PayTM go poof 💨
Nvidia’s rise, Amazon takes on Visa, and Zomato got plans.
Market summary: 📊
Turning out to be a total washout week in India so far, with markets again pulling back on Thursday. US managed to seek some relief, with tech turning around sharply.
US:
S&P 500 - up 0.34%
Nasdaq - up 1.07%
India:
Nifty 50 - down 0.75%
Sensex - down 0.62%
What’s brewing hot? ☕
1️⃣ Raising eyebrows — crypto branding is chasing mainstream sports. The Staples Center, an iconic stadium in Los Angeles where popular teams like the LA Lakers, LA Clippers play, will be rebranded to Crypto.com Arena, after crypto.com purchased naming rights to the place in a 20-year deal for an eye-popping $700 million — the most expensive naming deal ever. This is the 2nd such deal recently, after exchange FTX had gotten the rights to Miami Heat’s arena for $135 million — and gave every spectator a free NFT during one of the games.
2️⃣ Nvidia’s rise — the trillion-dollar club may soon get a new entrant, Nvidia. Not long ago, the company was primarily a gaming chip vendor, making graphic-cards for PC gamers, until it found that its GPUs can be used as accelerators to speed up AI-heavy computations in large scale data centers. Now NVDA’s data center business is on the verge of eclipsing its gaming business — growing 55% YoY last quarter. World’s bet on the metaverse is expected to further offer a boost.
PayTM laid an egg 🐣
PayTM failed to repeat the Zomato magic, with stock going bust at open — ending the day down 27% for its first day as a public company.
Shrewd folks could sense the jitters during the IPO subscription period itself, where the retail portion was just 1.7x subscribed, and few other categories barely filled up. But taking the crown as the worst listing of the decade? Didn’t see that coming.
Mr.Market has no emotions — PayTM built up from nothing, paved the way for others, created a category out of thin air… we’ve heard that story before too, but guess what, Mr.Market — he no care. In addition to the fact that they’re losing money by the boatloads, investors are also worried about rising competition in the payments space, and shrinking take rates.
PayTM is applying some band-aids with adjacent services, but none visibly moving the needle yet. Lots riding on continued execution, until then, likely going to be a choppy ride.
Big picture — looks like the retail market is smarter than a lot of us believed so far.
What’s poppin’ on Venture Street? 💰
Zomato liked what it saw with Grofers. After investing in the grocery-delivery company last year, Zomato is back leading a new $500 million round into the business at a $1.2 billion valuation — in a move meant to counter Swiggy’s Instamart.
Zomato has been on an investment spree since last month, spending over $100 million on stakes in Shiprocket, MagicPin, Curefit. Apparently a billion dollars has been outlined for such deals.
Far as grocery delivery goes, the quick-delivery space has been buzzing due to permanent changes in consumer behavior. Remember Zepto’s mega raise here earlier in the month?
Worth mentioning — Zomato’s investment spree has caused some tension among a few investors, who think IPO proceeds need to be put to better use. But, like what, coupons?
Meanwhile, quick look at two raises 👇
VC firm Better Capital closed a $15 million round to invest in pre-seed and seed startups in India. Better has previously invested in over 125+ startups including merchant services player Khatabook, and neo-bank Jupiter.
Meanwhile in the west, text-assistant Grammarly picked up a $200 million check from General Catalyst and others at a whopping $13 billion valuation. 30 million end users use the product.
Visa and Amazon are locked in a bitter conflict 😐
What happened — Amazon is threatening to cut off Visa as a provider of its co-branded credit cards, over a dispute on how much fees Visa charges.
Worse, Amazon UK has decided to stop accepting all Visa-credit cards, starting mid January, in an epic cock-fight between the two companies.
Some context — when you swipe a card at a merchant, Visa basically does the job of quickly checking your bank account to make sure you have the $$, and then telling the merchant you’re good to pay, assuming a “risk” for that time before money actually moves hands. For that, Visa takes a hefty 1-5% or sometimes even more from merchants.
Anyway, Amazon says Visa’s technology has barely changed over the past years, yet they keep charging more and more $$...
So what next — Amazon is now already courting Mastercard, Amex, and a few others for its Amazon Prime Credit Card. If that happens, Visa could lose hundreds of billions possibly in payment volumes!
Big picture — this spat was the last thing Visa needed. With the rise of BNPL, and other channels like payments via digital wallets, cards are increasingly losing popularity. This spat could kick off the company’s spiral decline before you know it.
Closing Out — Quick-look at a travel acquisition in India 🏨
Travel platform EaseMyTrip acquired a hospitality management company called Spree Hospitality, in what would be EaseMyTrip’s 2nd acquisition of the year.
Spree owns and operates hotels on lease — running a portfolio of 1,220 hotel rooms, corporate guest homes, and resorts, across major Indian cities and tourist destinations.
EaseMyTrip is looking to integrate those properties directly into its online platform, and instead of doling out payouts to property owners, keep $$ for itself and boost margins.
Big picture — travel stocks are back in the spotlight as we enter recovery. Some consolidation is imminent too.
What else are we snackin’ 🍿
🧐 Need em chips - Ford is taking its semiconductor supply chain in its own hands, working directly with GlobalFoundries to get its chips made.
🤷♀️ No money to pay bills - Alibaba’s profits tanked 81% YoY for the last quarter after the Chinese crackdown on big tech’s businesses.
📱 Fix ya own fone - Apple will let customers buy parts to fix their own iPhones or Macs, including replacing screens, battery or camera.
Hit that 💚 if you liked today’s issue.
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fix ya own phone, in US next year; not coming to India, are we?