Trillion dollar things 💰

Social court, looming IPO, and wealthy nerds.

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Market summary: 📊 

Yesterday was a mixed day in India, with investors unsure how to react with all that was unfolding in the US. However, American investors couldn’t give a damn about the fire in their backyard, and took the markets to all time highs.

US:

  • S&P 500 - up 1.48%

  • Nasdaq 100 - up 2.51%

India: 

  • Nifty 50 - down 0.063%

  • Sensex - down 0.17%


What’s hot bruh?

1️⃣ We holdin’ up good—GOI believes our GDP for this year will be down 7.7% as rippling shocks sent by the pandemic-driven economic freeze finally settle in. 7.7% drop is definitely horrifying for a growth nation like ours, but it's far better than the ~24% drop we had seen for the 3 months right after the pandemic had hit. That was scary. Hopefully we resume our growth trajectory next year.

2️⃣ The coin boys are dancin’ away—for the first time in its history, total crypto-currency market capitalization crossed $1 trillion yesterday. Bitcoin continues to rip through, breaking $40K last night, virtually doubling in under 22 days. Ethereum crossing $1,000 and a barrage of other coins running wild is driving the majority of this euphoria. Just like em old days of 2017.

FYI, so far no consequential use cases have been distributed widely for consumers, but champions promise we’re still super early in the game. We’ll see.

3️⃣ Clown show continues—for most part of the day yesterday it's almost as if everyone spent time processing whatever went down in the US. Rumors are, legislators will look to impeach Trump, opening ways for further prosecution once the man leaves office. Mike Pence, his VP, has distanced himself from Trump already. Gets messier by the day.

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Social media held court 🐦

First Twitter took down Trump's tweets responding to violent protests, then Facebook took down another video of him asking protests to stand back. Quickly thereafter Zuck released a statement that Trump’s FB account will be blocked forever. On the other hand, Twitter has slapped a 12 hour ban on his account, but a permanent takedown seems imminent. 

Why do we care—although this attack on government institutions is shameful, the policing role internet platforms are playing in restricting elected leaders in the highest of positions, effectively rendering their reach meaningless, is sparking fresh debate on how much power internet platforms really hold. Especially considering how far these actions fall from the “internet is open and free for all” trope that internet platforms always used in their defense to grow big all the while. Something ain’t right.

While we’re talking about social platforms, 

Twitter continues its acquisition spree, buying a full service creative agency called Ueno yesterday. Ueno basically designs modern apps, web services, and other projects with big name clients like Reuters, SuperHuman, and some well funded neo-banks using their services.

Apparently Twitter had a close relationship with the company, and beyond the fact that they will bolster the Twitter design team, we’re unsure how else this fits into Twitter’s growth plans. 

Some 50 employees of Ueno will move over to camp Dorsey.

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Nykaa’s IPO incoming 💄

Riding the COVID induced boom in digital commerce, online-cosmetic platform Nykaa is close to pulling the trigger on a $3 billion IPO by the end of this year or early next year.

We’d kinda saw the IPO coming when Fidelity, which generally does not invest in startups unless they’re close to going public, had written a surprise check to the company valuing it at about $1.8 billion.

While COVID boosted all of ecommerce, Cosmetics hasn’t particularly been a winner in the same magnitude as other essential categories or electronics (no need to dress up anymore, thanks to WFH) but the shift in consumer adoption of digital commerce will last forever, and as demand returns these platforms will inevitably see explosive growth rates relative to brick and mortar comparables.

Last we knew, Nykaa reported some ₹1,860 crores in revenues, with decent profitability, and was expecting to top this year with 40% growth in sales

Bottomline: The Indian cosmetics market is worth about $6.2 billion, growing close to 10% a year, but relative to the total addressable base it's still in nascent stages. In recovery, the digital pocket of the market should easily grow at a much faster rate. Category leaders like Nykaa will be outsized winners.

While we’re talking IPOs and big money,

Indian startups are absolutely killing it and the world stage—so far in the last 12 months, we’ve had about 10 companies sealing their spot in the unicorn club like it's a walk in the park. Total number of startups with more than $1B valuation now stands at 36


Closing outnerds are taking over the world 💰

Elon Musk surpassed Jeff Bezos yesterday to become the richest person on the planet, after his net worth booked $190 billion with Tesla stock ripping through the sky for yet another straight day. It's bonkers. 

Musk is a genius, nobody is arguing against that, but to remind you, Tesla made $28 billion in revenue last year, and its market cap is $700 billion. Bezos’ Amazon made $350 billion, or 11 times more. Yet Amazon market cap is 2 times that of Tesla. Irrational markets much?


What else are we snackin’ 🍿

🚗 Auto investments keep pouring - MG motor India is planning to invest an additional ₹500 crore in India. Along with considering starting an additional shift at its manufacturing plant in Halol in Gujarat, the company is planning to recruit 1,000 workers, directly and indirectly, at the plant by the end of 2021 to ramp up production of a new SUV.


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