Unicorn showers 🦄
PTON gets a new man, Airtel does okay, and an airline merger.
Market summary: 📊
India turned around to finish in the green on Tuesday. Western investors had a rare green day but volatility continues to make things tricky.
US:
S&P 500 - up 0.84%
Nasdaq - up 1.21%
India:
Nifty 50 - up 0.31%
Sensex - up 0.33%
What’s brewing hot? ☕
🤵 $PTON’s got a new man — Peloton’s meltdown finally led to its CEO being pushed out the door. John Foley, who founded the company and also owns significant stake can’t just be asked to bugger off, so they’re ‘elevating’ him to Chairman. He will be replaced by ex-Netflix and Spotify CFO Barry McCarthy. Meanwhile, company-hired consultants have already received a mandate — chop 2,800 jobs, stop construction of the $400 million factory in Ohio, and find other areas to trim excess — to save $1 billion in expenses by the end of this year.
💪 Bansal’s second baby ready for IPO — how fast Navi grew into a mature business is a masterclass in blitzscale building! Sachin Bansal’s 2nd startup is apparently ready to pursue a listing by the end of this year. ICICI, Bank of America, and Axis have been brought in to figure out the numbers, including a valuation tag. Fyi, the tech-enabled seller of financial services made ₹780 crores in revenues last year, with ~10% profit margins. Flipkart, when you?
Airtel put out decent numbers 🤙
What happened — Airtel’s quarterly earnings numbers give investors some confidence in the state of India’s bruised telecom market. Revenues are growing, ARPU is expanding, and new subscriber additions look healthy.
Quick look at the key numbers:
Revenues up 13% YoY to ₹29.9K crores
Profits of ₹830 crores, down by 3% YoY — that’s okay given Omicron
Average Revenue Per User (ARPU) jumped to ₹163 (from ₹146 last quarter). Airtel added 10 lakh new subscribers.
What next — management seems pretty upbeat they can muster the cash, the resources, and the strategic bandwidth to aggressively start investing in 5G deployment, with services ready in some markets by the end of this year.
The tiny hit on profits was as a result of accelerating investments here.
Meanwhile, insurance distribution is a tough business 🤕
Policybazaar, which has been down like 35% since its IPO, failed to revive any enthusiasm for its stock after losses widened by like 55% YoY to ₹298 crores during the October-December quarter.
PB’s revenues jumped a strong 73% YoY though, thanks to strength in both lending and insurance businesses. COVID health-scares are helping.
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Unicorn sightings getting frequent again 🦄
Late Monday-night, small merchant focused commerce platform, ElasticRun closed a $300 million Series E round from Softbank, Goldman Sachs and Prosus Ventures — 3x’ing valuation to $1.5 billion!
ElasticRun provides a full-stack platform that lets FMCGs and other retailers directly reach kirana-store owners across rural India. Merchants can source products from a diverse set of brands — from HUL to Tata to Reliance, while brands get extensive reach into pockets of geography where they may not yet have boots on the ground.
There’s a whole set of additional services bundled in, including working capital loans, logistics, and other. 10 million+ store-owners use the service, across 28 states!
Meanwhile, another one in the home services space, 👇
Livspace, a home interior and renovation platform, which connects you with designers and project implementers — raised $180 million from KKR, IKEA and a few others chipping in, at a $1.2 billion valuation.
Livspace works across 4 countries, and has serviced 7.5 million homes. Fresh capital will go to expand product offerings and chase new markets.
2 budget airlines in the US are merging, thanks COVID 💸
What’s poppin’ — Spirit Airlines and Frontier, two of the US’ budget friendly, barebones, strap-me-to-a-seat-and-take-me-there airlines are merging in a $6.6 billion deal — as the pandemic continues to mercilessly wrangle the flying business.
Airline revenues continue to trail at ~50% of 2019 levels in the US. For a business where you’re inherently burdened with heavy fixed costs, and have razor thin margins, that’s a prophecy of doom.
Not to mention competition from more capitalized players, rising oil prices, and other factors. So the duo thought joining hands would be a good way to 1. stop competing on their most money making routes 2. cut back on excess in salary, marketing and other expenses 3. give the top airlines meaningful competition.
Why care — if demand doesn’t take off as expected in India, we could be in for some consolidation here too.
Closing out — Razorpay made a quick buy 💰
What happened — payments API provider Razorpay scooped up a Malaysian subscription management platform called Curlec, for about $20 million.
Curlec basically offers a tool to manage subscriptions, invoices, automate payments and such — processing some $50-odd million in volumes. That’ll be Razorpay’s 4th ever acquisition, and its first outside India. Malaysian market is one of the early targets for them as the company pushes harder into South East Asia.
What else are we Snackin’🍿
💪 Crypto consultants - KPMG’s Canada division added Bitcoin and Ethereum to its balance sheet. Trying to pitch Web3 giants?
😔 Not looking great - domestic air passenger traffic in India declined 43% in Jan due to COVID restrictions across states.
👀 T Store incoming - Tesla is apparently working on an App Store for its cars, kinda like how iOS and Android have for smartphones.
Hit that 💚 if you liked today’s issue.
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