🤔 Too big to fail?
China's Evergrande crisis intensifies, Freshworks makes its big US debut, SoftBank backs fantasy sports NFT game Sorare, and some more updates.
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First up,
Market Recap 📈
Indian equity benchmark indices reached fresh all-time highs led by industry heavyweights, including Reliance Industries and the HDFC twins. Meanwhile, US stock futures rose after Federal Reserve pledged to keep its bond-buying program.
Sensex: 59,885.36 (+1.63%) ↑
Nifty 50: 17,822.95 (+1.57%) ↑
Dow Jones: 34,258.32 (+1.00%) ↑
Nasdaq 100: 15,176.51 (+0.99%) ↑
Bitcoin: $43.806.73
Top Stories 📰
1. Freshworks goes public 💰
A historic moment for India's tech industry.
Freshworks, a Chennai-based SaaS startup, finally makes its debut in the US, raising more than $1.03 billion in its IPO and becoming the first Indian software firm to list on the Nasdaq.
"I feel like an Indian athlete who has won a gold medal at the Olympics," said CEO Girish Mathrubootham before ringing the opening bell.
The company sold 28.5 million shares at $36 per share. But, growing investor interest in the California-headquartered company led to a massive surge, which bumped its share price to $48 and took its market capitalization to $13 billion. It will also benefit over 4,300 employees of Freshworks who have employee stock options—500 of whom will now become crorepatis.
Founded in 2010, Freshworks was last valued at $3.5 billion, when it raised $150 million from investors, including Accel, Sequoia Capital, and CapitalG in November 2019. It joins dozens of other firms that previously listed on US stock exchanges, such as HDFC Bank, Infosys, WNS, and Wipro.
The company plans to use the fresh capital toward general corporate expenses and acquiring complementary products, services, and technologies.
Why it matters? The listing has sparked new enthusiasm from venture capitalists, private equity funds, and hedge funds amid the growing digitisation and adoption of remote work during the Covid-19 pandemic.
2. Evergrande's debt crisis 🏠
Evergrande, China's second-largest real estate developer once considered 'too big to fail', is now on the brink of collapse.
As the company nears its $300 billion debt repayment deadline this week, the global economies raise concerns about its massive spillover. As per Refinitiv data, $2.2 trillion was wiped off the market capitalization of world equities on September 20.
The revelation comes after China's Ministry of Housing and Urban Development said last week that the company won't be able to meet its debt obligations. For context, Evergrande's liabilities account for 6.5% of the total Chinese property market liabilities and are 9% of the overall Chinese offshore bond market financing.
What about the spillover? Global markets reported a sharp sell-off after iron ore prices fell as the Chinese government levied restrictions on industrial activity. For India, the news further intensified the selling of steel, metals, iron ore, and chemical stocks, with analysts expecting textiles and garments to fall if China's government refuses to step in.
So far, the People’s Bank of China has responded to the crisis by injecting 90 billion yuan into the banking system, with plans to add another 100 billion yuan by the end of this week. But eventually, the extent of the spillover depends on whether Evergrande fully liquidates or restructures.
Why it matters? This massive failure of Evergrande, which many considered to be the bellwether of China's property market and a gauge of investors’ risk appetite for broader offshore markets, has left some to speculate: could it be China's version of the Lehman Brothers?
Deal Street 🤑
SoftBank backs NFT fantasy gaming firm Sorare
Sorare, a Paris-based global NFT fantasy soccer collectible gaming platform, raised a $680 million Series B funding round led by SoftBank. The round, which is the company's biggest round so far, values the company at $4.3 billion as investors remain bullish on the combination of fantasy sports and blockchain games. Founded in 2018, Sorare has more than 600,000 registered users on its platform and has licensed players from around 180 soccer organizations like Liverpool, Juventus, and Real Madrid, among others. Since last year, the company's sales rose 51 times, while its monthly active paying user base grew 34 times. It now plans to use the fresh capital for hiring new people and acquiring new licenses for its NFT products.
Portal fetches $8.5 million in Coinbase-led funding round.
Self-hosted Layer 2 wallet Portal has closed an $8.5 million funding round to create a self-sovereign and uncensorable DeFi on Bitcoin. GenBlock, Coinbase Ventures, and Autonomy Capital participated in the funding round, along with senior executives and founders of Tether (USDT), Ethereum, Blockstream, Polymath, MobileCoin, and others. The announcement comes a month ahead as the San Francisco-based firm plans to sell its public token on Republic.co launchpad. Portal not only facilitates fast and secure swaps between Bitcoin and other digital assets but also offers the speed and liquidity of centralized platforms with trust minimization guarantees that can help the company unlock Bitcoin’s potential to decentralize finance.
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