Tricky times 📉
Commodities on fire, Venture deals, and Google bets on security.
Market summary: 📊
India turned around to add some points yesterday, but the rally seemed to lack fizz. Let’s see how today goes! US continued its downward trend into another day.
US:
S&P 500 - down 0.72%
Nasdaq - down 0.39%
India:
Nifty 50 - up 0.95%
Sensex - up 1.10%
Quick shot of mid-week brew ☕
🙌 Commodities on fire — boring old commodities right? Not anymore. Nickel has shot up 70%+ so far this year. Prices of good ol’ Wheat are up more than 30% over the month. Reason? Supply from Russia and the Ukraine, which are some one of the largest producers of these products, stands jeopardized. Russia, for example, supplies 15-20% of the global battery grade Nickel — good luck with the EV revolution now. Both Ukraine and Russia supply 25% of global wheat, which means everything from your Pizza to Biscuits are going to cost you more.
Google steals Microsoft’s lunch in Cybersecurity 🤙
Not long ago did we mention how Cybersecurity is becoming a major concern for global enterprises, driving downstream spending. Well, Google decided to act.
Pichai’s move: Alphabet will spend $5.4 billion, all cash, on buying out cybersecurity company, Mandiant, to beef up cybersecurity offerings through Google Cloud.
Mandiant (earlier called FireEye) basically sells a suite to large companies to identify breaches at scale, and helps enterprises craft and execute an effective response strategy — which basically includes assessing what was exposed, what needs to be fixed and such.
Barely a month ago actually, they had approached Microsoft for a takeout, but we’re guessing the two teams couldn’t agree on a price and the deal fell through. Google quietly sneaked in! 🥱
Google is preparing for The Great Cloud Wars of the 20s: Amazon (AWS), Microsoft, and Google, are fighting it out for the $175 billion+ cloud hosting and infrastructure services market. Amazon’s AWS leads the game today, but Microsoft has been catching up fast under Satya’s leadership. This acquisition should help No.3 player Google Cloud compound its 10% market share at a much faster pace.
Lastly, Mandiant has deep distribution, channel partnerships, and relationships with all different kinds of enterprise customers — which could be great for Google to upsell/cross-sell other services too.
Worth mentioning — despite many believing Google is fighting a lost race, for 2021 Google Cloud accelerated growth to ~47% YoY! Thomas Kurian is nailing it on the job.
What’s poppin’ in Venture Town? 💰
First up, Certa, a no-code automation platform, closed a $15 million Series A round from Point72 Ventures and a couple of Angels.
Based in SF and India, Certa sells a tool that makes it easy for enterprises to directly connect their internal systems with those of their vendors — to automate data collection, reporting and other workflows.
It’s a simple drag and drop tool like Zapier that literally anyone can use, without having to call IT support every time data from a partner doesn’t render!
Certa is currently used by clients across retail, aerospace, credit card companies and other tech businesses. Fresh capital will be put into growth and expansion.
Then hopping back onto Fintech, 💳
Zeta, the startup building a banking-as-a-service platform, raised another $30 million, this time from Mastercard, revising valuation to $1.5 billion. 🎉
Zeta sells a ready-made tool to banks that integrates deeply with their legacy infrastructure, and enables banks to roll out sleek digital products faster. Meanwhile, the startup also helps other fintechs (think your favorite credit card startup, or a neobank) access banking APIs — for products of all kinds!
The deal with Mastercard comes with a tight partnership for the company to roll out credit-cards and other products on Mastercard’s payment rails.
Western countries are fist-fighting for Oil 👊
I mean, Data? Bitcoin? Space-tech? — we were told would be the next Oil. But here we are. In 2022. Killing each other literally over oil. 👏
What’s poppin’ — last night, the US went ahead and banned ALL oil, gas, and energy imports from Russia — despite local prices spiking to record high, further fueling a strong anti-Biden sentiment.
Some context: Russian aggression had put Western and European nations in a serious bind — should we take a stand and stop buying Russian oil, and in the process wreck our economy and the average joe? Or should be just let it slide.
Fact is, the West and its European allies are extremely overexposed to Russian energy. The EU for example gets more than 40% of its gas from Russia. These are cold countries mind you — Germany for example is telling its people “yes, we see the war”, but cutting Russia off would mean power-outages starting tomorrow!
Now the US is naturally gifted with plenty reserves, and has acted as a net producer for the past few years (meaning they make more oil than they buy). Russian oil can be quickly replaced with local production, but tight regulations meant to accelerate shift to green energy are becoming a hindrance.
Anyway, US imports just about 8% of its energy from Russia, and Biden is betting the local consumer will pay extra $$ for the rising prices, for now.
How does this affect me in India?
Prices could continue to rise in the global markets, more so if the Europeans follow the US in banning Russian energy. High odds.
Can India buy the excess oil from Putin for cheap? Probably, but is a long long process. Refineries would need to be upgraded, and it would also mean alienating the Middle East and the US on existing contracts. Super risky! Sanctions make it even harder.
Lastly, rising energy rates + global inflation = a weak global consumer. Indian exporters, producers, sellers across the table could suffer — accelerating the shift to a financial dry land.
Its a tricky time in the markets!
What else are we Snackin’ 🍿
💰 War Chest - Ukraine will receive a $723 million loan from the World Bank for funding essential purchases amidst its ongoing fight with Russia.
📱 UPI FTW - RBI rolled out UPI services for feature phones, to help folks in rural areas without internet connection make digital payments. Killing it!
✈️Gates open finally - After a gap of 2 freaking years, GOI is resuming international flight services again from March 27 thanks to waning COVID cases. But tickets expensive, thanks Putin. FML!
Hit that 💚 if you liked today’s issue.
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