Uber's sorrow 🚕
Hot hot games, TikTok's problems, and more venture deals.
Hi 👋, Tanvi here.
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Stock summary:
US:
S&P 500 - up 0.64%
Nasdaq - up 1.00%
India:
Nifty 50 - up 0.89%
Sensex - up 0.96%
Edtech keeps giving 🖥️
Edtech platform Springboard has now raised $31 million in its series B funding round led by Telstra Ventures and other existing investors. The startup offers professional certification courses to fill gaps in university training, making students job ready.
Springboard further plans to add more courses outside the high tech industry and looks to closely work with universities to adapt to evolving reskilling needs.
Takeaway - with unemployment at all time highs and the value of university degrees being questioned regularly, professional upskilling platforms will shine in the post-pandemic world.
In more fundraising news,
Payment gateway Razorpay is looking to raise a fresh round of funds, about $60-$80 million at a $600 million valuation, marking a 50% bump in valuation since its last capital raise. Existing investor Sequoia Capital India will co-lead the round.
COVID has altered the fabric of the digital economy, with a strong mandate for all types of business to digitize and RazorPay is a prime beneficiary of the shift in India.
However, a considerable mandate of the new capital-raise is towards scaling up their non-payments gateway business including lending and its neo-banking
The non-payment gateway enterprise now contributes about 30% of complete enterprise. And over 1 million merchants hailing from different segments make use of Razorpay’s services for their payment needs. Read more.
And finally,
Social app Sharechat is looking to raise up to $200 million, which could value the company at over $1 billion. Again, Sequoia India is the one leading the round.
Sharechat has been a winning beneficiary of the China ban with a total monthly active user base at 14 Crore and total downloads are estimated to have crossed 20 crore. Their short-video sharing app Moj has clocked up more than 50 million downloads so far, winning in TikTok’s wake
Capital raise will fuel development and growth as well as expand content offerings on the platform.
Uber’s side hustle? 🚕
Uber’s second quarter performance was a disaster as the pandemic decimated its business. Here’s a snapshot:
Reservations on the platform dropped 25% to $10.2 billion
Total revenue dropped 29% to $2.2 billion
Ride hailing business dropped 67%
But 103% growth in food delivery segment helped the company
Interestingly, Uber has acquired a SaaS company Autocab that sells booking, dispatch and fleet management software to the taxi and private hire vehicle industry. Uber hopes that this will allow the company to service rides in industries where the old school cab service is still popular - think corporate cabs or special fleets.
But there may be a grander experiment at play too where Uber improves the underlying software platform and brings it widely to global independent cab companies to manage their operations. Most cab operators don’t use good software and this is one of the spaces where a lot of market share can be captured in no time.
Bottomline: the pandemic has destroyed the ride hailing business and Uber will have to make tough decisions to help limit the damage. Selling software to other fleet operators and small cab companies could be a smart addition. Analysts also think e-commerce may hold lots of potential for them. Read more.
How hot is gaming 🎮
Couple days ago we talked about how hot gaming is right now. Nintendo’s business performance only underlines that. The company that made Pokemon Go and countless other legendary franchises saw profits grow 5 times thanks to breakout demand for its Switch device.
Stuck at home users flocked to its platforms, with leading games like “Animal Crossing” crossing over 22 million downloads since March. The company sold 5.7 million Switch devices worldwide despite most stores running out of them in no time due to a marred supply chain.
Finally, digital games sales more than tripled, with 56% of all revenues this quarter coming from downloads compared to 38% a year earlier. In short, the gaming market is on fire and will continue to be so in the coming future.
Why does it matter: Gaming is a $150 billion industry, much bigger than the global movie industry. Many foundational technologies such as AR, VR, Metaverse etc. are finding their first footing in the world of gaming. Read more.
Effort to localize 👏
As the geopolitical heat takes its toll on TikTok’s operations worldwide, the company is looking for ways to appease local regulators. Most recently, management announced that they’ll build a datacenter in Europe to keep citizen data local.
Also, just last month in a landmark ruling, Europe’s top court increased the scrutiny on international data transfers, forbidding in many cases processing and storage of data outside the bloc. Europe already has a pretty stringent data protection and usage policy called the GDPR.
Tiktok believes the current facility in Ireland will be up and running by 2022 and will lead to an investment of over $400 million in the region. TikTok reportedly had 17M users in Europe as of last year, likely double now.
Takeaway: data localization is going to be an increasing trend going forward. India too is likely to attract billions of dollars in data center spending as western companies scale up local operations. Read more.
Tweet of the day -
The Beirut happenings have stunned the world. Putting the explosion in perspective.
What else are we snackin’ 🍿
🧐 FB stands up - FB took down a video posted by Trump, citing spread of misinformation about the coronavirus. The video showed an edit clip of Fox News claiming children are almost immune to COVID-19. This marks FB’s first conflict with Trump after the platform had been accused of being lenient towards him.
🚕 Uber and Lyft sued - as pandemic tramples demand and drivers get squeezed, labor commissions have filed another lawsuit against Uber and Lyft alleging wage theft which says that both the ride hailing giants are misclassifying their drivers as independent contractors and not employees.
🧹 Google’s China clean up - Google has taken down more than 2,500 YouTube channels which were linked to China, in an effort to weed out disinformation on the platform as part of an ongoing investigation into coordinated operations linked to China.
💊 Same drug, different name - Alkem labs has launched Favipiravir for the treatment of COVID-19 patients under the brand name Afluenza after Favirapiravir got approved by the DCGA for restricted use.
🕴️ Bezos liquidates some his prize - After Amazon stock more than doubled from March lows, Bezos has liquidated about $3.1 billion worth of his stock, hopefully to take a vacation. After selling over a million shares, Bezos is still left with 54 million shares in the company, which puts his net worth at a whopping $189 billion.
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