Miners fortune
BNPL raise, and stuff from the week before.
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Market summary: 📊
Good pre-weekend sessions in both the US and India, with the week ending on a positive note overall.
US:
S&P 500 - up 0.077%
Nasdaq - up 0.21%
India:
Nifty 50 - up 0.64%
Sensex - up 0.60%
Weekend Brew ☕
✅ Trailblazers—who ever thought there’d be billions in making work apparel for doctors and nurses? FIGS did the impossible—the D2C startup that makes “scrubs” for healthcare workers, went public in a blockbuster raise, which saw stock pop nearly 41% on day 1, booking valuation of over $5 billion. Fashion and industrial-wear had never been merged before, but FIGS, led by two women entrepreneurs, changed the game entirely, leading with excellent marketing, giving consumers choices and fancy colors, and most importantly a unique fit. It's the only company founded by 2 women entrepreneurs to ever go public, and investors are counting on another Lululemon in the making...
Softbank puttin’ those returns to work 😎
Softbank is slowly ramping up investments, putting its harvest from the DoorDash and other blockbuster IPOs from 2020 to work already.
The company wrote a sizable check (undisclosed, read hundreds of millions) into Klarna, the buy-now-pay-later firm, which is also Europe’s most valuable startup, revising Klarna’s valuation to a massive $40 billion.
COVID’s blessing to ecommerce offered buy-now-pay-later services a HUGE boost, with Klarna making nearly a $1 billion in revenues last year, reporting close to 90 million users in 17 countries. An IPO is now imminent. Meanwhile, its US rival Affirm went public last year at a $25 billion+ valuation, signaling the entire industry’s coming of age.
Bottomline: the biggest overhang to the growth of the buy-now-pay-later industry is regulatory concerns over credit-risk getting out of hands. Otherwise, the services are believed to eventually grow to replace a sizable chunk of the global credit card business, which makes the market still young, and bright.
Not all growth is the same 💰
GPU maker Nvidia reported a cracker of a quarter, with revenues growing 80%+, profits doubling, and chips clearing off shelves faster than the company can make them.
Why? Boom in two key segments:
Gaming upgrades: hardcore gaming fans continue to upgrade their set ups, not too interested in leaving that couch for some fresh air even as lockdowns ease
Crypto miners: GPUs are excellent at parallel computing, which makes them ideal to solve complex problems necessary for Ethereum mining. With prices soaring, miners are fist-fighting with gamers to buy every unit that hits the market first
Also, NVIDIA is a key supplier of processors to massive data center operators like Google, Microsoft, Amazon, Facebook, who use these chips to train and test global-scale AI models at lightning fast speeds.
Despite the outstanding numbers, investors gave the stock a cold treatment.
Bad rep—back during the 2017-crypto rally, Nvidia had seen a similar boom for its GPUs coming from crypto miners. The company went out and told suppliers to load up on stock because this party won’t end soon. Meanwhile, crypto prices crashed within months, and Nvidia was caught with its pants down, holding too much stock with nobody to sell to. Burnt investors ain’t taking any more chances.
Tweet of the day 🐦
That’s it for today! Here’s a quick rundown of the major things that went down last week….
🙌 Masa picked his unicorn—Softbank plowed $250 million into billionaire Bhavin Turakhia’s banking-as-a-service platform Zeta, which basically builds tools that integrates with the core of legacy-banking systems, helping banks deliver better digital experiences to customers, while on the other hand helping startups offer banking, savings, investing products without assuming regulatory burdens. Valuation seemed odd, but we’re guessing Softbank understands this is going to be a long drawn out battle, with the most capitalized players likely winning long term.
🎮 Netflix and gaming—amidst debate of increasing competition, Netflix changed the subject altogether, with an entry into the video games biz. No concrete plans are known, but rumours are Reed Hastings is out interviewing execs for key roles. Investors had always been counting on the optionality the company has in sports, live events, news, and other avenues, and it's good that management is finally making moves as the streaming space gets crowded.
😔 Perils of berojgari—nationwide weekly unemployment rate spiked to 14.3% on average across India this week, as curfew-suppressed economy struggles to keep people working in jobs. What sucks is that we’re back to the same levels of unemployment we had seen back in June 2020, losing nearly 12 months of economic progress we made through recovery in the second half of 2020. Gonna take months before things get any better.
💰 Get Set, IPO—PayTM, host of the Indian payments party, is all set to go public at the end of the year, looking to raise over $3 billion at a $30 billion valuation, making it the largest Indian IPO to date. With 20 million merchants, 350 million+ active monthly users, processing 1.4 billion+ monthly transactions, the stats sure look unrivaled. And the diversification into broad verticals like investment, gaming, etc, is just cherry on the top. Can’t wait for the bid.
🔥 Digital Tata looks promising—Tata is apparently close to acquiring the $800-million online fitness elephant Curefit, as the old-school giant gets increasingly aggressive to rewire its salt-to-software empire for the future. Curefit has nearly 2 million+ users, working out, getting advice, ordering healthy food, on its range of fitness services, and the platform could be a synergistic holding in Tata’s books alongside BigBasket and online pharma marketplace 1mg.
🚗Ford's playing hard— After the pompous launch of the electric truck last week at the hands of Biden, Ford announced another $30 billion spending plan to boost EV production by 2025, particularly focusing on electric batteries, directly attacking Tesla’s moat. So far Ford has sold nearly 7k Mustang Mach-E & got a 70k booking list on the F-150 newly launched truck, and with less than 10% of vehicles worldwide electrified today, has a long market ahead of itself to cater to.
👏 Do it like Evan—days after launching Spectacles 3.0, Snapchat acquired hardware company WaveOptics, which essentially makes lenses and opto-electronic components necessary for its AR glasses, for over $500 million. Among all big tech, no company has shown so much aggression on augmented reality, outside of perhaps Apple. Just last year Snap spent nearly $250 million on acquiring key software tools to power use of AR for ecommerce applications.
🐤Tiger wants it all—the very next day after the Twitter and Delhi Police fiasco, Tiger Global led a $30 million Series B round in Twitter’s desi clone, Koo, valuing the company at $100 million. So far the company has scaled up to 6 million users, and although we’re not sure it can become a Twitter alternative, which BTW is transforming around a better use case as a “discovery” layer for the creator economy, we think success with emerging Internet users especially in hinterland India is guaranteed for Koo.
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Thanks for the updates