Good ol' scooters
EV infra, PayPal’s dreams, and Chesky deserves a drink.
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Kicking off the week ☕
✅ You get COVID, we get Mars—while this part of the world reels under the virus, China just landed a rover on Mars over the weekend, its first ever device on the red planet. The bot will be conducting some diagnostics, and then meeting with the US deployed helicopter and rover, which has been on Mars since Feb— the two agencies are then going to conduct some tag team missions.
✅ Cairn bringing out big guns—British energy giant Cairn has identified nearly $70 billion worth of assets of the Indian government overseas, for courts to force sell and recoup the $1.7 billion something that Cairn believes India owes the company in wrongly claimed back taxes. The list even includes Air India planes on foreign grounds, state owned ships, and oil and other cargo. Kinda petty, especially given the timing of the situation.
LOL, remember scooters? 🛴
If you magically happen to land in 2018, every press article, every tech thought piece, and literally every Twitter post would make you think electric Scooters are taking over the world.
Tens of billions were raised. Uber, Bird, Lime, Lyft, Grab, Spin, Jump and hundred others—all lit up smokin’ Softbank delivered grass... That party went bust pretty soon, and then after COVID came, sanitization spooked riders finally placed that scooter coffin into the grave.
Anyway, Bird, one of the leaders of the frat-party, is slowly gaining consciousness as consumers in the west recover and step out, and is apparently planning an IPO—at a $2.3 billion valuation, down from ~$3B a year ago, with revenues still down 40% from 2019-highs.
With those stats, and the unending problems we are seeing with Uber, Lyft, and other mobility companies, it's hard to imagine investors would be too excited about the listing.
But in our handbook, the entire boom and bust cycle is a sobering reminder of how fast fads come and go in tech-land, with old peaks invisible again for decades even. Check that bag for what fads you’re holding right now!
EV infra investments look solid 🔌
Success of GOI’s manufacturing incentive scheme for smartphone and electronics makers turned out to be a HUGE confidence booster. Now we’re out for round 2.
This time it's EVs—the center, over the past week, approved the department of Heavy Industry’s proposal to offer some ₹18,000 crores worth of incentives to boost domestic production of advanced energy storage facilities and batteries.
Basically includes supercharging production of anything that makes it easy to produce lithium ion batteries, or R&D for other advanced battery chemistry, as well as bulk energy storage solutions. Expectations are to ensure production capacity of over 50GWh of battery storage to support our slow migration away from coal, and 5GWh in electric vehicle battery capacity a year.
Big picture—globally, less than 5% of cars are electric. India alone has nearly 300 million registered vehicles, which could all be up for replacement over the next 30 years.
This offers a unique opportunity to kickstart a massive economic movement—boosting manufacturers, SMEs, part vendors, retailers, resellers, service providers, and export of components. For a change, it's good to see GOI actively get ahead of the curve for once.
PayPal sneaking up on Shopify 👀
PayPal is steadily transforming itself into more than just a payment processor, adding functionalities to solve wider problems of merchants as they scramble to digitize post COVID.
Most recent move? Acquiring returns processing company, Happy Returns.
What do they do—sending something you didn’t like back is easy as a click for ya, but the logistics behind it is a nightmare, and a massive loss maker for businesses. Happy Returns makes it simple, working with other retail shops to simplify pick up of returns (just walk to your neighborhood store and drop stuff you don’t like), while offering end to end software to brands to process returns, send you updates, refund payments etc.
Then the company works with logistics providers to send your merchandise back to the correct distribution center, or reroute it to a customer who actually wants it.
PayPal actually invested in the business’ $11 million round in 2019, and we’re guessing they’re thinking about Happy Returns as an immediate margin booster, while solving a critical pain point for merchants, which could make them extremely sticky.
Big picture—PayPal had earlier spent $4 billion on buying out chrome extension Honey, which offers deals and points, a front end product that helps merchants discover new customers, and retain them. Now, with back end services acquisition, we’re sensing much bolder “end-to-end commerce suite” ambitions here.
Key insight—items worth $428 billion were returned last year, with 25% coming from e-commerce purchases. Reverse logistics is a sleeping giant of an opportunity. FYI, Bizlog in India is an intriguing prospect, which raised ₹11 crore+ last year.
only if we could charge for intros ;)
Closing out—we bacc in the game baby 💪
Year ago, Brian Chesky was gasping for breath, running around with his CFO asking private equity and debt lenders to show some mercy and save Airbnb from a horrific crash and land. He ended up selling a part of the fort just to keep the lights on.
Then as lockdowns persisted, remote workers fled cities, and Airbnb not just survived, but thrived on long term rentals, discovering a new market for city hopping millennials. Last week’s earnings report showed just how far the company has come:
Revenue of $887 million, up 5% YoY
Net loss of $1.2 billion, owing to debt repayments and restructuring fees, but everyone knew that hit was coming
Nights and experiences booked were up 13% YoY
Gross booking value up 52% to $10.3 billion.
It’s a new world going forward—almost everyone in the west (Airbnb’s biggest market) is vaccinated, and with travel restrictions opening up, families are expected to finally make true on those vacations they’ve been putting off for 12 months.
Add to that the stimulus cash, and stonk gains, and crypto millions… Investors who stuck with the company are expecting a windfall, and Brian Chesky may just be the only person to deserve it all for masterful execution. Hang in there Oyo!
What else are we snackin’ 🍿
🍕 Another Food IPO - the company that operates KFC, Pizza Hut, and Costa Coffee in India, Devyani International, has been approved to go public. There’s about 692 stores across the country under their purview.
📺 Streaming inside shopping - Amazon’s latest launch for India is a free video streaming service, called MiniTV, which will broadcast content related to fashion, tech news, and old content licensed from YouTubers. Bit forced, tbh.
Hit that 💚 if you liked today’s issue.
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