Poach them all 💪

Drones in fashion, EVs unstoppable, and another fintech monster.

Mar 03, 2021

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: 📊

India sees another positive day as skepticism of the previous week slowly fizzles out. US markets however turned around and gave away everything added on Monday.

US:

S&P 500 - down 0.81%
Nasdaq 100 - down 1.68%

India:

Nifty 50 - up 1.07%
Sensex - up 0.90%

What’s brewing hot? ☕

✅ The EV wildfires are unstoppable—the year’s 2030, your car and your smartphone have a lot in common. Both are real fast computers packed with batteries and chips capable of doing some highly intelligent cool stuff, they’re LIKELY both made by the same company, and you can order one online to be delivered directly to your doorstep. The latest to pitch that plan is Volvo, claiming the company will be making a full electric vehicle transition by 2030 and will move sales to online exclusive by then. Volvo will also be stopping traditional engine production much earlier, and by 2025 expects to sell only EVs and Hybrids (petrol + electric combos), with the latter to be phased out eventually. EVs today make under 5% of total cars sold worldwide, and within 10 years that is going to 10x. The economic impact of the shift is going to be unimaginable.

✅ Today in digital commerce—Flipkart is gunning for a majority stake in OTA platform Cleartrip, looking to diversify its revenues base, add more product categories, beef up profitability as Walmart presses the company hard to get its financials in place before the looming IPO. Although the move pits the company in an already competitive space with MakeMyTrip, Yatra, Booking etc. splitting the bounty here, with its loyalty products and other rewards programs, Flipkart could make the proposition quite differentiating. Lastly, valuation will be down 30-40% easily given persistent decline in demand during the pandemic, which makes this the best time for a move like this!

Third time’s the charm 💉

The US FDA approved a third vaccine this week on an emergency basis, made by pharma and CPG player Johnson and Johnson. What’s special is that the vacc requires only a single dose instead of two that Pfizer-BioNTech and Moderna vaccines would need.

Also, the new vaccine does not need specialized storage, and can very much be administered by the side of the street if one wishes, eliminating major scheduling and distribution problems the current vaccine delivery is facing. The US has already ordered some 100 million doses, many of which will be sent abroad. Only overhang though—that the latest vaccine is about 72% effective, a bit lower than the other two, which could bother some people.

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Fintech’s latest gladiator 💰

Europe based fintech player Klarna, which offers a buy now pay later platform, raised a billion dollars in a private round that values the company at over $31 billion. Barely months ago competitor Affirm had opened to a blockbuster IPO on Wall Street, which underlines just how HOT the BPNL space really is.

The companies basically work with digital commerce platforms online to give customers the option at checkout to split a purchase bill into monthly payments, sometimes for a small fee, making money off of commissions on one end, as well as a tiny fee from merchants for facilitating credit. Merchants are glad to pay because a smaller upfront bill at the transaction means dumb consumers are obviously more likely to give in to the traps of consumerism.

Anyway, Klarna has grown to make $1.2 billion in annual revenues, with 87 million end users worldwide, and nearly 250,000 online merchants on the service—which is outstanding, indicating that the consumer pull is real, and these businesses a lot more successful than widely believed.

Bottomline: the BPNL model is estimated to process over $700 billion in transactions by 2025. Although fintech may seem as old as time to you by now, the amount of room for continuous innovation is staggering.

Drones are hot everywhere 💵

IdeaForge, a domestic drone manufacturing startup, raised ₹15 crores in venture debt from BlackSoil, WRVI Capital, and Qualcomm—to strengthen working capital needs and service impending large orders.

IdeaForge basically designs and makes custom drones for defense applications, security needs, and other enterprise applications, and is one of the handful of disruptive domestic ventures in the emerging UAV game. The company even won a $20 million contract from the Indian Army recently to supply a host of UAVs to support ops in tough terrains and weather.

Barely months ago had the startup raised over a million dollars in equity from Infosys. As global nations actively seek to cut reliance on Chinese imports for IOT, monitoring, and other surveillance hardware, the drone industry has suddenly gotten a jumpstart.

While we’re talking about raises,

Apna.co, the LinkedIn of blue-collar workers, raised a promising $12.5 million from Sequoia Capital India and Greenoaks Capital. That’d bring the company’s total raise to over $20 million, barely a year since founding.

Apna basically provides the nation’s blue-collar workforce with employment, upskilling, and networking opportunities in a social feed like organized mobile app interface. Total user base stands at about 6 million, while 80K+ startups and corporates hiring for gig workers and other skill based roles are routine posters on the platform.

Wal-s-mart 😎

Walmart has found itself in the cross hairs of Wall Street, and particularly Goldman Sachs, after the retailer poached two of GS’ star bankers to lead its newly proposed fintech venture.

Some hand holding—for the past few years, Goldman Sachs had been relentlessly making attempts to diversify beyond its institutional money management and investment banking business, ultimately resolving to muscle through digital banking.

Top hires were made, and Goldman in all its might, spent billions on getting an action plan in place, finally launching “Marcus”, an erstwhile lending platform now turned into a full fledged neobanking service.

But then came Walmart, luring away Omer Ismail, the soft spoken mastermind who was the head of the entire consumer banking division, as well as his top lieutenant David Stark.

Omer is in fact a 20 year Goldman veteran, and was regularly marketed by the company as the brains behind the consumer push, largely responsible for making Marcus a billion dollar annual business. David Stark on the other hand played a key role in formulating Goldman’s partnership with Apple on the Apple credit card.

FYI, Walmart’s proposed fintech venture is looking to build a consumer super app, and has already brought in outside investment from venture firm Ribbit Capital.

What matters—the banks, already reeling from a brutal attack by disruptive tech platforms, now risk being publicly stripped of morale as key leadership abandons ship. Rest of the execs are certain to follow suit, out from New York, to sunny California. Or Miami. Or BLR. Take your pick.

What else are we snackin’ 🍿

🤝 Laggards are teaming up to survive -Piaggio Group joined hands with KTM, Honda and Yamaha Motors to form an International consortium for swappable batteries for motorcycles and light EVs. Battery swapping is better over fixed batteries as it helps bring down vehicle prices as well as charging periods, but the practice has mostly failed to excite buyers and investors given the logistical hurdles in making stations available worldwide.

💉 Some relief in the stats - as the second phase of the vaccinations began, COVID cases in the country dropped marginally after 5 straight days of increase. Around 12K new cases were reported in the last 24 hours taking active cases to 1.68 lakh, along with the COVID related deaths dropping below 100 for the first time in a week.

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