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Digital empire, Fintech raise, and women make history.
Hi 👋, Tanvi here.
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Market summary: 📊
Quick healthy pullback in India yesterday, as emotions get checked before it's too late. US markets kicked off a bloodbath, but quickly recovered to make up for most losses.
US:
S&P 500 - down 0.032%
Nasdaq 100 - down 0.54%
India:
Nifty 50 - down 0.68%
Sensex - down 0.77%
What’s hot bruh ☕
✅ Limping along in the horse races—sick and tired of Reebok’s continually dismal performance, Adidas is planning to divest the business for pennies on the dollar. When competition from Nike was becoming hard to combat in 2006 or so, Adidas paid up $3.8 billion for the brand thinking Reebok’s fitness-friendly lineup would help it save market share and drive some growth. But Reebok struggled to hold onto its fort, with growth problems further worsened as assault from ecommerce platforms and DTC brands increased over the past decade. In the last quarter, the company pulled in barely $270 million in revenue, down 44% YoY, and Adidas sees little upside in showing any more patience.
“Sometimes just gotta cut your losses, bro” — reputed Meme Stonker.
✅ Ho jayega sir $200 billion—Nasscom thinks the Indian IT industry can book $194 billion in sales for this year, recovering to 2.3% growth, after COVID kneecapped the industry’s prospects in 2020. Shouldn't be too hard to pull off given India’s leading IT giants have only used the pandemic-led slump to cut back on costs, acquire smaller companies in new disciplines, and have already shown ample signs of demand improving in most recent earnings. Also, a generational shift of IT to the cloud, combined with fresh challenges that enterprises are grappling with due to remote work (including cybersecurity, employee management, communications)—a range of new opportunities are opening up. Lotsa money to be made by servicing these concerns.
Blast from the past 💥
Info Edge, one of the only digital-era companies trading in the Indian public markets, just crossed $10 billion in market cap this week, after an epic rollercoaster rally that saw stock crash in March, only to shoot back up nearly 3x since then.
Info Edge runs four digital brands under its umbrella from India’s Internet 1.0 era—Naukri, Jeevsaathi, 99acres, and Shiksha.com. As diversified in that as one can be. The pandemic’s benefit to digital businesses means revenues are expected to significantly accelerate as each of the verticals slowly begin to recover.
The company also has sizable stakes in Zomato, PolicyBazaar and a few other prominent startups, who’re planning to go public pretty soon and investors are counting on the benefit of those raises too.
Anyway, this makes them the first “digital” business coming out of India to ever achieve the $10B feat in the public markets, as most other Internet 1.0 era firms either sold, folded, or chose to stay private until their hair turned grey. ☝️
While we’re talking modern empires,
Freshworks dropped some hints on how far along it has come post COVID—the SaaS giant selling a suite of software products, from customer support to recruitment, saw its annual recurring revenues grow to $300M over the last 12 months, up nearly 40% YoY.
Assuming even the most conservative comparables in the public markets today, that’s easily a $6-$7 billion valuation that the company would attract. Now only if India’s top growth ventures cared about allowing the average guy ride the wave a bit and hastened moves on those IPOs…
Move aside Clubhouse, ola Dispo 📸
Photo app Dispo is quickly displacing Clubhouse to become the latest fad.
The app, kinda like an instagram for 2021, uses an old disposable camera-vibe to capture your best moments. The camera is purposefully constrained, with nothing more than a tiny view like one of those old cams, and you can’t see your pics until 9am the next morning. Then there’s an inherent social feature to share pics with your pals. Here’s a cool write up on the entire experience.
What’s crazy is that the app’s dominating the headlines solely because it's pushed by Gen Z influencer David Dobrik (you HAVE to know him), and is quickly becoming testimony of the power digital influencers hold in single handedly creating cultural phenomena, lately using consumer tech products as their bait.
The app is in beta right now, and David’s tens of millions of followers are scrambling in line to get an invite so they can look cool in their high school friends. Sounds lame, but that’s what's selling these days.
Bottomline: the trend where influencers to roll out their own consumer technology products, or tech founders explicitly taking on influencers as co-founders to tap into an existing distribution is expected to only pick pace.
Also, can’t help but notice a common theme between Cred, Clubhouse, and Dispo—the platforms leveraged the power of exclusivity (via invite only or request-access models) to create artificial scarcity, and are winning insane growth.
What’s a day without a fintech raise 🙌
Zolve, a neo banking startup, raised a $15 million seed round led by Accel and Lightspeed Venture Partners, with Blume as well as angels including Kunal Shah, and a few others pitching in.
The startup basically aims to solve the problem of cross-border banking for Indian immigrants, starting with the Indo-US corridor, and eventually launching a global banking solution that works across geographies. Banking systems as they stand today barely scale beyond state boundaries, let alone countries with disparate financial structures, systems, and operating standards. Immigrants are routinely subject to problems around access to credit, movement of money, high fees, resulting in a poor user experience. Not to mention, the routinely high remittance fees people end up paying for basic functions like sending money back home.
Zolve will be led by the founder of TaxiForSure, who brings credible operational expertise to the game, having sold the old enterprise to Ola for over $200 million in 2015 (that’s why the big ticket raise at seed itself). Odds of success look solid.
Closing out—WTO gets a woman leader 👏
The World Trade Organization, which basically regulates and controls global trade between 150+ countries, deciding fines, violations, rules and laws, made history this week by appointing African woman Ngozi Okonjo-Iweala as its director general.
Okonjo-Iweala is the first woman, and the first African to ever assume the coveted role. Previously, she was a 2 time finance minister of Nigeria, and also sits on the board of Twitter. 👏
What else are we snackin’ 🍿
⬆️ Bozos bacc at the top - weed, flamethrowers, sleek cars, meme-stocks, crypto coins—no matter what you shill your way to the top, it's gonna be hard to keep Bezos down for long. Jeff regained his position in style, with a net worth of $191.2 billion after Tesla shares pulled back considerably this week. Investors are realigning expectations with reality after Tesla’s epic rally over the past year that had seen stock nearly 8x.
🛰️ Meanwhile, Musk preparing new troupe - SpaceX launched 60 more Starlink satellites, bringing the total installed base in active orbit to about 1,000. In total, the constellation will have about 4,500 satellites installed over the next 5 years, at which point SpaceX will be offering internet services worldwide, particularly in regions with weak network coverage. They’ve begun rolling out subscription plans already.
Hit that 💚 if you liked today’s issue.
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And 'cos this article, Dispo gets atleast one more download. :)