RIL goes brand shopping 🤝

Disney’s two bosses, More unicorns, and GM adopts Cruise.

Mar 22, 2022

Market summary: 📊

After an exuberant week earlier, India kicked off the post-Holi week on a soft foot. US followed, finishing flat on the S&P, while the techy-Nasdaq gave up some gains.

US:

S&P 500 - down 0.043%
Nasdaq - down 0.31%

India:

Nifty 50 - down 0.98%
Sensex - down 0.99%

What’s brewing hot? ☕

🤝 Bob vs. Bob at Disney — Disney’s ex-CEO, the legendary Bob Iger, is apparently in conflict with Disney’s current-CEO Bob Chapek — which has caused a lot of disarray at the media giant. Rumors are, after quitting as CEO in Feb 2020, Bob Iger quickly got decision-remorse and tried to shadow run the game, offering Chapek unsolicited advice, while the new CEO struggled to navigate the gazillion-pound Gorilla through the pandemic and an assault by Netflix. Good read from CNBC.

😔 Tragic crash — a Boeing passenger aircraft run by a Chinese airliner fell out of the sky yesterday in China, with 130 passengers onboard feared dead. Video footage of the fall shows the airline cruising at 30,000 feet when it suddenly starts making a vertical decline. Cause isn’t known. And although this isn’t a Boeing 737 Max, the controversial Boeing aircraft that led to the Malaysian Air and Lion Air fiasco killing several hundreds, Boeing’s sketchy safety record in the recent times is coming back under the scanner. Investigations are on.

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Reliance keeps adding more brands 🙌

What’s poppin’ — after making more than 5+ investments so far this year, Reliance Retail has now acquired an 89% stake in a direct-to-consumer women’s undergarment brand called Clovia for about $125 million.

Clovia, operating since 2013, runs a portfolio of 3,500 products across categories — from innerwear to loungewear to swimwear, and even cosmetic-care. The company sells through an omni-channel model, reaching ~3 million end retail customers.

Reliance, which has been vigorously expanding its retail footprint during COVID, is looking to stuff its shelves with products for ALL tastes and demographics — the only way to reliably serve millennials and GenZ walking into its stores.

FWIW, Reliance also owns lingerie brands Zivame and Amante — both of which it acquired barley months ago!

Fun fact — the holding company of Clovia had raised at a $48 million valuation in December 2020, netting it a cool 2.8x premium in a year and half on this deal.

Bottomline — the vigor, focus, and conviction with which RIL is pulling trigger and pursuing these new ideas, while balancing its old cash cow empire, is remarkable.

Thats Me Democratic Party GIF by The Democrats

While we’re dealing with acquisitions, ☝️

Ola Electric decided to upgrade its battery-technology chops by pumping some serious cash into Israeli battery tech startup, StoreDot.

StoreDot has pioneered fast-charging battery technology, which claims to fully charge a battery in just 5 minutes. Part of the deal allows Ola access to StoreDot’s IP, which Ola plans on leaning on heavily as it builds a battery plant here in India.

Another unicorn printed in Venture Town 🦄

What happened — CommerceIQ, an ecommerce-management platform, closed a $115 million round from Softbank, Insight Partners and others at $1 billion+ valuation — becoming the newest unicorn of 2022.

CommerceIQ sells a software platform that helps brands run their online commerce operations — right from tracking sales across channels to understanding efficacy of their marketing campaigns, operational processes, growth moves, as well as general planning and benchmarking with competition.

2,000+ companies including big-brands like Nestle, Whirlpool and Colgate use the platform to track their digital operations. Fresh money will be put to use for expanding business and adding functionalities to the product suite.

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Digital commerce is booming, vets RBI 📈

…but so are problems!

For the year of 2021, an RBI report claims that digital transactions in India grew by as much as 30% YoY — a strong indicator that post-COVID behavioral changes are sticking. Here’s more from Moneycontrol.

There’s a bit of an issue though — as many of us have probably noticed first hand, growth in digital transactions is also leading to a direct jump in fraud.

For a 6-month period within 2021, incidents of bad behavior reported to the central bank topped more than 4,000 isolated cases, touching a total amount of over ₹35,000 crores. Some common exploits included the-basic stealing passwords, email phishing, text scams, stolen identities, you know it! Here’s an elaborate report of RBI’s findings from a couple weeks ago.

Why care — accelerated innovation on all fronts has exposed the lack of guardrails like never before post COVID. Spooked regulators are likely to put up higher hoops, which could add to costs and regulatory burden on young ventures.

Closing out — General Motors is doubling down on Autonomy 🚗

What’s poppin’ — after flirting with self-driving for better part of the last decade, General Motors, confident enough to double down, is buying out Softbank’s stake in its self-driving company Cruise, for $2.1 billion — taking its shareholding in the company to 80% to gain full control.

GM, which runs Chevy, and a gazillion other brands, is the classic old-school automaker you can imagine. Slow, heavily burdened by red tape, politically entrenched. For decades they delayed the looming shift to EVs, but with Biden’s backing and the $1.5 trillion infra bill signed in the wake of COVID, the company has found new wheels.

Back to the deal — GM had actually acquired 100% of Cruise back in 2016, but as costs of funding autonomy rose, Cruise raised outside money from Softbank, Microsoft, and a host of others. And now finally as self-driving, EV fleets, and scores of other possibilities seem inevitable, GM is returning back to fully adopt its child.

Why care — electrification of cars won’t happen in isolation, but hand in hand with “smarter software”. Companies that nail the combo (hardware + software) will thrive, and investors picking EV winners with no regard for “software chops” will likely implode.

What else are we Snackin’ 🍿

📱 Gaming matters - MPL will spend ₹2,000 crores on a two-month mobile gaming tournament called, The Great Indian Gaming League, starting from March 24.

😔 Watch out folks - Biden is directly warning US businesses and corporations that Russian state sponsored cyber attacks are going to increase. Cyber stocks FTW!

👀 Kangaroo check - the Aussies will invest ₹1,500 crores in India as part of an ongoing effort to juice up trade between the two countries.

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