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Market summary: šĀ
Relatively flat day for India with major induced running in circles. Similar sentiment echoed in global markets despite the UK announcing emergency vaccine approval.
US:
S&P 500 - up 0.18%
Nasdaq 100 - up 0.008%
India:Ā
Nifty 50 - up 0.036%
Sensex - down 0.084%
Its go time bruh š
Some great news to close out 2020 after allāthe worldās first, well tested, and trusted vaccine is live. The UK has now officially cleared Pfizer's vaccine candidate, with the first shots good to go next week. From peak lockdowns in March, to this dayāall in 2020. Seems unreal, and also bravo mankind!Ā
To remind you, Pfizer has claimed their dosage is about 95% effective, and the current authorization comes on an emergency basis. The UK health secretary says over 50 hospitals have been readied to distribute some 800,000 initial doses with further ramping up coming in time. India does claim it has partnered with all vaccine makers, but the distribution challenges around Pfizerās vaccine seem insurmountable for the dosage to be available here.Ā
The US and rest of Europe is expected to approve the vaccine in a couple of weeks. Meanwhile, the Astra-Zeneca and Oxford U vaccine that India was counting on is facing some testing glitches but should be in-line soon as well. Fingers crossed.Ā
Tata moves on BigBasketĀ šļø
Tata finally pulled the trigger on BigBasket, acquiring 80% of the online grocer for $1.2 billion, revising the valuation of BigBasket to $1.6 billionāa 33% premium. The acquisition is part of a broader mandate the Tataās are chasing, to digitally transform their diversified retail empire.
Some contextārecognizing the looming shift to digitization in commerce, and taking cue from Relianceās tactics, the Tata Group had shocked the markets announcing a āsuper-appā that was valued at a gazillion dollars. But people seemed a little concerned about their ability to pull it, given the surgical execution skills necessary to carry out a pivot like this, and Tata's lack of previous experience in scaling a hypergrowth digital platform.
But then, sense prevailed when Tata began cozying up to BigBasket, looking at the company as a trial bout and disclosing intentions of investing a tiny sum in their next round. Those talks now transformed into a more permanent partnership (humble brag, we predicted it could happen).
Anyway, for BigBasket this is a blessing which gives them a resourceful partner on their side that could truly scare rivals, and also one that they can lean on for a diverse product portfolio, further driving the appeal of their offering to end consumers.
Indiaās total grocery market stands north of $500 billion, with 2019 digital spending of about $2.5 billion only! COVID obviously brought an unprecedented surge in the demand coming digitally, probably doubling that piece. BigBasket claims it has the largest share (about 35%) of the digital pie, selling 18,000 products and processing 3 Lakh orders everyday across 26 cities. Buying into a category leader gives Tata a leading position in at least one arena right off the bat.
Bottomline: this transaction is phenomenal for everyone involved. BigBasket gets a resourceful, cash rich partner to keep fighting competition. Tata gets to dip its toes into the digital world at a relatively lower cost, before they go full speed with their super-app ambitions.Ā
And the local ecosystem wins because more traditional corporations will be forced to think digitally going forward, and in the process may acquire a few more startups. Finally, Reliance, Amazon, Walmart (Flipkart) get a message that the Indian markets are not going to be left at their disposal without meaningful market resistance. As good as it gets!
Edtech still hot on Venture Street š„
First up, we have KytāSequoia Surge backed venture which scooped up $2.5 million to expand its online-first, global academy for extracurricular learning. Titan Capital along with prominent angels including Kunal Shah and Amrish Rau pitched in.
Founded just this year, the company basically offers fixed-timed workshops to teach kids Yoga, Singing, as well as other skills such as Art, Animation, Chess etc. So far, some 1000 students have leveraged the services with over 20 teachers on board, and fresh capital will be used to fuel that count to 500 over the next 12 months. Ah poor kids.
Moving from kids to adults,Ā
Cohort based learning is getting hotterāand Habitat, a platform bringing socialized learning for civil servant aspirants, has raised a ā¹5 crore seed round from Unitus Ventures and Whiteboard Capital.
Started earlier in 2016, as a common repository centralizing all learning activities under a single platform, including discussions, doubt-solving, study-plan iterations, on-demand lectures, sharing of notes, assessments, etc., the venture is slowly distinguishing to bridge the gap of a ācommunityā and group and peer learning for its base.
Currently, the company boasts more than 10,000 subscribers, with about 60% registered users from Tier II and Tier III cities. Anyways, fresh funding will go to further strengthen technology and early team.
Commerce + SaaS, hot dam!Ā š¤Æ
Facebook acquired Kustomer, an omni-channel customer service platform, for a billion dollars, doubling down hard on the social commerce and associated opportunity ahead of them.Ā
Kustomer basically allows merchants to communicate with users across channels including email, text, FB messenger, and other medium, leveraging the power of AI to cross sell, up sell and handle basic queries without getting an agent involved until absolutely necessary. The platform will help some 110 million merchants on FB to natively manage customer support without glue taping a dozen tools together.
There was a fertile ecosystem of SaaS tools helping merchants sell on FB and manage operations, and by acquiring one of the leaders, FB can innovate fast, accelerate features, and most importantly use that as an entry point to provide more tools and services on a subscription basis.Ā
Anyway, for Kustomer, the deal comes at a nice 42% premium to the $700 million they were valued at before, giving Tiger Global, Coatue, Red Point a sweet exit.
Bottomline: monetizing commerce on its platform is a unique opportunity for FB. Most of their strategy so far had been revolving around capturing ācommissionsā income from payment processing and such. But spending a billion dollars on software tools adds a unique angle to the narrative.
If done right, FB can slowly build an āapplicationā empire on top of its platform, selling a wide range of merchant tools and other software. Kinda like a miniature Shopifyāwhich can open a multi-billion dollar revenue stream in no time.
What else are we snackinā šæ
š¦ If you didn't have enough- Hollywood studio Lionsgate has launched its independent video streaming app in India. Called Lionsgate Play, the service will be priced at ā¹99 a month and ā¹699 a year. It will curate Hollywood blockbusters and will also produce local originals.Ā
š China on the moon - A Chinese spacecraft landed on the moon on Tuesday to bring back lunar rocks to the earth for the first time since 1970. The lander was launched Nov. 24 from the tropical southern island of Hainan.
š 2020 a curse - the immortals are being taken. Owner of MDH and famed businessman Dharampal Gulati passed away at the age of 98. The iconic figure holds the distinction of scaling MDH from a small town setup to a spice behemoth making hundreds of millions in revenue.
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