Sticky affair 🚧
Global edtech, earnings galore, and Jio.
Hi 👋, Tanvi here.
Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.
Sign up below for free. 👇
Let’s go ahead and get started:
Market summary: 📊
This turned out to be a pretty disastrous week overall, with India losing some more on Friday, and US cratering big as investors rushed into the Halloween weekend.
US:
S&P 500 - down 1.21%
Nasdaq 100 - down 2.62%
India:
Nifty 50 - down 0.24%
Sensex - down 0.34%
Technology earnings galore 🖥️
Wall Street barely slept last night as analysts foraged for hidden clues in the barrage of earnings coming out from Silicon Valley. Some interesting insights worth calling out:
1️⃣ Amazon showed ecommerce is still roaring. With revenues up 37% to $96 BILLION in just the last 3 months, Bezos and co. are killing it!. Also, 39% growth in AWS shows cloud is going very well for them.
2️⃣ Google made a commendable comeback -- everyone had thought search ads were maturing and Google would land in shallow water but Cloud CEO Thomas Kurien delivered big time, growing Google Cloud Platform to $14B in annual revenue run rate, up 45% YoY. Also, YouTube grew 30% to bring in $5B in business for the quarter!
3️⃣ Facebook was meh. Growth in digital advertising revenue was truly impressive. But the old-FB platform is slowly decaying, which has begun to worry investors. Pressure on Zuck and team is rising to deliver on ecommerce, payments, and other additional monetization avenues to continue to milk the 3.2 billion+ total user base.
4️⃣ Apple showed nobody is dumb enough to buy $1,000 phones in the middle of a recession afterall, as iPhone revenues dropped 25%! But Mac and iPad sales were very solid, thanks to work-from-home buyers -- so on average Apple wasn’t hurt very badly. Also, Apple Services? $14 billion a quarter business now! Talk about subscription businesses taking over.
5️⃣ Last, Twitter embarrassed itself. Although revenues grew 14%, a sharp acceleration from last quarter’s decline, engagement on the platform disappointed—some 187 million people use the platform daily, while investors were eyeing for something like 195 million. Anyway, Dorsey could do little to stop damage and investors hammered the stock, down 22% on Friday!
Bottomline: Investors picked some key lessons 1. Don’t mess with the cloud demand—unless there’s a negative catalyst on the horizon, this market will continue to explode! 2. E-commerce is nowhere near done, even in mature markets like the US the runway seems very long 3. Advertising revenues are BACK big time after last quarter’s slump and digital ads are scooping up a much bigger share than before.
Phew what a week!
A sticky affair 🚧
Pidilite Industries—the maker of Fevicol in India, will acquire the India subsidiary of a US based company Huntsman Group, that makes adhesives and sealants under the Araldite, Araldite Karpenter and Araseal brands—well known and used in the construction and hardware industry.
The deal is priced at a relatively modest ₹2,100 crores for Huntsman India, which over the last year made about ₹400 crores in revenue. In addition to control over the India market, the acquisition also gives Pidilite the rights to sell Araldite products in the Middle East, Africa, and South East Asian countries.
The strategy is very simple—the acquisition will bolster Pidilite’s existing products in this arena, giving them more market share as construction and associated demand returns from the pandemic.
BTW we thought hard for some glue jokes here but really landed flat and eventually gave up. If you’ve got any, please share :P
Closing out the week on Venture Avenue 💰
First up, Bidesi edtech Udemy is courting investors for another $100 million at a $3 billion valuation. The firm has had a remarkable ride this year, winning big from the pandemic much like its peers, with consumer enrollments in courses jumping as much as 425%!
Armed with all that excess, they’re eyeing an even better run as markets recover, and a looming recession drives millions of jobless people to upskill. India, Japan and Brazil will be focused on for deeper expansion. Moreover, their enterprise offering where the best courses are bundled and sold to companies like Apple, PayPal for employee training is gaining a lot of traction. Sounds like a deal sealed!
Turning heads to healthcare for a bit, 🩺
Janani, a startup in the fertility care arena, has been seeded with a ₹1.5 crore check by idea-phase accelerator 9Unicorns. Several angel investors including a couple of prominent IVF experts pitched into the round.
The company aims to bring mass fertility solutions more broadly to the masses, aided by technology solutions, hoping to cut costs and reduce stigma. Part of their tech also involves building an AI tool that can churn data to reduce subjective influence of embryologists while choosing the right embryo. Sounds promising for sure.
Closing out, in the travel segment 🚂
Railofy, the company that sold insurance against unconfirmed train tickets, has raised another ₹4 crores for its seed round from Roots Ventures, Astarc Ventures, Better Capital, and others.
They basically offer ticket protection to railway passengers against waitlist and reservation against cancellation (RAC) buys, which has been a great hit with thousands of citizens who are returning home during lockdowns. The latest round will help them spread tentacles even farther during the festive season, extending protection to over 2,000+ passenger trains by 2021.
Ajooba 🤯
Ant Group is finally ready for the world's biggest IPO—which will see the Chinese financial services giant raise $34.5 billion at a $315 billion valuation!
To put that into perspective, Ant will be bigger than the $300 odd-billion JP Morgan group, and almost 4 times bigger than the Goldman Sachs group — highlighting how financial technology is slowly chipping away at legacy institutions and the global financial order they established and held true for over a century.
The company had generated nearly $18 billion in revenue in 2019, from its super-app Alipay, which spans payments, shopping, insurance etc. etc. Anyway, global investment managers are scrambling to get a piece of the pie before it hits public markets and expectations are set for stock to jump even more on day 1.
Finally, closing out on Reliance 🗼
Reliance Industries’ last 3 months performance was outstanding. Although profits declined by 15% YoY because of a shortfall in the Oil and Gas business, Telecom (Jio) and Retail business pleasantly surprised, growing very strongly.
Some highlights:
Jio expanded profits by nearly 187% to ₹2,844 crores
Average revenue per subscriber for Jio jumped 21% to ₹145
Retail unit revenue of ₹41,100 crores— back to last year’s levels
In all, the Ambani-led empire highlighted how swiftly it is transforming into a digital-first entity -- where Jio and Retail make up for the decline of old-businesses and carry the weight of the conglomerate into the future. 10/10 for execution so far!
What else are we snackin’ 🍿
📱 Army taking no chances - As the debate around privacy and snooping takes precedence, the Indian Army has launched a messaging app called Secure Application for the Internet (SAI) for its jawans, supporting an end to end secure voice, text and video calling for android.
🎮 Pulling the plug - PUBG Corp is finally shutting down India servers for the multiplayer game almost 2 months after the game was banned in India. The game will no longer be available to the existing users who had downloaded it before the ban either. Akshay Kumar must be rejoicing.
🙁 The times they a changin - Exxon Mobil Corp is planning to layoff around 15% of its global workforce over the coming 2 years -- which shines some light on continued erosion seen by giants of the past.
🏏 Paji’s VC innings continues - Yuvraj Singh has invested an undisclosed amount of capital in a nutrition startup, Wellversed. Yuvi has been an active investor in several startups since 2015.
Hit that 💚 if you liked today’s issue.
You can forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