Party busted 🤕
Making batteries, FB retreats, and creators winning.
Hi 👋, Tanvi here.
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Market summary: 📊
India had a meh day after a series of down sessions. US markets saw some bloodbath, with an all out assault played out against high-growth names in techland.
US:
S&P 500 - up 0.13%
Nasdaq 100 - down 0.22%
India:
Nifty 50 - up 0.22%
Sensex - up 0.014%
What’s hot bruh? ☕
✅ The insatiable Reliance empire—for a while there we believed Reliance may have had its fill of the India growth story, but nope! Jio Platforms wrote another big ass $200 million check to VC firm Kalaari Capital, one of the foremost venture growth platforms in the country. Kalaari had disclosed plans of raising a $200 million fund in 2019, and we’re guessing the entire fund is now coming from RIL. The move isn’t really a surprise though—Reliance is obviously playing for total domination, and one way to ensure that is by sprinkling cash across hundreds of ventures through a proven platform, hedging against eventual disruptive bets that you end up missing out on. May be double down on the ones that blossom.
✅ Ain't nobody riding cars—India’s demand for petroleum products tanked for the third straight month, down nearly 4% compared to same time last year, even as broad economic recovery holds up quite well. All the work from home, and the lack of road trips combined with still tangled supply chains in some parts of the country played a part. On the other hand, we suspect a modest amount of total miles travelled have probably moved on to electric vehicles over the past year too. Lastly, the high petroleum prices weigh on consumer capacity to spend.
FB flexed while it could 💪
Facebook has finally reached a deal with the government of Australia, and will stop blocking news companies from the region from accessing its platform going forward.
To remind you, FB had banned all news companies in protest against a law that demanded social platforms pay the news companies for using their content.
Nobody had expected FB to be this ruthless in enforcing its action, and the government, realizing its soft position, promptly started holding closed door negotiations with FB management—with Zuck and the Australian Treasurer in fact holding multiple one on ones.
Now post talks, FB is granted some extended time to figure out a payment arrangement with the media companies, which Zuck is apparently happy to do, and Australia has promised to amend the law in the meantime, to change how conflicts in payments arrangement between two negotiating parties are resolved in the future.
The final outcome will take some time, but the war has ended with a truce.
Bottomline: the tricky part for Zuckerberg will be pacifying investors that other regions in the world won’t pursue similar deals, and that all of these arrangements won’t eat into Facebook’s rich margins which make it such an attractive cash machine.
Spotify doubling down on the creator economy 🎵
Spotify will allow creators to directly monetize podcasts on its platforms, via paid subscriptions for exclusive content.
Podcast monetization is a monster challenge for creators trying to make the most of the fledgling channel. While ads work, tracking, targeting, and measurement are a pain. Several podcasters use bonus episodes or adjacent paid content as a lever to further strengthen monetization, but a comprehensive solution is missing.
Although other apps allow for this already, Spotify had so far been reluctant. The company will basically be bringing the feature over from Anchor.fm, a podcast making app that Spotify had actually purchased for $100 million about a year ago, and will be integrating it more tightly with the main SPOT app.
Spotify's recommendation algo will do the magic of bringing in more users, while Spotify takes a small cut of the $$ that creators make.
Bottomline: SPOT makes most of its revenues today through ads and subscriptions. Earning commissions by allowing creators to experiment widely on top of the platform, while providing them the tools to be prolific could be a powerful strategic move, helping them build a sizable commissions based business overnight. SPOT investors will be popping some champagne tonight.
The EV Game just got hotter 🔌
Days ago we jokingly speculated that Reliance might be venturing into EVs, turns out plans were already baking. SEBI filings show RIL seems actively keen on transforming its energy empire into renewables, however not leading with vehicles, but with electric batteries.
RIL’s massive energy empire has some 60% exposure to fossil fuels, and India’s rapid transformation and surprisingly high acceptance of EV technology means not making a preemptive move to capture the emerging space would be foolishness.
Battery technology is one of the biggest bottlenecks in the EV industry as of today, with ample scope to improve efficiency, drive prices of battery down, and dominate the market for a long time. Moreover, the same batteries can be supplied for energy storage, home energy needs and a range of other applications. Morgan Stanely says RIL could pump $10-$15 billion over the next decade to secure its energy leadership.
In fact, pre-pandemic, Reliance was very close to offloading 20% of its oil empire to Saudi Arabia’s government owned firm Aramco, but those talks never went through, and now speculation is rife that both Aramco and RIL could be joining hands in this green endeavor instead. Two rich AF giants further warming up an emerging opportunity, couldn’t get better for the local EV infra ecosystem.
While we’re on EVs,
Fleet deployments continue to pick pace—Amazon will be acquiring and deploying nearly 100 EVs sourced from Mahindra across 7 Indian cities, in a bid to electrify its delivery fleet across the country. The deployment is part of Amazon’s promise to leverage over 10,000 EVs in its delivery fleet in India by 2025, with an aim of being fully EV first by the end of the decade.
What matters: large corporations stepping up to adopt emerging paradigms helps accelerate mass consumer adoption of the tech as well as attract investor capital to the opportunity. Points to Amazon for doing their part.
Closing out—pawri busted 📉
Try not to look at your portfolio today. The unfettered rally that began about a year ago finally seems like it's losing steam. Sensex and Nifty just had 5 straight days of weakness, and a flat day at the end of it. BTC looks too comfortable under $50K. The Nasdaq’s slaughter has turned Wall Street all red, which could weigh things down worldwide. Its a shitshow!
The long term investors are secretly smiling though, it's a phenomenal opportunity to add to quality businesses on the pullback, and it also means expectations get checked a bit while the flakes getting pushed out, before it's too late.
What else are we Snackin’ 🍿
🗼 Airtel’s quest for a comeback - the race to get ahead on 5G deployment is slowly picking pace, and Airtel announced a close working relationship with 5G chip maker Qualcomm. Airtel will utilize Qualcomm’s platforms to roll-out virtualized and open RAN-based 5G networks, via Fixed Wireless Access set ups to small businesses and establishments in key regions. Basically, the duo will be working to bring 5G to market using modular state-of-the-art solutions, with the least investments and time to market possible.
📸 Making the platform complete - to help those over-drooling on food pics, Instagram will be educating users around eating problems by creating a directory of disorders, activated upon searching for a specific tag, that will guide users to resources or helplines provided by concerned regulators. Trials are on in western countries, with impending launches globally. The possibilities to offer incremental services within social platforms is truly staggering.
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