Namaste, Sat Sri Akaal, and Salaam. Happy Monday. 🫡

Today we’re diving into -
- Jio’s dreams to build a 2-wheeler business,
- BYJU’s hail mary moment,
- and Delhivery’s push to speed their service up.

Our read time today is 4 minutes and 53 seconds - faster than Tammy and Charlie got the safe open in HNY… 🙈

Let's dive in. 👇

Market Vibe Check

BYJU’s narrowly averts bankruptcy as lenders get angrier. 😒

TLDR -
- BYJU’s investors ripped management a new one at their shareholder meeting earlier this year.
- Investors have constantly been lecturing them 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 themselves. 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 (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 a few other companies to pay for the company’s expenses. He’s already pledged his main home for a loan, but it’s definitely too little too late.

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

Crazy stuff.

Jio gets ready to make a push into India’s 2-wheeler market. 🛵

TLDR -
- Jio is partnering with MediaTek to supply ‘smart’ dashboards to 2-wheelers.
- Jio supplies the OS and software, MediaTek builds the chipset and device itself.
- India’s govt. is aiming for 100% of 2-wheeler sales to be EVs by 2030 - so the demand is gonna be there, be it artificial or organic. 🤷

Dads and dada-jis alike have spent years roaming around on two-wheeled diesel-powered “scootys,” but the modern middle class Indian is demanding something more.

The 2-wheeler explosion in India is delighting manufacturers and buyers alike - and the latest player vying for a bite of $300 billion market is Jio.

Jio just teamed up with Taiwanese semiconductor manufacturer MediaTek to build digital dashboards for India’s e-scooter startups.

Jio basically wants your scooter to be connected to the internet - where they’ll make money by selling you 4G subscriptions and stuff like mapping software.

They’re gonna be pairing MediaTek’s chips with Jio’s Android-based operating system AvniOS to create a device that’s low cost, high efficiency, and super easy to scale across India/other emerging markets.

2-wheelers have traditionally been mechanical devices, but startups have come in and seduced India’s price-sensitive buyers with the long term cash savings that come with owning a battery-operated device.

MediaTek already supplies chips for Jio’s optical fiber-based broadband services, as well as its set-top boxes - so this ongoing romance will make it easier for them to hit the ground running in India’s crazy-competitive scooter market.

Motorbikes/scooters are still the MOST popular mode of transport pan-India after cars, which means that if Jio can niche down successfully and gather data on all the bikes which they get plugged into, they have more revenue streams than a traditional chip maker.

Currently a drop in the ocean, but anything helps as Jio pushes on their way to IPO by early 2025 - with a target valuation of $112 billion being floated.

Electrifying… ⚡

Quick-commerce gives existing e-commerce delivery giants a run for their money. 🤔

TLDR -
- Third-party logistics providers are stepping up their game to meet the demands of the quick commerce industry.
- Delhivery, Shadowfax, and Bluedart are all boosting their footprint in India’s top few cities to offer faster delivery.
- Instant gratification is the name of the game!

Zepto, Blinkit, and Instamart have fundamentally changed the buying behavior of those living in India’s largest cities.

And this focus on virtually instant delivery is putting a little more pressure on the backs of legacy logistics providers like Delhivery, Ecom Express, and Shadowfax.

Especially in cities like Delhi, Bombay, and Bangalore - 2-day delivery just won’t cut it.

These companies are all expanding their warehouses and ‘atomizing’ them out over a regular delivery area, and then using software to predict what products need to be stocked in which locations.

So instead of having a few large warehouses, they’ll have multiple small warehouses dotted throughout the cities they operate in - which means faster fulfilment for anyone ordering.

One of the most interesting trends is the focus on Tier-2/3 cities. As urban markets become saturated with dark warehouse after dark warehouse, attention in these markets will focus on boosting AOVs and retention.

Which means that the next wave of growth will come from cities that don’t get as much of the limelight - Jodhpur, Nagpur, Indore, Nagpur - and the like.

There is a LOT of money to be made providing the logistical backend in an increasingly networked, digitally reliant economy like India’s.

Godspeed.

In other news… ☕

Warren Buffett halves his Apple stake (FT)

OpenAI starts developing tools to detect ChatGPT’ed content from real content (TC)

Schonfeld-backed fund makes a move to Dubai (BBG)

India ranks #1 on global IPO league tables (Mint)

Murdoch family drama keeps ticking on (NYT)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC