Year of stonks 📈
Your order arriving, NFT surprise, and stuff from the week.
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Market summary: 📊
India managed to show some strength on Friday, yet finished the week down. US markets circled in place, now almost 7% below all time highs.
US:
S&P 500 - down 0.06%
Nasdaq 100 - up 0.61%
India:
Nifty 50 - up 1.28%
Sensex - up 1.30%
What’s hot today? ☕
✅ Surprise surprise—last week an unknown personality made a splash by splurging $69 million to purchase digital artist Beeple’s NFT masterpiece. Turns out, the man was actually a Singapore based Indian blockchain entrepreneur, Vignesh Sundaresan. Dude made the purchase under the disguise of Metakovan, his digital identity on Twitter, and is claiming his intention was to inspire Indians and people of color, and normalize the fact that brown folks can and do own exclusive pieces of artwork. Weird flex, but certainly managed to grab the world’s attention.
✅ FB looking to pull off a Roblox?—waning popularity of its platform among the younger generation is one of the biggest existential threats to Facebook, and the company is apparently planning a modified standalone version of Instagram for children less than 13 years old. FB VP Pavni Diwanji will lead the project. Good for her, but god help the kids.
FYI, where are the kids btw? Roblox. More than 50% of the US kids apparently spend time daily playing social video games on the platform. Social of the future is gonna be a hell of a lot different from what we’ve seen.
Stock game loading…. insert cartridge 📈
COVID made investing fun again, and the discount brokers are busy making money hand over fist.
Record 72 lakh new investors are known to have entered the market since last April, taking the total active accounts in India to over 1.73 crores. That’s a 71% expansion in “user base”. Top 10 discounters picked up 88% of the newcomers, with leaders Zerodha and Upstox leading the charge.
Couple of things helped cause the boom 1. Pent up savings during COVID and lack of alternatives for entertainment meant the white-collars could live a little everyday when the markets opened 2. Social platforms were abuzz with engagement leading to massive FOMO 3. A generational opportunity to capitalize on the pandemic enforced permanent shift in consumption patterns.
And lastly not to forget the absolute goddamn tear that the markets have been on since March 2020—responding to cheaper interest rates, low trading fees, stimulus etc. etc. There’s some interesting stats in this Bloomberg piece on where all the volume is coming from in India.
Going forward—the game of investing has permanently changed after 2020. Retailers are not only dabbling anymore, but are in fact thriving. Active investing made a comeback after nearly a decade of decline. Social investing is picking up momentum. We’re yet to fully realize the extent of all these behavioral changes set afoot.
… including probably a brutal sell off.
Your order arriving in... 📦
Zomato is apparently planning its much anticipated IPO as early as next month, with the company looking to raise nearly $650 million from the public markets. Thankfully it’ll be listed in India. None of that US or SPAC bullshit.
Not much information is available yet, and this news is based on a whiff that Bloomberg got. Also, the recent move to roll out a self-branded D2C product portfolio hints at revenue diversification, and probably a preemptive move to please prospective investors. FYI, just last month had the company raised a round at a $5.4 billion valuation.
In any case, this bid could set the stage for the rest of the digital-India names through 2021 and 2022, and given the EPIC run of delivery platforms like DoorDash in the western markets, expect nothing short of a blowout beat. Time to recoup some of that $$ splurged on takeout.
Quick look at the hottest stuff from last week...
👑 King of the internet—Stripe raised $600 million at an eye-popping $95 billion valuation, sealing its spot as the second most valued private startup globally after Bytedance. Little data around business performance was disclosed, but there’s no doubt COVID handed the company a massive boost as individuals, merchants, online platforms, all scrambled to get themselves digitized to keep the lights on. Fresh funds will fuel global expansion into Europe, as well as countries like India, Thailand, UAE, etc. where so far the platform hasn’t lived up to its promise due to heavy competition.
🤙 Flipping the game—Bytedance is entering the semiconductor business, with plans to develop its own AI chips which will be used to train AI algorithms for TikTok’s algorithms, as well as sold to other customers in mainland China. Chinese government as well as local enterprises are pushing hard to spend resources on developing cutting-edge hardware locally and cut reliance on foreign producers. Few weeks ago Baidu raised nearly $2 billion to kick off its own standalone semiconductor chip company.
💰Build in public FTW—Creator monetization platform Gumroad raised $6 million for its Series C, raising about 80% of the round from 2,700 strangers on the internet, in under 24 hours, thanks to a recent change in the crowdfunding rules in the US that revised the upper limit of raising from the public to $5 million from a million. The creator monetization platform made $9.2 million in revenues last year, up 87%, while profit of $1 million was up 286%!
👕 Find my damn size—Snapchat made a super interesting acquisition, buying out Fit Analytics, a startup using fancy computer vision AI to help ecommerce companies accurately capture customers’ clothing sizes. As social commerce picks pace, platforms are beefing up the use of fancy tech to close the gap between ad targeting and purchase decisions, driving ROI, and helping brands save billions a year on returns. Snapchat has so far been super innovative in this game.
🦄 Nailed it, the unicorn way—CRED is on its way to become India’s latest unicorn, raising $200 million in a fresh raise that’ll double the company’s valuation to about $2 billion. Leveraging the power of exclusivity, rewards, and community, to gamify something as mundane as payment of bills, the platform managed to filter out some 3 million of the most creditworthy users in India, barely in under 2 years. Adjacent products in lending, banking, and other financial services should be inevitable.
🔨 China not done hammering Jack Ma—very much dedicated to make an example out of Jack Ma, China is going after his media empire, demanding Alibaba and other companies divest all ownership of media outlets that Ma controls or has invested in. As of today, Ma owns the South China Morning Post, tech news site 36kr (via one of his companies), and has interest in the state owned Shanghai Media Group. FYI, global billionaires have always actively owned media companies, with Jeff Bezos owning the Washington Post, Marc Benioff the Time Magazine, and Warren Buffet controlling nearly 30+ regional newspapers.
🥤 Chasing incremental revenue—Zomato made a sly entry into consumer packaged goods, launching its own self-branded dietary supplement products to be exclusively sold on the platform, looking to actively diversify revenue streams. Scaling a D2C product is hard, but when you’re already running a marketplace with traffic in the millions each minute, most of the heavy lifting is already done. Also, the health supplements market is expected to top $8.5 billion by 2022 in India, thanks to an increasingly health and fitness conscious urban consumer base.
🎮 India gets its first gaming IPO—Gaming firm Nazara Tech, opened its IPO last week and saw its bid oversubscribed by nearly 175x by the last day, as investors actively seek to gain exposure to digital India and growth businesses of the future. The company owns a range of gaming and media properties, with exposure to multiple emerging technologies around esports, online betting, fantasy gaming as well as AR in games. This year, the company is on its way to book more than ₹400 crores in revenues, with growth expanding almost 75%+ rates, and valuation of ~8x revenues doesn’t seem too ridiculous.
✅ VW turns the heat on Tesla—Volkswagen is going head on into EV battle arena, directly challenging Tesla’s supremacy with a new grand plan that’ll see the company invest $29 billion over 10 years with promise of making batteries cheaper by 50%, drop charging times to under 15 minutes, and install 6 or more battery making plants in Europe. An extensive charging network and adding 10K new software developers is part of the plan. Long shot, but Volkswagen definitely has a deep cash trove and global operating experience to pull this off.
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