TikTok is still king

Also in today's edition: Uber being sued, SpiceJet earns by not flying, and Yamaha acquires

Good morning! Sensitive data of Byju’s students was left exposed for at least a week, according to an investigation by TechCrunch. India’s most valued venture-funded company had used a SaaS company to help it manage its customers and this company, it seems, let the data spill.

Anyway, on to the day’s stories.

  1. Amazon is coming for your ears

  2. Tiger, Sequoia, and Accel got early-stage fever

  3. Brazil says no, WHO says yes to Covaxin

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Covaxin Bombs In Brazil But Wins With WHO 

Brazil is pulling the plug on 20 million doses of Bharat Biotech's Covaxin, a deal worth $324 million. Signed in February, the transaction has now come under fire for improper invoicing and hasty talks, especially when Pfizer vaccines were allegedly cheaper. The Hyderabad-based vaccine maker is denying any transgression.

The allegations have pushed President Jair Bolsonaro, who has been drawing flak for poor management of the pandemic, further into a corner.

The antidote: Meanwhile, the World Health Organization is holding a meeting togrant Covaxin approval for Emergency Use Listing, with the process starting in July. Simultaneously, the US National Institute of Allergy and Infectious Diseases is backing a booster shot that can increase its efficacy, especially against the Alpha and Delta variants.

Wider acceptance: Getting the WHO approval is necessary for Covaxin to be accepted in other countries. It will also help travellers enter countries that are allowing only those who have had WHO-approved jabs.

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Capital, Capital Everywhere 

Froth. That’s the best word to describe what’s happening in venture capital right now. Sequoia announced its fifth Surge cohort. This time it had 23 early-stage companies, which have collectively raised $55 million. Meanwhile, Accel announced it has closed $3.05 billion across three funds to invest across companies in the growth stage. Tiger, too, not too long ago closed a ~$6.65 billion fund to invest across the world.

But where? Some of this capital is directed towards very early stage companies in India. Typically, these marquee VC firms would come in at a slightly later stage of a company’s life cycle. But that seems to have changed. One of the reasons is to get access to companies earlier. Due to a capital glut, valuations are peaking faster. This means when some of these mature VCs get in, their chance to make multifold returns is lower.

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The TikTok Ban, 17 Apps And 1 Year Later... 

A year ago, on June 29, India banned TikTok. A beeline of apps has been trying to fill the short-video void since, with 17 apps cropping up almost overnight.

The short-video scene is now, while popular, more fragmented. MX Takatak, Josh, Moj, Roposo, and Chingari are still in the game. But there’s Instagram (Reels) and Google (Shorts) to whom short-video is a mere feature (not a product) to retain their in-demand creators. As a hedge, Google has also ploughed millions into Josh and Roposo.

What of TikTok? Though banned in India, TikTok reported record annual revenue and profits. In the US, its largest market outside of China by revenue, it is the undisputed leader among short video platforms. Yet, it’s facing fire. Black creators are boycotting TikTok, accusing it of a "whitewashed culture" and not receiving due credit for their dance moves.

What about creators? The ByteDance-owned platform played a role in democratising fame, and once it disappeared, that fame was also distributed. Top TikTok creators were courted away by others, including YouTube and Instagram. The `A’ listers made money but others languished, unable to land deals.

Comeback? There have been reports that Tik Tok could soon be back in India, and has written to the IT Ministry with its side of things.

The Signal

TikTok drove the creator economy in the US. Those who can't, dance to trends. But there is more to TikTok than a glib joke. It enabled budget-constrained regional brands to target small audiences, something that was beginning to take shape in India before the ban. Despite trying to capture the magic of TikTok, no company could repeat its sheer depth and penetration. That meant small creators lost their base and, often, their only source of income.

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Debt To The Bubble 

The retail loan market in India has about 200 million unique individuals — half of the country’s 400 million workers. They have either taken a loan or owe on credit cards, according to a Transunion CIBIL report.

Same base: New customers aged below 30 and who live outside Tier 1 cities are predominantly borrowing for personal needs or to buy consumer durables. The report hints that the customer base is more or less stagnant, as half of the borrowers are from the existing base of bank customers. That’s not good given that the pandemic has caused widespread job and income losses.  

Stress mounts: Adding pressure to personal budgets, household financial savings have been slowing. When the pandemic began last year, the finances suddenly improved as people spent less but then started declining. It stood at a healthy 21% of the GDP in the first quarter of FY21 but halved in the next quarter and slipped more to 8.2% in the third.

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Amazon Is Finally Going Big With Podcasts 

Amazon is coming for your ears. Seriously. Last week, it acquired a podcast hosting and monetisation platform — Art19. Yesterday, it forked out the dough ($80 million!) for rights to “SmartLess”, the comedy podcast hosted by actors Jason Bateman, Will Arnett, and Sean Hayes, where celebrity guests appear.

The puzzle comes together: As Spotify and others like iHeartRadio have shown, one way to go big in podcasts is to acquire key business lines — a hosting platform, a monetisation platform, or in Amazon's case, a podcast production studio in Wondery. With Art19, Amazon Music will essentially allow hosting, besides selling premium ads (both pre-recorded and host-read) to its own hosts as well as other podcasts.

Last year, Amazon started offering podcasts on its Music app, with free (non-exclusive) episodes and original, largely, music-focused shows.

And more: Beyond music, Amazon is building its influencer programme by recruiting YouTube and TikTok stars. According to an Insider report, it offers influencers four tools — a partnership to create a limited edition clothing line, live-streaming, affiliate marketing, and a storefront. It is also testing a marketplace to connect brands and influencers.

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What Else Made The Signal? 

No fly, make money: SpiceJet made $150 million by not flying any aircraft. It is the only Indian airline that operates Boeing’s 737 Max which was grounded globally after two crashes. The money is compensation for not being able to fly its fleet of 13 Max aircraft.

Uber unsafe: Dozens of women are suing Uber over alleged sexual attacks by drivers in various US states. A San Francisco law firm has submitted a court petition to group over 80 cases into a single legal action.

Done deal: Yamaha is all set to acquire the Bengaluru-based car and bike rental firm Drivezy, yet another victim of the pandemic, for around $45 million. Drivezy will continue to operate independently after the acquisition.

Help is here: The World Bank has approved a loan programme worth $500 million to help Indian workers overcome pandemic distress. The loan is to be repaid in 18.5 years, including a five-year grace period.

Can’t fly abroad: The ban on international flights from India has been extended until July 31 on account of the pandemic. Yet, the ones under the Vande Bharat Mission and “air bubble” pacts with 24 countries will continue to operate.

Age filter: TikTok has reported that it removed more than 7 million accounts during the first quarter of 2021 for potentially belonging to people under the age of 13.

Logged out: Vivek Sunder, the COO of food tech unicorn Swiggy, has resigned from his post, according to Entrackr.


Fun Signals 

Play-acting life: People have been flocking in droves to get a glimpse of the rustic life in Xiapu County in southeastern China. But nothing you see there is real. From the mist to the buffalo to the farmers, all are props creating a scene of bucolic life so you get the perfect shot for Instagram.

Mark, is that you? The Colombian Police are looking for two perpetrators of an attack on the helicopter carrying the Colombian president Iván Duque. One of them looks a lot like Facebook CEO Mark Zuckerberg. The doppelganger is wanted for a sweet, sweet reward of $3 million.

On the Market: Are you a fan of the paranormal? If so, the ruins of a haunted village are up for sale in Scotland for offers over $172,859. The last occupant of one of the ruins was a lady in the 17th century. She may have predicted the coming of the railway and seems to be still haunting the place.

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