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Landing into the week☕
✅ Goddammit COVID—the second wave that never came is finally here. Rising fresh cases nationwide are slowly becoming a concern, while vaccination is lagging due to the administration and citizens’ complacency and lethargy. In the last 24 hours, India recorded over 43K new cases, nearly 4x the avg. levels a couple months ago. 5 states are known to bring in 83% of the new cases. Likely to get worse before it gets better. Get that shot yalls.
✅ Pockets empty—For the quarter of September (immediately post lockdowns), RBI claims that total savings by average people dropped by half as much, down to 10% of the GDP, while total household debt grew to 37% of the GDP. Remote workers and the white-collar folks used the pandemic to cut spending and save up cash, but there’s little doubt that average India struggled to get by, depleting rainy-day funds and taking on more debt to stay afloat. Easy to claim out economic recovery when all you do is buy meme stonks.
Stop sniffin’ 😖
Elon probably had a sleepless weekend. China is restricting Teslas from entering government or military facilities, discouraging military and government officials from owning the cars.
But why?—a simple case of mutual distrust or, a tit for tat. Firstly, Teslas are equipped with cameras and all kinds of fancy sensing and software which is routinely capturing data about its surroundings feeding its autopilot systems. The Chinese claim that the company could double as a covert surveillance rig for foreign powers, aka the Amercians.
FYI, China is one of the hottest markets for Tesla driving 12% of Tesla’s revenues, and the company’s ungodly valuation as well as business could brutally suffer if a backlash escalates.
Musk however vehemently denies all accusations. What makes matters worse is that the US has routinely slammed Chinese companies over slightest whiffs of overreach that could seem like spying or lax data practices. Take the case of Huawei as an example.
What now—Tesla’s certainly in hot water. The company is already suffering from increasing competition in China. On the other hand, laggards like Volkswagen are openly throwing the company challenges, further crowding the EV game.
If you’re an investor, you’ve gotta have balls of steel to stick by even after the stock’s EPIC 10x rally in the past year or so.
And oh, the story emerges in the backdrop of US-China bilateral talks, which was a freaking disaster, setting the stage up for a tough job ahead for grandpa Biden.
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Get rid of em old cars 🚗
You’ve probably heard about this a million times before, but the government is pushing for a vehicle scrappage policy to get rid of cars that are past its time, in a bid to offer some boost to India’s auto market, as well as help pull the environment-hurting monsters off the streets.
Quick look at the details:
Mandatory fitness test for personal and commercial vehicles after 15 and 20 years of operations. “Unfit” cars will be impounded
5% discount on new car purchases if owners scrap old vehicles. Sizable road tax rebates and waiver of registration fees during purchase if scrapping a car
All the government vehicles will go directly for scraping after 15 years
Parts of the impounded cars will be sold off to recycle, hoping that the auto industry can cut costs on making everything from scratch
Currently, India estimates about 51 lakh vehicles older than about 20 years, and 34 lakh more than 15 years older, all operating without any fitness certificate, and on an avg. polluting the air 10x more in comparison to an average vehicle. The policy will be rolled out in phases, going into full force starting October 2024.
Bottomline: India’s auto industry is expected to grow its revenues from the current ₹4.5 lakh crore to ₹10 lakh crore in about 10 years. The policy should reduce costs, and bring incremental demand into the market, improving prospects for players across the value chain.
Apple and EPIC to battle it out in courts 🏛️
Literally going to be Tim vs. Tim. Both Tim Cook, CEO of Apple, and Tim Sweeney, the CEO of EPIC, have been summoned as witnesses in the landmark Apple vs. EPIC Games legal tussle over Apple’s App Store policies, that began in summer 2020.
It's always the middle rank execs who show up for such court dates, and CEOs being summoned is quite an unusual scenario, which kinda underlines the importance of the matter. Third-party witnesses include execs from Facebook, Microsoft, and NVIDIA.
To remind you, the battle started last year after Apple excluded Epic's game Fortnite from the App Store because the company refused to pay Apple a 30% fee on processing payments inside the app, and used its own payment system.
Why care—these proceedings may seem too far from home, but the happenings will determine the fate of the decade old App Store operating model that has helped build easily trillions of dollars of value in consumer technology, and in the process helped create behemoths like Apple and Google.
Right off the bat, a considerable portion of its $50B+ Apple’s services business hangs in the balance, but long term the world is possibly looking at a very different tech distribution model that could finally give developers more control and power, and perhaps be regulated like a “utility”?
Oh, and while we’re here,
Barely days after Italy roasted Apple for fake claims of water resistance on the iphone, Brazil’s consumer watchdog fined the company $2 million for falsely advertising the iPhone 12 and selling it without any charger. So freaking embarrassing, but by now it's probably a routine exercise for a lowly assistant on Apple’s legal team to handle these cases, and Brazil’s glorious $2 million against a revenue base of $250 billion is like a drop in the ocean for the bosses.
Closing out—who got the dolla 💰
India’s VC industry had quite a unique 2020—funding dried up for the most part, with most checks going to double up on winners, and a few chosen COVID supported segments becoming outsized beneficiaries.
Quick look at the year:
Total PE & VC capital deployed of $10 billion for a year was down 17% compared to last year
$3 billion in new capital raised in 2020, up 40%
Consumer Technology ($4.9B), SaaS ($1.5B), and Fintech ($1.2B) dominated the game—receiving 76% of the total capital invested
SaaS matured with total deal counts dropping 40%, while total invested capital increased 10%
Lastly, Fintech was driven mainly by Payments with investments growing 20% compared to a year prior
Here’s a look at the India VC report put out by Bain and Capital for the venture nerds.
Going forward—one couldn’t argue against the popularity of fintech, consumer tech, and cloud SaaS in the aftermath of the pandemic, but that was predictable, and investors who ran to the shelter of certainty hopefully come out in the favor of moonshots as we begin to recover from the pandemic’s devastation.
What else are we snackin’ 🍿
👀 How the tables turn - Banned from Twitter, Trump’s heartbroken, and apparently is planning the launch of his own social media platform in the coming months. Barely months ago had ex-Pres pitched a TV channel to take on Fox News. For those wondering why, rumours are rife that he’s making a bid at the seat again in 2024, and considering the passionate following he has, bringing a couple million folks on these apps shouldn't be a problem.
Hit that 💚 if you liked today’s issue.
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