Spin off 💰

Woman founders, INFY boost, and Walmart's ambitions.

Dec 04, 2020

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Couple of sessions into December and the markets are yet to make any big moves either way. Sensex 45K will probably need more patience.

US:

S&P 500 - down 0.062%
Nasdaq 100 - up 0.086%

India:

Nifty 50 - up 0.15%
Sensex - up 0.033%

Spinning off crown jewels 🙌

Walmart has finally gotten Flipkart to spin off PhonePe into a separate entity, infusing $700 million into the new company in a fresh raise, and slapping a $5.5 billion valuation tag on it. The move was actually in the makes for a long time.

Post spin-off, Flipkart’s ownership of PhonePe comes down to 87%, while 10% will be owned by Walmart and rest of the 3% will be shared between other investors who pitched in. PhonePe CEO claims the move will make the company more effective, giving the company the independence as well as the cash to pursue long-term vision without intervention.

The company gets points for rapidly growing into one of the largest payment processors in India, winning big from making it easy for merchants to process digital payments from multiple channels in one unified app. Just this year, they beat Google to become the largest UPI app in terms of payment volumes.

Bottomline: perhaps Walmart was keen on separating lanes between the two because each of the companies are in a different growth phase. Despite a long headstart, Flipkart is kinda stuck on fending off competition from resourceful players like Amazon, RIL, in a low margin, relatively less profitable (at least for now) vertical that’s taking its slow time to mature.

The payment company on the other hand with its nearly 250 million users and a market leading position, has a relatively clear ramp to scale with little expertise sharing with the problems that Flipkart faces or is learning from. Separating management only builds focus and somewhat hedges Walmart’s bets. Also there are plans for an eventual IPO, which could give serious cash to the owners. 🙌

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Bozos loves podcasts 🎙️

Amazon is rumored to be in talks to acquire a podcast publishing platform Wondery, for about $300 million, jamming its own bid between Apple and Sony who were earlier reported to be courting the startup.

Wondery essentially provides the publishing tech and distribution platform for independent publishers to record, share and scale their podcast shows. It's no market leader by any means, but gets some serious engagement with 8 million users, 50 million+ downloads or streams across 100 shows, making it the 6th largest publishing platform in the US. This year the company is on its way to make $40 million in sales.

But we doubt Amazon cares about stats as much. For them, this could be an effort to solidify their positioning in the audio market and extend Audible’s footing, as competition makes aggressive moves to lead with the podcast format. Particularly Spotify, which recently had acquired another podcast publisher as well and not to mention the series of investments they’ve made heating up the space singlehandedly.

We’ll see how this pans out, and there are strong chances Amazon’s bid gets blocked by regulators.

Indigenous tracking chips get priority 💪

GOI has invited bids from semiconductor companies to design, make, and distribute about 10 lakh integrated NavIC and GPS receivers, in a bid to push the adoption of indigenously developed satellite positioning infrastructure.

Some context—around 2013, India started building a regional constellation of satellites that is 100% owned by us to build our own positioning and real-time monitoring system, spanning the country and about 1,500 kms of region around us. Called the Indian Regional Navigation Satellite System or NavIC, the system’s primary goal is to complement and reduce reliance on the foreign owned global positioning system (GPS).

Anyway, GOI’s integrated chips will combine both GPS and NavIC, giving India direct access to broadcast information that is relevant to the local region, while also allowing us to harness the best of the GPS system. The initial design and deployment of 10 lakh units will offer a test bed, and expect millions to be made in the following years, that will go into smartphones, government assets, local infrastructure etc. if all works well.

Semiconductor companies are invited for a pre-bid meeting on 14th December and all proposal bids should be submitted by 11th January.

What matters: strong self owned communications infrastructure is not an option but an absolute requirement if India wants to play a leading role on the global stage. NavIC is a tiny step in that direction. Also, we have a tingly feeling—Reliance’s low-cost Androids may be very keen on jumping on the bandwagon, plugging these SoCs into their phones. Bol rahe hai. ☝️

Sequoia sparking women entrepreneurship 🙌

Sequoia Spark—an initiative by Sequoia India to boost women entrepreneurship in India and the Southeast Asian region, has partnered with Niti aayog’s Woman Entrepreneurship Platform to launch an year long programme to promote women entrepreneurship in the country.

Starting with 25 women in the first cohort, Sequoia is offering them monthly office hours to address concerns, counsel founders, and carry discourse on sector-specific challenges as well as operating issues regarding their ventures. The VC firm hopes to leverage its global experience and resources to support the cohort with domain knowledge to accelerate outcome and help these entrepreneurs get to discover PMF rapidly.

Stats suggest barely 20% of enterprises in India are women-owned, a considerable bump from 14% levels from a decade ago, yet leaving a long long runway for further change. Points for Sequoia to formally look to change that and if it applies to you, you should definitely consider the program.

PS: We didn’t find a form handy, but hope the Spark form is how you can reach them.

What else are we snackin’ 🍿

🤝 INFY and Rolls Royce cozying up for tech - In a new partnership, Rolls Royce will offload some of its engineering services, design and R&D responsibilities to Infosys, to be delivered from INFY’s dedicated facility in Bengaluru. The partnership could be limited to enhanced use of cloud and software tools in helping RR folks design, build, test their equipment but such deals rarely take place which makes this a unique win for Infosys.

🙌 Local innovation boost - Peeps over at IIT-K have made a portable AI backed device for automatic inspection of goods manufactured in MSMEs. This product will help the MSMEs click pictures of products when set up on a batch of goods and send the feed to a cloud hosted AI model for quality control. Sounds amazing.

Hit that 💚 if you liked today’s issue.

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