Discover more from Filter Coffee ☕
Served in 10 mins 🛵
HUL getting spicy, Hackers don't rest, and Software M&A peaking.
Market summary: 📊
India reversed direction on Tuesday to finish up a percent. US stocks followed, after US and the UK announced a strategic trade deal and Biden disclosed he’s going on an emergency visit to Europe.
S&P 500 - up 1.13%
Nasdaq - up 1.94%
Nifty 50 - up 1.16%
Sensex - up 1.22%
What’s brewing hot? ☕
👨💻 Cyberwars begin — Okta, a cloud-based authentication system provider, is investigating a breach in its platform after notorious hacker group Lapsus$ shared screenshots from the company’s internal channels on Telegram. For folks unaware, Okta sells a turnkey authentication system that allows users to log into apps as well as port identity from one app to another — with its platform used by 20K+ firms globally, from Sonos to Peloton to likely your employer. The breach could have some serious consequences for everyone!
💸 Big bag alert — Katie Huan, the ex-crypto investing partner at top Silicon Valley VC shop a16z, who had quit to start her own venture, has raised a $1.5 billion crypto fund, the LARGEST ever debut fund by a female VC boss. $500 million of the pot is going to early/seed deals, and about a billion for proven late-stage crypto ventures.
Food delivered in 10-mins, profits will take longer ⏳
What’s poppin’ — after buying out Grofers barely a week ago, Zomato is planning on upgrading its delivery service to accommodate instant food deliveries in under 10 minutes, pulling some mixed reactions from users and investors.
How it works: at a high level, Zomato plans on employing algorithms to understand demand in regions with high order density, work with partner-restaurants to get the food prepped beforehand, and then ship that box to your dinner table the moment you hit buy. Not all items or restaurants will be covered.
Reasonable?: on face value, it could be an interesting way to make some extra $$. Like how Instacart of Doordash makes money from ads, Zomato could charge restaurants extra to participate in the program, offer featured placement on the app, and overnight build a new revenue stream. More products could be added over time too. Also, from a customer POV, getting your food quickly can be be one of those things you experience and then forever stick with.
However, the operational costs of rewiring the system could mean an expense-nightmare incoming over the next few years — one that IPO bag-holders and Dalal Street analyst-models aren’t exactly prepared for.
Meanwhile Zomato’s stupid habit of not conducting quarterly analyst calls when earnings are reported — further robs diligent investors of reasonably modeling these rapidly changing variables.
Regardless, instant delivery infrastructure is inevitable, even kids know that. So might as well force the rest of the industry (mainly Swiggy) to follow suit. Only positive we can sense.
Big picture — no matter how you slice it, likely going to be a long long road until shareholders see any value from these shenanigans. Buckle up.
Ramp raised a BIG one 💰
What happened — Ramp, the US-based corporate credit card venture, closed a mammoth $750 million round led by Keith Rabois the Founders Fund — doubling valuation to $8.1 billion, barely a year after turning a unicorn!
To put things into perspective, the NY-based company, wasn’t even in business until 2019, coming out of stealth in 2020 only. Ramp basically sells a simple credit card for SMBs, but then ties that with an AI-backed software suite to track spending, automate mundane operations like travel expense management, bill payments and accounting, which otherwise can get boring to do by yourself.
Anyway, the business has swollen to $100 million+ in revenues, with 200%+ retention rates, while processing $5 billion+ in annual payments. Here’s a good read from Packy!
Big picture — what Amex did with service, perks, and a cute voice when you call them, companies like Ramp and Brex are trying to do with the magic of automation.
Then switching back to Indian edtech, 📚
Leverage Edu, a digital education consultant helping students apply to foreign universities, raised a $22 million Series B from a consortium of investors — including Trifecta and Times Group, at a $120 million valuation.
Leverage Edu basically lists out the steps students need to take to go through their foreign education application process, offering counselling, and other services like education loans along the way. Revenues top some $20 million annually, with 6 million+ users on the service.
HUL wants some spice in its life 🌶️
Consumer products king Hindustan Unilever is apparently in early talks to buy a majority stake in India’s 2nd largest spice company, MDH — valuing the business at about ₹10 to ₹15K crores.
MDH needs no introduction — started by the late Dharampal Gulati with just a tiny shop in Delhi’s Karol Bagh, the company’s packaged spice products are now sold through a network of 400K+ retailers and 1,000 wholesalers nationwide, netting ₹1,200 crores in annual revenues.
The news is still half baked, but plugging MDH’s 60+ products directly into HUL’s unrivaled nationwide distribution could accelerate growth and allow the business to capture a whole lot more share in its segment rapidly.
Worth calling out — the market for branded spices in India is set to double to over ₹50K crores by 2025. Millennials and GenZ shopping for everything at supermarkets is helping steal share from the unorganized sector.
Closing out — consolidation in software is here 💸
What Happened — private equity giant Thoma Bravo is paying upwards of $10 billion to buy out business-planning software company Anaplan, as software stocks continue to trade at a fire sale in the markets.
Private equity’s obsession with software isn’t new. Robert Smith, the king of Vista Equity, is well known to call SaaS better than first-lien debt — safer as a business than anything else. Thoma Bravo itself was one of the top buyers of SaaS companies in 2021 — spending upwards of $30 billion!
Anyway, Anaplan, founded almost 17 years ago in an English barn literally, was trying to build a usable competitor to software giant SAP — and was well on its way to make $600 million in revenues this year, growing at 30%+ rates.
Bottomline — expect more such deals happening over the next few months as Wall Street investors continue to keep SaaS stock prices down.
What else are we Snackin’ 🍿
🚗 Gotta pay bills - Tata will bump up prices of its commercial vehicles by ~2.5% from April 1 to make up for rising material costs.
🙅 No other way - Europe, which heavily relies on Russian energy, is planning on facing some pain and cutting imports from the region finally, starting with Oil.
🤷 Growth worries - due to rising energy prices and inflation, rating agency Fitch has slashed India’s growth forecast from 10.3% for the next fiscal to 8.5%. Not good.
Hit that 💚 if you liked today’s issue.
You can forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