that could be a bunch of redditors buying everything they can to save face.
Overall, a disaster with no clear agenda to move beyond being a meme stock and making some actual business happen, cuz that would be boooooooring. Meanwhile, stock was rewarded with a 50% jump the next day. As they say, diamond hands baby...
What else are we snackin’ 🍿
💉 Doing your part - Swiggy will cover COVID-19 vaccinations for over 2 lakh of its delivery partners. The central government will let people above 45 years to take the vaccine starting April 1st, and over 5,500 of Swiggy's delivery partners, aged 45 and above will be eligible to opt-in for the vaccination in that first part. Several other corporations are similarly standing up to do their part.
💪 Building immunity early - Pfizer Inc and BioNTech SE have started testing the COVID-19 vaccine in children under the age of 12 and the first volunteers in the early stage trials were given the first dose this week. The company is hoping to expand vaccination in that age group by 2022.
Hit that 💚 if you liked today’s issue.
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The last GIF reminded me of Takeshi's castle, haha!