Rebellion 👿
Free streaming, agri robotics, and Bansal’s newest deal.
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Market summary: 📊
US:
S&P 500 - down 0.22%
Nasdaq 100 - up 0.96%
India:
Nifty 50 - down 2.23%
Sensex - down 2.13%
First things first…
Former President of India, Pranab Mukherjee passed away last night after contracting the coronavirus. He was battling a blood clot in his brain, which eventually led to his demise. He was 84.
Pranab Mukherjee was by a mile one of the finest leaders we have seen in Indian politics, well respected and known for his bipartisan friendships. His loss will be dearly mourned. RIP. 🙏
FREEEEEEEE 🔥
When Netflix stopped licensing movies from other studios and began producing its own content by spending billions of dollars a year, critics called the company’s move outright dumb.
After-all, why would you move away from leasing the best content (think Batman, and Avengers, and all the headlining stuff that attracts millions of eyeballs) from Disney, 21st Century Fox, Paramount and the other famous Hollywood or Bollywood studios and instead go through the ordeal of making your own content, likely of much worse quality?
Well, now we can see why. When you own your inventory, you can do whatever the hell you like with it. Including giving it away for free to acquire new customers. While your competitors are bogged down with convoluted licensing deals and legal agreements to even imagine doing something like this.
In its latest bout to attract price conscious users, Netflix will offer certain self-produced movies and shows for free. You don’t even need a subscription to sign up. Just visit Netflix.com/watch-free and check out the slate. Read more. The traditional media industry is shell shocked.
Bottomline: as the company approaches 200 million paid subscribers, its next lap is prioritizing users in emerging markets, who generally tend to be price sensitive. This feature couple with their strong regional content game will go a long way. Wish we could buy the stock!
New trends emerging each day 🤖
Move aside remote work and ecommerce — there is an uncanny winner coming out of this pandemic, agricultural robotics. Investment activity in this arena has spiked nearly 40% year to date, all thanks to a global shortage of workers for farming.
Local workers are hit with quarantine while constraints on global immigration has put a pause on international movement labor in developed regions, which means farms everywhere appear deprived of necessary labor force. While we may not feel the pinch in India, where the majority of our farming is unorganized, the US and the EU are struggling.
Also, cash strapped farms are using the opportunity to slash salaried workers in favor of machines that can be leased.
So far, more than $650 million has been deployed in the early venture space for this segment, already exceeding all investment that went into the space in 2019 and slowly catching up with 2018 investment levels. Read more.
Zuck coming for more 👀
Zuckerberg’s non-profit organization has invested in Mumbai based edtech startup Eruditus, as part of the company’s $100 million Series D round, valuing the startup at $800 million post-money. Leeds Illuminate, South African internet giant Prosus Ventures, Sequoia and Ved Capital were other notable investors.
Eruditus provides executive education programmes in association with global business schools such as MIT, Columbia, HBS, through a flexible six to eight schedule, made available on campus, off campus and online modes. The company plans to use this funding to expand to more countries, improve product functions, and make selective acquisitions.
In more high-profile raises,
Micromax co-founder Rahul Sharma's EV venture Revolt Intellicorp is looking to raise up to $100 million to fund product development and expansion into more cities.
Revolt sells the identical RV300 and RV400 electric motorcycles, and has already sold about 1,500 units since its inception last year. The company is working on two new vehicles. Sharma believes product validation is through and the capital will be utilized to bring the product more widely into the market. We have an Elon Musk here.
Finally, even The Chainsmokers want in on India
YC backed B2B commerce platform, Bikayi, raised a seed round of $2 million from big name investors including Mantis Ventures, a fund promoted by the popular band Chainsmokers.
The company’s first product - a Whatsapp integrated online store platform with embedded payment functionality for SMEs is attracting lots of attention. Cash raised will be used to beef up talent to accelerate product development, ramp up the platform, and onboard a million new merchants, says the founder. Read more.
Bansal pulls the trigger 💰
We wrote a week ago about Sachin Bansal’s grander ambitions revolutionizing financial services in India under the Navi Tech banner. Yesterday, the billionaire entrepreneur finally pulled the trigger on Future’s Insurance operations — in a deal valuing Future Generali’s non-life insurance enterprise at ₹1,400 - ₹1,500 crores.
Kishore Biyani’s debt laden Future Group is rapidly exiting core businesses, raising cash to avoid defaults, and Bansal may have received some urgency discount for sure. With the deal, Bansal’s Navi on the other hand gets a sturdy existing enterprise with enough cash flow fire-power to fulfil its agenda of revolutionizing old firms and mounting a lateral attack on the fintech market in India.
Just yesterday in fact there was a news that Bansal may be looking at Liberty General Insurance’s business for a buyout. Liberty General, a slightly bigger operation, has a balance sheet size of ₹1,734.41 crore and the entity desperately needs capital to improve its solvency position and match the minimum solvency ratio of 1.5.
Bottomline: while details of the talks are elusive, the deal will underscore a trend in motion — rapid consolidation in India’s non-life insurance business. Recently ICICI Lombard and Bharti AXA General had merged in a high profile deal. Causes could be 1. Threat for disruptive startups 2. Scared of large platforms entering the space or 3. Plain debt-fueled operations finally catching up to the laggards.
A brewing rebellion ✋
The Chinese apparently have had enough with Donald's nose poking with TikTok and are looking at ways to limit the scope of a foreign acquisition of TikTok, by all measures, further worsening things for Bytedance.
The Ministry of Commerce in China released an updated list of export controlled items over the weekend, and one of the items on the list was “personalized content recommendations based on data analysis”. Technically, this bans Bytedance from selling its IP to a foregin nation, unless China okayes it. The reason cited for enacting this law overnight was potential military uses of such technologies in addition to their current civilian applications. While it's not clear if TikTok prompted China to pass the law hastily, it doesn’t take a genius to read between the lines.
Large part of the TikTok value proposition is uncontrolled access to its IP including its divinely precise recommendation engine. Ever open the app and feel like you got dragged down a hole for the next 45 mins with no sense of time? Total black magic. Anyway, analysts believe it will take some time to ascertain the scope of this regulation, its intent, and how the US government responds.
What else are we snackin’ 🍿
🖥️ WFH storm catches wind in India - RPG Enterprises has become the first major Indian company to embrace work-from-home. The group’s salesforce will permanently work remotely, while other staff will be called in office 50% of the time. This will surely be a bold move for the non-tech enterprise with presence in tyres, IT, health, energy, infrastructure and plantations.
🍫 Taking on big problems - Nestle will pay $2 billion to own a peanut allergy treatment maker as the diversified food company looks to expand its fast-growing health science business. Nestle estimates that up to 240 million people worldwide suffer from food allergies, with peanut allergy being the most common..
💔 Awww, feelings hurt - A local court in Bihar granted tainted businessman Subrata Roy’s appeal asking Netflix to stop using his name in its upcoming web series 'Bad Boy Billionaires'. Netflix will move the Supreme Court today and file a writ seeking vacation of the stay ordered by the court. The docuseries covers high-profile of defaulters India saw over the recent decades.
✈️ International travel ban continues - International flights to and from India will remain suspended till 30 September. Only all-cargo operations and flights specifically allowed to operate by the aviation regulator including repatriation flights, charter flights, and flights under the Vande Bharat Mission, will continue to operate.
💊 India’s pharma winning big - As China loses favor across the world, India’s pharma space is looking attractive. Malaysia-based PE firm Creador has now invested ₹250 crore in Indian pharmaceutical packaging firm Shriji Polymers, a manufacturer and packaging play with operations in India, US and Canada.
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