Finding Unicorns

Finding Unicorns


By Keith Teare • Issue #20 • View online

2021 has been a good year so far for technology startups. 166 unicorns have been minted already, more than all of 2020. But how do you find a unicorn?

Contents

Editorial

It has been a very hard few weeks for almost every asset class. Stocks, SPACs, The US $, Bitcoin and DOGE coin, but not for startups.

The famous Gené Teare (at least in this newsletter) writes in CrunchBase News that 2021 has already seen 166 private companies surpass $1 billion in valuation, and become unicorns. It is only May and in the whole of 2020, there were only 163. This is not a bubble. The companies in the list (see the article below) are all fast growth, revenue-generating machines focused on real human needs or desires.

The investors who find these unicorns return fabulous profits for their investors. The earlier investors returning multiples of 10,00x and more. The later stage investors returning 3–10x in short order. But it is hard to get into these companies. The leading investors in seed, venture, and growth stages have succeeded in placing capital into unicorns regularly. As I explained last week, my new startup, SignalRank Capital is focused on partnering with the leading seed funds to support them in their best companies. Our goal is to be a listed fund, enabling retail investors to benefit from our investments by owning our stock. Let’s come back to this editorial in a couple of years to see how we did. Meanwhile, go read Gené’s article.

And now this …

AT&T is having a hard year. First deciding to exit Satellite TV with the proposed sale of DirecTV. Now spinning out Warner Brothers Media and merging with Discovery as its way of exiting its recently purchased media business. Verizon selling Yahoo recently is small potatoes by comparison.

The range of choices for streaming media is growing by the second. Netflix, Apple TV+, Amazon Prime, Hulu, Disney Plus, HBO Max, Peacock, Paramount Plus, And then all the sub-brands that you can buy for additional fees, Britbox, AMC plus, Showtime, Epic, Cinemax, MHz, PBS, Acorn, Topic, Starz and hundreds more. Each of the big ones is a bundle. Disney Plus can have ESPN and Hulu bundled. Hulu can have 60 channels of live streaming. And so on.

Now there are plans to split some into advertising-supported and advertising-free versions, in return for lower subscription fees for the ad-supported versions.

There is a fight for consumer attention, with all candidates needing a great library with regular fresh content serving its preferred demographic.

Streaming has won. But who wins streaming is far from over. AT&T has realized that it does not have the nous to be in this fight, never mind win it. The Warner/Discovery deal is to intended to create an entity that has a shot in the game.

My own belief is that we are at a halfway house in a likely end game. One where we pay for what we watch, not for what is in the bundle. Everybody will resist that end game because it will shrink what we spend on unmatched media. But it will come. The bundles are largely bloated, and unwatched. That can’t be sustainable.

The smart players are producing globally licensed content for globally distributed brands and going direct to consumers. Netflix started it. Amazon and Apple joined. Now HBO, NBC, Paramount, and others are jumping in. This is our current world. In the future, we will only stay loyal if we can get what we want, when we want it, and not pay for things we do not wish to see.

More in this week’s video with Andrew Keen and Steve O’Hear.


Finding Unicorns

Growth Firms, Not VCs, Are The Most Active Investors In New Unicorns This Year, And They’re Doubling Down — Crunchbase News

Less than halfway into 2021 there are 166 new unicorn companies, compared to 163 for the whole of 2020. New York-based hedge fund Tiger Global Management is the most active investor in the 2021 crop of new unicorns as well as in private unicorn startups overall.

news.crunchbase.comShare

The Angel VC: The growing dissonance between two business models (SaaS and VC)

In our weekly investment team call earlier this week we decided to pass on two early-stage SaaS startups that were both on track to grow f…

christophjanz.blogspot.comShare


Life, Death, and Streaming

Being a media company used to be cool. Now everyone wants out. — Protocol — The people, power and politics of tech

Your five-minute guide to what’s happening in tech this Tuesday, from telecoms ditching their media companies to Parler’s return to the App Store.

www.protocol.comShare

AT&T Agrees to Merge Its WarnerMedia Assets With Discovery — WSJ

The deal would merge the telecom giant’s media assets, including CNN and HBO, into a new company, unwinding AT&T’s big bet on entertainment after less than three years.

