Hi, it’s Alexandre from Idinvest. Overlooked is a weekly newsletter about underrated trends in the European tech industry. Today, I’m sharing the most insightful news of April.
For 2020, I want to pick one piece of news per day and write a short comment about it. I want to talk about something that strikes me. Something that happened in the tech ecosystem. Here is the issue for April!
Please note that the date picked for each event is not always the exact date of the event but the date I decided to write about the event.
Notion did not have to raise money but wanted to make sure that the company would survive even with a long economic downturn. With a $50m ticket at this valuation, Index will have only a 2.5% stake in the company which is not the usual unit economic for a venture round (15-25% dilution per round).
Notion is my favorite productivity tool discovered in 2019. We use it at Idinvest as an internal wiki but also as a project tracker and as a note repository for all our meetings with entrepreneurs.
I love the horizontal positioning of the tool that can be suited for many different use cases and its flexibility which means that it can replace many different tools at the same time (Google Docs, Trello, Pocket, Recruiting Pages, etc.).
Notion became mainstream in 2019 (with 1m users to 4m today) but it’s not an overnight success as the company was founded back in 2013 and struggled until 2016.
Thursday, Apr. 2nd: US-VC fund General Catalyst raised $2.3bn in commitments across three funds: (i) a $600m early stage fund, (ii) a $1bn growth fund ($10m+ annual sales) and a $800m “endurance fund” ($100m+ annual sales). $1.4bn were raised for an early stage and a growth funds back in 2018. Like other big players in the venture capital industry, General Catalyst is expanding its dry power in late stage to be able to compete with newcomer Softbank. I’m curious on how General Catalyst will execute this late stage strategy in the coming months. I guess the fund will start by signing a big check to support its portfolio company Airbnb during these harsh times. (Techcrunch, Forbes)
Friday, Apr. 3rd: The number of Zoom’s daily active users (DAUs) jumped from 10m in December to 200m in March. Zoom is probably the best illustration of the consumerisation of IT i.e. the idea that corporate services should be as easy to use as consumer ones - so much so that millions of people stuck have started to use Zoom to communicate with friends, to follow virtual gym classes, to attend to primary school classes etc. The below mapping gives a good overview all the verticals in which Zoom has been able to penetrate - almost against its will. (Zoom, The Economist, Medium)
Saturday, Apr. 4th: Crypto-exchange Binance acquired CoinMarketCap (CMC) for $400m. CoinMarketCap is an aggregator for crypto price and volume data. Binance could push for a switch in business model from ad-based to subscription-based paid by exchanges wanting to be included on the website. 207.2m people visited CMC in the past six months. It has become the first place to go for crypto newbies which makes it a perfect target for an exchange aiming at reducing its customer acquisition costs. (VeradiVerdict, The Block)
Sunday, Apr. 5th: Yapily raised a $13m series A led by Lakestar. Existing investors Localglobe and HV are also investing. It’s another European open banking platform (with Tink and TrueLayer) to let financial service providers and merchants connect to users bank accounts.
Airbnb private valuation is said to have declined from $31bn to $26bn in the month before this operation.
Airbnb was planning to go public this year. It seems to be complicated to maintain this agenda - even if the company has an issue with stock options plan for early employees that are supposed to expire next year.
Tuesday, Apr. 7th: Blossom launched a $5m angel investment program called Cultivate and aiming at (i) investing in people leaving unicorns to build their own business and (ii) growing a network of European angels with tech founders and executives.
Blossom will write $250k cheques for each startup picked by their network of business angels.
30 angels will be selected. Des Traynor (cofounder of Intercom), Guillaume Pousaz (cofounder at Checkout.com) and Shakil Khan (early investor at Spotify) have already been selected.
Angels will have to spend 45 minutes every two months with one of the founders backed by the angel programme.
Wednesday, Apr. 8th: Double came out of stealth with a $6m funding round from Index and Daphni. The startup is providing C-levels with remote executive assistants helping them to manage their workflow. Executive assistants working with Double are experienced and are able to work for 4-5 different executives. I like this trend of software tools that help lower-paid white collars become more productive and increase their salary. Double’s founding team was working together at calendar-app Sunrise and then at Microsoft following its acquisition in 2015. (Index, Techcrunch)
Thursday, Apr. 9th: Index raised a $1.2bn growth fund (vs. $1bn for the previous one) and a $800m early stage stage fund (vs. $650m). Index growth fund is both a follow-on fund for outperforming Index early stage companies and a fund to invest in new companies at growth stage. Index’s partner Mike Volpi commented that “ entrepreneurs hold the keys to the world’s recovery.” I tend to agree with this statement. (Techcrunch, Index)
Friday, Apr. 10th: Apple and Google are partnering to launch a decentralized covid-19 tracing tool. It will be distributed through (i) an API for public health agencies that want to integrate it in their apps, (ii) an app accessible through both iOS and Android. (Techcrunch)
I’m glad to see Apple going one step further towards open source and collaboration. For years, Apple refused to open its ecosystem to third parties. This has changed in the past few years (e.g. Apple TV included in 3P screens) and this partnership is another good point.
Tech giants are more powerful than States. The truth is that building an efficient tracking app would be impossible without them because they are the ones with large user bases and technological capabilities. More than even, these companies prove that they are becoming public utilities.
It strengthens the interest from both Apple and Google in the healthcare sector which is clearly described as the next trillion dollar market they should go after.
Saturday, Apr. 11th: Backmarket (Idinvest | Eurazeo’s portfolio) was experiencing a triple digit gross merchandise volume (GMV) growth in the middle of March. It’s remarkable knowing the size of the company (their last publicly reported GMV was €230m in 2018). The company has added a section Work from Home on its website. This growth is explained by (i) the rise of ecommerce during those days, (ii) the increase of laptop sales as people need to buy the proper equipment for themselves and their family during the lockdown. (Techcrunch).
