Pat on the back 👏

Musk surprises, Quibi's nightmare, and Asia's richest man.

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Market summary: 📊 

Indian markets keep on adding—Sensex is in kissing distance from 50K. US had another meh day, with the political circus confusing investors.

US:

  • S&P 500 - up 0.052%

  • Nasdaq 100 - down 0.081%

India: 

  • Nifty 50 - up 0.54%

  • Sensex - up 0.50%


Stuff to begin with

1️⃣ Why you do me like this bro—Future Group seems increasingly pissed with Amazon’s shenanigans after Bezos and Co. asked daddy-SEBI for a full review of the pending Reliance-Future acquisition. To remind you, Amazon is contesting it has the first right to invest in Future, and the RIL deal violates their agreement. With resolution now in courts, and Reliance unable to close on the acquisition until then, Kishore Biyani is making desperate appeals. 🤷‍♂️

2️⃣ Tesla’s got a surprise for ya—Tesla formally incorporated an India entity last night, fueling speculations that the much anticipated entry into Indian markets may finally be here. Odds are the current entity is in place to scope up the possibility of an eventual launch—initiate vendor talks, hire consultants, figure out government regulations etc. with an official play still years away.

However, it goes without saying, that given the explosive rise of the high-rolling upper middle class here, India is definitely one of the most attractive potential markets for expansion for them.

Also, the company’s entry could be a HUGE boost to an already nice humming EV market here. Musk fans are cheering and $TSLA was up 7% yesterday… you know, just another Tuesday.


Inflation starts pulling back 📉

After a run up for most part of 2020, consumer inflation finally crawled back a bit for the month of December—down to 4.59% in Dec 2020, from 6.93% in Nov 2020. 

Lockdowns jolted the economy, but with time supply chains and logistics infrastructure is coming back up, shortages at consumer retail points as well as hurdles in distribution are being resolved, the labor market is seeing people return to work, and banks with a better sense of its lending problems are slowly going easy with loans and access to capital—all of which possibly helped. The Dec 2020 rates are pretty much at the same levels they had been in 2019, before COVID came hammering.

Takeaway: value chains disrupted and tangled by the sudden freeze in economic activity are slowly getting ironed out. We think the government deserves points for painstakingly waiting it out, and not flooding the market with extra liquid cash via stimulus.

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Roku steals Quibi’s show 📱

Y'all remember Quibi—the mobile-first streaming platform that spent billions on acquiring top-rated original content. Well the company had embarrassingly failed because their bite-sized content meant to be watched by office commuters on the go was out of favor during the pandemic.

Well, the company had spent hundreds of millions on making tons of original content, with the likes of Sophie Turner (Sansa Stark), The Rock, Idris Elba etc. and now with doors shut they’ve sold it all to streaming hardware platform Roku.

Roku is essentially like a Chromecast (a fancier one) which basically turns any TV “smart”, and allows for multiple streaming apps to be accessed on them. Leveraging a platform agnostic approach, they’re slowly emerging at the forefront of the “tv-as-a-platform” opportunity.

Anyway, Quibi’s slate will beef up Roku’s offerings to millions using its service—jussssttt in case someone absolutely doesn’t find anything else to watch on the million other streaming services they’re paying for right now. Nobody knows how much Roku is spending on acquiring Quibi’s stuff, but don’t think it's more than a few million—peanuts!

Little insight for ya: keep an eye on Roku—it's emerging to be a unique position sandwiched between some of most popular streamers (Netflix, Disney, and others) and the viewer. They’ve grown their user base to 50 million+ and stock has been roaring.

While we’re here, 

Last year, Netflix spent nearly $17 billion on making original content. That’s the most (if you exclude sports) any single media company spent worldwide. This year, they’re eyeing a budget of $20 billion+, with at least 1 movie to be launched each week for the rest of this year!

Just bonkers how the company single handedly lit up the self-owned content game and ripped a new one to every single traditional media giant.


Sell yo losers, buy some winnahs 💪

As ride hailing demand slowly shows signs of bounce back, Uber’s stock has been running like a horse, nearly doubling up from March 2020 lows. Softbank wasn't gonna let the chance slip—and the company has offloaded 20% of their Uber holdings to book a $2 billion gain. Good kill.

Uber had a phenomenal startup journey, but the company’s tryst with the public markets had mostly been a dud. For the last 5+ years, late stage venture investors (Softbank had bet a lot on them too) mostly saw their money in the water.

Organizational issues, new CEO, driver protests, self driving mishap that literally killed someone—the problems wouldn’t stop. They quit many global markets, sold off to key verticals to competition elsewhere and just as costs were coming under control, COVID hit them in the nuts.

Anyway, Softbank’s been having a couple of horrible years here, with literally every big money bet (Oyo, WeWork, and many more) in large markets ending up on the wrong side. The $2 bill here should placate their investors and keep the lights on for further foraging. 

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Tweet of the day—🐦

We’re no fans of China either—but Zhong Shanshan’s meteoric rise surprised us. Give it a read.


What else are we snackin’ 🍿

💉 Roll outs pick pace - Serum shared a splendid picture of first doses going out from the Pune manufacturing facility. GoAir then operated a flight to Chennai from Pune, containing 70,800 vials of COVID-19 vaccines. Another one took off for Delhi. PM earlier announced that formal vaccinations will begin Jan 16th. Indian capitalist establishment deserves a pat on the back for making this happen.

🏛️ Won’t give in easily - Parler, the right wing social app popular among Trump fans, has sued Amazon after Bezos and Co. took em down from cloud hosting service AWS. Parler complains AWS’ decision is motivated by political enmity, accusing Twitter and AMZN to slyly colluding. Tch tch.

🖥️ Edtech full of surprises — Byjus’s is acquiring Aakash Educational Services, the nightmare of countless Indian students. The acquisition gives the company a unique omni-channel approach to deliver services, helping them differentiate from digital only competition. And on many levels it’s actually a pretty smart deal. Tons of teachers, perennial flow of revenue from undergrad aspirants. However, edtech giants that acquired scale promising disruption of the status quo — now slowly turning into old school Indian educators is slightly upsetting champions. 


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