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Market summary: 📊
After a solid run this week, investors finally sobered up and ran for the hills. US too, despite respectable earnings coming from techland, ended the week in the red.
US:
S&P 500 - down 0.72%
Nasdaq 100 - down 0.78%
India:
Nifty 50 - down 1.77%
Sensex - down 1.98%
What’s brewing hot?
✅ Walmart got some Kanye problems—Yeezy, the retail clothing brand owned by Kayne West, which also made him a billionaire, launched a new logo recently—quite an average look honestly, but Walmart claims Kanye copied it from their logo, and apparently is suing the company to get the trademark blocked. Considering Kanye’s wits for marketing, we see two plausible scenarios here—either its a full planned sabotage by the Yeezy gang to get some free mileage off the news cycles, or its very likely a design intern somewhere is getting fired this afternoon. Looking at the logo however, odds are this was a $5 Fiverr job. No offense. 💚
Sneak Peek into Venture Street 👀
Another innovator lost to a SPAC listing.
Oddly, this time it's a hardware play—GreyOrange Robotics is cooking plans of raising nearly $600 million from the street, at a sizable $1.7 billion valuation. Eyes are set for a year end listing, and chai-nashta has already been set up for the bankers.
GreyOrange originally started as a dorm-room robotics project, founded by a couple BITS students, which eventually scaled into a broad menu of highly intelligent and automated warehouse fulfillment, sorting, and packaging bots—that help several large Indian ecommerce brands sort out their fulfillment centers.
The business raised over $270 million in the past 4 years, and counts Tiger Global, Peter Thiel, Binny Bansal, as investors, and honestly easily ranks among one of the best hardware plays India ever delivered.
Quite disappointing to lose em to the western markets.
Meanwhile, cash won’t stop raining on edtech,
Upgrad, the Coursera clone for India, raised another $40 million at an $850 million valuation, barely days after raising a round at a ~$600 million tag. This bid was led by IFC.
The business cofounded by Ronnie Screwvala essentially works with global and Indian universities to offer upskilling courses for students. Growth has scaled to 100%+ rates during the pandemic, with revenues topping ₹100 crore a month apparently.
State of ecommerce ☝️
at least until Flipkart goes public, we’d have to rely on western giants to get a sense of how the ecommerce market is holding up...
Two class leaders, Amazon and Shopify, each pioneering a unique angle in the game, reported their quarterly numbers this week offering a thorough picture of how the assault on the malls and old-school retail is playing out.
Amazon pulled in $108 billion in revenues—for three months, up 44% YoY! Even the sexiest of startups could barely match those growth rates! Interestingly, 3rd party commissions, or fees Amazon makes from independent sellers grew an even faster 66%—showing how the platform is increasingly transforming into a “marketplace”, while slowly retiring its brand to become merely a logistics provider.
Also, quite amusing that as Amazon gets bigger, the company’s profitability levels are growing at a much faster rate, as economies of scale kick in and every dollar that comes through the door now goes straight to the “take-home” bucket.
Investors who stuck by trusting Bezos made life altering money!
Quickly turning heads to the “enabler”,
Shopify powered stores sold over $37 billion worth of merchandise for the first three months of 2021, nearly 2x from the year before!
The platform essentially serves two types of folks—the offline merchants making a hard pivot because COVID killed their business, or DTC brands born solely on the internet, and the numbers here clearly indicate that the rebels in both categories are thriving.
Bottomline: Amazon is a $1.8 trillion company, while Shopify is still at $120 billion. And when you consider that total global retail spending runs into $15 trillion each year, you get a sense for how big these platforms can really get.
Aight, that’s all for today folks. Here’s a quick look at the big stuff that went down this week...
🔥 Snap's serious about commerce—Snap’s visual-tech related acquisition spree deserves more attention than it is getting. Evan Spiegel spent $205 million on acquisitions in 2020, all of which mostly focus on using AR and AI to make commerce more personalized. Most notably, FitAnalytics for $125 million, which helps build a 3D body-size identity for users, Screenshop, which builds computer vision models to identify shopping items in photos to make product catalogs, then Ariel AI, which creates accurate 3D models of people from a bunch of images.
