Korean affair 💸
Real estate slump, Cisco loses out, and making of a beer empire.
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Market summary: 📊
India had another quiet day, with investors taking all their time to process the recent hot rally before kicking off another lap. US markets had a similar session as investors await clarity on the $1.9T stimulus proposal.
US:
S&P 500 - down 0.035%
Nasdaq 100 - down 0.23%
India:
Nifty 50 - down 0.019%
Sensex - down 0.038%
What’s hot bruh? ☕
✅ Gonna be a long road to recovery—the pandemic absolutely devastated India’s real estate game, with work from home pushing city dwellers and potential nesters to consider moving back to the comforts of their quaint hometowns, while broad unemployment and financial uncertainty held back consumers from assuming unnecessary debt. In all, housing sales tanked 31% across the nation, with NCR (down 45%) and BLR (down 39%) taking the worst damage among metros. Unsold inventory is piling up, and new project launches are getting paused, jolting everyone in the value chain from big builders to the daily wage laborers. Isss bad.
✅ Nothing has been kicked off—barely weeks after raising $7 million from angels including Kunal Shah, Carl Pei, one of the co-founders of OnePlus raised another $15 million from Google Ventures for this new connected hardware and wearables startup “Nothing”. $22 million in total is a lot of cash, and Google’s early participation signals the products will probably tightly leverage Android and Google’s smart home/ambient intelligence toolkits. One of their first products is apparently a wireless headphone. Pei has done it once with OnePlus, odds are he can nail it again.
✅ Show some balls—GOI had barely even meowed in aggression, Twitter India buckled and took down nearly 500 accounts and hashtags that the government cited for violating law and inciting violence. This plays out while government officials continue to depart the blue app in favor of local domestic alternatives like Koo. People have mixed feelings about government directives to social platforms, but Twitter and its friends have lost all credibility of “neutrality” when they picked sides against Donald Trump, so no tears there.
Quick pre-IPO raise 💰
Nazara Tech, one of India’s leading domestic gaming platforms, raised ₹100 crores from a late stage fund Instant Growth Ltd. Just last month Nazara had filed its papers for an IPO and the fresh raise is likely to beef up cash reserves and streamline ops until they get across the line.
Founded by Nitish Mittersain, a coding prodigy back during the Internet 1.0 wave in India, Nazara has been around forever. They’ve grown organically and via acquisitions to own some of the most enviable mass market digital properties in India across gaming, fantasy sports, kids gaming, and edutainment, and broad adjacent services. Expectations are set for ₹450+ crores in revenues this year, with growth holding 75%+ rates consistently.
This is the second big gaming investment in 2021, barely days after MPL raised a solid $90 million, and some of these firms have been absolute pioneers in broad innovation in the digital gaming space in India. Watch the IPO closely.
Dating giant Match made a surprise move 🌹
Match Group, the owner of dating apps like Tinder and Hinge, acquired Hyperconnect, a South Korean maker of video chat apps, in a deal valued at over $1.7 billion. That’s the most Match has ever spent on an acquisition, which shows this is serious business for them.
Hyperconnect basically runs two distinct consumer apps, one called Azar and the other Hakuna live. The former enables one-on-one video chats for users, the latter provides live video broadcast services. Both services are multilingual too, built with an audio engine that can capture voice and translate it into other languages, making the services popular worldwide.
Analysts suggest Match solely went after the Korean guys for their technology. In simple terms, it's a piece of technology called WebRTC, which basically enables lightning fast, real time peer-to-peer communication between two end devices, without involving the servers of another host app. For example: when you Zoom a pal, WebRTC allows your phone to talk to her phone directly without Zooms’s servers getting dragged into doing any processing or relaying for y'all.
Anyway, we’re thinking Match is planning on embedding the video-tech into its dating services to amplify options around communications. Either gonna be a good thing or a horrible disaster.
But the Korean bois are running legit businesses for sure—for 2020, Hyperconnect made nearly $200 million in revenues, up 50% YoY, with 75%+ of revenues coming from Asia. Azar has over 550M downloads, while Hakuna Live has nearly 25 million.
Bottomline: Match has always played for absolute domination, so watch closely for whatever plans they’re cooking up. Also, think it's a coincidence that they announce a splashy deal just as rival Bumble is set to IPO in a few days? Nope.
No room for imperfections around here 📈
Cisco just had their 5th straight quarter of revenue decline, failing to impress the markets, as old school technology giants desperately struggle to get by amidst strong shifts in the market in favor of emerging technologies such as the adoption of cloud.
Quick look at the key numbers:
Revenues of $12 billion, no growth since last year
Security business was the only thing to grow respectably, up 10%
Stock was hammered 5% by investors who much rather prefer owning some high flying growth company favored by the pandemic
Cisco’s primarily sell wireless routers, switches, and other network infrastructure components to support office IT ops and datacenter installations, which is basically out of fashion right now as global enterprises freeze spending on almost anything except tools that streamline remote working and distributed connectivity.
Management didn’t really do much to hide the hard market conditions, and the commentary for 2021 wasn’t exactly all rosy either.
Closing out—Eicher confirms auto trends 👋
On the other hand, look at how Indian traditional giants are routinely kicking ass…
Eicher further validated the trends we have seen from Mahindra and Mahindra and several other automakers in India so far—that demand, consumer or commercial, is overwhelmingly back after the near-death free mid-pandemic.
Quick look at some key numbers for Eicher:
Total revenues up 19% to ₹2,828 crores
Profits up 7% to ₹533 crores
Royal Enfield sales rose 5% YoY, with nearly 2 lakh bikes sold
Commercial vehicle sales were up 3%, signaling recovery in logistics and for small businesses
What matters: some of these auto companies have had their best quarter ever as gridlocks eased and pent up consumer savings gushed through the gates. Sustaining the momentum and topping these numbers going forward will be a challenge, but stocks will likely continue to outperform. And no, this ain’t investment advice.
Tweet of the day
We spent some time looking into the craft-beer revolution of India, and the guy who single handedly initiated it.
What else are we Snackin’ 🍿
🚀 Domestic space innovation is HOT- Agnikul Cosmos, a local space startup, became one of the world’s first companies to successfully test a 3D printed rocket engine. The semi cryogenic rocket engine, called Agnilet, is just one piece of hardware from start to finish and has no assembled parts. It takes about 4 days to make it, and can carry upto 100 kgs to the lower earth orbit. Could drive some huge savings at mass deployment.
🤝 FB and Shop cozying up - in a surprising partnership, Shopify will make its payment service, called Shop Pay, available to process payments across Facebook and Instagram. Basically merchants selling via FB Checkout on Instagram and other FB properties will be able to list Shop Pay as a payment alternative and directly get the money credited in their Shopify Business Account. The cozying up is making investors really happy about potential options for the duo to work together.
Hit that 💚 if you liked today’s issue.
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