Room and a stock 💪

Travel woes, Insurance raises, and Apple crawls back.

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Market summary: 📊 

Looking like a good week so far in India, with investors keen on making 45,000 sensex hopes come true ASAP. US markets turned south today as vaccine novelty wore off a bit. 

US:

  • S&P 500 - down 1.16%

  • Nasdaq 100 - down 0.69%

India:

  • Nifty 50 - up 0.50%

  • Sensex - up 0.52%


Two things to begin with

1️⃣ Saving AMZN billions—no travel during the pandemic apparently has helped Amazon save nearly a billion dollars in spending so far in 2020, that would’ve otherwise gone to pay for flight tickets, food and drinks, room and boarding etc. for its executive ranks. Billion dollars is crazy amounts of money to spend on ferrying people around, and these stats put into perspective the impact withdrawal of corporate travel has had on the travel and hospitality industry broadly. 

2️⃣ Indian airlines suffer—domestic passenger travel in India is down nearly 57% for the month of October. Markets were counting on pre-Diwali bookings to move the needle up a bit. Airlines, that usually run on a thin margin, are gasping for any sign of hope but as it appears any decent recovery to pre-2020 levels will take at least 2-3 years.


Who gots the cash? 💰

Insurance marketplace Turtlemint wrapped up a $30 million Series D round led by GGV Capital and a score of other VCs including American Family Ventures, MassMutual, SIG, pitching in, as fintech and particularly insurance continues to soar in the aftermath of COVID.

Running a dual model, the company provides your standard online insurance marketplace as well as works with over 1 lakh advisors to help them start their own insurance businesses, facilitating connections with insurance providers on the other end. 

In addition to that, the company is also pioneering an ed-tech proposition, upskilling agents to improve their sales skills and business sense, with content running in 7 regional languages and more than 20,000+ active learners. The breadth of these ideas is just staggering!

Then, we have Koreans building for India, 

TrueBalance, the softbank backed Korean venture, trying to steal PayTM’s lunch has raised a solid $28 million to become an end-to-end consumer fintech platform. 

The startup got its start building an app to help users read their mobile balance and recharge phones easily back in the day. But leveraging their deep distribution, they’re now counting on consumer lending to drive the next lap of explosive growth.

So far in 2020, the company claims their loan book has grown 8x, with an average ticket size of between ₹1,000 - ₹15,000, and they’re keen on going after the underbanked market with the new raise. We say good luck.

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You get a room and a stock 😎

Airbnb filed for its much anticipated IPO and investors got a rare glimpse into the closet of one of the most well regarded brands to come out of the valley over the last decade. The S-1 obviously got mixed reactions, with tech and Silicon Valley believers cheering for team Chesky, while old school analysts fussing over weak growth and losses. 

Some quick highlights from the document:

  • For 2020, revenue stood at $2.5 billion, while losses stacked up at $700 million

  • Compare that to $3.5 billion in revenue for 2019, but just $320 million in losses

Essentially, 2019 Airbnb was prioritizing growth and expansion over everything else, while taking baby steps towards profitability. Then 2020 jolted the company, taking booking volumes for example down by as much as a horrific 70% for April 2020 (remember the desperate fundraise they did to stay afloat?).

But then the tides changed when people bored of sheltering in place began booking short-term rentals (a month or so) looking to live in new cities or by the beach, locking themselves in an adventure in the middle of this nightmare of a year. Boom, booking rebounded in July, August, September and suddenly the machine is humming again. 

Amidst all that chaos, Chesky and company did everything they could to slash costs, cutting marketing expenses for example by 70%+. As the dust is settling now, what they’re left with is a new-and-profitable enterprise, much more polished and nimble, and ready to scale at the turn of a switch whenever demand returns. 

Investors sharp enough to see beyond the “lossy” numbers recognize that and odds are this IPO will be a blockbuster event closing the markets for 2020 on a high note. Lookout for $ABNB on the Nasdaq. 

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Change is here 🍎

Softening its stand on App Store policies a bit, Apple will slash commissions it charges developers for transactions on the App Store from 30% to 15% starting next year. There is a caveat though, for now the “allowance” will be limited to apps making less than a million in annual revenue.

When dealing with Apple, you’ve got a master of narrative management, that’s not frequently known to take beatings for external stakeholders. Backing down now after so much hoopla would’ve meant disgrace to Tim Cook’s Co., giving developers more fuel for further rebellion. 

At the same time, mounting regulator pressure and changing opinion regarding the company was making matters worse. So AAPL decides to mask the move with a “small business support” label, playing into the sentiment that’s selling like hot cake right now. SMH.

Anyway, the shift in tone and action highlights that the company understands it could be left alone on a cold hill and that the mood was slowly turning in favor of the “creators”. Now it's Google’s turn to echo a similar call or be left alone to fight its battles.

For developers however, it may not be everything they’ve asked for, but it's a good start!


What else are we snackin’ 🍿

😷 Ramping up testing—Cipla has launched an antibody detection test for COVID-19 called COVI-G which is expected to give results in 10 minutes. The company has signed a deal with the manufacturer of the kit, from Belgium-based Multi G, and will be taking up the responsibility of distributing the kits in India.

💉 Pfizer ready for deployment—ending trials for its vaccine which shows 95% efficacy, Pfizer is ready to seek approval from authorities for its emergency use. The pharma giant reports consistent efficacy of the vaccine across demographics with no major side effects. 

🧹 Cleaning up a mess—RBI has placed the struggling Lakshmi Vilas Bank on a moratorium, for 30 days, restricting consumer deposit withdrawals from the entity, while the regulator merges the bank with DBS Bank to prevent it from imploding. The Chennai based LVB which operates 500+ branches and manages ₹ 21K in assets, is struggling with bad loans, and has consistently seen losses worsen for 3 years.


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