Microsoft eyes Discord 👀

Dorsey NFT, cosmetics boom, and Harry to make an impact.

Mar 24, 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: 📊

Hints of recovery in India after a rather underwhelming open to the week. US markets reversed directions with investors taking all their time to reclaim peaks.

US:

S&P 500 - down 0.76%
Nasdaq 100 - down 0.53%

India:

Nifty 50 - up 0.53%
Sensex - up 0.56%

Quick shots for this AM ☕

✅ Everything is a piece of art—Jack Dorsey managed to sell his glorious first tweet as an NFT for $2.9 million. The buyer Sina Estavi is the CEO of a Malaysian blockchain company Bridge Oracle, and all the funds from the sale will be going to an Africa based charity organization. In the past month alone, almost a $1 billion has been spent worldwide on acquiring digital art. Stuff’s lit.

✅ COVID’s blessing—London based food delivery company Deliveroo will be going public at a $12 billion valuation, raising $2.5 billion from the public markets. Amazon, one of the largest investors in the business will be minting $140 million on an exit. COVID’s blessing helped the business double revenues over the past year, and given record stock openings of delivery platforms elsewhere, expectations are set for a stellar run. Meanwhile, we’re counting days until Zomato makes some moves.

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Nadella goes shopping, again 💪

...this time to get some Discord pie.

Microsoft is in final talks to acquire Discord, a chat platform popular among gamers, for as much as $10 billion. The gameplay is to obviously bring a socially vibrant communications service in-house to solidify Microsoft’s Xbox gaming empire.

Founded just 6 years ago, Discord has scaled to 140 million users, running nearly 6.9 million servers (think channels or groups), allowing voice, text, and video live streaming. Last year, they made $130 million mostly via a paid tier of the product. They also run a game store where developers distribute games and can keep 90% of their income.

Far as Microsoft goes, Nadella has quite the reputation for strong acquisitions, having purchased GitHub ($7.5B), Linkedin ($26B), Bethesda Gaming ($7.5B), each strategically solidifying core franchises for the company, somehow beautifully securing trends of the future. No reason Discord should be any different.

Bottomline: a robust communications and social platform is an essential part of building a gaming franchise these days, as gamers increasingly look to broadcast and socially engage around play. All the tech platforms taking a shot at the $150 billion gaming industry have their own—Google has YouTube, Amazon owns Twitch, Facebook has a live streaming service. Microsoft can finally do better than Skype.

Sorting out infra needs 🙌

GOI’s setting up a national bank called the Development Financial Institution, for the sole purpose of financing ambitious long-term infrastructure projects, raising a total of ₹3 lakh crore from the markets to capitalize the institution.

₹25,000 crores of the cash will come from the government itself, outlined during this years’ Union budget, while the rest of the capital will be raised from institutional investors including large insurance companies and pension funds, with tax-rebates as a bait to lure folks in.

The sole purpose of the bank is to finance mega projects that seem too risky to regular market investors, or if raising capital from the markets comes with higher interest rates. This allows GOI to be a lot more nimble in planning and executing projects for a nation that very obviously needs to sort out its infrastructure needs on war footing.

An elite board will be put together to keep a tight handle on operations, and GOI will own 26% of the entity. Some 7,000+ projects have already been outlined.

Hottest from Venture Street 🔥

Direct to consumer cosmetics brands are hot property.

Online cosmetic platform Purplle raised $45 million for its Series D round from Sequoia, doubling valuation to over $300 million. Verlinvest, Blume, and a bunch of others pitched in, while early backers made bank on an exit.

We’ve seen countless deals emerge in this segment lately, with most recently Amazon investing in MyGlamm, and Nykaa raising big money a few months ago. Purplle boasts over 7 million monthly active users, and COVID enforced digitization helped the company grow total sales volumes (or GMV) to over 90%!

Bottomline: the $6 billion cosmetics space in India is still largely digitally underpenetrated, which throws a huge runway ahead of these leading platforms. Expect growth to further accelerate as the economy opens up, people start to go out again, and all that glamming up starts to matter.

Switching gears to a rather boring segment, 🥱

Online taxation platform ClearTax will have Tiger Global lead a $100 million round. Great stuff, and the deal will value ClearTax at $850 million, but Tiger’s unicorn minting streak ends here.

There’s remotely no joy in doing your own taxes, and that’s enough for anyone to fall in love at first sight with ClearTax’s value prop. By simplifying a rather arduous and convoluted process, they’re grown to process over $250 billion worth of taxes each year apparently.

In addition to that, bundled tax-saving and other investing products have been quite popular with users, and a deeper entry into stockbroking and wealth management is on the cards.

Closing out—Chief Impact my a*** 🙄

Truly wishing Coffee’s loyal readers a life as comfortable as them princes.

Post his fiery tell-all interview with Oprah, Prince Harry had already landed a new engagement. Starting next Monday he’ll be ready to dorne his PJs, log onto Zoom and report as Chief Impact Officer at an employee training and SaaS company called BetterUp. No kidding.

“I intend to help create impact in people’s lives”, says Harry.

Jokes aside, it's clearly a celebratory hire, and BetterUp knew exactly the kind of jokes people would be writing giving the company free mileage. Heck, the designation was probably just made up last night by Jen in the marketing department.

Gotta respect the genius. So which of you famous folks want to make some impact around here?

What else are we snackin’ 🍿

🎥 Video commerce has arrived - YouTube is experimenting with automatic product detection in videos uploaded on its platform. An early version of the feature was tested midway through last year but is now being expanded to people watching videos in the US. Instagram wont be the only one at this scale trying to dominate the video commerce space anymore.

💊 Indian pharma continues winning - Glenmark Pharmaceutical is one of the first domestic drugmaker to get a $40 million credit-line from the International Finance Corporation to accelerate development on several respiratory drugs. The credit comes from an $8B fund put together by IFC to accelerate quality drug production worldwide to support healthcare delivery in the pandemic.

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