Software eats construction 🚧
Kirana commerce, Vernacular edtech, and China to mars.
Hi 👋, Tanvi here.
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Stock market summary:
US - S&P 500 - down 1.23%
India - Sensex - down 0.50%
Flipkart wants more 👀
Flipkart has acquired a 100% stake in Walmart’s India business to launch a B2B wholesale marketplace called Flipkart Wholesale, that will allow small and medium sized businesses to trade online, supported by Flipkart’s fulfillment and logistics operations.
The acquisition will give Flipkart control over 28 Walmart stores in India, giving the company access to over 1.5 million existing members including “kirana stores” and other MSMEs, broadly supporting Flipkart’s bid to enter and dominate the unorganized offline retail segment.
Kirana stores are the backbone of retailing in our country and they are quickly emerging as the key to profitable last mile logistics services in India. Recently, Jiomart had been making similar moves of launching a marketplace for SMEs and so was rival Amazon. A range of other startups are eyeing the space too.
Flipkart Wholesale will be out next month and will be a large focus area following Walmart’s $1.2 Billion fresh capital infusion into the company. Read more.
Tesla writing history 😎
So Tesla yesterday achieved a significant milestone with profits growing to $104 Million in the quarter, which surprised everyone of course, but also marked a key milestone for the company. That was Tesla’s 4th consecutive quarter where the company had turned a profit, which is one of the key conditions for companies to be included in the S&P 500.
Okay - if you’re a stock market noob here’s some grip to hold onto. Basically, the S&P 500 index tracks the performance of 500 of the largest companies that trade on US stock exchanges. Effectively, the index is considered to be one of the best representations of the US stock market. And of the world economy.
Companies once included in the index are “legitimized” on wall street and everywhere. Stocks see further interest from global investors, banks give them better credit, analysts become more interested in them etc. Overall, it's like a business transformation.
If Tesla’s inclusion goes through, this will be a huge accomplishment for CEO Elon Musk and a step closer to his dream of leading the global auto industry into an electric future.
Takeaway: Tesla has driven a long way to arrive here and its inclusion in the S&P 500 could mark the opening of a new chapter where electric mobility is finally going mainstream. Stock is already up 500% this year. Read more.
Software eating construction 🖥️
Global computer aided design (CAD) software leader, Autodesk, will acquire Pype, an AI based construction workflow software provider.
The acquisition comes at an interesting time when the real estate market has literally frozen, with new projects and R&D put on hold indefinitely. But it seems cash rich Autodesk thinks it's wise to use the slump to capture market share in the space. Sneaky.
Pype had made quite a good name for itself with big name companies along with the US government using the software. Construction is one of the largest segments of the economy, yet the majority of work is done through tied up excel spreadsheets making the opportunity to win business here very large.
Besides, Autodesk has been quite aggressive in the space having invested in 9 construction tech startups so far since 2017 including Assemble, Building Connected and PlanGrid with just these 3 acquisitions costing over $1.1 Billion.
Summary: Global construction market is a $13 Trillion pie, where less than 1% money is spent on software. There's a massive gap to use automation and software to cut costs and increase productivity and the big guys already see the future. Read more.
Edtech with vernacular twist 🙌
Entri, a job learning platform that prepares India’s youth for basic skills needed in the workplace has raised $1.7 Million in a round led by Good Capital. The raise tops the $1.4 Million the startup raised in Feb before the pandemic altered everything.
Basically, the company uses mock tests, flashcards and video lessons across various vernacular languages to help train those aspiring to get government as well as local private jobs. Languages of focus currently include Malayalam, Tamil, Telugu, Kannada and Hindi. Quite a fascinating idea.
New funds will be directed towards ramping up marketing and production of more content. With about 3 million users currently, the company anticipates a 10 Million base within the next 18 months. Since the lockdown began, they have seen a 100% rise in new users and 150% growth in sales topping $2 Million in ARR. What!?
