Rishi Taparia - Issue #40
This week we look at Walmart finally beating out Amazon (resulting in Softbank having a Jerry Maguire moment), Square going up market with an acquisition, Instagram getting into payments, China’s effort to change childhood education, the overlap between the Vatican and AI and more. Enjoy!
Commerce
Walmart Beats Amazon in $15 Billion Flipkart Battle
In what has felt like a one sided battle, Walmart finally put some points on the board. Flipkart’s board has approved an agreement to sell about 75 percent of the company to a the retail behemoth for approximately $15 billion in a massive win for all involved. Another point of note - Google is likely to invest in the business along side Walmart. And, for the doubters of Softbank, scoffing at the Vision Fund and how they could possibly return $100bn - well, it seems one billion at a time. Supposedly SoftBank, the largest investor in Flipkart, will cash out its 20% stake for approximately $4bn.
Macy’s Acquires Concept Shop STORY
In the latest episode of Acquiring our way to Innovation, Macy’s has acquired STORY, a concept store based in New York City. Rachel Shechtman, STORY’s founder and CEO will join Macy’s as their brand experience officer. STORY’s model was to transform a space month by month, rolling out new concepts to customers, taking the results and iterating from there. An appropriate strategy, but difficult concept to execute at scale without buy in. Hopefully Ms. Shechtman is given flexibility to push hard.
How Square’s Deal for Weebly Sets the Stage for Expansion to Bigger Merchants
Last week Square bought website creator Weebly for $365 million in a mix of cash and stock. The deal makes a lot of sense - Square is building out a ‘business in a box’ concept that now extends further online. The integration into the current onboarding process will be key to future success, but this is a great move by a company continuing to surprise on the upside.
FinTech
Instagram quietly launches payments for commerce
“Shopping on IG” is a phrase you’re sure to hear in the near future. Ok, maybe not exactly, “Shopping on IG” since that’s probably how the kids are talking these days, but you get the point. Instagram added a feature that now lets users “register a debit or credit card as part of a profile, set up a security pin, then start buying things without ever leaving Instagram.” I wouldn’t be surprised to see an Apple Pay integration to come shortly, but expect to see Insta make a major push with retailers, hopefully reporting on GMV in the future.
Amazon Offers Retailers Discounts to Adopt Payment System
Amazon is a major retailer and gets major discounts on payments processing. Now, in order to drive adoption of Amazon Pay, Bezos Inc. is offering to pass along the discounts it gets on credit-card fees to other retailers if they use its online payments service.
Banks and Fintechs: Adversaries or Partners?
Fintechs v. Banks is everyone’s favorite present day David v. Goliath story (ok, by everyone I mean some people…look in the mirror, you know who I’m talking about). Small, scrappy upstarts taking on large, slow moving behemoths with massive influence. Is partnership not actually better for both? I personally don’t believe banks are going anywhere anytime soon, and fintech companies are ill-advised to think they will magically win just because incumbents seem to not have their s*** together. My general advice to both sides: make love, not war!
SRC and W3C – Noyes Payments Blog
For my payment nerds out there, this post by Tom Noyes includes some great history, background and analysis on Secure Remote Commerce, EMVco’s (i.e. the card networks) attempt to exercise some control over online transactions via a common standard. Tl;dr - it would have been smart to have done this a decade ago but now Apple and Google control the experience so the networks will have to get more strategic in their incentives to the key acquirers and the W3C in order to not lose out to the likes of Ant, Apple, Google, and Paypal.
Technology
China’s children are its secret weapon in the global AI arms race
The subhead of this article is “China wants to be the world leader in artificial intelligence by 2030. To get there, it’s reinventing the way children are taught”. Needless to say, spend some of Sunday with this #longread.
Random Tidbits
Artificial Intelligence Opens the Vatican Secret Archives
Artificial intelligence unlocking ancient intelligence. Having just gotten back from Rome, this article got me all sorts of excited. The miles of manuscripts in the Vatican Secret Archives have been impossible to transcribe at length until now - how can you not to be excited at the prospect of an open and digitized Papal Archive!
Quote I’m thinking about (courtesy of Jeff Bezos): To laugh often and much; To win the respect of intelligent people and the affection of children; To earn the appreciation of honest critics and endure the betrayal of false friends; To appreciate beauty, to find the best in others; To leave the world a bit better, whether by a healthy child, a garden patch, or a redeemed social condition; To know even one life has breathed easier because you have lived. This is to have succeeded. - Bessie A. Stanley (often misattributed to Ralph Waldo Emerson)