Happy morning, Munchers! 🙏

As always, here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 43 seconds.

Yesterday, a robot pizza startup went in the bin, Middle Eastern buyers bid big for commodity powerhouses, and an Indian pet food brand raised big bucks. 🔥

Let’s dive in.

What’s hot, what’s not?

Market Commentary

• Higher rates are starting to bite the junk bond market - with higher junk loan defaults and a significantly higher cost of capital.

• China’s rate cuts yesterday caused a few jitters - they might not be cutting because they can. They might be cutting because they need the stimulus.

• FTX’s bankruptcy is gonna be pretty expensive. Total legal fees, admin costs, and general red tape is gonna come in at over $200 million. ☠️

Story Roundup

1 - Zume got cooked. Probably overcooked. 🍕

Zume is a company that makes pizzas with robots, then cooks them with robots, then delivers them with robots.

In 2020, they raised money at a $4 billion valuation.

Last week, they shut their doors for good.

When you ordered a pizza from Zume, a robotic driverless truck would immediately start coming to your location.

Inside this truck would be a robot pizza assembler and an oven - which means that the food gets to you in 8-12 minutes.

While the idea sounds laughably insane, Zume was backed by some of the big shots like SoftBank.

There are a few fundamental problems with a business model like this -
- one “robot van” can only be deployed for one customer at one time. The capex to scale would be MASSIVE.
- people aren’t THAT excited about a concept like this. Reviews said that Zume’s pizza was a little sub-standard and fell flat in comparison to other “real” pizza makers.
- the robots simply weren’t as efficient as humans - plus any tech errors meant that the entire customer experience goes for a toss.

Our timeline is CRAZY. 💀

2 - Middle-Eastern buyers rush for commodities. 🧱

State-backed Arab countries are becoming super ambitious.

They’re splashing cash like crazy on all sorts of opportunities.

In the last 24 hours, almost $20 billion in potential deals have emerged -
- Saudi’s PIF might be buyingg a $2.5bn stake in Vale (metals and mining)
- Abu Dhabi’s ADQ bought a $739 million stake in Nio (Chinese EV)
- Abu Dhabi’s ADQ also held talks to buy out investment bank Lazard.
- UAE’s Adnoc made an approach for Germany’s Covestro at a $12.5bn valuation (chemical production)

Appetite is big, and business is booming.

Forget the American dream - we’re looking at the Arabian dream here. 🛢️

3 - Indian pet food brand scoops cash at a $600mn price-tag. 🐶

Louis Vuitton and dog food don’t go well together.

But yesterday, they complemented each other very well.

LVMH’s private equity invested $60mn at a $600mn valuation into a grassroots Indian pet food brand called Drools.

This is one of the largest investments into the Indian pet care industry to date - and it’s also a massive vote of confidence.

Drools has 1.800+ employees on it’s payroll who manage 650+ SKUs across 35,000 retail outlets in India.

A capital infusion this big is gonna be a nice vote of confidence for other emerging market startups in the D2C vertical.

Funding winter who? 😺

4 - Illuminate raises $250mn to splash on B2B finance companies. 💸

Everyone keeps talking about the “slowdown”, but the big bucks are still flowing.

Illuminate is a UK-based VC, and they just raised their third $235mn fund.

Their thesis is very interesting.

Global financial institutions spend over $57 billion annually on maintaining outdated financial software, payments systems, and money-transfer networks.

Any robust digital asset infrastructure could take care of this problem in a snap.

And that’s where Illuminate throws mud at the wall to see what sticks.

They’ve invested in over 35 finance infra companies and this fund is gonna give them the firepower they need for tons more.

Big bucks. 🤷

5 - OLX decides to make some hard choices. 🔪

Things are looking real difficult for OLX -
- they’ve had to shut down the OLX Autos business
- they just laid off another 1,000 workers
- their financing businesses are facing a credit crunch

General mood for (most) VCs is that they won’t be taking too much undue risk and they still prefer safe bets on relatively low-risk companies.

Sign of the times…

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Cheers, and have a lovely day. 🙏

Aryaansh