Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning, folks. 🙏

Today we’re diving into -
- MPL’s 400% tax burden increase,
- BigBasket + Tata’s soaring losses,
- And, what SoftBank said about their Indian portfolio.

Our read time today is 4 minutes and 27 seconds - faster than you can pay an arm and a leg for tomatoes. 🍦

Let's dive in. 👇

Market Vibe Check 🥵

GST increases forces MPL to downsize 50%. 📉

TLDR -
- Real-money cricket betting platform MPL is laying off 50% of it’s workforce.
- Their tax burden jumped over 400% after the Indian government levied a 28% GST on their business.
- MPL actually turned EBITDA positive this year too 😢

Regulation is both brilliant and awful - this is a perfect example of both.

Earlier this year, the Indian government launched a 28% tax on real money gaming apps.

So if you put $100 into a cricket fantasy game for example, you would only have $72 to play with.

Plus, you’d have to pay another 28% tax on the profits.

So on one hand, we have the slowdown of an industry that forces thousands of young Indians into vicious gambling habits.

On the other, we have news like this - where startups are laying off hundreds and losing millions in investor money.

MPL recorded their BEST EVER MONTH in June (because the tax hit in July) and were an EBITDA profitable company.

The lesser of the two evils… 🤔

SoftBank waits eagerly for lots of IPO action. 💸

TLDR -
- A big chunk of SoftBank’s Indian portfolio is preparing to go public
- There are startups like Lenskart, Swiggy, FirstCry, and OfBusiness.
- Cumulative stakes are worth $42 billion and would be a BIG sigh of relief for SoftBank.

Lots of losses and billions of dollars later - SoftBank is finally seeing the fruits of it’s India investments.

Tons of their big-name India companies are in the early stages of going public.

A few of these companies are -
- Lenskart, at $5 billionish last
- Swiggy, at $5.5 billion last
- FirstCry, at $3.1 billionish last
- OfBusiness, at $5 billion last.

One very un-Softbanklike stat is that 93% of their 473 portcos have positive monthly cash flow.

Lots of excitement to come in the markets…

BigBasket sees big revenues, but bigger losses. 😅

TLDR -
- Blinkit revenues up 30% to 9.6K crores ($1.12 billion)
- Losses almost 2Xed, to 1750 crores ($211 million)
-  Loooots of new spending on growing into a big quick-commerce player.

Since 2011, BigBasket has been the undisputed king of India’s grocery market.

But revenue growth is starting to flatten out and losses are starting to pile on.

The reason?

Quick-commerce startups have been eating their lunch.

The numbers say this - BB revenues grew 5% over the last quarter and 30% this year - currently sitting at almost 10k Crore INR (~$1.12bn).

Sounds great, but losses spiked 2x to ~$211 million.

There’s a very sensible reason behind this.

They are spending a lot of money on moving into quick-commerce to fight with Blinkit, Instamart, and Zepto.

The thing is, Q-com tackles a very psychological impulse-buying issue.

They are able to offer things 5-10 minute delivery and often hand out VC-sponsored lollipops like 50% discounts and free gifts.

But BigBasket’s entire model depends on you pre-planning your grocery trips.

But hey - better late than never.

In other news… ☕

China drops into deflation for the first time in forever (BBG)

Google and Universal want to start licensing singers/rappers’ voices (FT)

WeWork becomes “substantially doubtful” about it’s own future (BBG)

Zoom gets into a regulatory hot mess after using call data to train AI (TC)

Lyft gets ready to say bye-bye to surge prices (TC)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team C