There can be just one Hero
Also in today's edition: Paytm IPO, YouTube Shorts goes global, France fines Google
Good morning! Sachin Bansal is going to make his way into the unicorn club again, a report from The CapTable says. The founder of Flipkart is trying to raise capital for Navi Technologies, which is trying to be a completely digital bank. The report says the talks are still in the early stages but Bansal values his company at $4.5 billion. Big billion day, indeed.
Anyway, on to the day's stories:
Shein was banned but now it is back.
Racist abuse and social media. You know the story.
Apple is planning its own Brexit.
Hero Vs Hero
The Hero brand, known for its two-wheelers, is in for a bumpy ride. Pawan Munjal-led Hero MotoCorp., the world’s largest two-wheeler manufacturer, is looking to enter the electric vehicle market. This hasn’t gone down well with nephew Naveen Munjal, who is the MD of Hero Electric — the market leader in the electric two-wheeler (E2W) segment.
Speaking to Moneycontrol, Naveen cited a non-compete clause agreed upon during the corporation’s 2010 restructuring which allows the companies to enter any segment but restricts brand usage. This means Hero MotoCorp. that has joined hands with Taiwan’s Gogoro to develop EVs for release next year might not be able to roll them out under the ‘Hero’ brand.
At present, Hero Electric has around 42% share of the E2W market and manufactures 75,000 units a year. Its dominance is already under threat from Ola Electric’s impending entry, and a family feud could only make matters worse.
Not So Kwik
On Monday, digital payments platform Mobikwik filed the draft red herring prospectus for its INR 19 billion ($255 million) IPO with Sebi. However, the company’s path to the bourses could be troubled.
Business down: At a time when many digital payments players have seen tremendous growth, Mobikwik’s financials look less than impressive. For FY21, its total income, revenue from operations, and gross merchandise value all fell, while losses widened, compared to the previous financial year.
Red flags: But perhaps more importantly, according to a BloombergQuintreport, auditors have flagged a number of concerns about the prospectus. These include uncertainty about the company’s future operations and irregularities concerning the payment of statutory dues such as PF contributions, employees’ state insurance, income tax, and GST.
The prospectus also denies a data breach exposing the sensitive data of 100 million users that was reported earlier this year. The denial has been issued before but, as this The Ken story ($) suggests, hasn’t been very convincing.
Kick It Out Already
England’s penalty shootout defeat to Italy in the Euro 2020 final on Sunday has triggered a familiar problem: racial abuse on social media platforms like Instagram, Facebook, and Twitter. Within seconds of three English players, particularly those of colour — Marcus Rashford, Jadon Sancho, and Bukayo Saka — missing their respective penalties, the nasty stuff followed. It was worse on messaging platforms like Telegram, where neo-Nazis frequently organise.
The ugly: Rashford, in particular, has been a standout figure over the past year with his several off-the-field initiatives. But this is not nearly the first time he has been abused online. Rashford, according to a recent study, is the most abused footballer online. In fact, it’s a shame that none of them are strangers to racial abuse, particularly on social media.
The bad: Social media platforms have tried measures to prevent racial abuse but they’ve been woefully inadequate. Simply banning certain keywords or terms does little. Banning accounts is like playing whack-a-mole. A bigger concern might be whether they really want to solve the problem. This Twitter thread from a BuzzFeed News reporter sheds light on Facebook employees’ frustration with the company’s apathy to racism.
The good: Football teams now often take a knee at the start of a game, a popular gesture against racial abuse, even though British politicians like Priti Patel have labelled it “gesture politics”. Many influential organisations, powerful clubs, popular players, and rich sponsors are protesting vociferously. The UK government has an ‘Online Safety Bill’ in the works that may now be further tightened.
Racism, not just in football or sport but overall, isn’t understandable or acceptable. It has to stop. Don't do it, don’t tolerate it, don’t look the other way.
Shein Returns To India
Comebacks are always celebrated. Shein’s made a comeback too. But it is going to be looked at with suspicion and curiosity rather than fanfare. The platform is still banned but it is back in India as a seller.
Where? Amazon. Shein has been a success story in China and across the world, beating the likes of H&M and Zara when it comes to fast fashion. The clothes are cheap and trendy and they sell like hotcakes. Tension between India and China meant it couldn’t make deeper inroads into the Indian market. It has now got another chance.
How? This part is not very clear. Is it coming to India as a seller through another platform or is there going to be a reseller in the middle? This is the second company that has made its comeback to India after being banned. The first? PUBGor as it likes to be now called: Battlegrounds Mobile India. The publisher, Krafton, had to publicly distance itself from Tencent when it returned. But not everyone is convinced.
It will be curious to see how Shein’s return will be perceived. Boycott or cheers?
Apple Could Be Out Of The UK
Apple could quit the UK if it has to pay a lot for patent infringement, the iPhone maker told a court.
Out: The company is fighting a patent battle with Optis Cellular Technology whose patented tech iPhones use to connect to 3G and 4G networks. It may have to shell out about $7 billion if it loses the case, an outcome not “commercially acceptable”. If it doesn’t agree to abide by the court’s ruling, it may anyway be thrown out of the UK.
Not the first time: Apple had earlier been hit by courts in several patent infringement lawsuits brought by Qualcomm. The company had reportedly held back $7 billion of Qualcomm royalties.
Efficient: Some firms deliberately infringe another’s patents in a practice called efficient infringement. Not everyone can afford expensive legal battles. The infringers reckon that even if patent owners go to court, the legal cost and ultimate settlement would be less than the cost of licensing the tech.
What Else Made The Signal?
Selling time: Paytm is planning to raise $268 million in a pre-IPO funding round before its planned listing around November.
Shorts fired: After its initial pilot in India and the US, YouTube Shorts will now be available in 100 countries across the globe.
Okay, Google? The French antitrust agency has slapped a $593 million fine on Google for failing to follow an order to hash out a deal with publishers to use their content on its platform.
Looney tokens: Warner Bros. is all set to take over the NFT or non-fungible tokens space with its release of 91,000 limited-edition tokens. It will feature Looney Toons characters like Bugs Bunny, Tweety, and Porky Pig in addition to basketball star LeBron James.
Making hay: Animall, a Bengaluru-based startup for connecting cattle buyers and sellers, has raised INR 1.026 billion (~USD 14 million) in its third round of funding from existing investors as well as Sequoia Capital.
Make space for local: SpaceX may begin partnering with Indian firms to manufacture satellite communications equipment such as antenna systems and user terminal devices ahead of its plans to launch Starlink broadband services in the country next year.
No investment promos: TikTok has banned financial services promotions on its platform, including financial investments and cryptocurrencies.
Thanks, Obama: We all have that one friend who’s brilliant at making playlists. In this case, it’s the former US President recommending over three dozen songs by artists ranging from Bob Dylan and The Rolling Stones to Lil Baby and J. Cole.
Very nice...not: Actor Sacha Baron Cohen has filed a $9 million lawsuit against a US-based Cannabis company for allegedly using his Borat character on a billboard ad.
Attack of the goldfish: In the latest example of invasive species wreaking havoc on local water systems, authorities in Minnesota have pulled thousands of giant goldfish from a lake. They’ve issued an appeal against the release of pet fish into water bodies. This is a huge problem in India too with many invasive alien species, especially catfish, destroying local biodiversity.