What’s brewing hot? ☕
✅ Nykaa made a quick purchase — Updated IPO docs show that the company acquired homegrown skincare player, Dot & Key, expanding its portfolio of self-owned brands. Dot & Key basically sells cosmetic staples like serums, face masks, toners, cleansers, along with a functional foods lineup under the name, ‘IKWI’. Deal value stands around ₹97 crores.
✅ Battle of the Pe — PhonePe is asking the Bombay High Court to stop its rival BharatPe, from using the suffix, ‘Pe’ for its newly launched BNPL offering called PostPe. TF, bey? “Pe”, a staple in the payments space, has been a topic of contention for both companies and a few others since like 2018. PhonePe had won a resolution in the past for a similar accusation, so they’re packing heavy this time… but… who TF has the time!
Count on Reliance to deliver 🔥
Plenty of moving parts in Reliance’s empire, but each unit did its job to deliver a solid, productive July-September quarter… with Retail particularly shining. Shareholders must’ve had a relaxing weekend!
Quick look at numbers:
Revenues topped ₹1.74 lakh crores, up a strong 43% YoY
Profits of ₹13.6K crores were up 48% YoY
Thanks to rise in crude prices, the oil-to-chemicals empire is showing strong growth too, up 58% YoY to bring in ₹1.2 lakh crores
FYI, growth may seem a lil out of whack, but that’s due to a low base due to total freeze in revenues last year.
Anyway, among the emerging businesses — Reliance Retail grew sales by 9.2% YoY as footfall rose to 80%+ levels. And, Jio added almost 24 million users, while ARPU increased 3.7%.
Bottomline — India’s bull rally was starting to look a bit shaky after earnings from FMCG and consumer stocks disappointed, but a 10/10 performance from the leader should help with some reassurance.
Zillow lands itself in a ditch ⚰️
What happened — we’re a bit late here, but… Zillow, the OG housing.com of the US, decided to pause its business of buying and selling homes, raising concerns that the company maybe at risk of an implosion.
Self-made crisis — Zillow started as a portal for house-listings, but began holding its own inventory of homes following competition like OpenDoor into the market. The model is simple yet complicated — the company runs numbers, finds homes, buys them from agents for itself, fixes homes, and then sells to users, delivering a digitized, low fee-experience.
Only problem, unlike tech companies which are historically asset-light, Zillow has to hold the homes on its balance sheet. Any hiccup in the housing market, and we have a bunch of data-nerds trying to pass as housing-experts with a mess on their hands. ‘08 crisis says hello!
And that’s exactly what has happened:
After a hot-rally during COVID for almost 20 months now, the housing market is starting to cool off a bit
Labor, material shortages, are making it hard to “flip homes” fast enough for Zillow
So effectively, Zillow is forced to hold homes for longer in its kitty, costing it more $$ in interest payments, without guarantee it can get the prices it was looking for.
What next — state of the real estate market is tied into the fate of the broad economy, traditionalists are concerned that the nerds may have pushed the numbers a bit too far. Zillow stock was hammered down 35%+ this year.
Big picture — real estate brokerage is a $150B market, which makes it soooo attractive to tech though!
Closing Out — Chime will look to IPO in 6 months 🤙
What happened — Chime, the no-1 neobank in the US, plans to IPO in March at a $40 billion valuation.
Chime’s low cost checking and savings accounts are mostly targeted at middle and low income Americans, as an alternative to the predatory fees and practices of traditional banks. The platform has about 13M users, and monetizes through interchange fees, micro-loans, all delivered through a gorgeous, basic digital UI.
Model is working — Chime’s revenue is on track to hit $1 billion this year, so it ain’t all hot air, proving that the neobanking business is likely to stay.
Also, at a $40B market cap, Chime would be the 60th largest bank in the world — a stone’s throw away from the value of Kotak Mahindra Bank (~$55B) or over Deutsche Bank or Credit Suisse!
What else are we snackin’ 🍿
🐤 Humming to the top - hot damn Kooooo... The desi-clone of Twitter, Koo, has now scaled to about 15 million users in India, adding another 5M last quarter.
⏳ Coming soon - PayTM has been greenlit by SEBI for its November IPO. Yay or nay?
Hit that 💚 if you liked today’s issue.
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