Jupiter hot damn! 🚀

$PIZZA wins, Uber problems, and retro-tax gone.

Aug 06, 2021

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Turning out to be a great week so far in India, hope Friday holds up well. US continues to be bouncy, and investors remain confused about economic outlook.

US:

S&P 500 - up 0.60%
Nasdaq - up 0.65%

India:

Nifty 50 - up 0.22%
Sensex - up 0.23%

What’s brewing hot? ☕

✅ Artists can and will make billions — tres comas club added Rihanna as its newest member, with Forbes putting her net worth at $1.7 billion — also calling her the richest female musician, and the second-richest woman in entertainment behind Oprah. Rihanna’s cosmetics line up Fenty Beauty drove most of the wealth, followed by Savage X lineup of lingerie, a VC-funded venture which is becoming a case study for leading disruption against category leader Victoria’s Secret. 👏

✅ How them pizzas selling? — Devyani International’s IPO was oversubscribed by nearly 7x by Day 2, led by the average joe, with retail portion filling up nearly 24 times over. Institutional buyers and other sections have shown lukewarm enthusiasm. For those unaware, Devyani runs Pizza Huts, KFCs, and Costa Coffee’s in India and is counting on a post-COVID offline-retail revival mixed with India’s undying love for western fast food, to drive its fortunes.

Emerging market neo-banking conference 💰

What happened — Jupiter, one of India's most promising neobanking startups raised $45 million, in anticipation of its full public launch.

The round was co-led by Brazil-based Nubank, one of the HOTTEST neobanking companies around the world. Global Founders Capital, Sequoia, and a few others pitched in too, at a $300M+ valuation.

Nubank magic — no other fintech startup has managed to tame disruptive banking game like Nu, which is growing like a wildfire and even enticed grandpa Buffett to invest in its latest round. If Jupiter can mimic some of its strategies and get counsel, this could be a powerful combo.

Valuation has raised some eyebrows for sure, but Jupiter says it has on boarded 100K users already, and has a long waitlist.

Meanwhile, 2 other major raises kept venture markets busy ☝️

MakersPlace, the leading NFT marketplace closed a $30 million Series A round from Bessemer, and a few others including Eminem. Famous for facilitating the sale of Beeple’s $69.3 million digital art — the most expensive NFT sold, MakersPlace reports a 10x rise in users this year, with purchase volumes topping $100 million+.

Then Rahul Vohra managed to pull in $75 million for his $35/month email software Superhuman. Old media wasn’t happy about the “excess”, leading to some feisty exchanges on Twitter. Enjoy!

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Dara, how them rides filling bro? 🚕

Uber swings from one problem to another, swaying its pack of shareholders on a giant pendulum! 🤷‍♀️

For last 12 months, Uber’s problem was that riders had disappeared. Now as people start to go out, demand has returned, but so have driver issues, with higher wages eating into profits.

For the last 3 months, Uber grew its revenue by 75% YoY to $4 billion, but came up with $500M in losses, because it had to pay out higher driver wages to keep them driving.

Why are drivers being a problem?

Global car shortages — used car prices are through the roof in the US, and its hard for some people to get a car to drive
Govt. stimulus has basically taken off the incentive for people to work

Investor patience meanwhile is running thin.

Worth calling out — Uber’s Food Delivery empire is now MUCH bigger than its ride hailing business, bringing $13 billion in volumes — 65% of all Uber bookings.

Meanwhile, Godrej does better than competition 👏

Godrej Consumer, the maker of Cinthol, Good Knight, and HIT, posted a 13% sequential growth in profits on the back of strong momentum in home and personal care segments.

Surprisingly, margins were stable — an oddly excellent performance as most comparables like HUL, Marico, had seen margins vaporize during COVID 2.0.

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WTF is retro-tax 🙄

What’s poppin’ — finance ministry is amending the Income Tax Act to remove a stupid-ass clause brought in 2012, that demanded retrospective taxes be paid to government on indirect transfer of assets, that happened even way back in history.

Some handholding — so lets take an example. Vodafone International wanted to enter India in 2007, it bought out 67% stake in India operations of Hutch. But… instead of buying into Hutch India directly, Vodafone purchased Hutch’s Cayman Islands registered company, which owned the India business, giving it direct control to the keys to the India business!

Now GOI claimed that was silly — you gotta pay me some taxes, so slapped Vodafone International with a massive-ass tax bill on the ~$11 billion deal.

Worse? Vodafone-Hutch deal happened in 2007. GOI brought the law in 2012. And fined Vodafone in 2014! Aka demanding taxes retrospectively.

The ruling became a pain in the butt for foreign companies trying to venture in and out of India — affecting 17+ major deals in history, including Cairn Energy’s restructuring, which led to embarrassing fights even in international courts.

Going forward — the Finance ministry now says it’ll eliminate the retrospective element of the clause, and abandon any demand of taxes, and even refund all of these companies any taxes charged under the 2012 law. 👏

FYI, taxes for all future deals remain unchanged however, with only the ones before 2012 dropped.

Should help boost Dalal Street’s morale a bit. Tax lesson over.

Closing out — Post-COVID carnage begins, 1 2 3... 😷

Tech rally on Wall Street is coming to a screeching halt, as growth stonks slow down and make investors pprreettyyy nervous!

Media infra — Fastly, a cloud delivery network provider, that basically makes sure the streaming, ecommerce, and other media-rich content is stored in locations where majority of users need it, was one of THE hottest stocks during the pandemic! Anyway, they came out and told investors that demand is falling off, as people step out, and time spent looking at a screen saturates. Investors rammed them into the ground — with stock down 25% in 1 day.

Ecommerce — handicraft marketplace ETSY, which basically found home-locked boomers buying off fancy lamps and curtains on its platform, is again seeing “back to normal” eat up its merchandise volumes. Stock was hammered 20%!

Streaming — ROKU, the company that sells OS to smart TVs, saw weakness too, with streaming time on the platform 15% below what markets were looking for. Stock down 10%!!

Why should I care — with these trends showing faults already, markets could be embracing a massive gyration away from pandemic staples, towards travel, airline, hotels, and other routine companies. Adjust them sails!

What else are we snackin’ 🍿

🕊️ Everything is fintech - Zomato registered a digital payments subsidiary, showing plans of diversification beyond the core food delivery. Good use of that IPO cash!

🧐 Your loss, my gain - Twitter couldn’t keep Stories for 2 weeks, but that ain’t stopping TikTok, which is running pilots in some non-US markets.

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