Namaste, Sat Sri Akaal, and Salaam. 🫡

Good morning folks.

Today we’re diving into -
- BYJU’s/Aakash negotiations that NEVER happened,
- Jio Financials’ insurance play,
- And Flipkart founder’s full exit from the biz.

Our read time today is 4 minutes and 32 seconds - faster than you can get an ice-cream from the Mother Dairy cart downstairs. 🤷

Let's dive in. 👇

Market Vibe Check

BYJU’s gets hit with another bouncer. 🤦

TLDR -
- The only decently-sized profitable arm of BYJU’s… isn’t even fully theirs.
- Aakash’s original owners & investors still own ~30% of the company.
- BYJU’s once missed a payment deadline to them so the founder had to put HIS OWN money into the deal. Conflict of interest who?

Two years back, BYJU’s broke headlines across the world by announcing that they’d spent $1 billion on acquiring a brick-and-mortar institute called Aakash.

This was odd, because BYJU’s is an ed-tech.

Aakash, on the other hand, is a pure-play 100% Ed, 0% Tech business.

But it turns out that those headlines can all be disregarded. The BYJU’s//Aakash acquisition hasn’t even gone through yet.

The deal had two parts to it.

PART 1 - $760 million in cash.

BYJU’s was supposed to pay the owners of Aakash (the family that started it + Blackstone PE + a few others) $760 million in cash, straight up.

Turns out that the company missed deadlines for these payments (🫢) and the founder himself had to put HIS OWN money into the deal.

No wonder that BYJU's was trying so hard to get Aakash's IPO going...

PART 2 - $240 million of equity.

The rest of the deal was supposed to be a share swap.

Aakash’s founders would put up their remaining $240 million of Aakash shares, and in exchange, BYJU’s would give them $240 million of BYJU’s shares.

The deal made sense at the time, because BYJU’s didn’t have to front cash during hard times & Aakash owners could enjoy future upside.

But that swap hasn’t gone through yet on paper. 💀💀💀

This means that -
- BYJU’s doesn’t fully own Aakash
- No one has any idea where we go from here
- IPO seems uncertain with this mess

Talk about hot water. 🥵

Ambani walks into an insurance license while hand-holding Blackrock. 💸

TLDR -
- Jio Financial Services is pushing for a license to provide insurance.
- They will focus on BOTH general + life insurance & have set 1000Cr for each aside.
- It’s also IPO-bound, looking to float on markets at $20-ish billion USD.

For over 20 years, nothing major has changed in India’s insurance market.

Each massive insurance company (even with all their billions of dollars) have failed to come near LIC’s gargantuan 50% market share.

Plus, the penetration of non-life insurance is even lesser - only at ~1%.

This is where Mukesh saab comes in.

He wants to tackle both life & non-life markets, with a ~1,000 Crore deep capital pool for each segment, coming to a $250 million total.

There’s going to be a strong digital focus here too - because the insurance game is all about distribution.

Classic Reliance play. 🤷

PayU ditches it’s foreign biz to focus on India. 🤔

TLDR -
- PayU just sold their international business to Rapyd (a fintech) for $610 million cash.
- Overseas biz makes up ~30% of their revenues.
- The reason behind this? They want to 100% focus on India solely.

Started as a Netherlands-based payments service… now it’s a full-stack fintech platform focused on India.

PayU sold their international business for $610 million in hard cash, giving them some gunpowder, albeit shrinking their business.

The acquirer is a fintech called Rapyd that wants to build it’s business out in LatAm.

Now that the rest of the world is out of their mind, PayU has solely India to focus on.

They had a top-line of $399 million last year - and that number has been consistently growing at ~25-35%.

Sign of the times…

In other news… ☕

America gets a credit rating downgrade, from AAA to AA+ (BBG)

Uber (finally) makes it’s first ever profit (FT)

Steve Jobs’ son launches a $200mn fund backing cancer research (TC)

Apple braces for sharpest revenue slowdown since 2016 (Mint)

Gamestop gets out of the crypto market (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC