Where does PolicyBazaar go now?

Also in today's edition: Zoom pays to settle, Reliance wants a bite, Moody's downgrades El Salvador

Good morning! Unacademy has raised another round of funding valuing itself at a little over $3.4 billion. But large companies raising large sums of money isn’t a differentiating factor anymore. The founder of the company tweeted that it wouldn’t be just a learning company anymore. It would be a large consumer internet company, which helps people find jobs and creators reach a wider audience.

On to the day’s stories:

  1. Jack Dorsey’s in the news. No, not for Twitter.

  2. After fake news comes fake rain.

  3. Has India taken a step closer to virtual currency?

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The Virus Marches On

The Covid-19 infection graph is turning upwards again in many countries, including India. Two forecasters who correctly predicted the trajectory of the second wave in India see the current spike turning into a surge but a smaller one than that of April-May. They expect it to peak in October.

South leads: Kerala is leading the national table with over 100,000 infections in the past six days. Neighbours Karnataka and Tamil Nadu are also reporting an uptick in numbers. The health ministry says this is not the third wave but the long tail of the second.

Global spread: In China, cases have now been reported from 14 of its 32 provinces, the most since the Wuhan outbreak in 2020. Rise in new infections has forced Sydney, Australia to extend a lockdown till at least the end of August. The US Centers for Disease Control warned last week that the delta variant would spread as easily as chickenpox and that “the war has changed”.

Silver lining: Meanwhile, Indian drug maker Glenmark hassigned a deal with Canadian biotech firm SaNOtize to bring its nitric oxide nasal spray to treat Covid-19 to Indian and Asian markets.


Jack Dorsey Gives BNPL Its $29 Billion Moment

Jack Dorsey, the bearded bitcoin evangelist and Twitter CEO just rode a fintech wave. Square, his other company, agreed to acquire Australia’s ‘buy-now, pay-later’ company Afterpay for $29 billion.

What is BNPL? ‘BNPL’ emerged as an alternative to traditional credit for young consumers who shop online and prefer to pay in installments for everyday items. These customers, particularly in the Gen Z demographic, are largely viewed as credit card skeptics.

Who else? Others in the space include the SoftBank-funded Klarna and American company Affirm, which recently went public. Closer home, Simpl, Lazypay, ZestMoney, and e-commerce companies such as Flipkart and Amazon offer BNPL.

What’s the big deal? Even with its pandemic tailwinds, BNPL is largely a Europe and Australia-centric phenomenon. While it is growing in the US, it currently accounts for about 2% of e-commerce transactions. Even established players like Visa and Paypal have been dabbling in the space. With the Afterpay buyout, Square, which already owns CashApp, could add more e-commerce-centric integrations.

By 2024, BNPL is expected to account for nearly 13% of all e-commerce transactions and with the market growing by 181% by then, Dorsey wouldn’t mind the last laugh (or tweet).


How Deep Is PolicyBazaar’s Moat?

Online insurance aggregator PolicyBazaar has filed for an IPO to raise $809 million. It commands an estimated 60% share of the online insurance distribution market which itself is only 1% of the overall market.  

Pandemic raises demand: The Covid-19 outbreak has boosted demand for health and life insurance products but selling them on the Internet perhaps has its limits. The company wants to put legs on the ground to reach remote but underserviced territories and sell to small and mid-sized businesses.

Brands leave: PolicyBazaar’s share sale comes at a time when many legacy insurance brands are dropping out of online marketplaces. HDFC Ergo recently delisted itself from PolicyBazaar, while ICICI Lombard and LIC have kept away from web aggregators.

The Signal

PolicyBazaar was the first player to distribute insurance online but that advantage has been levelled by rivals with smart digital marketing strategies. Insurers themselves have acquired digital marketing capabilities reducing dependence on PolicyBazaar. Those on its platform may have gotten wary when it got itself an insurance broking licence, becoming a competitor.

