Spittin' unicorns 🌈

Zoom's perfection, China drones, and Buffet still got it

Mar 02, 2021

Hi 👋, Tanvi here.

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Market summary: 📊

Indian markets opened strong after a week or so of persistent decline. US investors returned with a lot more enthusiasm, with tech adding substantially during the day.

US:

S&P 500 - up 2.38%
Nasdaq 100 - up 2.89%

India:

Nifty 50 - up 1.60%
Sensex - up 1.53%

What’s hot bruh? ☕

✅ Buffet still got it—if old-man Warren can swallow his mistakes and move on, it's probably time you get rid of that cash-bleeding meme stock you’ve been sticking to as well. In his annual customary letter to Berkshire Hathaway investors, Buffet outlined his investing performance for 2020, calling out his wins in Apple, Amazon, and Coke, and his billion dollar losses in an aerospace parts company called Precision Castparts which stands decimated after the pandemic froze the airline industry. People expecting the man to address the meme-stock mania were disappointed, but the 90 year old did highlight that keeping your transaction count low and avoiding too many fees is key in your journey to building long term wealth. The Berkshire letter is a true feast for business nerds.

✅ Paytm reclaims top spot—Paytm processed nearly 1.2 billion transactions across UPI, wallets, cards, and internet banking for the month of February, the highest number ever reported, booking the top spot for transactions volumes among other payment processing apps. For the last few months, dominance of PhonePe and Google Pay (who control over 80% of the market) had been hurting Paytm’s standing, and the fresh share gains show that the contest is nowhere close to done. Paytm’s merchant processing business, used by nearly 2 million SMEs, growing at 15% monthly rates, primarily drove all the outcome.

They’re all gunning from EVs 🔌

Smartphone manufacturer Huawei is the latest electronics vendor planning to enter the electric vehicle manufacturing game, barely days after iPhone assembler Foxconn had disclosed its own plans. While Foxconn would be making EVs for others, Huawei plans on launching its own models too.

Why the love—with most of the traditional car manufacturing processes pretty commoditized by now, the EV game is solely becoming about differentiated leadership in software, computing hardware, and battery technology—arenas where the electronics manufacturers score big points. On top of that, the old automobile industry continues to be lethargic and resistant to change, which is giving the ambitious smartphone and semiconductor assemblers a strong entry point.

Rumors are also building around Xiaomi’s eventual entry here, and that some of these players may even license tech from Tesla to fill gaps. Tesla investors are most certainly counting on Musk allowing for that—boosting revenues by supplying software or hardware to others for a fee.

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Meanwhile, the Western World wants its own drone company 🧐

Skydio, an autonomous drones supplier, raised a solid $170 million Series D round from Andreessen Horowitz. Bunch of others including Lines Capital, Next47, IVP pitched in.

Some context—nearly 75% of all the drones sold in the western market come from one Chinese company, DJI. Over time though rumors started to circulate that the Chinese might be doubling the drones as remote surveillance devices actively sharing data feeds with regulators. The US government ultimately stopped US suppliers from selling electronics components to DJI, kneecapping the company’s prospects.

Skydio and a range of other emerging platforms came out to fill this gap, appealing to the anti-China sentiment, and serving emerging enterprise use cases—in monitoring, surveillance, security, data gathering, and other functions.

Skydio in fact made a solid move into the enterprise market just last year with the launch of a special line up, and even signed one of the largest enterprise drone deals with Eagleview, an aerial imagery and analytics management platform. Other customers span infrastructure, construction, and government use cases.

Tiger hustin’ unicorns 🌈

Tiger Global is leading a fresh round in mutual fund investing platform Groww, infusing about $100 million into the venture at a billion dollar valuation.

That’d be the 3rd unicorn seeding check Tiger would've written in India in under a week's time now. Either some serious Softbank vibes here, or these are early signs of private-venture valuations in India catching up with the public market comparables in the US.

Worth mentioning, all three ventures operate in completely dislocated segments. Innovaccer leads in the healthcare SaaS, Infra.Market operates in the construction procurement and bespoke services, while Groww plays in consumer fintech.

Also, all three verticals have received an irreversible boost from COVID enforced broad digitization. Groww has scaled to some 10 million users on the platform, and fiercely competes with Zerodha, PayTM Money, INDWealth, and others in this increasingly crowded space.

Closing out—Zoom rocks Wall Street, again 💻

The darling of the pandemic continues to grow at ungodly rates even this far out since it all began, absolutely crushing investor expectations for the December quarter by a mile and more.

Revenues soared, profits grew, and Zoom expects the next quarter to be even better than previously guided. Quick look at the numbers:

Revenues up 369% YoY to $883 million in the quarter
Profits up 2,327% in the quarter, to $256 million
467K customers with more than 10 employees, up 470%
Dollar based expansion rate of 130%

Markets LOVED the numbers, and stock popped 10% immediately, despite the fact that Zoom is already a $120 billion company!

Everyone who needs Zoom is already on Zoom, so keeping the growth wheel spinning is going to be challenging for the company’s management, but investors are counting on the launch of adjacent products to help boost business. So far, Zoom has announced the launch of an email app and a calendar service, as well as the potential entry into contact center software. All of which are being viewed positively.

What else are we snackin’ 🍿

📹 Unlocking more creator tools - Instagram is adding a new feature to its app called live room, which will allow upto 4 people to broadcast live together at the same time. The function makes it easy to host joint interviews, Q&As, and other creator collaborative sessions on the platform.

🏏 IPL already picking checks - IPL champions Mumbai Indians have announced a partnership with DHL express as a principal sponsor and official logistics partner ahead of the 2021 season of the IPL. This is DHL Express's first cricket sponsorship. Last year, IPL’s brand sponsorships had suffered big, but bids from brands are looking a lot more promising this time around.

Hit that 💚 if you liked today’s issue.

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