GPU boom 💥
Venture deals, Airbnb IPO, and Trump backs ORCL.
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Market summary: 📊
US:
S&P 500 - up 0.32%
Nasdaq 100 - up 1.40%
India:
Nifty 50 - down 0.84%
Sensex - down 1.02%
Sneaky Airbnb 👀
Airbnb has secretly filed for an IPO, looking to end a roller coaster year on a high note. As the world learns to live with the virus, the company is optimistic of its prospects and hopes investors will be equally enthused.
Founded in 2008, the sharing economy poster-child is quite the example of Silicon Valley grit. Surviving multiple pivots and relaunches over the years, they went on to raise over $5.4 billion from private investors, invigorating the $100 billion global vacation rental market.
2020 however was a disaster for them. Pandemic decimated demand in March, driving a massive cash crunch which forced an intermittent raise at unfavorable terms. Valuation was slashed by almost 40% and the company had to lay off nearly 25% of its workforce.
But as lockdowns eased, people began avoiding hotels in favor of well sanitized and reclusive Airbnbs. Look how demand returned just as vigorously as it had vanished early in the year.
Although the valuation and shares to be sold have not been disclosed yet, the company is targeting a listing by the end of this year. Read more.
Incubating mobility ventures 🚗
Innovation in India’s automotive industry has mostly played catch up with the global counterparts, but auto companies are finally making tiny moves to change that as it appears. In a unique partnership, Maruti Suzuki and IIM B have tied up to support an incubation program at the institute’s Centre for Entrepreneurial Learning.
Maruti hopes that the partnership can help bridge the gap between the industry and talent, making auto industry resources more accessible to young innovators and accelerating the speed to market of nascent tech.
The program is broken down into a three-month (pre-incubation) and six-month (incubation) engagement, and startups in the institute will get access to domain experts, investor connect, mentoring, guidance to regulations and a cherry-on-the-cake demo day to help spur growth. Read more.
Good week in funding 👏
Able Jobs, a hiring platform for entry-level talent, has raised a seed round of $1.8 million from SAIF partners along with YC, Snapdeal founders’ Titan Capital, Neeraj Arora and Firstcheque also joining the round.
Hiring and training entry level staff can be an expensive effort for large enterprises with massive batch sizes and the Able’s end-to-end value prop takes the burden off of employers’ hands.
In similar events,
Alternative education startup, Masai School, raised a Pre-series A of $2.5 million led by Unitus Ventures, joined by India Quotient & AngelList India. The company runs a Lambda School type ISA-based tech upskilling program, which trains students and then gets them placed through its partner network.
Moving onto fintech,
FPL Technologies, the company that sells a mobile-based credit card product called OneCard with a focus on simplifying finances for millennials and GenZ, raised $10 million from Sequoia India, Matrix Partners, Hummingbird Ventures and other angels.
And then finally in a notable global travel deal,
Berlin based travel aggregator Omio has raised $100M in late stage funding to help see its business through the coronavirus crisis as it eyes M&A alternatives to stay afloat. The round saw big names pile on including Goldman Sachs Asset Management, NEA and Kleiner Perkins.
The travel aggregation platform has more than 27m monthly users from around 120 countries and has pulled in around $400M in VC funds since founding. While pandemic has decimated business, management believes the funds give them a lifeline to emerge leaner and stronger.
Financing SMB future 👏
Fintech startups, armed with tech excellence and real time data, are coming to the rescue of India’s unorganized commerce market, while traditional banks that are used to operating within a narrow set of parameters shy away from stepping up.
Two examples of how startups are leading on the financing front -
BharatPe, the payment app aggregating platform which sells an all-in-one processing platform to small merchants, is leveraging POS transaction data to come in as a lender to its customers. Based on everyday cash flow data, the company is able to underwrite working capital loans or even personal loans to proprietor businesses, offering much better terms than banks.
The company’s recent foray into this line of business has been quite impactful for its customers, and already has them projecting $1 million in interest income by 2021. Win win. Read here.
On similar lines is social commerce trailblazer Meesho. The company has recently partnered with another startup, Klub, which provides growth capital to small merchants. Leveraging existing data, select merchants on Meesho’s platform will be extended growth capital to scale operations and keep their supply chains from disruptions during the COVID crisis.
Embedded finance is a critical component of robust marketplaces, and small merchants being supported by tech companies is a win-win for the entire ecosystem. Kudos to Meesho.
Bottomline: Unorganized commerce forms more than 80% of India’s retail market, which in total is estimated to top $1 trillion by 2025. Banks are failing to leverage basic technology to underwrite growth needs and startups are swooping in on the opportunity to spin hay into gold.
What does Nvidia tell us? 🧐
Graphic card maker Nvidia reported its second quarter business performance yesterday—hitting it straight out of the park!
Here’s the two key takeaways that underline major trends in the post-COVID world.
Gaming - IS BOOMING. The company sold $1.65 billion (up 26% year on year) worth of GPUs to gamers across the world in the last 3 months, as locked down consumers turn to gaming in hordes to pass time. The trend is showing no signs of slowing and the entire gaming industry expects a 10% growth this year, to top $160 billion (that’s 4 times the global box office).
Cloud computing - is going strong. NVIDIA sold nearly $1.2 billion (up a whopping 85% year on year) worth of GPUs to datacenter deployers in the last 3 months, all thanks to work from home and all time high-consumer digital activity. As the world is turning to data heavy applications, GPUs are finding a use beside CPUs to help accelerate computations.
Tweet of the day -
Polina is one of the most prominent writers to jump on the “quit my job to go full-time on Substack” bandwagon. This is worth checking out.
What else are we snackin’ 🍿
📦 Hurting small sellers - Chinese e-commerce platform Club Factory, one of the apps that was banned by the Indian government, has left sellers in hot water having suspended their payment dues. Unionized sellers have sent the company a legal notice demanding for their payments to be released. Some of them have dues running in the crores.
🖥️ Extended WFH - Salesforce becomes another tech company to jump on the WFH bandwagon, extending remote work policy until at least July 31, 2021 for all its 50,000 workers. The company hopes the timeline gives employees guidance to plan their lives as it slowly tries to reopen its 160 offices based on local government guidelines.
🤝 Trump backs Oracle bid - The Donald has backed the bid of his friend Larry Ellison’s Oracle to buy US, Canada and AUS/NZ operations of TikTok, giving Satya’s efforts a mild jolt. The workings are still a secret but it's very likely that there will be a bidding war behind closed doors and Microsoft continues its relentless pursuit.
👋 Another Flipkart exec’s exit - veteran Anil Goteti, an SVP at Flipkart, who started by leading its books and ebooks segment backed in 2012 has resigned from the company. Perhaps new leadership and management has something to do with it? Anyway, in his most recent role, he was responsible for key strategic initiatives and advertising products. Who’s hiring?
🧐 Conspiracy theory purge - Facebook has removed nearly 800 Qnon conspiracy groups for promoting conspiracies and for celebrating violence as the social platform looks to police activity in an election year in the US, and hopefully not repeat mistakes it made in the past. The company has also made some 1,950 groups less discoverable and hidden.
🙌 Bringing indegenous discovery to e-commerce - The government is looking at ways to promote GI products (Geographical Indication products - basically merch that highlight a region's culture or people, like handicrafts) on e-commerce platforms and in modern trade stores, in a bid to boost locally made products as part of its ‘Make in India’ initiative. Amazon, Flipkart, Snapdeal and Reliance are called in to discuss promotional ideas.
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