Services push 📱
Dotcom vibes, auto woes, and prepping deployment.
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Market summary: 📊
Turned out to be a bright day in Indian market after a poor run this week so far. US markets gave away some ground, despite some hot tech IPOs keeping investors excited.
US:
S&P 500 - down 0.46%
Nasdaq 100 - down 1.67%
India:
Nifty 50 - up 0.72%
Sensex - up 0.66%
IPO scoops
1️⃣ Wall Street was rocked by the IPO of a data warehousing company Snowflake, a growth stock so hot even Warren Buffet couldn’t control his temptations. Demand was so high that the company ended up revising price a couple times, finally settling on $120 a share for open, only for the stock to more than double by the day’s end to $250.
Seasoned investors and analysts however got some serious nostalgic feels about the dot-com crash when tech stocks could soar overnight only to come down crashing harder the next day. Snowflake however is no dud of a company. Check out CNBC’s coverage.
2️⃣ Closer to home we learnt Walmart is preparing an IPO for Flipkart as soon as 2021, aiming for a valuation of about $45-$50 billion. However, the company is considering a foreign listing, may be in the US or elsewhere, which is kinda a bummer since Indian retail investors will have to jump hoops to participate. Regardless, this will be a hot deal. Here’s more.
Who got the pot? 💰
Beauty and grooming ecommerce startup with a social commerce twist, Foxy, has scooped up Rs 40 crore in a round led by Alpha Wave Incubation, with existing investors Matrix, Sequoia Cap, and Lightspeed pitching in.
Foxy runs a marketplace app and combines commerce with content such as unboxing videos, reviews etc. to drive engagement. The company personalizes shopping experiences with selfie-analysis, targeted curation etc. With more than 120 brands and over 6,000 beauty and grooming influencers on its platform, so far response appears to be very attractive.
Funds apparently will go to fuel middle-east expansion including scaling a team of engineers and data scientists there.
Next, an emerging theme, 🦻
The contact center software industry is getting cloud transformed rapidly. Riding that wave, one of the leading AI-based call-centre SaaS startups, Observe.ai, has raised a $54 million in a round led by Menlo Ventures, with participation from Next47 Ventures and NGP Capital.
The company’s software basically transcribes calls, highlighting areas of improvement for agents using NLP. Funds will go to fuel expansion in both the Indian and US markets along with an outsized focus on R&D to add capabilities in features like real-time coaching, omnichannel support, and interaction analytics. The company has 150 customers and has raised over 80 million in less than a year. Solid momentum!
In fintech,
Digital insurance player ACKO has raised $60 million from Munich Re Ventures with existing investors including Amazon, RPS Ventures and Intact Ventures pitching in. One of the most promising startups to come out of India’s recent fintech boom, the company sells insurance for auto, health, and purchase protection plans directly to customers, looking to revamp the insurance-purchase experience bottom up.
In just 4 years’ time, the company has issued over 65 crore policies to over six crore unique customers, which is awesome!
Finally, in a petro-chem deal, ⛽
Hindustan Petroleum Corporation Ltd (HPCL) will invest over ₹60,000 crore towards key infrastructure development projects over the next 5 years, giving a welcome boost at a time when economic weakness is looming. The capital will be deployed to fund HPCL's refinery expansion and augmentation projects, primarily to increase capacity of Mumbai Refinery to 9.5 million metric tonnes per annum (mmtpa) and Visakh Refinery to 15 mmtpa.
Show some love 🧐
Toyota had some harsh words for the government over high taxation of auto purchases in the country, claiming it will halt plans of growth if the government continues with what the company called are “we don’t want you” levels of taxation.
Taxation of vehicles, like everything else, is a maze of fine details in India. An average purchase could draw a GST bill of as high as 28%, in addition to others levies in a broad range of 1-22%. Here’s a primer from Cleartax if you’d like to nerd out. The bottomline is, the extra topping that goes into the government’s pockets discourages buyers from purchasing, especially right now in a market where the auto industry is desperately looking for the slightest boost.
Toyota claims it won’t exit the market, but may stall growth plans. Their market share has dropped from ~5% levels to 2.6% within 1 year. We take their words with a grain of salt, but the government can’t ignore repeated calls coming from the auto industry, particularly at a time when the agenda is set straight to attract foreign dollars and investors. Read more.
