Love for bans 🙄
Budget fever, Robinhood raise, and some mo DTC.
Hi 👋, Tanvi here.
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Kicking off the week ☕
✅ Budget fever at its peak—Monday will be budget day, and the finance ministry has already promised some revolutionary moves, calling it “unlike ever before”. Market’s expectations are set for some tax cuts, some stimulus, and incentives for corporations to accelerate investment spending. Economic recovery from the pandemic is surely looking promising, but the government’s gonna need to step on the gas really hard to pull us out of the 7-8% GDP decline we’re looking at this year.
✅ 2020, the year of devices—iPhones, Macbooks, Surfaces, Chromebooks, everything flew off shelves last year, making 2020 one of the best year on the record for hardware devices. We’ve seen Apple and Microsoft report blockbuster numbers, and now reports emerge Google sold nearly 11 million Chromebooks during the last 3 months of 2020, up nearly 300%! Work from home demand has proven a huge blessing for the entire ecosystem (vendors, device markers, semiconductor companies etc.), and the ripple is expected to last all through 2021.
No cash bruh, I’ll pay for it in oil 🛢️
Government's aggression with British energy company Cairn is returning to bite them in the buttocks, with GOI now looking to give away an oilfield to Cairn Energy, in place of handing out the $1.4 billion in taxes they’re supposed to pay the company back.
Some backstory: back in 2018, GOI ruled that Cairn owed them some $1.4 billion in back taxes for operating oil fields in India, citing some obscure tax law. Crain refused obviously, calling BS on the demand, so GOI went after their assets, force selling the company’s stock, seizing dividend and some cash to recoup dues.
Flustered, Cairn quickly ran to an international arbitration court, who ruled in Cairn’s favor, and warned the Indian government to stop endorsing such business killing tactics. The court cited a India-UK tax treaty that nullified the Indian government's charges, and asked India to return Cairn’s money immediately.
Anyway, now we’re in 2020—with a pandemic battered economy on our hands, and the government, let's just say, is running a little low on cash right now. Settling Cairn can’t be pushed and offloading some assets to them is the only easy way to cut through this mess and move ahead.
Billion more to save the fort from falling 💰
Robinhood got an emergency infusion of a billion dollars, after it was caught in the middle of the war between retail-rebels and hedgie-billionaires, which nearly broke the company’s balance sheet. Sequoia Capital and Ribbit Capital proved life saviors.
Nobody really knows if the cash raise was preemptive, just to make sure they’ve got enough moolah going into an expensive legal and reputational war, or if the company was close to facing a liquidity crisis. Also, once trading in certain stocks was restricted, customers were more likely to pull their assets out and demand withdrawals.
But the swiftness with which VCs stepped in shows not much has changed in terms of favorability for the company among its champions. Also, the company quickly secured a new line of credit from its bank.
Meanwhile in the meme world,
The internet is going gangbusters on how similar Vlad and DeepFuckingValue, the dude who started this GameStop fiasco on Reddit, look like.
Our fetish for bans 🙄
Few days ago, we cheered the government’s enthusiasm for cryptocurrencies, and plans for a digital currency in India. Turns out, we spoke too soon.
The government is introducing a crypto regulatory bill in the lower house of the parliament, as part of the budget proceedings, that seeks to build a framework to create a national official digital currency, and while at it, ban all private crypto currencies.
Is Bitcoin a private crypto currency or is it public? Ban everything else but Bitcoin? Or are we talking a blanket ban on anything other than a digital-rupee? The message itself is cryptic.
The Indian crypto ecosystem is definitely sick of the continued lack of clarity and the uncertainty. Without clear policy and framework, India could end up losing a generational advantage in how this tech transforms the world if we don’t take it seriously. Also, with threats such as this widely publicised, the average credible consumer won’t come anywhere near this asset class, which creates an artificial barrier to mass consumer adoption.
Closing out—the week ahead 👋
Last week was a mess—despite big quarterly performance updates from Apple, Facebook, Microsoft, AMD, nobody seemed to care much about anything other than meme stonks.
This week however has a formidable line up reporting their earnings—Google, Amazon, PayPal, Snapchat, Pinterest, Spotify will paint a picture of how numerous pockets of the internet economy are functioning.
Amazon is expected to have their biggest ecommerce quarter ever
Google’s YouTube business will be the focus of the print
Snapchat’s performance will shed light on the short-video game
In any case, these numbers combined with the weeks before should dictate the pulse of the broad market for a few months. We’ll keep you posted.
What else are we snackin’ 🍿
🦈Shark Tank India? - GOI has sanctioned the Startup India Seed Fund Scheme (SISFS) with ₹945 crore to finance domestic startups prioritizing innovation. To be eligible, the startup shouldn't be more than two years old and must use a tech solution at its core. Selected incubators would allot the funds and monitor the progress of the startups.
👊Amazon’s localization continues -Amazon’s move of launching seller registrations in Hindi and Tamil, to make the process regionally friendly, brought in 50,000 new seller sign-ups. Following the massive success, Kannada and a range of other languages will be next. So far, their regional language game has been quite effective broadly in appealing to heartland users and merchants.
🔥Celebs and DTC - are you even in the celebrity game if you don’t have a D2C product line? Priyanka Chopra’s latest move is a digital only eco-friendly vegan hair care line called 'Anomaly', which goes on shelves pretty soon. Indian DTC landscape is expected to explode over the next few years easily topping $50B+ in revenues, so expect many more such brands popping.
Hit that 💚 if you liked today’s issue.
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