Roll me one 😎
Shop moves, Zomato's investment, and TikTok wins.
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Market summary: 📊
Back to back down sessions in India as investors take out some profits. US markets had a pretty meh day too, but tech stocks continue to outshine.
US:
S&P 500 - up 0.028%
Nasdaq - up 0.33%
India:
Nifty 50 - down 0.42%
Sensex - down 0.35%
What’s brewing hot ? ☕
✅ Becoming more ugly — Cairn Energy’s crusade against India got support from another foreign company — Devas Multimedia, which is demanding $1.2 billion in dues from GOI, otherwise threatening the sale of Air India’s foreign assets to recover its stash. Devas' problems began with GOI when an Indian state-owned company Antrix (space consulting) abruptly cancelled a contract with Devas, citing unforeseeable circumstances. An International court had later ruled in favor of Devas in 2020, but whoever expects GOI to buckle!
✅ Arm up the rebels — Shopify, the platform that allows anyone to spin up an online store, is eliminating “commissions” for all developers building app on the platform who make less than $1M in annual revenue! For devs used to being routinely robbed of 20-30% commissions by tech giants Amazon, Apple, Google, Shop’s stand is a refreshing take, reflective of the “creator” empowered internet economy we’re heading towards.
Ecommerce roll up is THE shizz 🧐
What happened — after Mensa, and Goat Labs, yet another ecommerce roll up player, 10club, threw its hat in the ring with a sizable $40 million seed pot, funded by Fireside Ventures — to go out and purchase digital-only brands.
The agenda — this increasingly popular breed of companies has a simple operating mandate — identify leading online businesses, scaled from 0 to 1 by independent merchants, and then acquire them under a single umbrella entity, sharing knowledge and using modern tech and marketing tactics to scale these brands from 1 to 100, while building a robust and diverse portfolio of products. Modern era Proctor and Gamble right here!
Merchants (think you avg. Flipkart sellers) who typically lack the product, marketing, operational expertise to take products from 1 to 100, and are happy to walk away with a fat paycheck.
Western giants Thrasio and Aterian have shown multi-billion dollar entities can be created out of this approach. We’ve amply written about the model before too (Mensa, Goat). Anyway, 10club says it has already signed $15 million worth of letters of intent for acquisitions.
Bottomline —with Indian investors' aggressive crusade of this model is really intriguing, overnight making D2C roll ups one of the hottest categories on the horizon.
Quick look at Discord’s ambition 💪
What happened — gaming chat app Discord acquired an augmented reality startup, Ubiquity6, for an undisclosed amount.
Been around for 5+years, and backed by big balls investors (even Apple and Google), Ubiquity had launched a series of AR based apps, including geo-social app, and then a video chat and mini-games platform, but none of that stuck around or made noise — which makes us think team Discord got a huge flash sale on the deal.
Why care —Discord's recent arrangement with Sony to make it the default chat app on the PlayStation ecosystem has broadened its horizons. Expect big moves in frontier tech.
Meanwhile, Zomato made a deal too... ☝️
Zomato finally pulled the trigger on Grofers, joining hands with Tiger Global, investing $120 million in the grocery giant, keeping the cash-thirsty company from talking to Wall Street buyers for a US SPAC deal in the near term.
Zomato’s acquisition bid for Grofers had fallen through last year, but then with the 2.0 wave, expenses piled up while coffers ran dry, which we believe brought Grofers back to the negotiating table. Post-deal Grofers is valued at $1 billion, and Zomato IPO buyers should be happy about the “grocery” diversification option at some point.
Another hot IPO on the block 👏
Language learning service Duolingo is going public — riding the pandemic-enforced “gotta do something useful” productivity boom, to a ~$3 billion listing on the Nasdaq.
Quick look at the 2020 numbers:
Revenues of $161.7 million, up 129% YoY
Subscriptions form 73% of revenue
40 million monthly active users
Lost $16 million in 2020 — otherwise, are you even fashionable
The platform offers 95 language learning courses, across 40+ languages, and is a favorite among a millennial and GenZ dense user base. Meanwhile, the boom in broad edtech services has also brought a big base of K-12 students looking to supplement their school curriculum.
Big picture — public markets have shown less enthusiasm for edtech than private markets (Coursera, 2U, Stride, have all been duds). Hope that changes with more options.
Closing out — state of Mobile spending 💰
Global consumers spent $34B on in-app purchases on their phones, up 26% YoY, for the second quarter of 2021. App Annie’s report offers some insights into how people are spending their time as well as $$. Here’s a few key nuggets:
Games still dominate — attracting most downloads (3 billion) and spending ($7 billion)
Entertainment (streaming), Business (work from home tools), and Finance (banking, credit cards, investing) are closely following
Medical and fitness app spending up 75%
Travel is slowly starting to get more time and $$ share
Also, guess who overtook YouTube as the global king of engagement — attracting ~24.5 hours of monthly time spent per user on average?
What else are we snackin’ 🍿
⚰️RIP - BTC China, the first-ever Bitcoin exchange in China is closing as the Chinese keep hammering crypto into a grave.
🎁 OTPs, pain in the a** - Google is rolling out a feature for its Messages app in India, to delete OTPs automatically after use. Take my money!
Hit that 💚 if you liked today’s issue.
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