Infra, the real juice
Bet on Africa, Nestle's new goalpost, and things getting better.
Hi 👋, Tanvi here.
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Market summary: 📊
Awesome start to the week in India, with investors marching towards all time highs unfazed in the face of all the post-second wave uncertainty. US markets were closed for the memorial day holiday.
India:
Nifty 50 - up 0.95%
Sensex - up 1.00%
What’s brewing hot? ☕
✅ Bad, but could be worse—official stats are out, and India’s GDP contracted about 7.3% for the last financial year that ended this March. Mixed feelings—the bad thing is that it’ll take us yeaaarrss of accelerated progress to make up for the economic losses, the good thing however is that 7.3% number is much better than what the regulators and government were bracing for, thanks to the relentlessness of enterprises—corporate, as well as small business India.
✅ Osaka serves it cold—tennis star Naomi Osaka quit from the French Open because the she was forced to do media appearances. Basically Tennis players, like any other sport, by contract are asked to meet with the press post games. Osaka bailed on a couple of these events citing mental health problems. French Open fined her $15K and threatened with expulsion if she continued to do so. In a couple hours the 23-year-old former No.1 rank holder packed her bags and told the French to basically suck it.
Ecommerce infra, FTW 🛒
Digital commerce is unstoppable, and infrastructure enablers are making bank.
Logistics-as-a-service company Delhivery raised $277 million from typical late stage investor Fidelity, revising valuation by 50% to $3 billion, in perhaps its last ever fundraise before going public.
The company, which basically provides end to end logistics services—from managed warehousing, cross country transportation, to last mile delivery, has been on a tear on the back of the digital-boom of the past decade, further escalated amidst the pandemic. Hiring has been on fire, and new pin codes are being added at a wildfire-pace.
Now a fresh three-hundred million pot brings some serious fireworks to an already lit party!
Bottomline: India’s delivery market is flush with smaller, fragmented logistics vendors that lack the visibility, consistency, and flexibility that modern digital commerce demands. It’s a phenomenal opportunity for a disruptive tech-native vendor to rise and dominate the space, and we may already have a horse running far ahead of the pack here...
Africa is where the puck’s goin... 🧐
Western world is slowly waking up to the raw potential of Africa, as enterprises, capital, and business leaders try to get ahead of the curve and bet on the nations’ potential.
Couple of major happenings that caught our eye:
The NBA, the world’s foremost basketball league, created an NBA Africa entity valued at more than a billion dollars, to kick off a standalone basketball league in the region. Major brands have been recruited, streaming-first distribution is being planned, and the league will be started with 12 teams.
With the early stage landscape heating up, venture capital funding by the end of 2021 for Africa is expected to top $2.5 billion+, making it the best year on record for the continent. $800 million in net capital has already been distributed by April 2021.
Lastly, Chipper Cash, a cross border payment app, which makes it easy to send money to anyone across the region's disparate financial systems and currencies, just became the most valued startup in Africa last night after Silicon Valley Bank led a $100 million Series C round, at a $1B+ valuation.
Big picture—your growth-tech discourse is incomplete without a mention of Africa here on out. Massive population explosion over the next two decades, coupled with widespread digitization is making the entire region a fertile hotbed for foreign capital, talent, and opportunity.
Long term problems 💻
Intel’s new CEO Pat Gelsinger, presenting to a group of investors and analysts at a trade show in Taipei, signaled that the global semiconductor shortage the world is experiencing will last for more than a couple of years.
What's causing it—pandemic-ruptured production lines, coupled with new demand coming from emerging pockets (automotive, IOT, 5G, Crypto mining), is putting more and more strains on recovery, extending backlog of orders and causing planning delays downstream.
Intel had actually recently approved a $20 billion spending plan to build new facilities on war footing, and the fact that the company continues to keep a gloomy outlook despite that, shows a harsh mirror to the rest of the semi industry.
Closing out—Nestle is rewiring itself 👋
What happened—Nestle executives, apparently worried about the majority of the company’s product portfolio (food + drinks) being generally “unhealthy”, high on sugar, fats, or things that have no place in the 21st century diet list, are planning a comprehensive change.
Details so far remain scant, but Financial Times accessed a presentation being circulated within the company’s global executives that cited nearly 60% of Nestle products being unsuitable for shifting consumer tastes and preferences.
Going forward—emerging needs of the avocado-toast generation are no longer just “fads”, but literally $10 billion+ public companies with billions in revenues (Oatly, Beyond Meat, Impossible Burger, Hello Fresh). Good news? Nestle management’s taking cognizance. Bad news? Reinvention could hurt margins—a tough swallow with loyal shareholders.
Otherwise a quiet news Monday with the western world closed for business on the occasion of Memorial day. We’ll be back tomorrow with some more…
What else are we snackin’ 🍿
😷 Things lookin… good?- India has reported less than 2 lakh COVID-19 cases for 3 days in a row, the lowest new infection rate reported since April 9. Lockdowns seem to work, and the worst may be behind us. Fingers crossed.
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