Hot streak 🔥
SPACs march on, Cyberscares, and decoding Zomato.
Hi 👋, Tanvi here.
Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.
Sign up below for free. 👇
Let’s go ahead and get started:
Market summary: 📊
Friday turned out to be a quiet day for both Indian markets and in the US, both remaining relatively flat. Yet the week was harsh, with Nasdaq ending with its biggest weekly drop since March 2020 lows.
US:
S&P 500 - up 0.053%
Nasdaq 100 - down 0.60%
India:
Nifty 50 - up 0.13%
Sensex - up 0.037%
Zomato’s tricky purchase 💪
Food-tech giant Zomato, threw a googly when it disclosed plans of acquiring Fitso — a fitness membership platform that provides members access to sport facilities and trainers.
The deal is valued at about $20 million. Fitso started about 5 years ago with a partner-finding app meant for runners and cyclists but over time its services have evolved to now helping members access local workout and sports facilities along with personal coaches, mainly focusing on swimming pools.
While Zomato did not comment on the strategy behind the transaction, we imagine a move to capture fitness-first foodies with “healthy eating” products and services could be in the pipeline here. Read more.
Watchout for bad actors 👀
Microsoft has warned the US that foreign states, specifically Russia, China and Iran, have escalated cyberattacks on citizens and political organizations with the intention of derailing the ongoing presidential elections.
For those unaware, the 2016 presidential elections that got Trump elected were a breeding ground for cyber attacks and targeted misinformation campaigns on citizens, mostly originating from Russia. These attacks had played a large role in swinging the mood of the unassuming populace and gave the world a lesson on how dire the impact of social media can be in mass manipulation if left unchecked.
Yet, almost 5 years in, little is being done to fix these problems worldwide. The US Presidential elections are scheduled about 7 weeks out, and be advised, it will all be a circus. Read more.
Why do we care: the days when wars between powerful nations were fought with just bullets are clearly behind us. Cyber attacks and digital misinformation warfare can be equally or more damaging and an easy way to derail internal stability. This plague has put global security at risk — including for India, where a passionate voter base is ripe for antagonization by bad actors. How will world leaders work to stop this?
Capital talks of the day 💰
Rainmatter Capital — the fund backed by Zerodha, has led a ₹ 2.7 crore raise for an online learning platform QShala, which works with children across all ages to polish them in fundamental abilities such as public speaking, interpersonal skills etc. The early stage venture also conducts family-quizzes and other engaging general knowledge learn-by-doing sessions, and engagement so far has been very promising. The breadth of ideas here surprises us!
Next up in SaaS,
Insure-tech company i3 Systems has raised $1.5 million from Unitus Ventures in a pre-Series A round. Reliance CFO Alok Agarwal and other notable angels pitched into the round.
i3 systems builds software that automates repetitive tasks — such as claims processing or underwriting decisions for insurance applications. The founders observed that about 90% of the data in insurance companies was in the form of free text in documents, which made it inaccessible, and decided to build systems to automate processes. Billions are spent each year on insurance software, and the opportunity for these guys is massive.
Finally, a sweet gesture,
Nestle believes the nation needs more entrepreneurs during these times. To do its part in this, the company has announced a program to streamline its franchising model, to take in youth and train them to run a franchise operation from the ground up.
Under the “Nestle Needs Youth” program, applicants will be supported to operate Nestle’s kiosk business model under its various brand banners. The company will help identify locations as well as will train participants in the basics of operations, business, as well offer mentorship.
Not all entrepreneurship has to be about launching a rocket ship high-growth startup. Cash flow-first small businesses particularly are the backbone of India’s economy, and any help that keeps the ecosystem stimulated definitely merits appreciation.
No stopping for SPACs 🏠
The latest high-flying startup from Silicon Valley to go public via a merger with an SPAC is real estate brokerage Opendoor — which makes the process of buying and selling homes 100% digital.
The SPAC in this case, called Social Capital II, is led by billionaire investor Chamath Palihapitiya, and the transaction could be valued in the $5 billion ballpark. Social capital will conduct a fresh round of equity raise to fund the deal.
Refresher — an SPAC is basically a public holding company designed to take another company public via a merger. By doing so, young companies bypass a range of IPO related frictions and try to get better pricing from investors.
Back to this deal, Opendoor was last valued at some $3.8 billion and is a massively attractive opportunity considering the trillions of dollars worth of market it plays in. The entity, if the merger goes through, will no doubt be a hotly contested stock on Wall Street. Read more.
Tech IPOs in India continue hot streak 🔥
Despite a looming economic plague, technology companies are unstoppable. Last week saw the Happiest Minds IPO was oversubscribed by a huge factor. This week we have Route Mobile, nearly 75 times oversubscribed on the last day of bidding.
Route operates a unified communication and messaging platform that allows brands and enterprises to conduct en-masse conversations via SMS, phone, and other chat services. The tech has benefited from the pandemic as the majority of customer-to-brand communications are now digitized. ARR is growing at 30-35% rates and the IPO will give the company some ₹600 crore in cash.
In its prospectus, Route mentions the company will deploy proceeds from the IPO to pay off debt first and then to chase other strategic initiatives. Prospects look bright especially when you compare the services with global peers like Twilio or others whose stocks have doubled or tripled in no time. Read more.
Investors see the future 🧐
Reliance stock gained almost 10% in the last week alone, cruising the company among the top 40 of the world's most valuable firms. RIL became the first Indian company to cross the $200 billion market cap landmark, as investors finally started to understand Ambani's vision.
Yesterday alone stock gained as much as 8.45% after the Amazon news broke out, taking this years total gains to 55%, beating all benchmarks by large. Since the bottom of the pandemic, Reliance is up nearly 184%.
RIl is followed by Tata Consultancy Services ( ₹8.75 trillion), HDFC Bank ( ₹6 trillion), Hindustan Unilever Ltd ( ₹5.01 trillion), and Infosys ( ₹4 trillion) in the top 5 table. Read more.
Tweet of the day -
What else are we snackin’ 🍿
🖥️ Infosys keeps adding in the US - the IT giant plans on hiring around 500 additional tech workers in the US by 2023. This is part of the company’s recent commitment to hire 12,000 additional workers in the country, bringing its total to 25,000 roles.
♻️ Full circle - for those of you who remember, Facebook started as a campus networking platform in Harvard, eventually rolling out to 100s of schools in the US. Now the company is again launching a dedicated product for colleges, called FB campus. Students will be able to create profiles specifically for connecting with classmates with groups, events and the standard fare.
🎵 Quashing TikTok’s appeal - the Trump administration finally came out with a response that no exception will be made in the TikTok deal and that the deadline issued to the company stays. Earlier last week the company had reached out to the government for some leeway.
🧐 Mental disease defense - Disgraced entrepreneur and founder of Theranos, Elizabeth Holmes, who has been charged for defrauding customers and investors, will be following a “mental diseases” defense in the court to help her get out of the trial. Well, who knows it sticks but definitely sounds disgusting for a person who was considered an intellectual genius.
📃 Indian NGOs against FB - FB’s execs have received open letters from over 40 NGOs and organizations demanding the company take measures to ensure the independence and thoroughness of an ongoing human rights audit of India’s operations. The demands are in light of accusations that FB’s content moderation practices are biased in India.
Hey👋 , you think any of your friends would enjoy Filter Coffee like you? Connect us!
You can just forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