Tough day for unicorns 🦄
Amazon’s robot, Security concerns, and Streaming wars.
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Market summary: 📊
Another good session in India with major indices now in the positive on the week. The US opened strong, but growth stocks caved through the day as old-school companies took the lead.
US:
S&P 500 - up 0.60%
Nasdaq 100 - down 0.33%
India:
Nifty 50 - up 0.51%
Sensex - up 0.50%
What’s hot bruh? ☕
✅ Olympics without tourists—after much debate on whether to cancel or push the already postponed 2020 Olympics, Japan has finally decided to get done with it in July, albeit without allowing foreign spectators entry over concerns of flooding Japan with the emerging variants of the virus. Everything else remains the same, and the same rules apply to the Paralympics too, while the opening torch relay event on March 25th will be held without visitors. Japan will be forgoing a billion dollars in ticket income over the decision, but delaying the event has already led to total costs swelling by 15-20% more on the $15 billion or so budget. Unfortunate.
✅ Domestic robots may be around the corner—Amazon has secretly put an 800 member team on designing and producing a domestic robot, doubling down on its ambitions in the smart home category. The product is apparently in late prototype stage, and follows other ambitious projects the company has been pushing for recently including the in-home flying surveillance camera system, with literally zero f*** given for all that privacy debate. The robot will have a couple screens, temperature, humidity, air quality sensing capabilities, will be equipped with Alexa’s wits, and will be the size of about 2 cats. Wild.
Oddly tough day for the bellwethers 📉
Firstly, ride hailer Ola, which is still suffering from depressed demand for its services thanks to remote work-led weak commuter traffic, saw existing investor Vanguard Group cut its valuation by another 9.5%. This follows an earlier move by Vanguard to slash Ola’s value by 45% during peak lockdowns, now eventually valuing the business at a paltry $3 billion.
The cautious outlook probably is more indicative of the old school, risk averse firm that Vanguard really is vs. what it says about Ola’s prospects. But it does put a data point out in the universe that’ll be hard to combat and disprove for the Ola team if it plans on IPO’ing anytime soon or is walking into investor offices asking for more capital.
FYI, Vanguard owns about 1% stake in the business. Far as Ola goes, the company saw its revenues dragged down 95% YoY at one point mid-2020, but gradual recovery puts them at 30-40% of 2019 traffic levels, if we were to guess based on Uber’s numbers.
Not to mention the company’s continued push into becoming a vertically integrated EV maker, which probably deserves more appreciation. Suit yourself Vanguard!
Then there’s cash-strapped OYO.
Softbank’s vision fund affiliate issued a sizable term loan of $200 million to OYO to ensure there’s enough fuel to power through these uniquely harsh times. Majority of the cash is going to strengthen the balance sheet against persisting uncertainty, while a portion of it will be deployed for improving tech & data analytics.
Although management hints at growth gradually recovering, it's nothing like the Airbnbs of this world (strong bounce back → new use case discovery in remote workers → IPO), so don’t expect a cheerful IPO just around the corner until the holiday market truly turns around. Maybe post vaccination.
Not the best of days for the pandemic-battered giants...
Zuck confident on AR's delivery by 2030 🥽
Facebook imagines that everyday users will be able to teleport via Mixed Reality headsets to remotely interact with each other as though they’re in the same space by as early as 2030, and that the tech will be widely utilized in workplaces, further boosting adoption of remote working.
It's no secret that mixed reality and wearables are becoming the next frontier of competition for big consumer tech companies, but the ambitious deadline for smooth experiences is quite bold. FYI—Facebook has its smart glasses with Ray-Ban lined up for a launch later this year, although they won’t be full AR.
Zuckerberg is also pitching the potential of AR tech in fighting climate change, limiting corporate and other types of travel to only essential levels. But wait, isn’t Zoom doing that already bruh?
Why care: so far adoption of mixed reality tools have failed to scale beyond gaming and other hobby applications, but an iPhone like moment in the industry could unleash a trillion dollar application deluge that will create massive application level companies in the process here. The market seems ready, the tech is awaited.
Watch your back 👀
Verkada, a cloud-based security camera startup saw nearly 150,000 of its cameras breached by a group of hackers, gaining access to live feeds of hundreds of the companies’ clients, including factories and warehouses of Tesla, Gym facilities of Equinox, offices of cloud company Cloudflare, other gyms, hospitals, and schools.
It’s grossly embarrassing.
FYI, Verkada installs cams in your enterprise facility, and then offers a modular cloud platform for you to manage feed, detect and capture anomalies, and other fancy analytical intelligence.
The hack was orchestrated by a person named Tillie, who is part of an online hacker collective, and is now claiming the attack was meant to help the company secure lose ends. Apparently, Verkada was negligently storing its admin-level passwords on the open internet, from where Tillie and his/her friends managed to access it, and were able to peep in at live as well as ALL archived footage. Red-faced Verkada is now investigating.
Bottomline: Just a couple days ago had hackers breached into Microsoft’s Outlook, which according to US security officials is still affecting new systems, and then before that a high profile hit via IT monitoring software vendors SolarWinds had left global authorities and enterprises exposed.
Cybersecurity is one the biggest overhangs stopping global enterprises from realizing the full potential of the cloud.
Closing out—the streaming wars aren’t over 💻
Disney+ is now reporting over 100 million paid subscribers on its streaming service, a record feat the company achieved solely on the power of its intellectual property, blowing past every single estimate that analysts and the company itself held out.
For comparison Netflix last quarter reported 200 million subscribers, nearly double that of Disney, but it took them a long winding 12 years or so to get there, which makes Disney’s feat, in 18 months, all the more admirable.
Regardless, globally, as cable TV and fixed televised content erodes in popularity, streaming is expected to replace the default button on the 1.8 billion or so television sets across the world. And as far as the competition goes, it’s the TikToks and the Snapchats that the streamers compete with going forward, as opposed to each other.
What else are we snackin’ 🍿
🗼 Struggling to keep market share - Vi is working with Disney+Hotstar to offer a year of free content to its users, hoping that’ll stop them from jumping ship over to Jio and Airtel. The Collab offers users access to the IPL library as well as most regional content slate on the streamers.
🎮 Roblox is a go - social gaming platform and game engine Roblox successfully listed itself on the NYSE under the ticker $RBLX. The company’s 17 year long grind to eventually scaling to 150M+ users and becoming the default social network among kids in the western world is intriguing, which has now poised them to lead on innovation surrounding mixed reality and use of crypto in gaming.
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