www.wsj.comShare

Weapons of mass (value) destruction

Telecom companies tend not to be particularly good at anything, including running their own businesses. They never seem to learn — only to spend incompetently on expansions into new markets involvi…

om.coShare


Bitcoin and Banking

Research: Bitcoin Consumes Less Than Half The Energy Of The Banking Or Gold Industries

A recent report from Galaxy Digital found that the Bitcoin network consumes less than half the energy consumed by the banking or gold industries.

bitcoinmagazine.comShare

Stanley Druckenmiller: Current Fed policy is totally inappropriate

Stanley Druckenmiller, CEO of Duquesne Family Office, and Christian Broda, managing director at Duquesne, argued in an op-ed for the Wall Street Journal that…

www.youtube.comShare

Dollar Falls to Three Years Low as Deficit Nears $2 Trillion — Trustnodes

All the latests news on Crypto, Blockchain, Bitcoin, Ethereum, Tokens, ICOs, Fintech, and more.

www.trustnodes.comShare


Betting on our Remote Future

Zoom is launching a dedicated Events platform | Engadget

Zoom is launching an events platform that builds on its OnZoom beta test to offer a hub for online and real world gatherings..

www.engadget.comShare


Personal News

Legal & General appoints Head of Venture Capital Investing

Legal & General Capital (LGC) has appointed Peter Maher as Head of Venture Capital (VC) Investing, supporting the growth of its SME Growth Equity platform.

www.privateequitywire.co.ukShare


Startup of the Week

Amount, which helps banks modernize and compete with fintechs, raises $99M Series D at a $1B+ valuation (Mary Ann Azevedo/TechCrunch)

Mary Ann Azevedo / TechCrunch: Amount, which helps banks modernize and compete with fintechs, raises $99M Series D at a $1B+ valuation — Amount, a company that provides technology to banks and financial institutions, has raised $99 million in a Series D funding round at a valuation of just over $1 billion.

www.techmeme.comShare


Tweet of the Week

https://thatwastheweek.com/media/d3b63c8b04ff6c215042d84eb461d96c

Vertical farming startups: the competitors, compared — Sifted

A growing number of vertical farming startups — businesses using a style of high-tech farming where crops are grown on stacked trays indoors — have popped up in Europe over the past decade.

Their mission? To create a more sustainable and less seasonally-dependent food chain — and, possibly, make heaps of money doing so. Over 6bn people are projected to be living in urban areas by 2050, and vertical farming could offer a more land — and water — efficient way to feed them than traditional farming. The market is projected to grow substantially in the next few years, and reach $12.77bn by 2026, up from $2.23bn in 2018.

Leading the pack — at least in terms of funding — is Infarm, a Berlin-based startup founded in 2013 which has raised more than $300m since launch from big investors like Atomico. But it’s not the only vertical farming startup catching the eye of VCs: France-based Jungle raised €42m in March 2021, while UK-based Jones Food Company raised $10.9m in June 2019.

sifted.euShare

Capital-Intensive Agriculture Sector Plants Seed For Additional SPACs In 2021 — Crunchbase News

Capital-Intensive Agriculture Sector Plants Seed For Additional SPACs In 2021 Crunchbase News

When CEO David Rosenberg wanted to take AeroFarms public, he considered a traditional IPO, but soon decided that a merger with a special purpose acquisition company provided a better path to the public markets for his startup, which grows crops in vertical indoor farms.

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He soon found a match with Spring Valley Acquisition Corp., a $232 million SPAC that went public last November and was looking for a business in the sustainability sector to acquire. In March, the companies announced that AeroFarms would go public via a merger with Spring Valley in a deal valued at $1.2 billion.

The merger is among a growing number of agricultural and food-related technology startups that are choosing SPACs, also known as blank-check companies, as their path to the public markets.

Expect to see between four and seven more agriculture technology SPACs this year, according to Sanjeev Krishnan, managing director of S2G Ventures, a Chicago-based venture firm that invests in food and agriculture startups

news.crunchbase.comShare


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