| Here's your daily business briefing. - 🚜 John Deere partners with SpaceX
- 🍔 Deep Dive: Chick-fil-A dominates industry
- 💰 U.S. startup funding slumps 30%
Thanks for reading! Shriram
p/Shriram | |
| 1 | | The world's largest farm machinery manufacturer, Deere, has partnered with SpaceX's Starlink to provide satellite internet connectivity for its digital farming initiatives, connecting equipment in internet-deprived areas. This collaboration aims to utilize Deere's digital products and Starlink's satellite fleet for automation in planting and harvesting in remote locations. More: - Starlink is well-known for offering high-speed internet via its network of roughly 5,300 operational satellites in orbit.
- Deere's Starlink service will debut in Brazil and underserved U.S. regions later this year, featuring custom antennas for challenging conditions.
- Deere ($DE) has invested in digital farming, such as driverless tractors for field plowing and software for herbicide sprayers to differentiate between crops and weeds.
- The collaboration tackles the problem of poor Wi-Fi coverage on roughly 30% of agricultural land in the U.S. and a worse connectivity shortfall worldwide.
- For Starlink, which wants to expand its clientele for internet services outside of highly populated areas, the agreement represents a major boost.
Zoom Out: - According to The Wall Street Journal, Starlink's revenue increased to $1.4B in 2022 from $222M in the previous year.
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What the numbers say: Chick-fil-A's market share in the chicken fast-food segment grew to 45.5% in 2023. It also ranks as the third-largest U.S. restaurant chain with $8.7M in annual per-restaurant sales, despite being closed on Sundays. McDonald's, the largest chain by sales, has roughly 14,000 locations but sees lower average annual sales per restaurant at about $3.7M. Relevance: Chick-fil-A's success, marked by high sales and customer loyalty, has influenced competitors like McDonald's and Popeyes to introduce new chicken sandwiches. Chick-fil-A's expansion into liberal areas like New York City and Seattle reflects its resilience against negative publicity related to its support of anti-LGBTQ organizations. More data: Chicken consumption in the U.S. is set to reach 101.7 pounds per capita in 2023, driving Chick-fil-A's market share growth amid expansion plans, including international ventures in the U.K. and Asia by 2030. | | | |
| 3 | | In 2023, U.S. startup funding fell by almost 30% to $170.6B, down from $242.2B in 2022, driven by valuation adjustments and rising interest rates. Despite the decline from the 2021 peak of $348B, AI startups stood out, securing one-third of the total U.S. investment. More: - The popularity of OpenAI's ChatGPT propelled investments in AI and fueled an investor frenzy.
- OpenAI and Anthropic, two AI laboratories specializing in building large language models, accounted for 10% of the deal value in 2023.
- There were 3,934 completed agreements in the fourth quarter, indicating a slight upswing in deal activity and probable market stabilization.
- The percentage of startups with lower valuations than in earlier rounds rose from 8% in 2022 to 20% in 2023, suggesting a widespread valuation reset, especially for late-stage businesses.
- In 2023, U.S. venture capital raised $67B, a 60% YoY drop to a six-year low, potentially affecting startups' capital needs amid a fundraising slowdown.
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| 4 | | The JPMorgan Healthcare Conference highlighted the growing interest in antibody-drug conjugates (ADCs) for cancer treatment, exemplified by Johnson & Johnson's ($JNJ) $2B acquisition of Ambrx Biopharma ($AMAM). Pfizer ($PFE) and Merck ($MRK) are also actively pursuing ADC-related deals as key growth drivers in the pharmaceutical sector. More: - Analysts expect ongoing ADC interest due to enhanced technology confidence, extended market exclusivity, and attractive propositions from Asian drugmakers.
- With a projected revenue of around $9.7B in 2023, the ADC market will reach $31B of the $375B worldwide cancer market by 2028.
- ADCs emerge due to technological advancements, rendering updated versions more secure and profitable.
- Among the businesses making significant investments in ADCs are Merck and Pfizer; by the early to mid-2030s, Merck anticipates $20B in additional sales of cancer drugs.
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| 5 | | CES 2024 featured many companies unveiling AI-powered products, from snore-reducing pillows to mood-detecting mirrors, and showcased innovations like pet-like companions and cars integrated with the ChatGPT chatbot. In contrast to earlier, more narrowly focused themes, the dominant subject this time was the widespread acceptance of AI. More: - Non-tech firms, such as Walmart and L'Oreal, showcased their AI strategies, highlighting the use of generative AI to improve customer product discovery.
- Volkswagen and other automakers have revealed plans to include ChatGPT in their vehicles for informational and control purposes.
- CES 2024 emphasized the shift to experiences powered by technology, with chipmakers Nvidia and AMD unveiling processors for the next-gen AI products.
- Analysts highlighted a trend of companies investing in AI technologies without fully defining use cases, emphasizing the anticipated ubiquity and seamless integration of AI in the coming years.
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| 6 | | Microsoft has become the world's most valuable company, surpassing Apple, with a record market capitalization of $2.887T compared to Apple's $2.875T. Apple's shares experienced a 3% decline in 2024 amid concerns about smartphone demand, following a substantial 48% rally in 2023. More: - Microsoft's 3% YTD increase, following a 57% surge in 2023, is attributed to its leadership in generative artificial intelligence via investments in OpenAI.
- Microsoft's cloud computing business saw a boost in the July-September quarter due to the integration of OpenAI's technology.
- Apple faces subdued demand, particularly in China, where economic recovery is slow, and competition from Huawei has eroded market share.
- UBS expects Apple's Vision Pro mixed-reality headset, launching on Feb. 2, to have a limited impact on the company's 2024 earnings per share.
- Microsoft and Apple have high forward price-to-earnings ratios, with Apple at 28 and Microsoft at 32.
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| 7 | | Quick Hits: *This is a sponsored listing. | | | |
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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