We talk to startups and investors, you get the value.
We talk to startups and investors, you get the value.
Hey friends! We are glad to come back with our traditional VC market news digest! The summer is over, the panic around COVID-19 subsided a bit, the IPO market and venture capital investments in general began to revive. We have a lot to tell you, let’s begin.
Today we will talk about:
Investment in a business networking project from sunny San Francisco Lunchclub;
Successful investments of a live video shopping service Bambuser from Sweden;
Announcement of a dating startup from the former top manager of Tinder — Bumble — that is going public;
Preparations for the NYSE of a esports startup Skillz, most importantly, with the help of SPAC.
Lunchclub is a project for expanding a professional network of contacts. In fact, it is a match for professional and business interests: you simply describe your background, interests, goals, and AI connects you with a relevant person in a face-to-face video chat. This format appeared only during isolation times. At the time of its foundation, in 2017, the startup was an offline dating application in San Francisco, New York and other major cities.
Now, tens of thousands of useful meetings and acquaintances take place on the platform every week, which is 10 times more than it was before the pandemic.
The startup recently raised $24.4 million with a valuation of more than $100 million, with Coatue and Lightspeed Venture Partners leading the round. Early investors in the project include Andreessen Horowitz, which led the startup’s $4 million Seed Round in September 2019.
The new round of funding will significantly increase the company’s runway: these resources will be dedicated to improving the technology of matching, as well as finding monetization options. Now there are several ideas for rewarding a startup team: for example, if using their service it is possible to find employees or raise investments in startups, as well as to introduce employees within large organizations.
What does it mean? Matching people based on their interests is not a new idea, but it gained a second wind after the coronavirus crisis. The project used to try to bring people with the same interests in real places, but now people do not need a live presence. With all the variety of social networks, it is important for people to communicate with like-minded people and it doesn’t matter what exactly they agree on: in music tastes, fashion or views on politics. Any solution that allows you to find and connect two people is of interest. I think that the founders will continue to work on the accuracy of matching, because the more people are happy with the meetings, the more likely they will recommend it to others and spread the product.
Skillz startup was founded in 2012 in San Francisco. It allows any mobile game on Android or iOS to turn into a tournament: attract other players (friends or strangers) and play together for prizes, points or financial rewards.
Today, the platform hosts many tournaments on a daily basis, which gives indie developers a new source of income: Skillz estimates that in 2020 their platform will be able to host more than 2 billion casual esports tournaments, and will hold $1.6 billion in buy-ins per year for games hosted on her platform. More than 2.7 billion gamers play on the platform every month, and more than 10 million developers are represented on the platform itself.
The company announced its listing on the New York Stock Exchange this fall. Skillz opted for a merger with a Special Purpose Acquisition Company (SPAC). Flying Eagle Acquisition will partner in the Skillz deal. The company expects to raise $849 million with a pre-money estimate of $3.5 billion. This estimate is 6.3 times higher than the company’s projected revenue in 2022.
To date, according to Crunchbase, the total investment raised by Skillz is $291.6 million. The investment was received in 10 rounds from 16 investors.
What does it mean? eSports on mobile? It didn’t sound good as real hardcore players only play PUBG and Fortnite. But the guys from Skillz strategically made the right move towards mobile games — and they paid off! It has long been known that people do not just want to play, they are interested in competing with each other, this has a very good effect on Retention, as a result, such games earn better. Just like Roblox, the platform takes all the headache with networking protocols, scalability, advertising and cross-promotion — great solution!
Bumble is, in a way, a unique dating app, because women take the first step here. The project was founded in 2014 by Whitney Wolf Hurd, ex-top manager of another popular dating app — Tinder. The service, along with dating apps Badoo, Chappy and Lumen, belongs to the MagicLab holding, which until November 2019 belonged to Andrey Andreev. But last year Blackstone Group acquired a controlling stake in Bumble, then the entire MagicLab was valued at $3 billion.
The company recently announced its intention to go public, Bumble expects a valuation of $6 billion to $8 billion and is already in talks with banks.
What does it mean? It’s amazing how Bumble found its place in the overheated dating market. In fact, this is a dating app for women, because the founders decided to change the rules of the game — now women can initiate dating and meetings. Service and community help them feel protected! Bumble is positioned not only as a dating app, but also as professional dating and an app for searching for people of interest near you. This project says one thing: having a clear positioning is very, very good for a business, since it allows you to clearly target your audience and give them a unique advantage.
A startup from Stockholm, Bambuser, managed to raise $45 million in 2020, even during the global COVID isolation ($34.5 was just raised during the pandemic). The startup is a SaaS solution that allows companies to sell products in live video mode, the startup started using this model 2 years ago, in its current form the startup was launched last fall.
The pandemic and, as a consequence, the relative frozenness of the retail industry gave the startup business a new impetus in development. The company’s offer is used by such brands as H&M, Motivi, Moda Operandi, Frame, LUISAVIAROMA and Showfields. Brands turn to Bambuser because they want to offer their customers a live shopping experience while retaining the brand, owning customer data and the transaction itself — this is the difference between a startup and e-commerce platforms and social networks. In the second quarter, Bambuser’s net sales grew 669% year on year.
The total amount of investments in the startup since its inception in 2012 is $62.4 million. The investors in the last round were Consensus Asset Management, Handelsbanken, Harmony Partners, Lancelot Asset Management, Tenth Avenue Holdings and TIN Fonder. This quarter, the startup plans to open an office in New York, by which time the United States has become the largest market for the project.
What does it mean? Old sales formats (offline stores, shopping malls, etc.) began to work poorly, recently we have seen network sales grow, in particular, on Instagram. Selling goods in real time with only a phone nearby is a great idea, because it is no different from the “store on the couch” format, except that ordinary people, not professionals, talk about the goods. Perhaps I will buy a product, depending on who and how it presents it to me, this is where the main distraction component lies. I am sure that a celebrity with a large number of subscribers can sell thousands of items per minute, talking about the merits of a particular product.