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Market summary: 📊
Well that was a short lived sell off in India, with markets making a decisive reversal. US continues to circle in place, but tech had a pretty solid afternoon.
US:
S&P 500 - up 0.33%
Nasdaq 100 - up 1.21%
India:
Nifty 50 - up 1.36%
Sensex - up 1.38%
What’s brewing hot? ☕
✅ We may have a runner here—ever since its IPO Uber has been a dog of a stock. But that may be changing, as a leaner, meaner, post-pandemic Uber has begun showing great signs of life. Uber’s ride-hailing business has recovered to report an annualized revenue run rate of $30 billion, growing 9% in March 2021. Meanwhile, the food delivery biz of Uber is putting up even bigger surprises, recording an annual run rate of $52 billion, consistently putting up 100%+ growth rates on a YoY basis. Vaccinations in the western world are only about to light things up!
✅ $BTC through the roof, again—Coinbase is all set to go public when Nasdaq opens, and the press cycles will be running hot, hopefully pushing more people to download the app and likely make that first transaction—and $BTC is riding that sentiment to tear through new highs, crossing $62,000 for the first time. Skeptics of all shapes and sizes stand beaten to pulp.
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Hottest from Venture Street 💰
Death, Taxes, and Tiger Global’s ❤️ for India, are 3 current certainties of life!
In the latest bid, Tiger led a $100 million Series D round in social commerce platform, DealShare, revising the company’s valuation to $400 million.
DealShare started as a Whatsapp based grocery store, and has now turned into a group-buying platform where people can shop deals together to save $$ on everyday items, primarily targeting middle and lower-income consumers. Barely 3 years since founding, the business has scaled to 25 cities, and just months ago had raised a big round.
Lockdowns were obviously a huge boost to volumes transaction, and fresh funds will be put to expanding footprint to 10x more cities.
What matters—social-commerce driven spending is estimated to top $6 billion+ by 2025 in India, making it an obvious hot theme. But what’s unique about DealShare is the platform’s surgical focus on catering to consumers in the lower tier cities, which giants like Amazon and Flipkart have struggled to capture.
If they can keep executing, we may have another giant in the making!
Meanwhile, Pine Labs made a quick acquisition,
The payment processing company acquired a south-east Asian startup called Fave for $45 million, which basically helps offline merchants offer loyalty programs.
Shoppers visiting offline neighborhood stores use Fave’s app to scan QR codes and make payments, and then earn points which can then be redeemed at the merchant’s location the next time. Small businesses get repeat customers, and Pine hopes the acquisition will add more value to its merchants, beefing up its services portfolio, and thickening merchant relationships.
How’s the machine breathing? 🧐
Two fresh macro data points offer us some insight into the functioning of the economy, and so far things pretty much seem in line with expectations:
Inflation up a notch—retail price inflation levels increased to 5.52% in March 2021, up for the second straight month after an epic slump of 4.06% in Jan of this year. Raw material and transportation getting expensive, pent up savings adding more cash to the market, and higher prices of fuel are primarily responsible. Although April expectations are set for a drop, with looming lockdowns and new disruptions, that’s wishful thinking...
Industrial production tanked a bit—Feb 2021 saw a 3.6% decline in India’s industrial production output, primarily led by a drop in mining activities, manufacturing, and construction output. But the decline may not really be too catastrophic, considering we saw relentless production from October to Jan to meet all that EPIC pent up demand we saw during the festive seasons, and now it's just the machine resting back for a bit.
Going ahead: supply chains and production systems were just starting to come back to normalcy, and inflation was showing signs of somewhat stabilizing. But fresh lockdowns on the horizon could add a ton of uncertainty, making the markets and investors more inclined to stay away and bid time.
Wear that mask.
Still the King 👑
TCS, the OG of Indian IT, continues to surprise with revenues growing for the third straight quarter, and a strong pipeline of deals giving investors tremendous hope of accelerated recovery.
Quick look at the quarter:
Revenue up 9.4% YoY to ₹43,705 crores, blowing past all expectations
Profits were up an ever better 15% YoY, to ₹9,246 crores, as all that pandemic-time cost cutting is finally paying dividends
Operating margin came in at a respectable 26.8%
$9.2 billion worth of new deals won during the quarter
Despite a blowout performance, the market’s mood was kinda sour on Monday, so the stock ended the session down 3.6%.
Bottomline: these numbers underline that we’re well past the COVID-wrought IT slump—with growth slowly returning, and operating certainty helping put up respectable profits.
Lastly, the numbers read very well for the other IT stonks set to report over the next few weeks.
The SPACs aren’t done yet 😎
The Uber of Southeast Asia, Grab, will be going public in one of the largest SPAC mergers ever, led by Altimeter Growth, at a record valuation of $40 billion!
Makes Indian Zomatos and Swiggys look so damn undervalued.
Pre-listing, the business will be raising $4 billion from BlackRock, Fidelity, and T Rowe Price, to strengthen its balance sheet and look decent to public market investors.
Lil backdrop for ya—Grab runs a “super app” with services stretching from ride hailing to food delivery to payment and travel bookings, serving 350 cities in over 8 countries, with a total base of 190 million users. Last year, despite challenges from the pandemic and intensifying competition from rival Gojek in key markets, Grab grew revenues 70% YoY with borderline profitability.
SE Asia, just like India, offers a promising post-digitization greenfield, with tens of millions still coming online each year.
Bottomline: with the Ubers and Airbnb's public already, it's time for their emerging market look-alikes to follow suit, and prospects so far look bright. Far as SPAC fever goes, it's hot as ever, with 100+ companies going public in March alone.
and oh… Softbank owns 10%+ of Grab, so that’s another windfall in the making for Masa.
What else are we snackin’ 🍿
🙄 Hero edtech... wait, what? - the Hero Group launched its ed-tech portal, in partnership with MITx and CodeAcademy to support post-schooling upskilling. Little details are available on where the value proposition fits in, but the Munjal family is personally backing the initiative with $10 million from its own coffers.
Hit that 💚 if you liked today’s issue.
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