Software on sale 💸
Tata's slowdown, FTX's killer raise, and Fisker comes to India.
Market summary: 📊
Indian markets finished in the green, hopeful of a favorable budget coming in today. US investors rushed to pick up growth stocks on sale — helping major indices add a serious chunk.
US:
S&P 500 - up 1.89%
Nasdaq - up 3.29%
India:
Nifty 50 - up 1.39%
Sensex - up 1.42%
What’s brewing hot ☕
📈 Winners win — booming demand for 5G smartphones and broad price increases for chips helped semiconductor revenues jump 25% for 2021 — to $583.5 billion, making it the BEST year on record for the industry, per Gartner. Samsung was the biggest chip seller for the year, while Intel finished second, followed by memory vendors like SK Hynix and Micron. All leaders are expected to channel the billions in extra $$ into setting up larger, faster, sleeker production facilities.
👎 Marico misses — like its friends HUL and Britannia, Parachute oil-seller Marico came out with some pretty soft stats for the past quarter. Although Marico’s revenues jumped 13% YoY to ₹2,407 crores, its profit mostly remained flat, while margins compressed 3.2% as input costs of raw materials spiked due to inflation. Marico also once again reaffirmed that demand in rural areas was dying out. Not a very bright time in FMCG!
Software fire-sale is attracting Private Equity 💸
What happened — investing powerhouse Elliott Management and PE-giant Vista Equity Partners are joining hands to make a $16.5 billion deal to buyout virtual desktop service provider Citrix Systems.
Citrix basically makes software that lets large enterprises deploy a virtual-desktop system on your office laptop/desktop, that renders all your company permitted applications. It’s essentially an old-school piece of software — which made a ton of sense before cloud made things so easy, but even now is widely found in circulation.
Anyway, the 32-year-old company makes $3.3 billion in revenues and has wide distribution into a host of enterprises that aren’t exactly known for their tech chops.
Both buyers believe that Citrix’s tech is undervalued and hope to leverage the notorious surgical financial engineering of private equity to juice more profits out of the business. Besides, both could leverage Citrix’s rather widespread distribution to cross-sell other SaaS products they own.
Big picture — PE giants have been prolific buyers of software companies for a long time. Now that software stocks trade 40-50% below their peaks, M&A is expected to pick up even more vigorously.
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Who got the dough bruh? 💰
SuperOps.ai, a process-automation SaaS platform, closed a $14 million Series A round from Addition Cap, Tanglin Venture Partners, and a few angel investors.
SuperOps, founded by an ex-Freshworks executive, sells a platform that helps teams running customer-service helpdesks improve overall productivity by automating repetitive tasks around documentation, certain project management functions, alert generation, and such.
Some 36 clients are currently running the beta, and funds will be put towards hiring, R&D and improving product stack.
Meanwhile, FTX is freaking killing it in the crypto world 👇
Sam Bankman-Fried’s baby, FTX Crypto, raised another massive $400 million Series C from Tiger Global and Softbank, revising valuation to $32 billion! FTX is one of the leaders in the crypto derivatives market — serving retail as well as an extensive base of institutional clientele (crypto hedge funds and such).
Since the company’s last fund raise in October, it’s user base has jumped 60%, while daily trading volumes have risen 40% to $14 billion, all amidst a mass crypto sell off.
Tata stumbled for a bit there 🤞
Overtaking Hyundai to become India’s 2nd largest auto maker by the end of 2021 was probably the only bright spot in Tata Motors’ last quarter. Otherwise, semiconductor shortages and production issues hollowed out the auto-giants’ business, leaving little to cheer about.
Quick look at key stats for Q3:
Revenue of ₹72,229 crores, came down 5% YoY
Lost ₹1,516 crores for the quarter — against almost ₹3K crores in profits for the same time last year
Tata sold 2 lakh vehicles for the quarter — a 56% YoY jump
Margin dropped to 9.8%, down from ~16% last year
Tata mentioned that demand remains exceptionally strong, and that once problems are sorted, growth should pick pace. Stock, which has been up 70%+ over the past year, is holding firm on that hope.
Closing out — Foxxcon will make EVs in India 🔥
What’s poppin — Foxxcon, who runs an extensive electronics manufacturing empire worldwide (including manufacturing iPhones for Apple), just signed a contract with EV-company Fisker to make their cars here in India.
Foxxcon had barely months ago announced its plans of venturing into the EV production — joining a host of electronics manufacturers making the transition. Fisker meanwhile, is a newly founded EV company that went public in 2020 via a SPAC merger on the NYSE — and is yet to scale its operation.
Anyway, the duo will make Fisker’s low-priced EV model called Pear set to launch in 2024-25. The vehicle will cost about $30K (or 20 lakhs INR) — and will be available domestically as well as for for export. Fisker is already setting up a tech-center in HYD, hiring 300+ engineers to kick off software R&D.
Worth calling out — Fisker is founded by ex-BMW luxury car designer and billionaire Henrik Fisker. Henrik’s wife, Geeta Fisker, has Indian roots.
What else are we Snackin’ 🍿
👀 Test it out - China has selected 15 regions and some ~16 government entities like universities, banks, hospitals, to start testing its state-owned blockchain technology.
📉 Not as bad - boys and gals in India’s National Statistical Office revised their numbers — saying India’s GDP actually contracted just 6.6% in 2020-21, and not 7.3%, as earlier predicted in data released in May 2021.
👏 Tobi gets coined - Shopify CEO Tobi Lutke will join the board of Coinbase. Crypto-powered payments coming to the Shop?
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