Masa wants in
Slack's sweet quarter, and stuff from the week before.
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Market summary: 📊
Indian markets soft landed into the weekend after a pretty decent run this week. Using the meme stock chaos as an excuse, Wall Street finished in style too, giving tech a nice bump.
US:
S&P 500 - up 0.88%
Nasdaq - up 1.78%
India:
Nifty 50 - down 0.13%
Sensex - down 0.25%
What else are we snackin’ ☕
✅ Aviation gets a speed boost—United, one of the largest airlines in the world, made some waves by signing a deal with supersonic jet maker Boom to buy 15 of their supersonic jets to be delivered in 2029. These jets travel faster than the speed of sound and can cut travel time between global economic centers by half (think Mumbai to London, 4 hours). There’s a fair bit of skepticism around the technicalities of going so fast, and if it makes any economic sense, but with air traffic expected to explode post-COVID, the market is desperate for efficient innovation.
✅ Slack blasts a sweet quarter—Slack is THE default homebase for remote workers and learners, and it's starting to show in the numbers. For the first 3 months of 2021, the company grew user accounts by 39%, brought in $273 million in revenues, and reported solid improvements to its bottomline. Things seem to finally fall in place for the company, which has since its IPO in early 2019 largely failed to live up to the market’s expectations, until Salesforce swooped in and acquired them last year. Good steal!
Flipkart’s quick raise… 💰
3 years ago, when Softbank was on a bottomless decline, Masa Son had offloaded his 21% holding in Flipkart for a handsome payout when Walmart had come knocking. Now, flush with cash on its recent wins, Softbank is apparently back, with a $700 million check this time, leading a $2 billion pre-IPO round in Flipkart.
Bunch of other big name late stage buyers are piling in as well, including ADQ and CPPIB, the sovereign wealth funds of Abu Dhabi and Canada.
Post round, Walmart’s bright lil boy will be valued at $30 billion, dressed up to appease bankers and underwriters of Wall Street for its impending listing in the US.
Big picture—western investors have handsomely rewarded e-commerce stocks from emerging markets in the past, including MercadoLibre (LatAm), Jumia (Africa), PagSeguro (Brazil), Sea (Singapore). Expect nothing short of a grand welcome this time too, whenever that is.
Quick check on RBI’s mood... 🙄
The Reserve Bank held a press conference yesterday offering the markets a temp check on its mood in the backdrop of the economic carnage enfolded by the pandemic.
Quick highlights from the discussion:
Repo rates to be held at 4%—in simple terms, this is the interest rate at which any bank (think SBI) can borrow money from the RBI to go out and lend it to average folks and businesses. Higher these rates, higher the downstream rates charged by banks to make a profit, which makes access to capital hard. RBI keeps these rates somewhat low right now to spur economic activity downstream.
RBI says it expected GDP next year to grow 9.5%—promising in the face of uncertainty
Not too worried about big loan problems coming out from the pandemic, working with banks to resolve problems before they blow up
“Concerned” about crypto trading, but won’t block anything (THANK YOU!)
Public debt stands at almost 90% of the GDP—but hopes that focus on growth will solve that problem
Couple other initiatives announced to make capital access easy to aviation, hotel, bus operators, rentals, and other worst-hit sectors
Key takeaway—generally, the bank gave the impression that the worst economic impact of the 2.0 wave should be much lesser than what we saw in 2020, and with consumer confidence high, problems like inflation will take care of itself in due time.
That’s all for today! Here’s a quick look at the big things that went down last week...
🚀 Infra winners—logistics as a service provider Delhivery raised $277 million from late stage investor Fidelity, revising valuation by 50% to $3 billion, in perhaps its last ever fundraise before IPO. The company powers end-to-end logistics operations for modern digital sellers, offering services from managed warehousing, cross country transportation, to last mile delivery, demand for which has been on a tear on the back of the ecommerce-boom for the better part of the past decade.
📉 Auto biz bleeding—car sales numbers for May came out this week, and things don’t look so bright. TVS volumes were down 30%, Maruti down a damning 70%, Mahindra, Tata, Eicher, all tanked more than 50% relative to April numbers. Only bright spot was Mahindra’s tractor sales numbers, which because of pending back orders, was only 12% down.
💻 Dev’s are HOT—Stack Overflow, the favorite “social” platform for coding aficionados got sold for $1.8 billion to private equity giant Prosus this week. The website gets nearly 100 million unique user visits every month, and Prosus is hoping it forms the top of the funnel and a critical distribution lever for the PE company’s multi-billion dollar portfolio of cloud software and SaaS tools. Also, another data point showing the power of communities!
💪 Auto giants shifting gears—Mercedes made an odd decision to go ahead and sell cars directly to customers in India, just like how Tesla does things globally, stopping supplying dealers with new car inventories, and mostly relegating dealers to post purchase services. Meanwhile, Mahindra & Mahindra will spend over ₹12,000 crores over the next 3 years to plot a comeback in India's auto game with 20+ new models, with nearly 50% of that capital going to EVs. Both giants hope the “changes” will help them become future proof.
💰Scaling bijness—D2C rolling up has suddenly caught fire in India. Mensa Brands, the holding company kicked off by ex-Myntra CEO Ananth Narayanan, closed on a $50 million Series A round led by Accel Partners, and a bunch of others pitching in. These companies operate solely with the intention of buying out leading “independent” digital brands, scaled on Amazon, Flipkart, and other marketplaces, consolidating them under a single umbrella, saving on operating costs, and scaling them beyond the 0 to 1 journey. Mensa joins Goat Labs and a few other recently funded startups in India.
🦄 Minted some more unicorns—Tiger Global is valuing B2B marketplace OfBusiness at $1.2 billion, pumping $100 to $150 million into the company. OfBusiness basically offers a procurement platform for SMEs, who use it to bulk order raw materials and other industrial products. Earlier in the week, Urban Company, the services marketplace closed on a $255 million Series F led by Prosus Ventures and Dragoneer, at a $2.1 billion valuation. Lastly, online pharma company PharmEasy is working with Tiger Global and B Capital for a $40 million round, at a $1.8 billion valuation. Unicorn count in 2021, 15!
😎 Etsy got a GenZ filter—Etsy, the ecommerce platform that caters to handicraft sellers and artsy merchants, dropped $1.62 billion on acquiring Depop, a marketplace for used clothes and merch—which is increasingly becoming popular among GenZ and young millennials. Over 30 million people use the platform across 150 countries, and Depop made $70 million in revenues last year. The market for used-fashion is expected to top $64 billion in spending by 2024, still largely fragmented, and ripe for disruption.
👑Zoom is still king—16 months into the pandemic and Zoom hasn't slowed down one bit. Revenues of $950 million, were up 191% YoY for the first quarter of 2021, with paying customer base nearly doubling to 500K. With the back to office trend in full swing in the western world, an aggressive push to capture the broader productivity suite (calendars, Zoom Phones) as well as video-APIs is expected to keep the needle moving. $95 billion company already!
Hit that 💚 if you liked today’s issue.
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