GDP horoscope 🧐

Marketplaces, Trump’s new gig, and venture deals.

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Market summary: 📊 

Indian markets gained some more ground as investors view vaccine news quite favorably. US gave away some ground after a solid month this far. 

US:

  • S&P 500 - down 0.48%

  • Nasdaq 100 - down 0.30%

India:

  • Nifty 50 - up 0.74%

  • Sensex - up 0.72%


Two things to begin with...

Donald Trump has secured himself a post-White House job, floating intentions of starting a subscription media empire dedicated exclusively to his right wing base. Per Axios, Trump plans on “wrecking” Fox News, a popular news channel that’s a favorite among his party voters

First of all, LOL.

Secondly, if he’s serious about it, he could end up doing some serious damage to the industry status quo. Despite what the election outcome suggests, he had solid pull within his voter base and has successfully run a famous reality TV show in the past. 

Moreover, he’s shown he can raise capital too and sympathetic appeal has only gotten him more popular after the election debacle. So… you never know. 

Then moving onto Musk-land, 

Tesla is now part of the S&P 500 index, after much criticism, doubting, pushing around and belittling, Elon Musk must feel knighted, ending a 20 year illustrious quest on a high note. While those that took shorts against him hope they’re left with a roof to cover their heads after Tesla’s crazy run this year! Stock was up like 8% on the inclusion alone.

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Business of buying Amazon businesses 😎

Heroes, a company based in Europe, which is in the business of acquiring and scaling successful Amazon businesses has raised $65 million, highlighting the relatively undiscovered potential of systematically scaling an empire on top of Amazon’s platform. 

Another company that plays in this arena in the US had shocked everyone by raising at a $1 Billion+ valuation recently.

Some context—early in its days, Amazon banked heavily on its own merch to achieve scale, but now the fledgling marketplace is stepping back from pushing its own products in leading categories, to allow a 2-sided merchant-consumer marketplace to thrive without intervention.

Merchants who get started with niche small brands usually make it big here, but then hit walls, as they struggle to balance scale and momentum. That’s where businesses like Heroes come in, infusing capital into leading brands, that goes into buying ads, hiring, and other growth moves even outside of Amazon onto other platforms. 

One can argue that this is the old school private equity model custom fit for the digital era. Anyway, with COVID elevating digital businesses, the possibilities for some have never looked better and the VC money chasing these platforms only further legitimizes prospects. 

The future—last quarter, Amazon made nearly $21 billion or 25%+ of its total ecommerce revenue from fees collected from merchants, which grew 55% YoY!! In a few years, it's very likely that ALL merch sold there comes from third-parties while Amazon is just a “platform” with a website and a million trucks that delivers stuff and collects tolls. Ideal retirement for Bezos.


Hottest from Venture Street 💰

Tech-studded IPL is just done, and nothing gripped the nation’s frenzy like fantasy sports this time. Riding that wave, fantasy gaming platform PlayerzPot has raised around $3 million in its Series A funding round. The investors' names have been kept a secret (weird flex, but OK).

Endorsed by Smriti Mandhana, the platform has nearly 3x growth in revenue and 2x growth in its user base during the season, with the current user base standing at a solid 2 million apparently. 

Fresh moolah will help build more sporting verticals, improve UX and push some key growth initiatives.

Meanwhile, Eric Yuan doubles down on Arzoo,

The Shopify for electronics retailers in India, Arzoo, has again raised an undisclosed sum from Zoom founder Eric Yuan and valley VC Bill Tai. Both had pitched into the company’s previous rounds as well.

Arzoo basically helps its 5,000 or so store partners build a best in class online storefront, that lets them compete against leading marketplaces like Amazon. Their “Go Store” model brings the best of inventory sharing, pricing data, supply chain in the backend etc. to store owners, giving them a serious edge. We had written about the company’s success when they announced the raise of their Series A.  

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To close out 🧐

Goldman thinks India’s economy recovering from COVID can actually grow faster than imagined, and to reflect that the company will revise its forecast for GDP growth for this fiscal year. 

The bank expects India’s GDP to now contract 10.3% this year, from the 14.8% levels of contraction it had predicted in September. The pre-Diwali consumer spending spree as well as solid third-quarter business from some of India’s largest companies may have helped move the needle.

Anyway, GDP forecasts are as useless as your horoscope from last Sunday’s newspaper, but bankers and macro allocators tend to rely on these data points to get a general sense of where the “consensus” view lies.


What else are we snackin’ 🍿

🛒 Sugar coating - Amazon has launched a performance based benefits programme to push its 7 lakh sellers to “grow” their business on a marketplace. At the same time, the company has quietly also revised its merchant fee structure which was earlier postponed to after Diwali.

💻 Another WFH bull - Adjusting to the new normal, DBS Bank and Holdings will allow its employees to work remotely upto 40% of the time in the future.  To keep up with industry changes, the bank also plans to upskill or re-skill more than 7,200 of its staff, of which about 4,300 are based in Singapore.

🐦Fleets for everyone - that’s the latest call Jack Dorsey made. After a successful pilot in India and Brazil, Twitter is looking to bring ephemeral stories to everyone globally. Engagement is expected to skyrocket, while user experience to nosedive. Tread safely.


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