Takeaway: the growth some of these companies are witnessing is staggering, which goes to show just how hot the ed-tech segment really is. Particularly, when you combine learning with a vernacular twist, the opportunities seem abundant. Read more.
Can’t travel on planes, might go to space 🚀
After the UAE’s Mars mission in the middle of the pandemic, China has now launched its own bid in what could become its first successful landing on the Red Planet. The craft is named Tianwen-1 (translated "Questions to Heaven").
The 5 ton probe is expected to arrive on the red planet in February 2021 after a seven-month, 55-Million-kilometre voyage.
Meanwhile, the U.S. is also preparing for a launch of NASA’s Mars Perseverance Rover which is scheduled for July 30. The U.S. and Soviet Union are the only countries that have landed and operated a rover on Mars, so if China’s mission is successful, it would be a big feat.
The current flurry of launches is basically because interplanetary alignment ensures that the distance between Earth and Mars is at its shortest right now. We wrote about UAE’s launch here.
India runs on Whatsapp 📱
Doubling down on its popularity and utility in India, Whatsapp will work with local banks and financial institutions to help bring better financial products such as insurance, microcredit, and pension to underbanked citizens.
Per Whatsapp India Head Ajit Bose, the company will start supporting multiple pilots with select financial partners with a focus on supplementing banks’ existing digital presence and accelerating pace of access across segments and geographies in the country.
There is little clarity on the exact look of the end product but mass outreach, account openings via whatsapp, customer service etc. could be on the table.
Nearly 350 Million people are estimated to use Whatsapp in India. Whatsapp’s first fintech offering, UPI based Whatsapp Pay, is currently being tested with a tiny base but has been permitted to scale upto 10 million users, and competes with legends including Paytm, Flipkart's PhonePe and Google Pay.
Bottomline: India lives on Whatsapp and as the domestic fintech ecosystem heats up, Whatsapp's role as a key distributor of products will continue to evolve. Our bet is that a massive ecosystem of apps and business will be built on top of Whatsapp over the next decade, particularly for “Bharat”.
Tweet of the day -
What else are we snackin’ 🍿
😷 India is fighting hard - new domestic coronavirus cases rose 45,720 in the past 24 hours, pushing the total Covid-19 tally to over 12 lakh mark today. Total number of recoveries crossed 7.82 lakh. The death toll due to the disease rose to 29,861 with 1,129 fatalities reported in one day.
💉 US commits to buying bulk vaccines - U.S. government has agreed into a contract with Pfizer and German biotech BioNTech, agreeing to pay nearly $2 billion for 100 Million doses of the COVID-19 vaccine that is under development.
🙁 Struggling to adapt - Airbnb on Wednesday announced the launch of 'Enhanced Cleaning Protocol' for its local hosts in the country, in a set of measures taken to help restore traveller confidence. Hygiene and safety has been one of the top reasons why consumers hold back and Airbnb is doing everything to reduce anxiety.
👍 Siemens launching internal comms tool - employees will be given an app that would share information on lockdowns, office occupancy, and other operating data. More than 100,000 staff in 30 countries will get access to the app. There is no information provided whether the company will sell the software to other companies as well.
⌚ Delays at Intel - Intel’s stock cratered yesterday when the company announced that it’s 7nm production process will be delayed due to pandemic taking a toll on operations. The company’s roaring revenue and profits in the second quarter on the back of strong demand by cloud buyers as well as consumer device upgrades was overshadowed.
📈 US struggling to contain the pandemic - total coronavirus cases grew to over 4Million in the US. Testing has been ramped up significantly which justifies their outsized reporting. But political mishandling and late lockdowns on heartland USA led to the virus rapidly spreading across the country.
🤝 Box and Google partner - cloud storage company Box has partnered with Google Cloud, with the former using Google’s server storage capacity globally. The cozying up sparked rumours of a potential acquisition in the making.
Hope you took a thing or two away from today’s edition. 😀
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