✅ Trying to stand up—Huawei, shot in the knee with harsh sanctions by the US, is apparently plotting a transformative comeback, but this time exclusively prioritizing leadership in software, particularly in two critical areas—smart cars, and cloud computing. A promising partnership with Chinese car maker Arcfox has already been forged, and Huawei has already disclosed its plans of making electric vehicle manufacturing plants.
🦄 New unicorn in da house— Urban Company closed on a $190 million round, with Prosus Ventures leading the bid at a $2 billion valuation. The company runs a marketplace for services from haircuts, to house cleaning, to electric installations and more, which won big from the pandemic, with revenues doubling to over ₹200 crores+ in 2020. Expansion into key global markets is the agenda going forward.
🙂 Self driving, harder than it looks—Lyft, a ride hailer in the US that competes against Uber, will sell its self-driving unit to Toyota for $550 million, getting out of the game once and for all. Lyft tried staying in for 4 long years, but with the ride hailing business freezing, it was becoming hard to convince shareholders why profitability wasn’t the only focus right now.
☹️ IPOs, you win some, you lose some—Zomato is all set to go public, looking to raise $1.1 billion from the Dalal street. The business booked revenues of $336 million, up 98%, but losses have swollen too, as operating in the pandemic became a nightmare. Will be interesting to see how that sits with the street. Meanwhile, SaaS giant Freshworks announced plans for a US listing. The business will be eyeing a $10 billion valuation, and with a $300 million revenue base, growing 40% YoY, don’t think that’s gonna be too hard.
🥶China's mad at its kids—last month, Alibaba was fined a record $2.9 billion. Yesterday, news broke out Tencent will be fined $1.6 billion, for alleged “improper” reporting of past acquisitions, as well as anti-competitive behavior, particularly in their music streaming business. China’s stifling of its own tech giants continues to baffle global investors, even as the country desperately needs support of its tech fraternity to fight the global tech wars.
📈 Where da bois at? A quick roll up of the big fat tech earnings and the clues they leave on the state of digitization of this planet:
Google smashed it out of the park with total revenues for the first quarter up almost 35% YoY to $55 billion, YouTube up 50%, Cloud revenues up 46% so on and so forth. Folks can’t stop thanking CFO Ruth Porat for cracking the whip and bringing some discipline to the company’s negligent expense sheet.
Microsoft killed it too with Azure cloud growing 50%, LinkedIn growing 25%, and Xbox growing 35%. Satya’s artful execution continues unhindered, and with big acquisitions in the pocket, stopping that growth wheel looks quite an impossible task.
Technoking's baby Tesla reported its 7th straight profitable quarter with revenues of $10.4 billion, up a solid 74%! Tesla sold 185K cars this quarter, and so far, it looks like the business is limited by nothing but its capacity to produce more vehicles.
FB, again a winner, with revenues growing an awesome 48% YoY, as traditional advertising slowly withers into obsolescence, and all of that spending comes chasing social platforms. Fun fact, 3.5 billion people use Facebook’s products each month, almost 70% of the world’s able population, excluding babies.
Lastly, Apple sold iPhones by the boatloads, making $90 billion in total sales last quarter. Literally every device category was flying, thanks to record work from home and edtech demand. Biggest surprise was Asia Pacific (excluding China) sales up 97%!
😷 India’s battle continues into another week—fight against the invisible enemy prolonged into another week, with fresh 24 hours cases topping 375K, daily death toll topping 3.5K, and total COVID infections to date slowly inching towards 20 million. We’ve vaccinated about 9% of the population so far, but if things go as planned from May 1st, we could be at twice the number by the same time next week. Fingers crossed.
Hit that 💚 if you liked today’s issue.
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