Takeaway: India has historically considered cars a “luxury” purchase, and that’s why taxes are so high. But we’re in a unique economic slump, with auto sales down by large, and such open lambasting of policies is terrible for sentiment. Perhaps GOI needs to lend an ear this time and let the auto sector breathe some.
Dr. Reddy’s pre-deploying its fleet 💉
Dr. Reddy’s has partnered with the Russian Direct Investment Fund (Russia’s sovereign wealth fund) to conduct independent trials and distribute almost 100 million doses of the Russian-made Sputnik V vaccine for COVID-19 in India. Although Sputnik’s efficacy and testing is widely questioned on the global stage, Dr. Reddy’s and GOI are conducting independent tests and trials to be 100% sure before they commit.
India’s pandemic situation is clearly worsening by the day, and a well diversified portfolio of vaccines in place, to learn what works and what doesn't, and then scale accordingly could be key in saving lakhs of lives and that is exactly what’s driving this strategy.
India has already entered agreements with other leading vaccine projects, including the Oxford-AstraZeneca designed and Serum-Institute manufactured vaccine. Dr. Reddy believes that deployments to hinterlands could begin as early as the end of 2020 if the Sputnik V is proven safe. Read more.
Takeaway: when it comes to pandemics, India has a mixed reputation. We’ve been taken down by major pandemic outbreaks in the past, but have kicked the ass of other outbreaks like Polio. All we can do is hope for the distribution machinery to stand its hardest test when a vaccine is eventually greenlit.
On a similar note - the US is preparing to ship doses of the vaccine to the masses within 24 hours of it being approved (whenever that happens) after all trials are deemed fit. The CDC is hopeful of positive news by the end of this year.
Apple’s hard push into services 🍎
Apple launched itself into the prized trillion dollar club by selling billions of high-priced iPhones. Soon the company had begun seeing signs of a maturing smartphone market — people weren’t upgrading smartphones as often and new users were becoming hard to find. So how does a company that large keep growing with device sales saturating?
Apple picked Services — a simple plan, continue to enthrall users by selling subscription services for Music, Movies, Fitness, Storage, Photos etc. and build a tight ecosystem. Within no time, the company built a $50 billion annual business. That agenda just got another strooonnggggg push yesterday when Apple launched its “bundle” designed for families and groups with various tiers.
Here’s a snapshot of what changed -
Could be great for Apple, but competitors are crying out loud. Spotify was blowing the horn again that Apple is now openly working to kill competition. Peloton got a surprise too, and said it welcomes a new competitor in Fitness. As always, Apple didn’t even acknowledge the noise.
(FYI, Apple services also includes payment commissions, developer fees etc.)
What else are we snackin’ 🍿
👏 So brave, Kim! - In a bid to curb hate speech and propaganda on social media, Kim Kardashian has joined other celebrities to freeze her Facebook and Instagram accounts for 1 FULLLLLL DAY. 🙄 Well, something is better than nothing. The move is an extension of a continuous campaign launched by a civil rights group to boycott advertising on FB in July.
🛰️ Chinese sats ova yo head - China has launched 9 satellites into orbit from a platform at sea in its first commercial launch from the waters. This was a crucial test for the Long March 11 rocket which is expected to help improve efficiency and is capable of launching from on top of a ship.
🕴️ Japs get a new PM - Yoshihide Suga, 71, has been elected as the Prime Minister of Japan by Japan's Parliament after Shinzo Abe resigned due to a chronic illness a few weeks back. Suga is expected to announce his cabinet later on in the day.
✋ US trials remain paused - AstraZeneca’s Covid-19 study which was halted after a participant became ill with neurological symptoms continues to stay paused in the US, awaiting a regulatory review by FDA. Trials of the vaccine have already resumed in the UK and South Africa after a temporary pause.
🙌 Another IPO in the making - Mobiwik, the fintech company, is eyeing a public listing by 2022 and has already kickstarted the process. The company will join the likes of PhonePe, Paytm, Zomato who have also announced their plans to file for IPOs in the next two years!
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