Pheko toh lambi 😎

Some positive data points, and quick look at the week before.

Dec 12, 2020

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Pretty good week in India with Sensex comfortably booking 46,000 levels. US markets crawled back and investors decided to sell and book profits going into the weekend.

US:

S&P 500 - down 0.13%
Nasdaq 100 - down 0.21%

India:

Nifty 50 - up 0.26%
Sensex - up 0.30%

Quick pulse on the nation ☕

1️⃣ Auto sales showing promise—for the 4th straight month, India grew auto sales as pent up demand slowly came out during the festive season. October car sales were up 14.1%, while for November new shipments rose by another respectable 4.7%. Best part? Majority of the growth for November was driven by commercial car sales (up 17%)—which is a very strong signal for broad underlying business recovery in India. Bloomberg has a cool chart.

2️⃣ Govt. wraps up credit guarantee scheme—the centre’s credit scheme which was put in place to help small businesses with government-backed loans to survive during the pandemic has now been closed, even though it's barely 65% full. GOI had allotted ₹3 lakh crores but only ₹2.05 lakh crores was availed by small businesses. Hard to say if it was the fear of red tape, lack of awareness, or banks’ unwillingness to approve loan applications that caused this, but citizens have been critical and the government gave up after extending the deadline by a month.

Share Filter Coffee ☕

Disney promises the moon 🌕

Disney announced a renewed agenda on making the entertainment giant a digital-first business, diverting focus from its profitable TV and movie businesses, and turning attention to driving growth in online streaming here on out—a hard pivot for a $350 billion company.

But management seems in the right mood to make it happen, and they even stoked investor confidence by projecting 260 million Disney+ subs by 2024. Nobody was expecting such confident estimates. For comparison, Netflix has close to 200 million subs and they’ve been at this streaming game forever, while Disney started barely 2 years ago and has managed to scale up to 85 million subs.

Disney also announced a tiny $1 monthly price increase to its streaming service—showing it won’t necessarily compete on pricing alone either. Regardless of whether Disney can or cannot do the unthinkable in 4 years, the Streaming wars are about to go down big—with two $200 billion+ companies running for market dominance. Got a favorite?

Takeaway: Disney has an upper hand with quality content—they own some of the most enviable franchises in Mickey Mouse to Star Wars and have a promising presence in emerging countries like India (Hotstar). Netflix won’t have it easy.

Then, refreshers from the week before

🤑 Luminar Tech goes public

Thiel-backed Luminar, the maker of innovative, low cost LiDARs went public last week, and the stock soared 45%+ on day 1, making the 25-year old founder Austin Russel, one of the youngest billionaires ever. Dude started the company when he was 17, got backed by Peter Thiel, and managed to get a SPAC to take his venture public in under 8 years. Luminar’s products have found their way into the finest self-driving projects, with big orders rolling in from Volvo and the likes.

👀 Walmart set to take Flipkart public

Walmart is ready to pull the trigger and take Flipkart public, with an IPO of nearly $10 billion that would more than double their investment in the company from 4 years ago. Expectations are set for valuation of about $40 billion, almost a 60% bump from previous levels, and Goldman Sachs is the chosen banker to lead the transaction. It's a bummer though that the IPO will be listed in the US, shutting most average Indian investors out.

🤝AWS and Blackberry cozy up for cloud data platform

Amazon’s AWS cloud unit signed a deal with old-friend Blackberry to develop and market a cloud data platform for smart vehicles, integrating with Blackberry’s automotive software and making it available via AWS cloud. Autonomy and smart cars are all the hype right now, and supporting one of the most basic architectural needs for mass deployment of fleets, the platform streamlines data gathering and management, and can be used by any car maker using AWS. A near-death Blackberry had been gasping for breath and this could be the lifeboat the company desperately needed.

🚕 Uber gets rid of autonomy

Uber sold off its self driving unit to a pure-play self-driving startup Aurora—which exclusively focused on making autonomous large semi trucks. It's a complex deal that allows for Uber to own sizable ownership in Aurora (some 26%) and gives them skin in the game if at all they want to buy the company out later. To remind you, Uber’s self driving initiative was hamstrung by a series of bad events including an ugly legal suit with Google, and even the death of a pedestrian, but given the pandemic and the cost problems it brought, Uber had little patience to fix everything and keep funding the project.

💰 Meesho preps for unicorn club entry

Winning from two secular shifts 1. Rise of socially-influenced commerce 2. The digital commerce boom in lockdowns, Meesho is apparently close to wrapping up a $150 million round, sealing the startups entry into India’s ever expanding unicorn list. Post raise, valuation will be doubled from the ~$700 million level the company had raised at last year. Going forward, as operating leverage kicks in, growth is likely to accelerate even faster, delivering more and more $$ on the profit line for the team to experiment with.

⚠️FTC suing Facebook for illegal monopolization

US Federal Trade Commission, the government guys who are responsible to regulate competition and ensure a healthy marketplace are going after Facebook for monopoly and bad practices, asking the US federal courts to forcibly separate Instagram and Whatsapp from Facebook. Hours later, 40+ US states sued FB again for similar charges in a state court. Obviously FB will put up a defense in courts, but overall the happenings could result in serious long term damage to the company if not handled properly—markets are frantically researching Bill Gates and Microsoft’s date with regulators in the past to get cues.

💰 Finally, the grand IPOs

This week was all about money-bag IPOs coming over from Silicon Valley, setting a frenzy on Wall Street, and in the process supercharging sentiments around startups and early stage company building ALL AROUND THE WORLD. DoorDash, after multiple revisions to its IPO prices, opened at $102 and quickly shot up 85% to $180+ giving the company a $55 billion market cap. Airbnb was even better—soaring over 120% on the first day to clinch $100 billion in market cap briefly, eventually setting at around $85 billion.