Second innings 😎
Musk wins, 5G testing, and SBI’s capital raise.
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Stock summary: 📊
US:
S&P 500 - down 0.44%
Nasdaq 100 - down 0.71%
India:
Nifty 50 - up 0.20%
Sensex - up 0.22%
Unstoppable Elon 🚀
Musk’s SpaceX has closed on $1.9 billion in fresh funding, in the largest capital raise by the company to date, bringing valuation to $46 billion.
The funding comes as the company hopes to build out the most awaited Starlink satellite constellation, offering broadband internet commercially by the end of 2020, accelerating monetization.
Unlike the majority of us, 2020 has been a phenomenal success for Elon. His enterprise took men to space, he sold more cars year-to-date than ever before - in the middle of a recession, and grew his company’s stock by 4 times, powering himself to the 4th richest man position. Whatchu got startup boi? Read more.
In India’s own little space victory, 🛰️
Startup Pixxel has raised a $5 million seed funding as it gears up to launch its first earth imaging satellite, aboard a Soyuz rocket. The funding is led by Blume Ventures, Lightspeed India Partners, and growX ventures with other notable investors pitching in.
Freshly raised money will be put to work towards hiring and to fund the development of its 30-satellite earth observation constellation, to be deployed by 2022. Exciting stuff! Read more.
5G humming along 🗼
After the government passively hinted at blocking those using Chinese networking gear for 5G tests in India, Airtel is now looking at Ericsson and Nokia as potential suppliers.
Huawei and ZTE, two prominent Chinese telecom vendors, have been banished from selling in major markets now including the US, Australia, several European countries over concerns of snooping for China's ruling CCP. While India had not explicitly banned the vendors, the government has certainly made its sentiment apparent on several occasions.
Anyway, Airtel’s decision now will allow the Department of Telecom to release spectrum so that carriers (Jio, Vodafone, Airtel and others) can carry over their 5G trials. No timeline on when that will start has been offered. Read more.
Second innings 🤝
Sachin Bansal’s foray into insurance business and purchase of DHFL’s struggling insurance franchise left many stumped, but the ex-Flipkart boss seems to have much grander ambitions in the space. After reorganizing his portfolio under the Navi Insurance umbrella, he’s now out to buy a stake in another insurance player, Future Generali Life Insurance.
Backstory: Bansal plows $450 million into Navi Technologies, his new venture, with a focus to improve banking and insurance services for Indian consumers. Then goes out and buys Chaitanya Microfin and DHFL Insurance’s struggling business in Jan 2020. The company then consolidates, lays off staff, moves HQ from Mumbai to Bengaluru (seeking to imbibe a tech DNA) and rebrands a couple times to shun its past. And now Bansal comes back for more.
This time he reaches out to Kishore Biyani’s debt-saddled Future group to see if they’d like to offload the Future Generali biz, to raise some cash - which Mr. Biyani could desperately use right now. Remember Biyani sold his retail business last month to Mota Bhai’s Reliance after it faced a liquidity crunch.
Anyway, the gist of the matter is that Bansal’s plans are grand and he’s quietly building solid momentum. The deal could be a strategic masterstroke as it gives him a live business with solid cash flow, an existing customer base to directly tap into, and an old school insurance house ripe for technology optimization. Read more.
Bottomline: The promise to bring basic financial access to 1.3 billion Indians is unimaginably attractive in India. Bansal hopes to enter with insurance, and then move sideways to offer banking, lending, payments and other staple products. We’ve rarely seen such transformations in India—this will be worth a watch.
SBI prepares for apocalypse 😎
The largest bank in India is looking to raise capital to better prepare itself to take on the economic devastation left in the aftermath of the pandemic. SBI will offer 15-year bonds at a paltry 6.8% interest rate, raising $1.2 billion—in one of its largest bond sales ever.
The bank’s motivation is simple—raise while you can and be agile to face defaults coming from the economic crisis. Even before the pandemic, India’s banking sector was having a rough time with non-performing assets at alarming high rates. Regulator RBI had been cajoling banks to beef up their liquidity positions to secure base. The coronavirus only further complicates that situation, leaving banks very little room for error.
Also, looking to operate a tight ship, State Bank will be very cautious with lending through the year and has slashed its 2020 loan growth targets by 2%. Read more on the raise.
Ride hailers looking at franchising 🚕
California is giving Uber and Lyft a hard time over driver management, and the companies who had both threatened to shutter operations in the state this month, are apparently also looking to “franchise” out their brand to local taxi companies. Like a McDonald’s.
By licensing their brands to experienced cab fleet operators, the companies believe they can avoid directly “employing” the drivers, and thereby circumvent any conflicts with labor laws.
Both companies have operated in this fashion at some point or in some markets in the past - Uber works with taxi fleet companies in Spain and Germany to bring liquidity to its platform.
Although both companies have not committed to the model yet, executive management is hands on with the decision making and Lyft apparently has even presented a plan to its board. Read more.
Tweet of the day -
What else are we snackin’ 🍿
💼 Google’s entry-level hiring platform - Google is launching a job search app in India called Kormo Jobs, in an effort to lend a helping hand to millions looking for entry-level roles. The company first launched Kormo Jobs in Bangladesh in 2018 and expanded it to Indonesia last year.
📱 Mobile time surges - Indians spent increasingly more time on their mobile devices, touching almost 5 hours a day. Pre-lockdowns the number was just over 3 hours a day. Thanks Twitter.
💰 More VC raises- Unitus Ventures has raised ₹75 crore from SIDBI’s Fund of Funds for Startups. The fund II will invest in 15-20 early stage ventures, and has already kicked off the deployment with ₹8.5 crore wired to Masai School, an ISA based upskilling platform.
👏 Homegrown CPUs get a boost - The government has launched a contest to promote homegrown microprocessor companies, as part of the Atmanirbhar Bharat agenda. Some 100 shortlisted companies will be eligible for a grant of ₹1 Crore to fund their companies.
✈️ Airline devastation - South America’s largest carrier, LATAM Airlines, has laid 30% of its workforce or over 12,000 employees since March. The carrier reportedly lost $890 million for the second quarter, and was forced to file for bankruptcy in May.
🎵 Trump hops on Triller train - in the pettiest of rebuttals, Trump has gotten himself a verified account on TikTok competitor Triller. The app is one of several TikTok alternatives that have experienced a spike in downloads since the president sealed TikTok’s fate with an executive order.
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