Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning folks. Today we’re diving into -
- BYJU’s major melodramatic investor angst,
- Flipkart’s bet to bolster their war chest,
- and Temasek’s decision to go electric.

Our read time today is 3 minutes and 43 seconds - faster than RCB plunged to the bottom of the table. 👋

Let's dive in. 👇

Market Vibe Check

BYJU’s gets some much-needed breathing room. 😤

TLDR -
- BYJU’s investors ripped management a new one at their shareholder meeting this week.
- They spoke about their financial recklessness, lack of runway, and operational goof-ups.
- The company also made it’s $1 BILLION loss public.

BYJU’s investors are angry for three big reasons.

1 - Financial recklessness. Lots of it.

BYJU’s faced a consolidated loss of over $1 billion last year. This is a crazy number, and it stings even more when you consider that their largest investors have pegged the company’s valuation at $3 billion.

Of this $1 billion loss, around $520 million is a direct cash loss due to horrible operation, and the rest $480 million is a write-off of their most controversial acquisition, scandal-struck WhiteHat Jr.

The only silver lining (if you can even call it that) was the fact that their revenue 2X’ed from the previous year, going from $275mn to $500mn. But this too missed their own internal targets by 50%. 🙈

2 - A lack of trust in the guys running the show.

From reports of what went down at the meeting, it looked like most investors didn’t care about what was going on, and were treating BYJU’s like a write-off. They abstained from voting on key decisions, instead of their regular thumbs up/thumbs down.

Many of their biggest shareholders sent management a barrage of questions regarding -
- cash management and account reconciliation
- internal controls
- resource allocation and ‘suspicious’ fund movement
- and so much more

3 - Funding and runway (or a serious need for both)

Right now, cash is above all else.

BYJU’s needs a $120-130mn check to keep itself alive for the next 3 months, and none of their current investors are too keen to get bitten twice.

One talking point was genuinely whether Byju himself (the founder) should sell a few of his Dubai homes or his personal stake in Aakash Coaching to pay for the company’s expenses.

PS - they still haven’t found the funds which went to a hedge fund in Miami, used to buy a Mansory-specced Lambo, a Rolls, and a Ferrari… 🙈

Crazy stuff.

Flipkart starts throwing mud and building a fintech war chest. 💸

TLDR -
- Flipkart just raised $600m from Walmart to invest in fintech and lending.
- They’re building up a pool of ~$1bn to attack as the market cools down.
- Pretty bold and aggressive strategy at a time when people are choosing to abstain.

Flipkart just picked up a fat $600mn check from their American best-friends Walmart, and they’re using it to ready up a stash of ~$1 billion.

This money is gonna be invested over 2 main verticals, fintech and lending.

Earlier this year, they piloted a lending product, which let you borrow 5 Lakh INR with approval in under 30 seconds.

Lending can be incredibly powerful for an ecom business like Flipkart, because it makes use of a treasure trove of otherwise (relatively) irrelevant data.

Flipkart understands the psyche of everyone who buys, including their -
- brand preferences
- order frequencies
- average order values
- returns and exchange history
- HUNDREDS of more KPIs that would take me a few thousand words to go through 😅

The logical next step is payments, which they haven’t really shed much light on, but they’re most-likely going to come out with a UPI-based product that makes it easier to transact. Like the hundreds before them. 🙈

Flipkart has also been tossing Walmart’s cash at a ChatGPT-like shopping bot, and some short-form-video based commerce.

When in doubt… throw mud and see what sticks 🤷

Temasek sinks some cash into Mahindra’s EV arm. ⚡

TLDR -
- Singapore’s state fund Temasek is splashing 1200Cr for a 1.5% stake in Mahindra Electric.
- Pegs the company’s value at $9.8 billion+
- A good chunk of this cash is gonna go toward a $1.2 billion EV plant in Pune.

This time last year, Mahindra dropped plans to go ham on the EV market with 5 new SUVs.

Today, they’re pushing on with full speed after a $145 million cash infusion from Singapore state investor Temasek.

Temasek is gonna be handing them this $145 million in exchange for 1.49% of the business - an effective valuation of $9.8 billion.

Mahindra sees the future in EVs and have set out plans for 1 in 4 sales to be fully electric by the end of the next 4 years.

Tons of foreign investors are throwing cash into India’s EV market -
- Tesla’s big office play
- Hyundai’s bet on electric SUVs
- Audi’s Q8 hitting showrooms early

Charging up…

In other news… ☕

Tesla sales drop as they lose their grip on the EV market (NYT)

Airtel picks up 2000 crores more from an anchor investor for a follow-on IPO (Mint)

Canoo spent 2x it’s annual revenue on it’s CEO’s private jet last year (TC)

NATO plans a $100bn ‘Trump-proof’ fund for Ukraine… (FT)

US economy loses 39,000 jobs and undercuts their manufacturing wins (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC