SaaS time ☁️
Twitter's changes, Venture raises, and CRED's move.
Market summary: 📊
India turned sharply in the green on Wednesday, adding a percent to major indices. US continued its downward spiral, with the Nasdaq starting to feel real shaky.
US:
S&P 500 - down 1.18%
Nasdaq - down 1.06%
India:
Nifty 50 - up 1.08%
Sensex - up 1.09%
What’s brewing hot? ☕
1️⃣ IT spending peak — Gartner claims India’s own domestic IT spending could top $100 billion by 2022 — up 7% YoY, helped by broad post-COVID digitization and spending to modernize legacy systems. Also, thanks to remote working, spending on devices is set to top about $44 billion, while the rest goes to software applications, hosting, platforms, data, and services payroll. Good for vendors of all shapes and sizes!
2️⃣ Twitter did what? — Twitter’s latest policy bans people from sharing photos, or videos of private individuals on its platform, without their consent. The vagueness of the blanket ruling has pissed plenty of people — on both sides. Twitter says, if the content is “newsworthy”, or if the image is of a public personality, it “may” be allowed. Investors meanwhile aren’t impressed by the costs that would come from all the extra policing (sure AI works, but want to know how many lawsuits will follow?). $TWTR was down ~5%. Weak start for our player PAgrawal!
Dalal Street’s first SaaS IPO 🤙
What’s poppin’ — RateGain, a top India-based cloud software vendor for the travel and hospitality sector, will IPO this month — raising ~₹1,330 crores. Bids open on December 7th.
The company sells a real-time pricing engine to online-travel operators, agents, airlines, car rental players, large hotels — that helps understand how competitors are pricing their nightly rates.
There’s a whole bunch of other tools too — related to data, marketing, ticketing, and other — all sitting in the backend, finally ensuring that price-conscious customers reaching your online portal eventually do convert. RateGain serves some 1,400 clients globally, processing 30 million bookings a year.
Financials are decent — revenues tanked 60% to ₹250.7 crore for the last year, with losses doubling to ₹27.8 crores as COVID made a dent. That’s what worries the old-schoolers. But gross margins of 80%+, 95%+ recurring revenues, and 65% business in North America where travel has already recovered solidly — point at a bright future.
Bottomline — classic, boring, sticky software play, quietly snuggled in the background, powering transactions in the billions.
Who raised the big monies? 💸
BNPL is still hot. Simpl, one of the many in the internet-lending game, closed a $40 million Series B round from Valar Ventures and a few others.
Simpl works with brands to let customers split payments into installments. Another one of the company’s offerings, called Bill Box, is making automated recurring payments and bill-splitting easy as well. Presently, 7M customers use the service.
Worth mentioning — ~$680 billion globally will be processed by BNPL platforms by 2025, more than 10% of the total ecommerce spending. Bye credit-cards.
Meanwhile, in food-technology 🍲
Tiger Global led a $40 million round in cloud kitchen player EatClub Brands — which operates brands such as Box8 and MOJO Pizza across 5 major metro cities. EatClub has its own app and pitches itself as a food-membership like Amazon Prime. Revenues top ₹100 crore+ each year!
CRED is betting on enterprise expansion 💳
What happened — CRED made another acquisition, buying out enterprise expense management platform, Happay — dipping toes into the B2B financial-software world.
Happay’s SaaS tools help employees submit their corporate expenses bills, and for companies to track spending, along with integrations into accounting, HR, banking and other functions. Last known, Happay was tracking almost a billion dollars in expense volume. ET says the deal values them at ~$180 million.
While it’s unclear how CRED wants to play this shot, tightly bundling Happay users to give them points (and linked deals) on their CRED account for corporate expenses could be a solid start. Deals on things from corporate travel to spending on SaaS tools… a whole new game!
Closing out — Jack is bacc, with a bang 💥
Day after cleaning out his desk at Twitter, Jack Dorsey pulled off a Meta-like change at his payments company.... rebranding Square as “Block” — a holding company that will own Square (the merchant payments business), Cash-App (payments + investing superapp), Tidal (music), TBD (undisclosed Bitcoin project) and a few other projects.
Block’s focus obviously is to leverage Blockchain (and specifically the Bitcoin network) to build blockchain-native internet payments and associated services. Dorsey has been a vocal proponent of BTC and decentralized governance, so there’s little surprise here. Pretty cool website tho!
Big picture — $SQ has been a pioneer within the payments space from Day 1. Worth keeping a close eye on as the Web3 and blockchain-payments space matures.
What else are we Snackin’ 🍿
❌ No flights - international flight resumption which was scheduled for December 15, will now be shelved. Thanks Omicron.
📈 Keeps growing - GST revenues for November topped ₹131K crores, the second highest since the tax’s introduction.
🤷♀️ Zuck’s men are bailing - David Marcus, the leader of Facebook’s crypto wallet project, who fought countless battles with global regulators on the company’s behalf to push FB’s stable-coin project is departing, surprisingly. Not good.
Hit that 💚 if you liked today’s issue.
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