Aggregators sometimes run into conflicts with the sellers on their platforms. That happened with Amazon when it was reportedly using independent sellers’ data on its marketplace to develop competing products. Food-tech companies Zomato and Swiggy drew flak from restaurant owners who accused them of charging exorbitant commissions and masking customer data.


SMS to pay for fertilizers 

Even as the Reserve Bank of India works on a central bank digital currency, the Indian government has launched e-RUPI, its own mechanism for welfare transfers.  

Defined use: It’s a prepaid electronic voucher and will be delivered as an SMS string or QR code to the phones of beneficiaries of welfare schemes. The coupons, developed by National Payments Corporation of India on its UPI platform, are programmed to be specific to the person and purpose such as child welfare, fertilizer subsidy, and insurance. e-RUPI is backed by 11 banks, some of them only issuing vouchers while others both issue and accept them.

Old idea, new form: The government hopes it will help plug leakages in benefit transfers and reach its cash support to the intended citizens. The idea itself has been around in other countries. In the US, food stamps are part of the federal government’s nutrition programme for low income groups. India hadtoyed with the idea more than a decade ago but it remained on paper.


This Rain May Not Be Real

From the UAE to China, there’s a new recipe cooking to tackle sweltering heat: artificial rain. Thailand, Indonesia, and Ethiopia are also going to try it.

Gaining ground: With temperatures pushing 50°C in UAE and 37°C in China, governments are taking the weather into their own hands. China is inducing rainfall with unmanned drones. Beijing wants to cover 60% of the country's landmass under its fake rain program by 2025. Cloud-seeding operations use drones to spew chemicals like silver iodide into clouds. Another technique shoots electrical charges into the sky.

Consequences: While engineered rain can bring respite from heatwaves and droughts in the short run, they can lead to negative implications like acidification of oceans to metal toxicity in the long run. India is worried such projects could add to global tensions. The effects of artificially altering weather are also not fully understood and changes at one end of the globe could impact another.


What Else Made The Signal? 

Paying a bomb: Zoom will pay $85 million to settle a lawsuit claiming privacy violation when it shared personal data with Google, Facebook, and LinkedIn which let hackers ‘Zoombomb’ meetings.

Biggies go all out: Hedge funds, mutual funds and sovereign-wealth groups poured into startups this year, pushing aside venture capitalists. Investments in US startups totaled $150 billion in the first half of 2021, exceeding even pre-pandemic funding.

Grabbing the sub: Reliance Retail is eyeing QSR chain Subway’s India franchise for $200-250 million. Subway has ~600 outlets across the country.

Chop chop: Moody's Investors Service has downgraded El Salvador's rating over uncertainty about new funding from the IMF since adopting bitcoin as legal tender.

Hush fake news: YouTube has suspended Rupert Murdoch’s Sky News Australia from posting on its platform for a week for uploading fishy clips about the pandemic.

New ‘Sunshine’: Reese Witherspoon’s Hello Sunshinewhich produced shows like ‘Big Little Lies’ has been sold for $900 million to a media company backed by private-equity firm Blackstone.

Fun Signals

Hotel for pigs: China has some unique ideas. It has now come up with condominium-style hotels for pigs to keep them safe from diseases. Some are as high as 13 stories, complete with security cameras, monitored meals, veterinary facilities, and restricted access.

TikToker games: In the age of TikTok, delayed gratification is no longer a concept. This Olympics is having its key moments there instead of prime-time television. From Simone Biles’ exit to behind-the-scenes dorm room competitions from the athletes themselves, this year’s games are wildly different from any in the past.

Panoramic jump: The world’s highest bungee jumping spot has opened up in China at the Zhangjiajie Grand Canyon Glass Bridge. Visitors can take a plunge from a 430-meter-high glass-bottomed suspension bridge that gives them a literally breathtaking view of the Wulingyuan wilderness.

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Update: In yesterday’s edition, we mistakenly referred to Scarlett Johansson as Scarlett Johannson. Our apologies.