ITC got plans 🤙

Akasa's firepower, Venture raises, and Paradigm gets a big one.

Market summary: 📊

India continues to trade sideways for almost a month now, with Wednesday ending up another dud. US had a soft session as well, for no apparent reason.

US:

• S&P 500 - down 0.26%

• Nasdaq  - down 0.01%

India:

• Nifty 50 - down 0.56% 

• Sensex - down 0.52%

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What’s brewing hot? ☕

1️⃣ Akasa packing heavy — Jhunjhunwala ain’t kidding with his airline. The company has apparently ordered $4.5 billion worth of jet engines along with a 5-year service agreement for its extensive fleet of Boeing 737 MAX jets. That’s big dough! CFM International, a joint venture backed by General Electric, will supply and service the engines.

2️⃣ More like passive-vision — gaming company Activision Blizzard which makes the popular Call of Duty title is in hot soup over mismanagement of countless sexual harassment cases at workplace. Top of the stack is an incident in 2017, where apparently one of ATVI’s female employees was raped by her supervisor, but management failed to respond to any complaints. Worse, ATVI CEO, despite reaching an out of court settlement in the incidents, failed to keep the board in the loop. The SEC is now involved, and Wall Street is beating stock into pulp. 

Oddly lousy midweek news day. Let’s do a quick rundown of the important things!

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ITC deciding to get leaner 💪 

Markets aren’t appreciating “value”, so cigarette-king ITC is apparently thinking of spinning out a technology consulting business from its belly — ITC Infotech, as a separate entity. 

ITC Infotech, much like TCS or INFY, but on a smaller scale, helps clients across manufacturing, healthcare, consumer goods, banking, and travel, manage their digital transformations and other mundane IT operational tasks.

Last year the business made about ₹2,500 crores in revenues by itself (barely 3.3% of the total ITC business), growing 8-9% YoY — inline with the rest of the IT industry. Profits stand at ~₹500 crores. If you slap a comparable 5x multiple, it could be worth about ~₹25,000 crore as a standalone business.

Welcome move — current ITC shareholders could get a tiny piece of the new business, which helped ITC pop 4% yesterday. are we finally breaking the spell or what?

Bottomline — an increasing faction of ITC bag-holders have advocated for separating its ciggy-empire from the rest of the FMCG, hotels, and other businesses to unlock value. So no surprises really… whatever moves the needle. 🖖

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Who got the Big Monies! 💰 

First up, Velocity, a revenue-based financing platform, raised $20 million from Peter Thiel’s Valar Ventures, Presight Cap, and a few others for its Series A.

Velocity acts as an alternative to VC or bank-financing for capital intensive D2C online brands — loaning them money based on how fast they’re growing and how much sales they’re generating. Velocity plugs directly into a brand’s Shopify or Amazon webstore and reads data real-time to understand their standing.

Still early in the game, 1500+ companies utilize the platform, who process about ₹1,200 crores in gross commerce volumes.

Bottomline — India’s archaic banking and financial system is not designed to lend to emerging digital businesses, at the speed and level of credibility they seek. Alternative platforms will play a crucial role.

Meanwhile in e-commerce, ☝️ 

GoKwik, a data platform that helps ecommerce brands boost conversion, closed a $15 million Series A round from Sequoia, Matrix Partners and others.

GoKwick basically has an elaborate plug-and-play checkout platform — which integrates with any ecommerce brand (Mamaearth, Good Glamm Group are customers) and pre-fills customer information, checks for fraud, shows payment options etc. — all with the goal of increasing checkout conversion.

Currently, the platform reaches some 8 million end customers. Promising!

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Quick look at a global fintech acquisition 💳

What happened — Digit, a popular neo-banking and savings app in the US, is being acquired by an old-school lender called Oportun, in a deal worth $213 million. 

Fintech folks may have heard of em, Digit offers goal-based saving products as well as a debit-card and some robo-investing features, competing against the likes of Stash, Acorns, and others, serving about 600K millennial users.

Oportun meanwhile is a classic brick and mortar lender, serving low-income customers. The company will leverage Digit’s tech prowess + product-savviness to turn the oomph up on its own digital lending experience.

Consolidation coming? — thousands of fintechs raised easy VC-$$ over the great-fintech-bull-run of the past 3-4 years. Now joining hands with cash-rich incumbents is the only reasonable exit for many. That’s life.

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Closing Out — Crypto’s biggest pot to date 💰 

What Happened — Paradigm Cap, a top crypto-focused VC fund, raised $2.5 billion for their newest fund — the largest VC fund raised for the space ever, which even tops a16z’s raise from June 2021.

One of the guys who cofounded Coinbase, Fred Ehrsam, is at the helm of Paradigm, and the fund has backed some top crypto startups — including the fastest to unicorn crypto play — FTX exchange. Skeptics are yelling a crypto top, but looking at the cash stuffed down the pipes, still feels like 7pm at the party… 👯

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What else are we snackin’ 🍿

😎 Back with a bang - PUBG New State, the revamped PUBG for India has crossed 1 crore downloads already on Google Play, within a week of launch. 

📹 Human or robot - Instagram is asking users to provide a video selfie for verification to curb the prevalence of bot accounts on its platform. 

🤷‍♀️ That didn’t take long - Invesco is apparently delaying its Blockchain ETF in India citing regulatory uncertainty. Bruh, what did ya think?

💪 PayTM opens today - irrespective of how it ends today, quite the ride for One97 Communications, and for India’s fintech space!

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