Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning, folks. Hope life is good.

Today we’re diving into -
- Third Wave Coffee’s $35mn Series C,
- Zerodha’s latest valuation markup,
- And Modiji’s push for a body to police data.

Our read time today is 4 minutes and 48 seconds - faster than Diljit finally released a timeless album (spoiler: not for Reels… 🙈)

Let's dive in. 👇

Market Vibe Check

Third Wave nabs $35mn to get India hooked on coffee. ☕

TLDR -
- Third Wave Coffee just picked up a $35mn Series C to grow their coffee business as if it’s a tech startup.
- There is insane competition in the cafe business - lots of deep-pocketed companies have entered and are growing like CRAZY.
- A small portion of India is spending billions/year on premium products and it’s buoying aspirational brands.

Young India is spending BIG bucks on “aspirational” products.

And the latest winner from this growing trend of spending - a coffee shop called Third Wave that’s growing like a tech startup.

They just picked up $35mn to build an airtight brand and put up locations all across India.

The cafe business is no rocket science - but it it is SUPER difficult to compete.

You have legacy players like Starbucks who come with their drones of hooked fans, and then you have players like Reliance-backed Pret - who have virtually limitless pockets.

These so-called aspirational brands have been THRIVING -
- Apple India has been having bumper revenue jumps every month
- Niche clothing stores are popping up in Uttam Nagar
- India’s Rolex market is getting overpriced (you have to think things twice when a Sub costs $20k…)

Bhaiya 2 cutting lagao na → Bro, can I have an extra-steamed latte…

Zerodha marks their valuation at $3.6 billion. 💸

TLDR -
- Zerodha just marked up their valuation internally to $3.6bn.
- They’re growing super fast and targeting a lot of passive products.
- Their dream: collect a 0.5% management fee across millions of uncles’ retirement accounts.

I got 99 problems but cash flow ain’t one…

Zerodha is probably the most profitable single-generation startup business of our time. They did $826mn of revenue with over $400mn of profit - all while the founders retained 100% of the company.

The only time their valuation gets updated is when they buy back stock from their employees - and it’s now sitting at a neat $3.6 billion.

All these broking houses are now competing for PASSIVE traders.

In other words, they’re specifically targeting dadajis/uncles who have 1-2Cr+ in their accounts, who just want a simple and no jhanjhat way to compound their wealth and earn a live-able retirement income.

Earlier this year, Zerodha tied up in a 70/30 JV with Smallcase to build Zerodha Fund House.

There’s gonna be a boom in these low-stress investment products that “autopilot your retirement”.

India currently has the world’s youngest population, but that simply means we’ll have an army of grey-haired people in 40 years =)

Indian government finally takes a step towards regulating data. 🙈

1.4 billion people produce a LOT of data… and India hasn’t been doing much to protect them.

New Delhi now wants to set up a National Data Management Office, which will regulate every company that processes user data in any way/shape or form.

The good stuff so far -
- there will be a standard interface to save on red tape
- bureaucratic costs will ideally be cut by 50% (includes time AND resources)
- it will be based on Saudi’s data laws (dont know how good this is)

Solid hai…

In other news… ☕

Lithium price crash gets China on tilt (BBG)

Paytm Money finally turns a profit (Inc42)

Saudi makes it’s FIRST investment into natural gas (BBG)

Twitter signs a live shopping/ad deal with Paris Hilton (FT)

Tesla vehicle deliveries plunge after lower demand and supply-side havoc (FT)

And that’s the tea the chai for today.

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

Lots of ❤️,

Team Cutting Chai