Meesho lands a big one 💰

IPO fest, Gas prices, and Zoom's heartbreak.

Market summary: 📊

The downfall continues in India — slowly turning painful. US had a brutal session too, overall making this a rough week for global stocks.

US:

  • S&P 500 - down 1.19%

  • Nasdaq - down 0.43%

India:

  • Nifty 50 - down 0.53% 

  • Sensex - down 0.48%


What’s brewing hot ☕

TCS won a contract — TCS landed a mega deal from India’s commodity exchange, the MCX, to build rebuild its trading and post-trade operations platform. The project, called Udaan, will work to reduce trade latencies and make MCX’s current platform sturdier for rising volumes. FWIW, TCS already has solid experience building similar technology, including a few projects in Europe, so an INFY Tax-portal like scenario seems avoidable!

Round 2, Team Invesco  — Invesco scored a quick win in the Zee fight after the National Company Law Tribunal sided with the firms demands and asked Zee to hold a shareholder meeting as soon as possible — citing a company has no right or power to deny a major shareholder its right to request an EGM. Ouch! NCLT has set a deadline of October 4. 

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Big money pouring in 💰

Startup town had a busy day! Meesho picked up a $570 million check from Fidelity and B Capital, more than doubling its valuation to $4.7 billion. 

We’d written about this a few days back, but Meesho’s growth has been gangbusters after COVID and the business is quite aggressively pushing beyond socially-driven fashion into general merchandise, grocery, and other verticals.

What matters — Still day 0 in the India ecommerce story, and to think Flipkart got sold for $16 billion….

Meanwhile, the big bucks keep flowing in 💸

  • In B2B commerce — OfBusiness which provides a procurement platform for industrial goods to SMES raised another $207 million from Tiger Global and Alpha Wave, doubling valuation to $3 billion. The company combines the marketplace with a bunch of SaaS tools that simplify new contract issuance, tender management, as well as lending services — and is growing revenues at 300%+ rates. 

  • Then in Health Insurance — YC backed Loop Health raised $12 million for its Series A from Elevation Cap, General Catalyst, and Khosla Ventures. Loop basically provides group insurance plans to large employers — combining it with its own virtual primary care experience through in-house physicians, which makes it easy for people to understand their policies and fully avail benefits. Loop serves 50K members, and is growing sales 50% MoM.

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D2C poster child goes public 📈

What happened — Warby Parker, kinda like the Lenskart of the US, went public at a $6.7 billion valuation — in one of the most watched IPOs of the year.

WP had all the ingredients for failure when it started in 2010 — it was an online-only store that would ship customers prescription eyeglasses (a product that people are extremely picky about) — not 1, but 5 of them, so people can pick 1 they love and return the rest. WP would then take the doctor’s-prescription, plug prescribed glasses into the frame, and resend a box to consumers. So taxing!

Despite the hoops, it worked, and people LOVED the experience. But… as you’d imagine with all that back-and-forth, profitability became wishful thinking. 

Quick look at the financials:

  • $487 million in revenue for last 12 months, growing 33% YoY

  • Loss stands at ~$60 million, never made a profit

  • Has 2 million active consumers, and spends 20% of its revenue to acquire users, with costs rising

Anyway, here’s the S-1 for the D2C nerds. 

Why care — public market reaction (and patience) with these D2C businesses will set the tone for the rest of the pack worldwide. Also, can’t stop but admire sturdier D2C companies like Nykaa here in India which are profitable from the get go.


Zoom got its heart broken 💔

Zoom had made its first mega acquisition a while agobuying call center software provider Five 9 technologies for $14.7 billion. Well, last night Five 9’s shareholders decided to reject Zoom’s offer, effectively killing the acquisition.

Why though — Zoom had agreed to pay for the acquisition with all-stock. But since the deal was announced, Zoom share prices have tanked — down almost 30%. Five 9 shareholders met and decided they were getting the short end of the stick!

What now — Zoom was counting on the deal to foster its entry into the $50 billion contact center biz to save its declining video-conference empire.

Eric Yuan better bring out some cash (via debt, or pay more shares), or quite possible a competitor (Google, Amazon, or even Twilio) swoops in and runs away with his bride.


Closing out IPO buffet, for all tastes and sizes 🙌

IPO markets are buzzing again. Quick look at a few names worthy of shopping… 

  • Old school agriculture — Fertilizer manufacturer Paradeep Phosphates was green lit by regulators to go public. The company makes complex fertilizers under the brand names Navratna and Jai Kisaan-Navratna. FYI, GOI owns about 19.55% in the business, most of which will be sold during the IPO, along with an offer of new shares worth ₹1,255 crore — and funds will be put into acquiring a fertilizer facility in Goa, and repayment of debt.

  • Health care delivery — Global Health, the holding company that runs hospital chain Medanta just filed its docs for a listing. The company runs multiple healthcare facilities around north and north-east India, is backed by PE giants like Carlyle, churns ₹500-600 crores a year, and was an acquisition target for the Manipal Group a couple years ago. 

Bottomline — nearly ₹45,000 crores will be raised from the public markets over the next 2 months, across 30+ major raises. Have your pick! 


What else are we snackin’ 🍿

💰 Creator honey - Facebook is launching a creator education program in India, to help creators learn how to effectively grow more on its platforms.

👴 Talent moves - SpaceX appointed a former PayPal employee, Sanjay Bhargava as the India director of Starlink, SpaceX’s satellite internet venture.

🥱 Open wallets - GOI raised prices of natural gas in India by ~62% — a raise for the first time in nearly 2 years.


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