Zuck in hot water 🛑
Sony moves, Meesho unicorn, and more woman CEOs.
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Market summary: 📊
Sensex touched 46,000 quite easily but withdrew to rest back a bit yesterday. Global tech continued advances while other industries tread cautiously.
US:
S&P 500 - down 0.13%
Nasdaq 100 - up 0.54%
India:
Nifty 50 - down 0.38%
Sensex - down 0.31%
Anime streaming anyone? 🖥️
Direct to consumer streaming is on fire and Sony is sealing its destiny by buying AT&T owned anime streaming service Crunchyroll, for a whopping $1.7 billion.
Founded in 2006, Crunchyroll is the world's largest online library of Japanese animation, owning rights to more than 1000 anime titles—may not be too exciting for the people who’re not used to the genre, but just like gaming, the fanbase for this content runs into billions, particularly from younger demographics who are exactly the base that brands like Sony, and others are struggling to connect with.
The deal gives Sony direct access to Crunchyroll’s 3 million paying subscribers across more than 200 countries, offering them a potential adjacent entry to explore wider opportunities in the streaming world, and maybe even compete with Netflix, Amazon.
Also, Sony owns Funimation, another anime streaming service, and last year they acquired Silvergate Media, the producer behind Netflix's animated series Hilda and Peter Rabbit, for $195 million—all of which gives them unparalleled power over this market, globally.
Code Red at Facebook 🛑
Last night, the US Federal Trade Commission—the government guys who are responsible to regulate competition and ensure a healthy marketplace, posted its most scathing take down of Facebook (or of any digital business ever), accusing the company of monopoly, bad practices, and asking US federal courts to forcibly separate Instagram and Whatsapp from Facebook.
Hours later, nearly 40 US states sued FB again for similar charges in a state court, slapping the firm with 2 high-profile cases to deal with overnight. The reports are a culmination of year long research and investigation into FB’s practices.
Basically, the government is arguing that Facebook systematically kept an eye out for top social platforms emerging on the landscape, filtered the ones that could grow to threaten it, and then went out and bought them out to solidify its standing. Then FB made those platforms a version of itself—starkly different from what they used to be. The lawsuits specifically demand Whatsapp and Instagram be spun out.
What’s next—obviously FB will put up a defense in courts. But to remind you, FTC is the same body that had taken Bill Gates to task in 1999, winning a judgement in court forcing Microsoft to be broken up for monopolistic practices around dominance in the browser market (although Bill managed to assuage them later, and get the judgement turned in appeal courts). Point being, these guys aren’t kidding around and could do Zuck and team some serious damage.
If you’re interested, here’s a link to the FTC notification outlining an embarrassing takedown of FB. Meanwhile, despite smoking happenings, Facebook stock didn’t even bat an eye—if you needed a reminder about how irrational the markets are right now, there you go.
Meesho eyeing big leagues 🛒
Riding high on the pandemic driven boom and its steadfast vision to empower SMEs and solopreneurs in India, Meesho is apparently close to wrapping up a $150 million round, sealing the startups entry into India’s ever expanding unicorn list.
If early news is to be believed, Napsters is leading charge for the round, doubling its stake in the business while Facebook, RPS, Elevation Capital, and Venture Highway would be pitching in for more. Post deal, Meesho would double its valuation from the $700 mills it raised at last time in 2019.
For those closely observing the startup, this is rarely a shocker. Their platform added direct value to millions looking for some direct self-employment, allowing them to harness the power of the internet, India’s growing consumer class, and booming digital commerce, to earn a living independently. Then COVID happened, and since then the company is claiming to have grown 4x relative to earlier levels, clocking 10-12 million orders per month in a row. Some 6 million resellers leverage the platform, with top 15% driving 2/3rd of its business.
What lies ahead—the marketplace is effectively ready. On one hand the company has resellers thriving, on the other end it has built a network of wholesalers and a robust logistical infrastructure that delivers to consumers nationwide. With resellers doing most of the “selling” and “customer acquisition” through their social networks, the unit economics should be far more favorable.
Going forward, as operating leverage kicks in, growth is likely to accelerate even faster delivering more and more $$ on the profit line for the team to experiment with. Don’t be surprised if management doubles down with exciting new products, channels, and more.
Also, damn what a year has it been for YC backed founders man.
Efficient energy is shining ☀️
Atomberg, an energy-efficient fan startup raised ₹70 crores from A91 Partners with Trifecta Capital and Survam Partners pitching in. Not everyday do we see hardware startups raising big money in India, and that too in energy efficiency and green tech.
Originally conceptualized at IIT Bombay back in 2012, Atomberg basically makes fans with smart control modes that in addition to being power efficient natively, simplify basic controls like for example switching off when people aren’t around—may seem inconsequential, but a batch of such installations in corporate facilities, industries, large scale residential etc. can in no time drive mass savings.
The company is hoping to move in that direction, although so far the majority of demand comes from consumers—with them making and fulfilling some 100,000 orders a month, selling through 6,000 stores and through popular online platforms.
With fresh funds in hand, management aims to deploy resources in enhancing production capacity, brand awareness, and further diversify product portfolio in consumer electronics.
Bottomline: the world is waking up to clean energy and efficiency with renewed enthusiasm. Tesla as you know has skyrocketed this year, literally every clean energy and environment ETFs, stock index, is up 2x, 3x in 2020. The stage is set for energy conservation and green tech to shine in the coming years, and it's inevitable that the Indian hardware + software arena will warm up to the opportunity as well.
Tweet of the day 🐦
What else are we snackin’ 🍿
😎 Another woman CEO - Liquor company United Spirits Limited has appointed Hina Nagarajan as the company’s MD and CEO and will be effective from 1 July 2021. Nagarajan is an MBA grad from IIM Ahmedabad and will be succeeding Anand Kirpalu.
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