Namaste, Sat Sri Akaal, and Salaam. 🫡

Today we’re diving into -
- Paytm’s softening growth and slimmer losses
- BYJU’s big governance mess
- Reliance’s data center business chess

Our read time is 4 minutes and 57 seconds - faster than you can cook Maggi. 🍜

Let's dive in. 👇

Market Vibe Check

Paytm’s sluggish growth numbers 🚀

TLDR -
- Losses trimmed by 50%, revenue up 40%.
- On track for positive cash flow by 2023 end.
- 23% increase in transacting users.

Ever since their IPO, Paytm has been put under the microscope by hundreds of investors, portfolio managers, and Linkedin influencers.

They no longer have the luxury of burning billions behind the veil of being a ‘hyper-growth’ startup.

More prudent decision-making, and a prioritization of profits.

The numbers clearly tell this story too - losses fell by ~45% from 650Cr to 358Cr.

Expenses mainly fell because things like IPL are in the past now, and a one-off expenditure on employee appraisals etc inflation last quarter’s expenses.

But on the other hand, because of a less liberal spending plan, revenue growth rate also slowed down -
- Jun ‘22 - 89% q-o-q
- Sep ‘22 - 76% q-o-q
- Dec ‘22 - 42% q-o-q
- Mar ‘22 - 43% q-o-q
- Jun ‘23 - 39% q-o-q

Looks like they’re consolidating at the 35-45% growth per quarter zone.

Paytm is STILL packing quite the punch. ✊

BYJU's behind the scenes blame game 🤦

TLDR -
- Biggest investor Prosus is VERY angry.
- Company management overlooked a lot of ‘governance advice’
- Internal reporting structures did not evolve fast for a company of their size

BYJU’s drama has been going on for a long while now.

But this is where it gets serious - their own investors start calling them out.

Prosus is one of the world’s biggest tech investors.

They’ve poured in $600mn+ into BYJU’s.

After tons of markdowns, valuation cuts, and down rounds, that stake is now worth a fraction of what it was after the company’s valuation went from $22bn to $5.1bn.

Prosus is saying that “reporting and governance did not evolve quick enough for a company this big”, which is crazy because BYJU’s didn’t have a CFO until early this year.

Golmaal hai bhai sab golmaal hai…

Reliance's data center ambitions 🗃️

TLDR -
- Reliance is splashing $46mn for 1/3rd stake in a data center JV.
- They’ve agreed to provide $76mn more if need be.
- Coming off the heels of their 2019 tie-up with Microsoft to market their Office & Azure cloud services.

Mukesh Ambani is the Midas of Indian markets.

And the next gold rush seems to be in data centers.

Reliance just splashed $46mn on a data center park investment with $76mn+ more in the pipeline.

Two facilities are being set up - a 20 megawatt facility in Chennai and a 40 megawatt facility in Mumbai.

Now here’s the interesting part.

Just two weeks back, Amazon announced a big strategic shift.

Their numbers showed one big thing. Cloud services (which run off these data centers) make SO MUCH MORE money than plain vanilla e-commerce does.

Here are the stats to back it up -
Amazon International retail -
- Revenue growth of 1% from last year
- Total sales of $29.2 billion
- Operating margin of -6.5% in the last 12 months
- Loss of $1.2 billion

But on the other hand, here is Amazon Cloud (once again, off the data centers they invested in)
- Revenue growth of 16% from last year
- Total sales of $21.4 billion
- Operating margin of 26% in the last 12 months
- Profit of $5.2 billion

Mukesh baba is seeing the money… and making a good move toward it.

Long-term business chess. ♟️

In other news… ☕

Elon Musk kills billions in Twitter brand equity (NBC)

Saudi gets a major growth downgrade by the IMF (BBG)

Jeeves crosses $40 million a year from selling corporate credit cards (TC)

Threads loses 75% of it’s traffic in 2 weeks of launch (Mint)

Wells Fargo preps for a $30 billion buyback (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC