What a listing!! 👏
Venture deals, Intel struggling, and stuff from the week before.
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Market summary: 📊
Listing day frenzy helped India end the session on a high. US had a solid Friday as well, as investor mood was lifted by blockbuster tech earnings.
US:
S&P 500 - up 1.01%
Nasdaq - up 1.15%
India:
Nifty 50 - up 0.20%
Sensex - up 0.26%
What’s brewing hot? ☕
✅ $ZOMATO through — venture ecosystem snatched a mega win on Dalal Street with the Zomato IPO gushing through the gates at a premium, ending the day at ~₹125 — nearly 65% higher than the bidding price, The optimism and the outcome is beyond the wildest imaginations of Dalal Street — which shows there’s a lot more young and passionate capital chasing new narratives and ideas than earlier imagined. Follow-on listings must be salivating!
✅ Kill them all — Chinese stocks were beaten into pulp on Wall Street on Friday after news broke China is forcing some edtech companies to turn themselves into non-profit corporations, obviously leaving shareholders out to dry. Education companies were hammered, down nearly 40% in a single session, while large tech companies like Alibaba, Tencent, were beaten too. Remember the $DIDI IPO? Now trading 45% down!
Healthcare party pulling the big bucks 💰
Khosla Ventures, Founders Fund, Nithin Kamath, Kunal Shah and a couple other heavyweights put together a $5 million seed pot for BLR based Even Healthcare, a company looking to disrupt old school insurance products with a more transparent healthcare membership.
Even’s model charges users $200 for an annual subscription that offers folks between 18 and 35 a solid supplemental health cover, with access to high quality facilities covering unlimited routine check ups, diagnostics and scans. With a 5K+ waitlist, the product is set to go live during the next quarter.
What matters — the convoluted nature of general health insurance policies, the lethargy of old companies, and the arrogant lack of transparency on which they thrive, offers a nice entry point for emerging tech-first platforms to add some value here. Can’t wait to see some magic!
Meanwhile, Info Edge made a tiny acquisition ☝️
InfoEdge, the owner of Naukri.com, acquired HR tech startup, DoSelect, in a ₹21 crore deal to bolster dominance in the online recruitment market.
DoSelect basically mines employee databases to help companies make better decisions on who to hire and who not, as well as figure out upskilling plans, employee retention trends, and other HR basics — which will now bolster Info Edge’s portfolio of HR products.
And oh, for InfoEdge, that Zomato IPO is returning a sweet sweet pot…
Two quick updates from Big Tech land 🖥️
Semi giant Intel met with investors to discuss its second quarter performance — a rather disappointing show, but a lasting boom in personal computing devices helped save the day. Revenues grew a silly 2% YoY to $18.5 billion, but CPUs going into personal computers grew 33% YoY — as work from home and edtech demand won’t skip a beat. The ongoing semiconductor shortages and supply chain disruptions continue to eat into Intel’s profits though, hurting the company’s ability to put up a respectable offense against AMD, and other competition.
Back in Menlo Park, Facebook decided to stick it to Apple on Friday, announcing it will distribute its gaming app via a workaround on iOS — basically as a shortcut for a webapp that will open in the browser. Other companies to follow FB here are Amazon, Microsoft — all eschewing the App Store because Apple is asking for a cut out of the third-party developer commissions.
That’s it folks to conclude a rather eventful week. Here’s a quick summary of all the big things that went down this week!
🤓 New crypto business — Square will be creating a crypto powered infra layer that will make it easy to create and deploy crypto-apps for independent developers. Square will earn commissions on every transaction, and with the $120B+ payment volumes processed annually, the optionality to build at the center of this high-velocity financial transaction pool (online + offline + P2P) is unlike any other for Square.
😐 I’m just getting through — Oyo managed to raise $660 million in debt funding to keep the lights on, with Fidelity, Citadel, and a few others pitching in. COVID’s assault continues to delay the revenge travel boom, and funds will be used to consolidate past debts, while what’s left goes to investments in tech. Biz is still down nearly 60% from 2019 peaks, but one cannot rule an Airbnb-like quick turnaround if travel recovery picks expected pace towards the end of the year.
💰 Quick roundup of major earnings on Dalal Street:
First up, India’s largest private lender HDFC saw revenues and profits growing, but rising bad loans and management’s cautious guidance killed the mood. Bad loans ratio stretched by 8 basis points vs. last quarter, not too bad, but enough to make conservative investors really really nervous.
That print was quickly followed by Bajaj Finance, who mentioned similar problems, especially with the auto-loans vertical feeling serious tremors from loan payments stopping. Markets are closely watching the entire sector now.
Meanwhile, decor-king Asian Paints blasted a killer one, with profits more than doubling to ₹574 crores, with revenues of ₹5.6K up nearly 96%! Margins were a tad poor, again as weak supply chains and inflation eats into profits.
Jubilant Foodworks had a great quarter as well. The company that runs Dominos and Dunkin’ Donuts in India saw revenues grow 131% YoY, with same store sales more than doubling. New store openings are looking good too.
Lastly, we had HUL reporting nice growth in revenues and profits too. But like its peers in the previous weeks, HUL also advised caution on profits taking a hit because of rising raw material costs.
🤔 Zoom expands fast — Zoom acquired Five 9, a SaaS player that supplies software for remote contact centers, for ~$15 billion. Zoom has been rapidly adding new services (Zoom Phone, and other productivity tools like Calendars) running fast laps to prepare for a post-pandemic reality where its video-conferencing app becomes redundant. Investors are demanding reasons to stay with the $100 billion stock, and this ticket to a $25 billion contact center software market should help hold the line for now.
🤤Tasty IPO — Devyani international, the holding company that runs 290+ Pizza Hut, 260+ KFC, and 44 Costa Coffee in India, was greenlit by SEBI for its IPO, and will raise about ₹1,400 crore in the IPO to fund expansion. Devyani made ₹15K crores in revenue the year before COVID, and remains profitable. The business also owns several homegrown brands, and looking at the reception of Burger King India, Barbeque Nation, and other QSR brands lately, things look quite promising.
🙂Sad boi hours — Swiggy closed a mammoth $1.25 billion Series J round led by Softbank and Prosus Ventures, at a $5.5 billion valuation, days after rival Zomato locked bids for its IPO, looking to make sure it has enough firepower to take on $ZOMATO in what could be the start of brutal market share wars. Softbank alone brought $450 million to the party. Fresh funds will go towards expansion of the core delivery biz, while doubling down on non-food verticals.
💻 Commercial real estate hurting — Bloomberg quint says demand for office workspace in India went down nearly 38% YoY for the first half of 2021, as lease renewals get abandoned and new lease commitments are avoided amidst fresh-wave uncertainty and the success of remote working lifestyle. Vacancies across major cities run 15-16% levels, while rents have crashed 5-10%!
🤑This is bijness — finally, Tesla announced that the company will be opening up its charging network to allow other EV companies worldwide to charge their cars on it. Tesla as of today, barely makes a dime on the cars it sells, and aggressive buildout of infrastructure, and earning commissions from it, is a critical piece of the long-term profitability game plan. Not to forget, the optionality to turn these charging zones into food, drinks, and micro entertainment hubs.
Hit that 💚 if you liked today’s issue.
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