Monkey see, Monkey do 🐒

More IT earnings, AR moves, and cleaning old tech.

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Market summary: 📊

So far it's turning out to be a great month for Indian markets, helped by stellar earnings from the IT giants. US markets remain in a limbo with elections just a few weeks out now.

US:

  • S&P 500 - down 0.66%

  • Nasdaq 100 - down 0.81%

India:

  • Nifty 50 - up 0.31%

  • Sensex - up 0.42%


Cleaning out the garage 🧹

Yahoo is apparently shutting down Yahoo Groups, after the company as well as users don’t see why something like that should exist in 2020. The decision comes from Yahoo’s new overlords Verizon, who had purchased the erstwhile giant for a paltry $4.5 billion in 2017.

Jokes aside, the Y Groups service, as you may have figured out by now, competed with FB Groups, Reddit and such, allowing strangers on the internet to discuss random stuff since back in 2001. As times changed, internet strangers have become meaner while Yahoo’s user experience has gone to the dogs, so this eventual death is not surprising to anybody.

Why we care—the news is kinda a reminder of how fast things evolve, prosper or go obsolete in the digital world. Once heralded as the greatest consumer internet giant, Yahoo has vanished while those disrupting it, like Google and Facebook, have gone on to build trillion dollar franchises. 

The incumbent, who leaned too much on spamming users with irrelevant ads and chasing a million directions, ended up reduced down to Verizon’s play toy. Aight.. enough philosophy.

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Who gaats the cash? 💰

In the latest ecommerce win, fresh-produce marketplace FreshToHome is looking to raise a whopping $130 million to help mount a credible attack against the leaders BigBasket, Dunzo, Swiggy as well as RIL, AMZN, Flipkart in India’s piping hot hyperlocal and ecommerce market. 

And there’s no dearth of enthusiastic investors ready with their checkbooks—PE giant Invest corp, Raed Ventures, Middle East Oils and Grains, and other notable buyers have already formed a line that stretches around the corner. About 30% of the round is full already.

Slightly different from its competitors, the company specializes in delivery of fish and meats, which is a priority for them, along with other grocery and ready to eat foods. So far they’re operating in 7 cities, with a solid network of direct sourcing, cold storage capabilities and distribution. Funds will go into wider sourcing and tech-quipping providers.

Takeaway—like how we said a couple days ago, it's now or never in the e-grocery market, because winners will leverage economies of scale and drive a merciless assault on smaller market participants very quickly with freebies and doles. Over $4 billion in prize money is at stake and expect deals and M&A to stay hot over the next few months. 

IIT Madras has an answer for Wolf Gupta ☝️

A startup incubated at the IIT has launched a gamified coding platform called HakerKID, to help kids learn coding, based on the block-based programming language. Essentially, the service breaks down logic into modules that connect together to flow like a story, creating narrative based assignments. End goal is to prepare kids to compete for an ‘International Block Coding Olympiad’.

It's free of cost, so far has been tested with 1,200 kids from all over the world and is surely a laudable effort on the institute and the startups' part to change the status quo. 

But on a serious note, what TF will it take for us to leave these children alone for once? By the time these kids grow up, coding would probably be abstracted considerably by low-code tools, while soft skills and or liberal arts know-how could end up mattering more than ever. Should we start a gofundme here? 🤨

Lastly, one update on the Roblox IPO

Roblox, the social gaming platform and development engine has confidentially submitted documents for its IPO. Relatively unknown to the adults, the platform is a huge hit among kids and teenagers internationally, with over 150M active users flocking to it for social gaming each month. Eyes are set for a blockbuster public offering.

Or… analysts aren’t ruling out an acquisition from FB or Snapchat even.

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Monkey see monkey do 📱

In its latest strategic move, Flipkart has decided to make self-branded smartphones, leveraging the “MarQ” label under which the company has been selling TVs and air conditioners before. Management believes that its devices will have solid appeal from the “Bharath” market.

Manufacturers have been identified already, with Forme Communications Technology and Advantage Computers India leading charge. If you remember, Flipkart had originally made a bid at smartphones in 2017 but had lost the battle to low-cost Chinese smartphone players.

But now considering the turning sentiment against China, management thinks it may be worth a shot again. They plan on pricing the devices in the ₹15,000 range—not exactly cheap, but not expensive either. Hmm.

Could this work for them?—sounds alright, and with India’s expanding digital base, we can see why this could be a quick win. But the strategic backpaddling on self-branded devices in the past makes us wonder if this is just an attempt to mimic Reliance’s recent move of launching low-cost Android phones in India.

And it's not just this, the theme is consistent with investments and decisions Flipkart has made recently—be it with online pharmacy, or hyperlocal commerce, or strategic bets on smaller ventures, the company has mostly chased its more ambitious competitors, Amazon and RIL. 

Without the founders at the helm, they increasingly look like a headless chicken, coming up with something new each day, mostly playing catch-up with rivals despite having had such a massive lead in the market. Or it could just be that their PR machinery sucks at narrative management, but in any case, it's not the ideal position to be in when you’re up against two giants led by two of the fiercest capitalists of our times.

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Infosys smashes estimates 💻

India’s widely watched IT earnings season has so far passed with flying colors, as Infosys came out with brilliant numbers yesterday, marking good wins for 3 of the top 5 IT companies now after TCS, Wipro both beat earlier. 

INFY managed to grow quarterly sales 3.1% YoY, a show of might in a time when the IT industry was expected to contract like 15%, bringing in $3.3 billion in revenue. Revenue attributable to Digital services grew 27.4% YoY to $1.6 billion. Moreover, operating margins expanded like 4% and a healthy dividend put shareholders on cloud9. 

What’s next—the worst is over for the IT industry and with lockdowns easing and employees slowly easing into the shift to work from home, things will only look bright from here on out. INFY is also guiding for 3-4% overall sales expansion this fiscal year, and particularly with 5+ cloud acquisitions in their pocket so far, it shouldn’t really be a problem to get there.

While we’re on the subject of big tech ☁️

Big Cloud wars have never been this aggressive with AWS, MSFT Azure and Google Cloud dishing it out to win big contracts from laggard enterprises who are desperately trying to pull off “digital transformations”. 

In that, Google has had some respectable wins via partnerships and most recently has won a contract from Nokia. Under a new 5 year deal, Nokia will move its IT infrastructure to GCP away from its self-managed datacenters, with particular focus on shifting its 5G focused services onto GCP. Pichai and Google Cloud CEO Thomas Kurian must be grinning in some corner.


Tweet of the day - 


What else are we snackin’ 🍿

👻 AR revolution is here - Snapchat will be one of the first to put Apple’s new LiDAR scanner to use in its iOS app for a LiDAR powered lens. The scanner, using high speed light beams, will be able to model a 3D view of the objects around you. 

🙌 Mark’s pledge - Priscila Chan and Mark Zuckerburg are planning to donate another $100 million to fund infrastructure for the US election in November and also support election officials. The couple had previously donated $300 million to the election officials to help deal with the pandemic.

🤝 Enticing holiday spenders - Flipkart and SBI have joined hands to provide both their debit and credit card holders an instant 10% discount as it gears up for the upcoming festive season. It has also partnered with Paytm to provide shoppers with cashback.

No more free trials - Netflix has pulled down the free trial option from its website for the US. The company is looking at different marketing promotion sas these markets enter the mature growth trajectory now and freebies fail to entice many users.


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