Good gaming day 🎮
More SPAC, Google’s problems, and IT prepares for a comeback.
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Market summary: 📊
India had a modest withdrawal on Friday, but later in the day the US markets saw another day of relentless pullback as investors went into a holiday weekend by exiting their positions. Will India reciprocate on Monday?
US:
S&P 500 - down 0.81%
Nasdaq 100 - down 1.27%
India:
Nifty 50 - down 1.68%
Sensex - down 1.63%
SPACs flood the market 💪
The what: SPAC or Special Purpose Acquisition Companies are all the new craze on Wall Street as they allow companies looking to IPO to bypass a mountain of negotiations and scrutiny and expedite the process of going public. Peter Thiel backed Lidar maker Luminar was the most notable company to choose this route and we have another credible candidate in the making — popular gaming platform Skillz.
Founded in 2012, Skillz provides game developers with a platform to make any mobile game socially competitive, that you can play with friends or strangers for points or prizes. The company most notably powers Solitaire Cube, Blackout Blitz and 21 Blitz. The pandemic has helped a great deal in accelerating growth, as with no sports or outdoor activity, locked down users took to playing against each other from their couches. Some 2.5 odd million users use the platform today.
Now the company is set to go public through a merger with Flying Eagle Acquisition Corp, a blank-check company founded by Hollywood executives Harry Sloan and Jeff Sagansky, in a deal that values the company at $3.6 billion.
Big bracket investors like Wellington Management, Fidelity Investments, Franklin Templeton Investments and Neuberger Berman have committed more than $159 million to the deal. Read more.
While we’re on the gaming subject, 🎮
A local gaming platform, Winzo, announced it has raised $18 million in a Series B in a round led by Makers Fund, a Singapore based interactive entertainment fund, and Courtside ventures.
Winzo is a social gaming platform that hosts multiplayer games from third party developers and is available in several regional languages, which has helped the platform grow quickly in tier 2 and 3 cities. Funds will be used to strengthen its content pipeline and widen user base.
Aaaaaaaand, while we’re on the topic, 😎
Famed tech entrepreneur and ace game developer Akshay Kumar launched a indigenous gaming platform FAU-G, after a relentless 48 hours coding sprint, to replace the void left by PUBG. Kumar is being lauded for his efforts nationwide.
Jokes aside, it's hard to believe the developers of this game had no whiff whatsoever of the imminent PUBG ban but let’s overlook that for a second. 20% of the game’s proceeds will be donated to India’s bravest who lost their lives protecting us, which is extremely commendable.
Lastly, talking about fundraising and doing some good, 🤑
A seed-to-plate startup, which operates a marketplace for farmers, connecting them directly with retailers and consumers has raised $2 million from Rebright Partners, Mitsui Sumitomo Insurance Venture Capital and others. The firm uses information science to supply farmers with precision agriculture information, boosting yield, and will use the capital to help expand its network of buyers on the platform. Awesome!
Google in hot water 🏛️
Turning the antitrust heat a notch up on Google, the US Justice Department made public its plans to bring a lawsuit against Google as soon as this month — in one of its first US government assaults on big technology.
The department's issues with Google are likely to focus on one key set of allegations — does Google violate antitrust law by favoring its own businesses (for example YouTube) in the search results rather than presenting neutral search results. Wanna take a guess?
Google’s display of advertisements and other links in the first few results on its search engine has attracted a lot of attention from regulators. European Union for example had recently fined the company $2.6 billion for a bunch of allegations against placement of search results, including for displaying Google Shopping results first when users search for any product, deprioritizing other results and thereby hurting smaller European online businesses on purpose.
Key takeaway: it is definitely surprising to see the US keen on reprimanding its own tech giants when it is competing against China for global tech dominance, that too, literally 8 weeks away from a major election. But, considering Google has been proven guilty once in Europe, a similar outcome in the US cannot be ruled out. Best case scenario is that Google pays a small fine. An extreme case scenario would be breaking up Google Search and YouTube (and other products in discussion) into two separate entities.
Old IT’s cloud dreams ☁️
Over the last few months we saw many old IT companies aggressively acquire cloud startups as the old giants look to overcome the current IT slump and be better prepared for a cloud-first future.
