Pine labs ooof 🔥
Bezos out, Tata buzzkill, and GST dries up.
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Market summary: 📊
Gain some, lose some. After a move up on Monday, India turned around on Tuesday. US investors returned to take tech stocks higher, while rest of the market turned south.
S&P 500 - down 0.20%
Nasdaq - up 0.40%
Nifty 50 - down 0.10%
Sensex - down 0.04%
What’s brewing hot? ☕
✅ End of an era — greatest capitalist of our times, king of ecommerce, cloud computing, and the nightmare of big box retailers, Jeffrey Preston Bezos, is finally out as the CEO of Amazon. From a successful gig at a hedge fund, to a cross country road trip to start an online bookstore — dude finished by creating $1.7 trillion in shareholder value in under 27 years, while building a Delta Force like bod. Good luck topping that to new Amazon CEO Andy Jassy. BTW, great time to pick up The Everything Store.
✅ Buggatti dumped — Volkswagen sold off sports car maker Bugatti to an electric car startup from Europe called Rimac, run by a 33-year old European Elon Musk. The new company formed post spin-off will be called Bugatti-Rimac, and will exclusively make electric hypercars. As old school giants aggressively electrify (Ford, GM already miles ahead), expect all pet projects, side hustles, and distractions to be passionately offloaded by large auto companies seeking focus. Points to VW!
Quick look at a Big Balls finance deal 😎
What happened — Japan’s 2nd largest financial services company, Sumitomo Mitsui (SMFG), invested $2 billion to buy out 74% stake in India based Fullerton India Credit — making a splashy and first of its kind move for a Japanese-firm in India's financial services market.
SMFG was apparently having major growth problems in the local Japanese market — and hence major investments are being made into Indonesia, Vietnam, and Philippines — markets that are seeing aggressive lower-income to middle class shifts.
Fullerton India meanwhile runs your regular car, house, personal loan shop — with 630 brick and mortar locations, servicing citizens and small businesses, reaching 3 million end consumers.
Big picture — at the time when India’s credit and financial services industry is sounding the horn on brewing COVID 2.0 related economic damage, a major $$ deal by a foreign player is a vote of confidence that not all stinks.
Venture Street had a HUGE day 💰
Multi-hundred million fundraisers don’t happen everyday.
Payment processor Pine Labs raised $600 million, at a valuation of $3 billion from a host of late stage, gold standard investors — including Fidelity, BlackRock, IIFL, Temasek, and others.
When digitization picked pace, India’s bulk payment processing market was light years behind, and Pine with a timely portfolio spanning POS terminals, digital wallets for merchants, integrated invoicing, online payments, combined with working capital loans, helped bring large merchants into the 21st century.
Today the business serves 150K merchants across India, processing nearly $30 billion annual payment volumes.
Bottomline — a check this size is a HUGE vote of confidence in the maturity of India’s payment market. And looking at how far modular payment giants like $SQ have gone in the west, $3B is a rookie number.
While we’re on raises, ☝️
TWID, a rewards payment company, raised $2.5M from BEENEXT, Sequoia, and other angels. TWID runs a 3 way network of merchants, brands, and consumers, allowing users to “earn” points from brands and encash them at sale — driving repeat purchases for merchants, and savings for users. Quite a promising idea!
Tata dented India’s auto party 🚗
Last week we had India’s automakers doubling volumes month over month — brushing aside the 2.0 freeze of May, which had had auto stocks rise 5-10% over the past few days.
Well, yesterday Tata buried it. Company’s management offered a bleak outlook that the ongoing semiconductor shortage will continue to weigh on the industry, forcing delayed deliveries, which won’t clear out until the end of 2Q — even hurting volumes by almost 50%! Ouch.
Basically, delays in fulfillment = consumer cancellations = lower revenue recognized.
Big picture — impatient near term investors bailed, with auto stocks taking a hit. Long term $HODLERS wouldn’t bat an eye tho.
Closing out — how it hangs, India? 🧐
Investors will be busy digesting a couple emerging data points, trying to get a grip on the state of the economic machine:
GOI’s feeling the pinch as GST collections for June slide to a 10 month low to ₹93K crores. That is the lightest the pot has felt since September, indicating weakness on Mainstreet. However, GOI has enough $$ loaned by RBI and from the liquidation of PSUs, which should keep the lights on.
Turning heads to corporate India, earnings are coming up and we’re getting some hints into how things may look — Bajaj Finance’s loan book expanded a tiny bit, Titan saw outstanding growth in sales, AU Small Finance says its revenues tanking, and Godrej Consumer, like other FMCG giants last week hinted at outstanding sales growth. In summary, despite hiccups, the impacts look well contained.
Bottomline — for an average investor, deciphering and playing ball with these near term nuances is like tryna beat Tiger Woods in a round of Golf. Better strategy? Stay put, play long
What else are we snackin’ 🍿
🎧 Dropping soon - Oneplus co-founder Carl Pie had left the company to start a new venture called Nothing. First product will be out by the end of July— $99 noise cancellation earbuds.
📦 Boxy problems - enterprise storage company Box is unable to resolve its conflicts with major shareholder Starboard. Either CEO Aaron Levie gets booted, or a hostile takeover baking.
Hit that 💚 if you liked today’s issue.
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