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22nd December 2021
Good Morning! 

The Matrix movie is out now guys!! 
As you can tell we are super excited about it. The first time we saw the Matrix and this video on the simulation theory we were seriously questioning the world around us.
What are your views on the simulation theory?
  MARKETS
 

SENSEX

56,319.09

+ 0.27%

NIFTY

16,770.85

+ 0.17%

US$

75.60

- 0.41%

GOLD

48,099

- 0.29%

10-YR

6.47%

+ 3.4 bps

OIL

5,413

+ 5.15%

*As of market close

  • Markets: Stocks bounced back a bit yesterday after 2 days of heavy losses on Friday and Monday. It was still a very volatile session though with the Nifty50 moving more than 250 points intraday.  IT, metal, healthcare and consumer stocks outperformed.

IPO

What A Turnaround Sirjee
Turnaround
 

Remember Snapdeal? The e-commerce startup. Yeah just like RDX Bhai in Welcome, they want you to know 'abhi who zinda hai'.
They have filed their papers to go public.

The Backstory

Snapdeal started back in 2010 and had actually established itself as one of the top 3 e-commerce players here. We definitely remember using Snapdeal. At one point we would be browsing between Amazon, Flipkart and Snapdeal to figure out who is offering the cheapest price.

But then in late 2016/2017 things came tumbling down. Snapdeal made a ton of acquisitions that didn't work out for them. Some of these were with a sizeable cash component. That, and a really high monthly cash burn rate meant by mid-2017 they had funds for only 1 month of operations left.

Many people thought that would be the end of the company, but they persisted and actually turned things around.

The Turnaround

Instead of focussing on competing with Amazon and Flipkart on general e-commerce, they decided to niche down to value e-commerce.

Value e-commerce is all about giving customers decent quality products at super affordable prices. Naturally, this appeals to a huge segment of our population, particularly people in tier 3/4 cities.
Ever since that decision, Snapdeal has ended up becoming the first at-scale platform for value-e-commerce. (Think of them as an online equivalent of DMart.)

They now sell stuff like daily wear clothes, everyday use kitchen items and home decor items and 80% of their customers are from smaller cities.

The IPO

They plan on raising Rs 1,250 crore.
Snapdeal also gave out some financial deets with them reporting that they've generated operating revenue of $31.9 million in the first half of FY22.

The Takeaway

A few years back we would have never imagined this day would come, Snapdeal has had quite the turnaround story.
We are intrigued to see what sort of response they get in the public markets though.

Tech

10 Minutes Only
10 Minutes

The 10-minute grocery delivery space is really heating up.
Zepto has gone on to raise another major round of funding, just 2 months after raising.

Zepto has raised $100 million and is now valued at $570 million - more than 2x its valuation in November. Talk about growth.

If you are confused about how anyone can possibly do 10-minute deliveries, it's because of the dark store model.
This may sound shady like the dark web but it's just a fancy word for local warehouses aka 'dark stores' for online orders all over the city.

The reason VCs are running to fund them is because of their crazy growth. They are expanding into new cities while maintaining a month on month buyer retention of 65%.
They are now in Bangalore, Delhi, Gurgaon, Chennai, Hyderabad with Pune and Kolkata coming soon.

The jury is still out about whether this will be a viable business model, but this is a general cycle for newer ideas investors get infatuated with.
Do you remember the days of food delivery when he had Swiggy, Zomato, FoodPanda, TinyOwl and many more?
Maybe this space also consolidates to 2 players eventually and Zepto probably hopes to be one of them.

Economy

Jobs Jobs Jobs
Looking for a job

Amidst all this positivity about startups and fundraising, there's one headline that seems like cause for concern. 

New formal job creation in India was at a 4 month low in October 2021. The new additions to the payroll for October came in at 10.77 lakhs, a decline of 1.92 lakhs when compared to the number for September, according to data released by the Employees Provident Fund Organisation. And this is lowest since 10.68 lakhs in June.

While in June we were still going through the devastation of the second wave of the coronavirus, one would've thought that October, (also being close to the festive season) would have seen job creation be much higher.

Dr Pronab Sen, former Chairman of the Indian Statistical Commission says this is because a large number of small and medium businesses have shuttered since the pandemic. Now though, he sees the economy stabilising and expects an uptick in job creation as well.

Interestingly, (and rather disturbingly), the number of people that left the EPF was more than those who joined in the Financial year 2020-21.
 

On a Lighter Note

Campus Ambassador Program

If you are a college student do check out our campus ambassador program. 
For more deets check this out.

If you have more time ...

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