Mobile wars 🔥
New media, streaming loser, and struggling smugglers.
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Market summary: 📊
The sell off that started this week continued into another day in India. US markets took a positive turn with all major indices finishing up in the green.
US:
S&P 500 - up 1.05%
Nasdaq 100 - up 1.88%
India:
Nifty 50 - down 0.86%
Sensex - down 0.79%
Capital roundup 💰
EasySend, an Israeli no-code startup that helps insurance players build customer facing applications, raised a whopping $16 million last night from Intel and others. Started in 2016 as a compliant form solution provider for financial services, the company has found great success building B2C applications and fresh capital will be put to launch more products within its vertical. Read more.
Low-code is a promising accelerant for the next lap of the digitization of our world, unlocking creative potential of millions that are held back by the lack of technical abilities. Industry estimates are set for ~25% CAGRs in the space, taking spending up to $45B+ by 2025. Expect more deals to come out of here over time and keep an eye out for interesting ideas mushrooming.
Turning our heads to Insurance,
Insurance marketplace, InsuranceDekho, scooped up $20 million from its parent company GirnarSoft — the umbrella entity that owns a range of web properties including CarDekho, Gaadi, and other portals.
The company runs the classic insurance comparison service and has grown quite aggressively in little time, servicing 450+ cities across the country and partnering with nearly 26 general insurance companies since launch. The company closely works with advisors too and plans on scaling advisor count by 5x from current 20,000 advisors with the fresh capital. Growth apparently has been doubling each quarter! 👊
Finally, in an old school capital allocation,
Indian Oil Corporation (IOCL) will invest ₹17,825 crore in its Gujarat refinery to implement Petrochemical and Lube Integration processes, as the company looks to expand petrochemicals capacity by more than 70% from its present 3.2 million tons a year. The proposed upgrade will last 42 months and will set stage for the corporation to expand into adjacent petro-chem segments.
The investment is a welcome blessing in times when the private sector is reticent on capex commitments given economic uncertainty. Aight, onto other stories…
RIL shouts the battle cry 💪
Armed with cash in its pockets and an enviable low-debt operating position, Reliance is hungry for blood, and it has chosen the domestic low-cost smartphone market as its battleground. The company most recently has asked local suppliers to start ramping up production to make nearly 200 million smartphones in India in the next 2 years.
The phones in question are ~₹4,000 Android equipped low-cost smartphones, that would most likely be sold bundled with Jio wireless plans, helping RIL widely expand its footprint into price-sensitive “Bharath”. Google’s $4.5 billion infusion in Jio a few months ago ensures the Android-provider’s loyalty from the software front.
Reliance’s strategy here is similar to how they conquered the wireless market with Jio— attract users with a cheaper entry price-point, then lock them in with a dense portfolio of adjacent services and add-ons, secure margins by bundling tightly and make it hard for competitors to undercut or add any differentiating value. Read more.
Bottomline: there is little reason why India won’t pounce on these phones — a gift for Daadi, another one for Bunty’s online classes... the demand is right there. 👌 Beyond RIL, an inevitable expansion in smartphone installed base will certainly help ring in victory for startups building apps and services for “Bharath” in the long run. Lastly, the domestic manufacturing industry is certain to win big from increased competition in the space while China takes a hit.
While we’re on the subject Xiaomi has taken to selling phones out of van in rural India, apparently to expand its footprint and to assuage consumer concerns about Chinese roots of the phones. The pilot will also sell other electronic devices.
HBO shows they’ve still got it, for now🖖
HBO had quite the night at this years’ Emmys, beating “rival” Netflix to take home the most number of awards. HBO’s Watchmen took home more Emmys than any other show this year, a total of 11, powering HBO’s total award haul for the day to 30. Netflix however led with nominations — a total of 160, compared to HBO’s 107, finishing second with 21 awards.
Among other streamers, Amazon took home 4 awards (down from its 11 last year) while Apple earned itself 2 accolades. Read more (especially if you’re looking to watch something new right now...).
Key Takeaway: well, despite Netflix having invited more nominations, HBO (representing traditional media companies) seems to have managed to defend its position on the leaderboard this time. But that could look very different next year, because with most movie/show production stalled around the world, the traditionalists are running low on content, while Netflix having spent $15 billion+ on original content in 2019, is armed to the teeth.
While we’re still talking about streaming 🤣 —
Quibi — a novel streaming service that wanted to bring “bite-sized” (~10 min) on-the-go streaming videos in the US is apparently closing down barely 6 months from launching, despite having raised $1.75 billion to date. What!?
The reason? 90% users bailed after trials expired and acquiring new users is proving very hard. And it's literally the pandemic that killed them, because Quibi’s service was designed for on-the-go mobile-viewers aka commuters going and coming from work.
What a stark contrast to other streaming services that have only won HUGE from lockdowns. Read more.
Smugglers struggling to pay bills 🤣
The lockdowns have had another casualty — India’s gold smugglers. Bloomberg claims the pandemic has choked the entry of illegal smuggling in the country to historic lows, bringing the industry to its knees.
Last year about 2.7 tons of illegal gold was seized at Indian airports, the year before that it was 3 tons. This year on the other hand airport officials have barely opened an account at 0.02 tons, which has Bloomberg estimating that just about 25 tons may have been smuggled through the entire year of 2020, a MASSIVE drop from 120 tons last year.
In the ballpark of 17% of the nation's annual demand of gold apparently brought in through untraceable channels like these. However, the slump may be short lived as international flights and elimination of gold import duties in Sri Lanka show smugglers more hope. Read on.
Tweet of the day —
The independent media and creator landscape is on fire right now. Here’s how a 16-year old creator is making bank.
What else are we snackin’ 🍿
👏 Getting better? - After recording a whopping 1,01,468 cured patients in a day, India’s active COVID-19 case count now stands at 9,75,861. The total case tally is at 55.6 Lakhs and India has shown consistent recoveries during the last 4 days with over 90K people recovering per day.
👎Hopes smashed - mall entertainment and gaming operator, Smaaash, is shutting down after the pandemic reduced footfalls in the malls and its efforts to raise money did not lead to fruition. The company had over 650,000 sq. ft. of space with over 41 gaming zones and is one of the first companies of its kind to shut shop because of the pandemic.
🙄H1B gets heat, again - The US department of labor has submitted a proposal to the White House asking to increase the minimum wages of H-1B and other work permit holders.
👀Family tiff going sour - The Tata-Mistry feud has gone sour after the SP Group publicly declared its time for them to cut ties entirely with the TATAs. The SP Group, which is struggling with liquidity, had pledged its Tata holding to raise cash, which was blocked by the TATAs.
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