It's slowing down 📉
Crypto hacks, Grocery acquisitions, and the battle for IPL rights.
Gm fam! 👋
Last week was quite the rollercoaster! Despite solid earnings, the thought of Putin sitting with a finger on the red-button kept investors on the edge of their seat. This week probably looks the same — and the weeks after, until we find some solid ground once US fed rate hikes are announced in March.
Otherwise, India is lined up for an easy week here. Investors in the US are out for the weekend and Monday, celebrating Presidents’ Day. Let’s hit it! 🤙
Kicking off the week ☕
😕 Hacks and crypto, go hand in hand — OpenSea, the top marketplace for NFTs, fell prey to a phishing attack which led to about 32 users losing NFTs worth upwards of $1.7 million. In layman’s terms, it looks like the attackers exploited a vulnerability in the underlying protocol and duped users into signing off on an open-ended partial transaction (possibly via raffles, or some click-to-play scam). Attackers then filled the blanks in the partial transaction to clean out users’ holdings on the platform. Here’s a spreadsheet of everything that was stolen. Good luck navigating this as an average user.
🤩 What a win! — GOI’s incentive scheme for the installation of semiconductor and display fabs in India (aka large facilities capable of making precision semi chips like microprocessors, as well as displays) received a pretty solid response — with 5 firms submitting bid adding up to over ₹154K crores, against incentives of about ₹75K crores. Among bidders is also the newly formed Vedanta and Foxconn joint venture, along with a few other Singapore based players.
Shopify says the music is stopping 📉
What happened — Shopify, another popular darling of pandemic-investors, got absolutely hammered last week after the company hinted at slowing growth going into 2022, as pandemic tailwinds slowly begin to wither.
Fyi, $SHOP sells an industry leading platform to build online stores, as well as payments tools that make ecommerce possible for the neighborhood mum selling cakes online as well as your favorite $500-million D2C brand!
Anyway, Shopify grew revenues by 57% for 2021, processing $175 billion in volumes on its ecommerce platform, almost 3x of what the company used to do before COVID!
But… as normalcy returns, those growth rates are becoming too dreamy and the valuations appear too stretched. Some factors making things harder for Consumer-focused companies across ecommerce, payments specifically:
Rising inflation eating away middle class spending power
COVID indigestion, from all those impulse purchases folks indulged in
People stepping out, choosing to shop at the local mall for a change
Brands folding because cash is drying up
Markets have already begun reading doom for the entire segment — right from Shopify (down 60% from all time highs), to Amazon (dead money for a year), to Etsy (down 40%), to even payments players like PayPal (down 65%), it’s a hit-job everywhere!
Big picture — at some point these companies start looking hot once again, but until then, macros dictate investor mood, and all metrics and trends take a back seat. Hard not to think things won’t tighten in the private markets too.
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Weekend party in Venture City 💰
Increff, a supply-chain management SaaS company, raised $12 million for its Series B from TVS Capital Funds, Premji Invest and a few angel investors.
Increff’s platform basically helps retail brands like Puma, Adidas, Tommy Hilfiger, Bata layout and plan inventory operations, managing how products are moved through the supply chain — across warehousing, transport, order fulfillment, returns management, and other functions.
Fresh capital will fuel sales efforts, and tech stack improvements.
Meanwhile, Smallcase is getting cozy with CRED 💳
Techcrunch says CRED is apparently in talks with investment platform Smallcase to lead a new round that’ll value the business at over $400 million!
Smallcase, which basically curates simple baskets of stocks for young investors and market newbies, processes more than $2.5 billion worth of transactions for 3 million + users. Could be an interesting partnership for CRED as they move beyond credit management and bill payments.
Quick look at a grocery tech acquisition 🛒
What happened — Tata-backed grocery-delivery player Bigbasket acquired a deep-tech startup called Agrima Infotech, to bolster its retail-tech capabilities as it tries to pull off an omnichannel expansion strategy.
Building quietly under the radar in Kochi for over 11 years, Agrima basically sells a roster of tools that digitize various aspects of running an offline retail operation. For example, their image-recognition platform helps identify and classify perishable products (e.g. Apples vs. Oranges). Then there’s a payment and AI based self-checkout system. There’s a retail data analytics platform. Here’s a look at the portfolio.
Anyway, owning Agrima’s technology in-house could be extremely valuable as Big Basket doubles down on omni-channel and plans the buildout of 200+ physical stores nationwide by the end of next year.
Closing Out — Bezos and Ambani lock horns over IPL 🏆
What’s poppin’ — as if the legal battle over Future wasn’t enough, Reliance and Amazon are now taking their rivalry from the courtroom to the stadium, with both apparently too keen on buying digital broadcasting rights of the IPL for a record $6.7 billion!
IPL pulls 350-400 million eye balls globally each year. Disney, via its partnership with Star India, owned broadcasting rights since 2017, but that deal is set to expire this year.
You know what IPL did to the success of Disney+ and Hotstar in India and worldwide, so the two billionaires willing to get dirty in the mud here for the eyeballs isn’t too surprising. Maybe Netflix gotta jump in too?
What else are we Snackin’ 🍿
📈 Homes ain’t cheap - US home prices jumped 15.4% from last year to an average of over $350K in January. Rising interest rates will likely end the party soon!
😕 Sell off extends - foreign investors withdrew over ₹18.9K crores from the Indian markets in February, making it the fifth consecutive month of foreign fund outflow.
👸 Just when I thought… - the 95 year old Queen Elizabeth II of Britain has tested positive for COVID. Not good.
🤙 Progress - Biden and Putin have accepted a proposal from the French for an emergency summit. Hopefully puts an end to this looming war business.
Hit that 💚 if you liked today’s issue.
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