Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning, folks. 🙏

Today we’re diving into -
- Brookfield’s optimism over their $500mn luxury hotel bet,
- Peak XV’s post-rebrand acceleration,
- And WeWork’s single bright spot - India.

Our read time today is 4 minutes and 42 seconds - faster than you can enjoy 1½ a paneer frankie on a rainy Mumbai night. 🔥

Let's dive in. 👇

Market Vibe Check

Brookfield seems pleased with their Leela deal. 🏘️

TLDR -
- 6 months back, Brookfield paid ~$500mn for Indian hotels brand Leela.
- In classic private-equity style, they’re firing growth on all cylinders.
- There is no global + instantly recallable Indian brand like Sheraton, Fairmont, Wyndham YET. (maybe Taj)

Half a year back, the Leela was staring down the barrel of bankruptcy.

Lots of key hires had left, finances were in terrible shape, and the company was on life support.

Brookfield paid a massive premium and bought them out for $500mn.

Cut to today - both profitability AND brand are on fast-track.

Pre-tax earnings have 2X'ed and Brookfield is set to put the Leela brand on 15 more buildings over the next 2-3 years.

They currently own 5 of the 12 resorts with the Leela name - remaining 7 are all under management contracts.

Assets like the Leela are difficult to build from scratch even if you have billions in the bank.

As a 5-star resort player, you're up against the Sheratons and Fairmonts of the world - which means that you can't just play the hotel business.

You have to sell yourself as a lifestyle business.

So Brookfield is essentially paying for -

- an established brand

- '000s of trained employees

- a distribution network to launch into escape velocity from

Probably the next Taj. ✨

Peak XV speeds up the cash-splashing. 💸

TLDR -
- $10 billion fund Peak XV is ramping up it's deployment.
- They've evidently reworked their investment style and speed ever since their Sequoia split.
- Aren't shying away from ‘risky’ bets and are apeing into anything that looks powerful.

Peak XV is throwing money around like it's 2021.

Ever since their split and rebrand from Sequoia India, they've also redone their investing style.

Over the last few months, they've written checks like -

- $50mn to Mukesh Bansal for a "Gen-Z focused premium fashion service"

- $25mn to Masters Union for their new-age business school which has a USP of better placements than IIT

- $12mn to Sarvam, an Indian AI company developing localised language models.

Most VC funds have been shying away from moonshot ideas and moved towards "tried and tested" business that cash flow like crazy.

But if they're jumping into rounds like this, something must be going right.

Celebrating the Sequoia divorce in style. 🤷

WeWork finds Indian market to be a diamond in the rough. 💎

TLDR -
- WeWork India did 1350Cr of top-line last year with 250 Cr of profit.
- Virtually the only bottom-up profitable segment for them globally.
- Works well in India since there are lots of takers for the flexibility that they offer.

WeWork's management has had it's fair share of sleepless nights...

But one bright spot is giving them a little bit of rest - India.

Their India top-line grew over 40% at a time when all their other major markets ended in the red.

Current sales stand at ~$52 million and momentum looks good as well, with double-digit growth every quarter.

The way India works is that both corporates + little businesses want a lot of flexibility.

WeWork's biggest Indian offices are some of the only ones globally that have a high percentage of flexible spaces - kinda like an Airbnb'ed office.

And this attracts big-ticket clients, since +80% of WeWork's clients are corporates.

Last year's numbers were 1,350 Cr of top-line with a 250 Cr profit.

Probably the only fundamentally profitable busine

ss for WeWork 😬

In other news… ☕

Rolls-Royce drops a $30 million Droptail Roadster (BBG)

German prices fall by fastest rate since 2009 (FT)

Xi Jinping lets China’s economic engine take a few hits (BBG)

YouTube plans on compensating artists for AI music (FT)

Cargill trials 120-foot sails to cut down on fuel burn (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it. Have a mauj-masti filled day ahead.

Lots of ❤️,

Team Cutting Chai 😤