Continuing the trend forward, Cognizant has acquired 10th Magnitude, a Microsoft Azure specialized cloud consultant based in Chicago USA. Big cloud vendors like AWS, Azure are rapidly gaining market share in the cloud infrastructure market, and Cognizant believes the acquisition expands the Microsoft Azure expertise within its latest group dedicated only to MSFT. 10th Magnitude’s 150 employees will join Cognizant at the earliest.
In a similar deal,
Infosys will acquire a US-based product design and development firm Kaleidoscope Innovation for about $42 million. The company is a full-spectrum product design, development, and insights firm serving customers across medical, consumer, and industrial markets and had a revenue of about $21 million in 2019.
With the purchase, Infosys aims to expand its engineering services portfolio and strengthen presence in medical devices, consumer and industrial markets across the US — a highly lucrative arena. Infosys had recently also committed to hiring thousands of people across the US, as the company looks to beef up on-shore presence.
JioSaavn sniffed it 🎶
Remember a couple days ago we wrote about the JioSaavn partnership with short-video app Triller, to allow users to create videos within the Saavn app. Well the move had baffled everyone but kinda makes sense now.
Yesterday Spotify filed for a patent looking to secure the company’s technology that would allow users to make TikTok styled videos from within the music streaming app. So far, no music streamer had tried to enter TikTok’s turf, and I guess that’s going to be common now and Saavn wanted to beat the news. Spotify’s proposal has small changes to differentiate the product from TikTok — but essentially it's all the same. Music + user created videos + open discovery = killer engagement. Read more
Reactions to Spotify’s news were mixed. Loyalists thought this would make the app unpleasant, while investors cheered all the extra engagement and growth. We’ll see how this pans out.
This is never going to end now, is it...💰
Foreign investors can’t stop giving money to Mukes bhai. After private equity firm Silver Lake bought 2.8% of JioPlatforms for ₹10,202 crores a couple months ago, the company is now looking to invest another $1 billion more into Reliance Retail.
The deal is being talked out with Reliance seeking a $57 billion valuation, offering Silver Lake a 1.57% stake in the entity. Talks resumed in the backdrop of Reliance’s recent close on Future Group’s retail, logistics, and warehousing assets for a whopping ₹25,000 crore which offered the company a competitive leg up and massive scale to dominate the space when demand returns in the post-pandemic world.
Apparently all investors in Jio have received a prospectus for potential investment in Retail, so don’t be surprised if the Arabs are next in line or if Facebook wants a piece for itself.
Key takeaway: on a serious note, capital raises from foreign investors at these rates have not been heard before in India — which speaks a LOT about India’s changing perception in the global markets as a credible growth investing opportunity. Read more.
What else are we snackin’ 🍿
🦇 Batman tested positive y'all - Warner Bros has temporarily halted the shooting of the film “The Batman” after the actor Robert Pattinson tested positive for COVID-19. The film was being shot in London.
⚰️ PUBG no more - The app stores have finally taken down PUBG mobile and PUBG mobile lite apps after the government banned the games citing data privacy concerns and a threat to national security. The kids are ANNOYED AF.
🏠 Can no comeback yet - Oyo has planned to extend the furlough period of its employees by another 6 months till February 2021, it will also provide an option to voluntarily separate from the company and continue to provide them financial assistance to support their kids, education etc. in the meantime.
👀 Unending saga - Softbank becomes the latest to open talks for a possible acquisition of TikTok India. Although the discussions are at an early stage, the deal will depend on various factors such as valuation, government regulations etc. Remember, Reliance is in the pit as well.
✈️ Airline’s nightmare continues - Virgin Atlantic is planning to cut more than 1,000 jobs as recovery stretches out for air travel. If the layoffs are confirmed then Virgin’s workforce will have halved from a solid 10,000 people before the pandemic began.
🤝 Pinky promise - Facebook has made a “promise” to the Congress Party that it will remove hate posts continuously posted on its platform by Indian figures after it was accused of political bias.
📱 MPL swaps Vivo - After Vivo made an exit from sponsoring Big Boss, Mobile Premier League will be joining Colors as the presenting sponsor. Digital brands are rising to the occasion in the aftermath of the Chinese exodus or bans.
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