What’s next for Zoom?
Netflix problems, mo IPOs, and Adani being stripped.
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Market summary: 📊
Ouch. Painful sell off on Monday as IPO enthusiasm wears off pretty quick. US saw a similar beat down as rising Delta variant cases threaten economic recovery.
US:
S&P 500 - down 1.59%
Nasdaq - down 0.90%
India:
Nifty 50 - down 1.07%
Sensex - down 1.10%
What’s brewing hot? ☕
✅ The SEC says No — the eye popping deal that billionaire investor Bill Ackman had put together a couple months ago to acquire 10% of the Universal Music Group shamefully fell through, after the SEC and the NYSE working together convinced Bill and his hedgie-boys to drop it. Official explanation? Failure to meet NYSE’s SPAC rules. Unofficial? Nobody knows for sure. Ackman will proceed with the deal anyway though — with his own money and that of his hedge fund Pershing Square, instead of retail investor capital.
✅ Netflix loves drama — so much that the company’s Slack channel is writing scripts. Couple of top Netflix executives were fired over the weekend for apparently abusing and criticising Netflix’s chief marketing officer and other top brass over personal chats in Slack. “We don’t encourage saying things that you wouldn’t say to a person’s face” was the explanation given. Questions are now being raised if Netflix was snooping on personal communications. But there’s a lesson here for the remote junta…
Zooming into contact centers 🧐
Zoom acquired Five 9, a SaaS company that supplies software for remote contact centers, for ~$15 billion — officially marking Zoom's entry into a new business vertical, as the video conferencing business matures.
Five 9 basically helps your favorite brand’s call center digitize operations — moving away from their clunky old school systems, to a software where all tickets are visible, routing of calls is smart, and a bunch of AI models spit up actionable info on how effectively operations are run.
The company has been around for 20 years, and thanks to the pandemic's boom in online conversations, saw revenues jump 30%+ to $400 million+, with stock 4x’ing in just 1 year.
On the other hand, Zoom has been rapidly adding new services — (added Zoom Phone, and other productivity tools like Calendars recently) running fast laps to prepare for a post pandemic reality.
Big picture —$ZM investors are demanding reasons to stay with the $100 billion stock. For now, adding a play that opens a gate to the $25 billion contact center software market should help hold the line.
Also, what an exit for Five 9…
IPO street flush with flavors of all kinds 😎
Devyani international, the holding company that runs Pizza Hut, KFC, and Costa Coffee in India, was greenlit by SEBI for its IPO.
What should you know?
Runs 290+ Pizza huts, 260+ KFCs, and 44 Costa Coffee’s in India
Will raise about ₹1,400 crore in the IPO to fund expansion
Made ₹15K crores in revenue for peak year pre COVID, and has something called profits that the twitter stonk gurus love
Also, Devs owns a bunch of homegrown quick service shopping-mall-staple eateries — Vaango, Food Street, Masala Twist, Ile Bar, Amreli, you name it.
What to expect — given the outstanding treatment BBQ Nation, Burger King India have received, and the track record of Jubilant Foods, expect markets to lap up every last morsel of a stock that comes out.
Keep the prospectus handy.
Mondays are always big on Venture Street 💰
Last week’s public market enthusiasm offered a shot of steroids to startup activity downstream...
First up, online eyewear retailer Lenskart raised a massive $220 million round from Temasek and Falcon Edge, at a $2.5 billion valuation. Lenskart combines 750 physical outlets across the nation, and a robust online presence, to sell 8 million+ eyeglasses a year — and business will now expand in foreign markets, while evaluating the optionality to expand into broader healthcare services.
Another online used car marketplace, Spinny, raised big bucks — closing on a $108 million Series D round led by Tiger Global at an $800 million valuation. Spinny sells about 2,000 cars each month — and like other online platforms, is counting on fears of public transportation, and rising prices of new cars to keep fueling growth for digital marketplaces.
Lastly, Razorpay acquired TERA Finlabs — a risk technology software vendor for an undisclosed amount. Tera, a subsidiary of a UK based digital lender, basically uses advanced analytics to understand risk and create customizable credit products, which will now help Razorpay power credit decisions for its 10,000+ roster of SMEs.
Key takeaway — enthusiasm level max.
Closing out — dost dost na raha? 🙄
What’s poppin’ — Finance ministry says a bunch of Adani group companies are under the scanner, being investigated for financial irregularities, in some extreme level political chess that’s unusually out of character for the current admin.
There’s little to no clarity exactly — just chatter that SEBI is sniffing around for lack of compliance with its guidelines.
Why we care so much — Adani stocks have been front running the market’s irrational exuberance over the last 16 months, and this could be the straw that eventually ends up breaking the camel’s back.
What else are we snackin’ 🍿
🗣️ It's you — US officially accused China of conducting the Microsoft email hack few months ago, which affected millions of enterprises, kicking off “cyberwar” mode on between the 2 nations.
👨💼 Mentor hire- Hyperlocal discovery platform, Magicpin, appointed Zomato co-founder, Deepinder Goyal as an independent director. Acquisition brewing?
Hit that 💚 if you liked today’s issue.
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