Retail empire 😎
Tech earnings, Ride hailing, and TikTok sale.
Hi 👋, Tanvi here.
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Stock summary:
US - S&P 500 - up 1.24%
India - Sensex - up 0.68%
Strengthening retail empire💪
Further expanding its millennial friendly retail catalog, Reliance Brands has now acquired a 15% stake in leading lingerie retailer Zivame, from Ronnie Screwvala’s Unilazer Ventures.
Reports suggest Reliance will try to buy out all the other investors of Zivame as well to get a majority control over the company, paying up north of $160 Million.
RIL already has several big brands under its wing in India, including luxury labels such as Jimmy Choo, Tiffany and Diesel. All of these brands give RIL a strong advantage in upping its brick and mortar as well as ecommerce game.
As far as Zivame goes, the company holds substantial market share in the premium lingerie category but COVID-19 took a toll on its expansion plans as well as cash reserves. Just before considering this sale, its bid to raise $50 Million in additional funding had miserably failed.
Founded by Richa Kar in 2011, the company made Rs.140 crores last year and in addition to a vibrant digital presence, owns 30+ stores, and is available through 800+ partner stores countrywide.
Takeaway: with Future Group’s retail business in its pocket, RIL is out to build a retail empire like nothing we’ve seen in India. Flipkart and Amazon must be sweating. Read more.
Qatar can't get enough of India 💰
Now the Qatar Investment Authority is finalizing talks to put another $1.5 Billion into Reliance’s fiber optic infrastructure play JioFiber. The investment will be made into an infrastructure investment trust, basically an existing special purpose investment vehicle, that holds JioFiber assets.
After a successful digital services raise through JioPlatforms, now Ambani is looking to get more capital support to expand his infrastructure tentacles, all part of the broader dream of remodelling RIL as an asset light tech player.
Just last year had Reliance received almost Rs. 25,000 Crore from an investment consortium led by Canada’s Brookfield Management in a trust that holds Jio’s telecom tower assets. Currently Jio digital fibre has a 700,000 Km network of fibre optic cables in India and is planning to expand it to 1.1 Million KM.
Bottomline: everyday we’ve decided to allot 1 section to RIL’s advancements. Seriously though, what a company! Also, we can’t help but notice how the middle easterners' interest is piquing each day in India. Read more.
True hyperlocal innovation 🛒
VilCart, a hyperlocal commerce startup operating in rural Karnataka has raised a bridge round to top its earlier 2 Crore raise to digitize rural commerce. The company operates a platform that lets rural retailers order goods online and currently operates in 10 districts of Karnataka.
The raise involved big name investors including co-founder of MindTree - N S Parthasarathy, ex Sr. VP of RIL Ananth Ravi, Prashanth Prakash of Accel Partners, among others. VilCart plans on using the capital to double down on expansion in neighboring Andhra and Tamil Nadu, as well as on hiring and beefing up technology.
In addition to helping local retailers source effortlessly, the company is helping local rural brands get discovered beyond their geographical circles, in many cases bringing them to big cities. Currently the platform is serving about 5,000 kirana stores across 1000+ villages. A farmer-to-farmer trading marketplace is in the making too.
Why are we excited: We’re often quick in calling out RIL, Amazon, or Flipkart as the early winners of India's hyperlocal commerce, but our brick and mortar is so unorganized that there are countless possible angles of attacking the problem. Winners will be local, mostly fragmented and likely under the radar. Read more.
Tesla jams it into Uber 🚕
Tesla reportedly could enter the turf of Uber and Lyft as soon as next year by launching its own ride hailing service. For a while now Musk has been selling investors on the dream of an autonomous ride-hailing fleet, and this could be the first move in that direction for the company.
Tesla’s ride-hailing app, Tesla Network, will allow car owners to list their vehicles on the network and pick up and drive willing customers. It's not clear whether other cars would be allowed here or not. The company’s ambitious plans include learning and training autonomy models from ongoing operations on the platform, and accelerating its eventual dream of building a self-driving robo taxi fleet.
Analysts believe they can very well position themselves as a luxury ride hailer and charge at the higher range of what Uber and Lyft does per kilometer and still see demand flooding in.
While we’ve learnt to take Musk's ambitious timelines with a grain of salt, a rapid launch could really turn the heat up on competition.
