Hold the Credit Cards ✋

PayPal surprise, browser wars, and a streaming shutdown.

Hi 👋, Tanvi here.

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Market summary: 📊

Indian markets crawled back a bit after a respectable run up earlier in the week. US continued its oscillations as the near-term picture remains hazy.


  • S&P 500 - up 0.52%

  • Nasdaq 100 - down 0.02%


  • Nifty 50 - down 0.35%

  • Sensex - down 0.37%

Legitimizing a crusade 📱

PayPal opened the floodgates on the crypto industry last night when the company announced it would allow users to hold crypto currencies in their wallets on the platform and would also seamlessly allow purchase of goods and services with 26 million merchants who use PayPal’s service. 

To put that in perspective, that’s a $240 billion company openly embracing digital currencies, while promising to build the infrastructure necessary to allow consumers to spend their money. That’s probably the most significant vote of confidence the crypto community has received in a long long time. 

Digital currencies essentially eliminate the need of a centralized entity like a bank (not all of them, there’s enough horse shit out there), guaranteeing the exchange of value between two parties. For years now, the tech and its fervent advocates waited for the acceptance of a neutral stakeholder that could give the tech the cross border network and user base where its appeal truly shines.

PayPal, with 350 million users on its platform, across some 200+ countries, processing $200 billion+ volume in one quarter, could very well be that push this nascent industry demanded.

Fresh from the deal stables 💰

German sportswear giant Adidas is preparing to sell off its long-struggling Reebok brand, as a restructuring attempt to turn the company around is yielding no results. Reebok, founded in the UK, lasted 50+ years, but is struggling to make headway in the era of ecommerce and DTC. 

In the last quarter, the company pulled in barely $270 million in revenue, down 44% YoY and a pittance compared to the $3.8 billion Adidas paid for the company in 2005. 

Adidas is keen on sealing a deal and closing this out by next March apparently, and competitive suitors as well as Private Equity groups are being talked to for a potential sale.

Finally, a promising fintech bid, 💳

Signzy, a SaaS platform that allows financial services players to streamline their KYC and onboarding processes, has raised $5.4 million in a round led by Arkam Ventures and Mastercard. Kalaari and Stellaris pitched in as well. 

Leveraging the power of no-code, the company simplifies the processes of connecting blocks in the background to help fin-serv companies build tools to automate risk and compliance processes

Takeaway: despite spending almost $500 billion on IT, global financial services firms massively lag in digitization. Tons of gaps are emerging in the aftermath of COVID. Startups will continue to benefit from those tailwinds and Mastercard’s involvement underlines that opportunity.

Latest offense from the Jio camp 🗼

Jio is slowly becoming an Amazon, a Google, and a telecom carrier all morphed into one. And oddly, they’re getting full marks so far for execution. Their latest move is the launch of Jio Pages—a dedicated mobile browser like Chrome, designed on the Chromium Blink browser engine.

Designed keeping India in mind, the browser by default supports like 8 languages. Jio also highlighted an obsessive focus on privacy and data security (wink wink), slyly appealing to the anti-Google sentiment brewing right now. It comes with incognito, pin lock, dark mode yada yada—you know the standard feature set.

The move is very timely and a strategic masterstroke. By controlling the gateway by which India surfs the web, Jio can get unparalleled insights on consumer behavior, interests and other information about users, with which they can entrap consumers in their broad portfolio of products and services—from buying jeans to investments.

Moreover, they can natively embed the browser in their soon to release low cost devices, make it default, and then milk the user base for data for years to come without batting an eye. The fact that they took like $5 billion from Google and are now out to eat their lunch makes it crazier!

Matt Leblanc Adam Burns GIF by CBS

Takeaway: what Jio is doing in India has been the dream of telecom operators globally. NTT, Orange, Verizon—they all tried capturing end to end internet services, but found themselves battling a complex web of regulation that was designed to keep the internet free and open.

They all had missed 1 critical piece of the equation—you need to have the unquestionable backing of the government on your side. That’s how Ambani plays. Notes lo. ☝️

While on this topic, 

As India gets ready for 5G, Reliance has forged a partnership with Qualcomm to test out its locally built network infrastructure systems and get it to smoothly work with Qualcomm’s 5G modem chips. QCOM is one of the global pioneers of modems, the semiconductor chips that go into smartphones to connect them to wireless internet.

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Rally ends in a hot mess 🤯

India’s dream of putting a credit card in everyone’s hands got a rude awakening when SBI cards reported worse than expected bad loans, thanks to COVID eating into the livelihoods of end consumers. 

In its earning release, SBI Cards reported its bad loans surge to an alarming 4.29% of its loan book, up nearly 3x from the 1.29% levels seen in the June quarter. What’s worse? An ongoing litigation in the Supreme Court stops banks from disclosing all problematic loans as bad loans, because of which SBI says it can’t disclose the real hit, which could be a staggering 7.5%! What!?

Honestly, a surprising turn considering jobs have only been added and the economy has only improved since then. Anyways, SBI has increased allocation to ensure this doesn’t spiral out of control but the trend will dent the company’s momentum around selling cards aggressively. 

Which brings everyone to the huge big question mark—has India done enough to educate its citizen base on responsible credit usage, for it to overnight embrace these products? We smell a business idea.


What else are we snackin’ 🍿

💋 FB dating comes to Europe - Facebook is planning to launch dating services in 32 European countries. The rollout was delayed earlier this year due to regulatory conditions raised by Ireland’s data protection commissioner. Facebook dating, within the Facebook app was launched in the USA in September last year and is now available in 20 other countries. 

🛒 Wholesale expansion - Flipkart has announced the launch of a new wholesale store in Tirupati Andhra Pradesh. The company has been running the Best Price stores that parent Walmart had dumped on them and this single store is expected to create some 2,000 direct and indirect jobs.

💰 Spending $1.7 billion over 6 months - Quibi, the streaming company founded by a bunch of media-oldies who looked at Netflix, Disney, and thought spending $1.7 billion and hiring big name celebrities and producing cool content is enough to woo millions of users, is finally shamefully shutting down. Tch.

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