Sorry Don :(

Intel changes boss, Plaid blocked, and defense win.

Hi 👋, Tanvi here.

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Market summary: 📊 

Indian markets had a flat day yesterday. May be today’s the day we see 50K after all. US markets had a respectable up day after a pullback the previous day.

US:

  • S&P 500 - up 0.23%

  • Nasdaq 100 - up 0.63%

India: 

  • Nifty 50 - up 0.096%

  • Sensex - down 0.050%


Three things to begin with

They’re booting him—the US house has again impeached Donald Trump, this time for inciting violence and an attack on the US Capitol building. Several Trump-loyalists from his side of the party voted in favor of impeaching the boss, and one of the staunchest Republicans, Mitch McConnell in the Senate (kinda like the upper house of the parliament), is apparently leaning on doing so too. In simple terms, Trump’s toast.

₹48,000 crores for LCAs—India will spend big money on acquiring 83 indigenously made Tejas light combat aircrafts, all going to beef up the Indian Air Force’s fleet. Hindustan Aeronautics, the marker of these badass birds, has already set up facilities in Nasik and Bengaluru. Also, ₹48K crores is a lotta money, the spending is a big win for the local defense tech ecosystem.

Wipro does a good job—the spree of stellar earnings reports from IT giants continues unhindered. Wipro had a pretty solid quarter, all the more impressive when put in context of the horrible second quarter of 2020 these companies had witnessed. 

Quick highlights:

  • Revenues of ₹15,670 crores, up 3.68% YoY (not much, but wayyyy better than last quarter’s negative rate)

  • Profits of ₹2,967 crores, up 20.3% YoY

  • Margins improved some 2.4%

So far, the performances seem consistently on point—growth is returning, margins are expanding, and profits are improving. Also, big points for IT management for pulling off these wins even in such a hostile environment. 👍

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Hottest from the Venture Street 👏

There’s probably never been a time worse than right now for the budget travel business, and it's no secret that Oyo has had it pretty rough lately. However, some timely relief comes for the business with a fresh check from Swedish billionaire Martin HP Söderström.

Deal size hasn’t been disclosed, but Oyo recently raised a tiny $7.4 million (tiny for them) as part of its Series F raise, and this check may be clubbed with that. Apparently the company’s expansion plans in holiday homes in Europe is what caught Martin’s eye here, and he’s taking a board seat too, which makes us believe he’ll come back with a bigger check once he has a better grip over their Euro expansion plans.

Then onto Snap’s new purchase,

Snap has acquired StreetCred, a startup building a plug-and-play geo-intelligence platform, that basically allows app developers to embed advanced location-based services inside their own apps like such as geography-based games or social apps.

Snap has been a big innovator when it comes to cool social features. Their “Stories” format literally caught on like wildfire. Another feature, Geo-maps, which basically allows users to see what’s going on around them in a map like interface, has been a big win with young users too. Anyway, this looks like a classic acqui-hire deal to bolster that functionality, and all of the StreetCred’s team starts at Snap coming Monday.

Last, onto a quick Pharma deal,

Drugmaker for kidney related ailments, Le Renon, raised $30 million from A91 Partners, at a $500 million valuation. Surprisingly Sequoia is an existing investor in the company as well, holding a 12.5% stake. Le Renon controls nearly 30% of the market in manufacturing nephrology drugs in India, and will use the fresh capital to bolster the product portfolio and improve R&D capabilities.

Good times for Indian pharma at China’s peril. 🤞


Regulators spoil the mood 👁️

Visa’s move to acquire fintech infrastructure startup Plaid landed in the water, after the US justice department sought to block the deal on anti-competitive grounds in Nov 2020.

After 3 months of trying to fight it, now both companies have decided to walk away from the transaction.

Plaid is a pioneer—the startup basically allows users to connect their bank accounts to any fintech app via a simple 3 step process. It's quite literally a revolutionary product, and hundreds of consumer fintech apps, from budgeting to savings, literally came into existence because the company solved a critical piece of the logjam, and made everyone’s banking data, so to say, “portable”.

So when Visa announced they’d be interested buyers for $5.3 billion, nobody really was surprised. Visa, although not many understand, basically runs a service that connects millions of consumers, merchants, and their banks, on this convoluted “network” to facilitate transactions—or in other words, allows users to “carry along and share” their financial data everywhere with them. For example, Visa works with your bank to tell a merchant down the street that you are “capable” of paying up for that coffee you ordered (that’s what happens in the backend BTW when you swipe that debit card).

Anyway, Plaid somewhat does the same too but with digital apps, allowing users to connect and carry your bank data anywhere, which in the long-term threatens Visa’s offering. Problem was, the regulators sniffed out Visa’s motivation of self-protection, understanding that they’re essentially buying Plaid to secure and insulate themselves against eventual disruption. So, no go bruh.

Regardless, cases were filed in November, and before it got to formal litigation, the regulators got what they wanted. Both Plaid and Visa seemed to have shook hands in the right spirits, and Plaid CEO even posted a tweetstorm about it.

Bottomline: secretly, we bet Plaid is delighted. Before COVID, the fintech markets weren’t running as hot as they are right now. With Square ($100B+), PayPal ($250B), Stripe (reportedly raising at $100B+ valuation), the game has completely been flipped. Getting sold for $5.3 billion is for kids these days—not a global pioneer that’s reshaping how every living person carries around their financial data. 

Don’t be surprised if they manage to raise the fresh round in 2 weeks at an absurd valuation. 💸

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What Dan can do 🖐

When hedge fund titan Daniel Loeb took an activist stake in chip giant Intel, we told you to watch closely. Last night, Intel’s CFO turned CEO Bob Swan was asked to step down, “amicably”. VMWare CEO Pat Gelsinger will be appointed as Intel’s new boss.

And FYI-nothing about such resolutions is ever “amicable”. 💁‍♂️

Intel had been battling issues for a while— the company’s manufacturing capabilities were starting to lag Chinese rivals, and then the company also missed out on the cloud-GPU boom, this time to Nvidia. The changing market conditions, and a weakening positioning had begun hurting employee morale, as well as investor confidence. We’ve amply written about it before.

Anyway, Intel is now scheduled to release its earnings report in a few days, and the markets will be eyeing further explanations then. As far as the new CEO goes, Pat Gelsinger is a computing rockstar with a thorough understanding of the software infrastructure landscape. He’s a good pick to diversify Intel’s focus.

For now, stock popped big time on the news and loyalists are cheering.


What else are we Snackin’ 🍿

🥱 AMZN woos with Video - Amazon Prime Video has partnered with Airtel to launch an India first mobile-only plan for ₹89. As streaming wars intensify, the fight to please the Indian consumers is at its hottest, and Netflix had launched a similar plan last year at a starting price of ₹99.

Malaysia goes hard on fresh lockdown - to curb the spread of the virus Malaysia has declared a state of emergency which is expected to last till August 1. Under the restrictions all social events which involve mass gathering are banned, with residents only being allowed to travel within a radius of 10 kilometers.

💰 Ecommerce enablers are stronger than ever - Supply chain services provider Delhivery has announced the opening of 2 new tech offices in Bengaluru and Ahmedabad, beefing up its domestic footing. The locations are estimated to add some 500 new jobs.


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