Bottomline: the pandemic decimated Uber and Lyft and now just as the market recovers they have another formidable problem to deal with. Costs per kilometer can drop at least 5 times for autonomous vehicles, and Uber and Lyft can seriously be undercut. That’s a long shot, but exciting nonetheless. Read more.
Stellar performances by technology companies 👏
CPU and graphic card maker AMD put up quite a show as strong cloud demand and locked-down consumers upgrading their work stations helped the company’s second quarter business performance, with revenue growing nearly 26% compared to last year.
Intel’s production problems and the company going out of favour with customers has certainly helped AMD and they are slowly inching towards capturing 20% market share now in the CPU market. Investors took the stock over 10% after the results were announced.
In other similar news:
Spotify’s second quarter performance was phenomenal as well. The streaming company grew its revenues by 13.2% over last year and reported almost 300 Million active users on its platforms. Out of that, 138 Million users are paid subscribers, up 37% compared to last year. Closest rival Apple Music is at under 50 Million users, so yes you may say that Spotify is dominating the music streaming market.
And then there is Shopify, the company that allows independent vendors to build online stores. The company grew revenues by 97% vs. last year - almost doubling sales, beating investors expectations for just 40% growth. Total sales volume on the platform grew 119% to $30.1 Billion in just one quarter. Imagine that. Stock promptly gained 12%.
Bottomline: the pandemic has accelerated digital services and cloud computing, compressing 2-3 years worth of growth in 6 months. We’re already in the future. Read more.
Guess what’s TikTok’s worth? 🤑
$50 Billion. Considerably more than Snapchat or Twitter. Think about that because the company just started towards the end of 2016, while Snap started in 2011, Instagram in 2010, and Twitter long before in 2006.
The valuation comes as TikTok’s owner Bytedance struggles to save its child from the wrath of Uncle Sam. ByteDance is a Chinese company, and is unique in the sense that it is one of the firsts to receive such popularity outside of China, particularly in the west.
However, the US has been consistently slamming them for snooping and data privacy violations. So ByteDance is looking at alternatives, including spinning TikTok off, or selling a majority stake even. Logic being, if the company is HQ’ed in the US, may be they are spared all the additional scrutiny and excused from the wrath of investigations.
Reports suggest that the company has received bids from its investors including Sequoia and General Atlantic, to transfer majority ownership in TikTok to them.
Bottomline: gotta give credit to ByteDance for creating a global behemoth this fast. However, given the anti-China sentiment and the platform's role in ruining Trump’s rallies, the US administration could do some real damage to them. Read more.
Tweet of the day -
Twitter is a goldmine of wacky information. If you are a history buff, you may find this interesting.
What else are we snackin’ 🍿
🙌 Generous MacKenzie Scott - one of the earliest employees of Amazon and the ex-wife of Jeff Bezos, donated $1.7 billion of her wealth in the past year to causes including racial equality, LGBTQ rights, public health and climate change after she signed the Giving Pledge - in commitment to donate the majority of her fortune to charity.
☁️ IT’s cloud reincarnation - Cognizant will acquire a Microsoft cloud partner company called New Signature as it looks to expand hyperscale cloud advisory services and plans on building up a dedicated group within Cognizant centered on Microsoft cloud solutions.
📱 Paytm’s new hire - the investing brainchild of Paytm, called Paytm Money, has appointed Varun Sridhar as its new CEO to head and launch the company’s foray into equity brokerage business. Watchout Zerodha. Sridhar brings deep fintech experience having led the launch of realme PaySa and having worked on the BNP Paribas acquisition of brokerage ShareKhan.
👊 Twitter vs. Trump Jr. - Twitter has temporarily frozen Donald Trump Jr.’s account after the president’s son shared a video making false and potentially life-threatening claims about the coronavirus pandemic.
🤝 Neobanking moves - Digital banking platform Niyo has acquired mutual fund investment startup Goalwise for an undisclosed sum in a cash-and-stock deal. The founding members of Goalwise will join Niyo’s leadership team and run Niyo Wealth as an independent vertical.
🖥️ YC demo day to go virtual - Adjusting to the new normal, YC has announced that it will conduct its 2 day demo day virtually with the entire program streamed live. Some are happy, some are pissed.
📚 New education policy baking - For the first time in almost 34 years the cabinet has approved a new National Education Policy after the ones adopted in 1968 and 1986. Some highlights include promoting multi-disciplinary education, and bringing foreign education players to India.
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