Technoking 🚀
Stripe killing it, ecommerce policy, and new banks.
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Market summary: 📊
Indian markets continue to face resistance, ending up with another down day yesterday. US saw some relief with tech stocks particularly gaining. The choppiness continues.
US:
S&P 500 - up 0.65%
Nasdaq 100 - up 1.12%
India:
Nifty 50 - down 0.67%
Sensex - down 0.78%
What’s brewing hot? ☕
✅ Fostering creators—Clubhouse’s creator accelerator program will incentivize people to create their own shows, build an audience, and eventually monetize their base, with the first cohort inviting 20 creators worldwide to be groomed under special supervision. A bunch of new features such as link sharing, language filtering, and mass invites were revealed to make the platform more flexible. Creator-first platforms are increasingly spending a large chunk of their capital and attention to cultivate a community in the early days, making it easy for more people to jump on the solo creator bandwagon. Example, the widely popular Substack fellowship. Exciting times!
✅ Meanwhile, SpaceX casually makes history—Musk’s space company flagged off their record ninth Falcon 9 rocket flight carrying 60 more Starlink Satellites to orbit, part of the company’s goal to build a constellation of 12,000 satellites up there to be utilized to power high-speed internet here on earth. 1,000 satellites have already been placed into orbit, and the company’s beta program has some 10,000 paid users using internet services already. It's a giant experiment, but if it works, the disruption across the telecom and media industry is going to be unimaginable.
Meanwhile, back on earth daddy-Musk can’t stop his shenanigans. Dude told US market regulators to change his title from CEO of Tesla to Technoking of Tesla, while the CFO is made his Master of Coin. Yep.
The OG gets honored 🎵
Stripe raised a fresh round of $600 million at an eye-popping $95 billion valuation making it the second most valued startup globally after Bytedance.
Allianz X, Sequoia, Fidelity all pitched in, while founder-Collison brothers’ home country was represented on the cap table by Ireland’s National Treasury Management Agency.
Obviously COVID handed the company a massive boost as enterprises of all shapes and sizes, worldwide, scrambled to get themselves digitized, rushing to DIY payment platforms to get paid and keep the lights on. Literally every other macro theme from marketplaces, to SaaS, to the creator economy somehow ends up placing tailwinds for Stripe’s bottomline. It’s just magical.
Management is extremely secretive about metrics, which again indicates the company’s solid footing, which translates into unparalleled negotiating power against VCs and investors.
Anyway, the fresh funds will fuel global expansion into Europe, as well as countries like India, Indonesia, Brazil, Thailand, and UAE where so far local platforms have managed to hand Stripe its ass. Points to RazorPay.
What’s hot on Indian deal street 💰
In a quick gaming raise, GetMega raised $9 million from Accel India, Nexus Ventures and a bunch of angels on the back of their impending public launch.
The company runs a social gaming platform where users can bet money and socially compete against other users for rewards—playing into an increasingly common theme emerging in the Indian gaming tech ecosystem. GetMega plans on putting the fresh money into running a growth campaign featuring 200+ YouTube influencers over the next few months. Interestingly, the platform has already scaled to 5 million registered users.
Bottomline: the nascent gaming tech ecosystem in India is looking red hot with consumer pull for such services extremely strong. The rise of fantasy platforms like Dream 11, as well as the looming Nazara IPO, will continue to attract mainstream investors to this ecosystem.
Meanwhile, turning heads to a quick IT acquisition,
Tech Mahindra acquired a 70% stake for $25 million in Perigord, a supply chain digitization and advanced labeling consultant serving the pharmaceutical industry, with plans of acquiring the entire business in due time.
Perigord basically helps pharmaceutical companies streamline and digitize their supply chain operations through sophisticated labeling techniques and record keeping, improving visibility and reducing fraud as high value goods like medical devices travel through logistics networks. Tech Mahindra hopes to capitalize on the businesses tech + sales relationships to further deepen its digitization business within the healthcare & life sciences verticals.
Investors approve of the deal and Tech M stock popped 3% on the news. FYI, the consulting space has easily seen more than 25 high-profile acquisitions since COVID as IT firms rapidly digitize to serve emerging demand in cloud, SaaS, and other hot tech.
Rok sako toh rok lo 😎
GOI’s keen on rolling out a policy that restrains monopolistic practices in the e-commerce business, and a draft in-the-making has already managed to sour the mood for category leaders Amazon, Flipkart, and others, particularly those run by foreign companies.
In addition to addressing anti-competitive actions, and control over usage of data, the planned policy is likely to focus on protecting the rights of small retailers. Here’s what we learn from a draft leak found by Economic Times:
Enforcing a code of conduct that’ll govern how discounts are used to gain market share.
Sales of self-branded products, and artificially favoring preferred-sellers will be checked
Algorithms will be tested and monitored to make sure small retailers selling on the platform are not overlooked
No cross-border flow of data and consumer intelligence will be entertained
Most conclusions based on this leak are speculative at this point. And it's very likely that the leak was intentional to deter the leading platforms from pursuing any more shenanigans.
However, although the sentiment behind the move of protecting small retailers is extremely laudable, following the guidelines is going to be a mess, and the policy could very well end up becoming nothing more than a nightmare for smaller ecommerce companies. While the big guys just throw a bunch of money at fancy legal teams to figure out the web of regulation.
Bottomline: there’s no doubt that the incentive-laden artificial dominance of the foreign vendors at the top (Amazon, Flipkart) needs to be checked. But more regulation on the entire ecommerce game isn’t probably the best way to go about it, considering regulation makes things harder for the small guys too. Remember how GDPR blew up in Europe’s face?
Closing out—them fintech, they wanna be banks 📱
Global fintech bellwethers are slowly becoming the very institutions they set out to replace—Banks.
In the latest, US based consumer fintech platform SoFi, which is one of the largest super-apps of its kind and is backed by the who’s who, recently acquired a tiny community bank called Golden Pacific Bancorp.
Industry experts aren’t surprised. Consumer apps that started fintech-wars with a differentiating digital experience are now entering a phase of product adoption where a sexier UX alone is not enough to build a moat. They have to protect margins, get more control over financial products they sell, and keep a larger share of commissions earned via interest, interchange etc.
Buying banks and becoming one yourself is one way of solidifying your position. The other way, like how Square did recently, is to apply for a bank license yourself—a lot more tedious but increasingly popular path.
What matters: banking charters are extremely hard to get, almost impossible in India, but critical in the long run to the vision of many startups that promise the moon. With time, the leaders are likely to use this high-jump barrier as a means to draw the line between regular upstarts and those with mettle to make it.
What else are we snackin’ 🍿
💉 Vaccination humming along - India crossed the 30 million mark in COVID vaccination coverage on the 59th day since the drive was kicked off nationwide. However, daily cases are slowly increasing as well, which is a bit of a concern.
Hit that 💚 if you liked today’s issue.
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