Sunday, Apr. 12th: It’s Sunday. Time to take a step back. I listened to the interview of Benchmark’s general partner Sarah Tavel on Invest Like the Best. Amazing episode. She had great learnings to share on marketplaces and consumer products. (Invest Like the Best)
Kickstarting a marketplace is about building liquidity. In existing markets, you should try to unlock new units of supply before going after incumbent players. Booking.com did it with Expedia by setting up a lower cost fee structure for hotels allowing small hotels to have an affordable centralized place on the internet to list their booking availability. Postmates did it to Grubhub by adding a 3rd layer to the food delivery market with riders unlocking the possibility for all restaurant to offer a delivery service and not only for the ones that already have a delivery logistic.
Marketplaces have three stages in their growth: (i) kickstarting the marketplace when you have to find the right playbook and acquisition channels to onboard customers and suppliers on your marketplace, (ii) tipping the marketplace when both sides of the marketplaces are organically using your service, (iii) winning your market measured by how big you are compared to your closest competitors.
Power users vs. new users dilemma for consumer products: after a certain threshold of users, you should focus more on getting right the experience for new users vs. giving your power users the features they want.
Find the core action in your consumer product. At Pinterest, it was the fact of pinning something on its personal board because the action (i) was increasing dramatically the retention of the user, (ii) was enhancing Pinterest graph database to offer more customized content for new users. Once you have found this core action, make it accessible and optimize it.
Monday, Apr. 13th: Choco raised a $30m series B round at a $250m valuation led by Coatue Management with participation also from existing investors Bessemer, Atlantic Labs and Target Global. Choco is a restaurant supplier ordering platform. This round is happening only six months after the announcement of the series A and was settled just before the covid crisis. (Techcrunch, La Tribune 🇫🇷)
You may think that players like Choco and Rekki must be struggling during this crisis. Of course, it’s not the best moment to deal with restaurants. But during these days, Rekki and Choco are able to lock their supply (wholesalers and food producers) which are harder to attract compared to restaurants. Both companies are well funded and I’m confident that they will grow exponentially post crisis.
In France, Choco launched a website for consumers to order from wholesalers. Choco is having legal troubles with the Rungis market because it started with a website mentioning Rungis in its URL - blurring the lines and suggesting to end consumers that they could order from Rungis market which was not the case.
Tuesday, Apr. 14th: 16,000 passenger jets are grounded worldwide due to the current healthcare crisis. A picture is worth a thousand words and Bloomberg is showing several pictures in this paper demonstrating how impacted the airline industry is. (Bloomberg)
Wednesday, Apr. 15th: Alan is publishing publicly its Q1-2020 letter to shareholders giving precious details on its operations under covid-19. Jean-Charles (CEO) has also starred in an episode of the 20 Minute VC with Harry Stebbings that you should listen to. (Alan, 20VC)
Their annual recurring revenues grew by 15.5% from €50.5m to €58.3m during Q1. The growth slowed down in the past 3 months.
It launched “Coup de Pouce” which is a new free product dedicated to non-members of the Alan’s community.
It experienced a strong acceleration of teleconsultations adoption since March.
Thursday, Apr. 16th: Trade Republic raised an impressive $67m series B led by Accel and Founders Fund. It’s a German-based equivalent of Robinhood. It lets people buy and sell shares but not only. You can also buy exchange-traded funds (ETFs) and derivatives. It has attracted 150k users and is managing €1bn worth of assets. (Techcrunch)
Friday, Apr. 17th: Stripe extended its series G from $250m to $600m at a $36bn valuation. Like Airbnb, Stripe was a strong potential candidate for an IPO in 2020. Due to the current economical context, the round may be delayed in 2021. (Axios)
Saturday, Apr. 18th: I’m impressed by the aggressive geographical expansion led by Kry during the covid crisis. Kry is a Sweden-based telemedicine service that you should have heard about in France under the brand Livi or through the partnership it does with Alan. Kry has raised €220m+ with prominent investors like Accel, Index, Creandum, Project A and OTPP. It has strengthened its positioning in numerous European countries and is now opening the US. (CNBC)
Sunday, Apr. 19th: It’s Sunday. Time to take a step back. I listened to this amazing interview with Spotify’s founder Daniel Ek on Invest Like the Best. I wrote a paper on the rise of audio - mainly inspired by the success of Spotify. After this interview, I’m doubling down on the company and on audio as a promising tech trend. (Invest Like the Best)
Monday, Apr. 20th: The Premier League is back… on FIFA in partnership with NBC. A week long tournament has been set up and will be broadcasted on Twitch and Youtube but also on traditional TV on NBC. I love the fact that the frontiers between sport and esport are being blurred and that NBC is broadcasting an esport event. So many things is happening on Twitch right now. It’s just amazing. I had already talked about French tennis-man Gaël Monfils who started a Twitch channel and F1 drivers doing a virtual championship also streamed on Twitch.
Tuesday, Apr. 21th: French insurance startup Alan is raising a €50m series C led by Temasek. We already talked about their Q1-2020 results in this post. Jean-Charles Samuelian is progressively shaping his company to fullfill his vision of building the best platform for everyone in Europe to access all wellbeing and healthcare services. I have been following the company for more than 3 years and it’s one of the most impressive successes in the French startup scene. (Techcrunch, Index, Business Insider)
Wednesday, Apr. 22th: Bill Gurley will not be in the team deploying the 10th $425m fund that Benchmark is currently raising - meaning that he is retiring from Venture Capital. Bill Gurley is one of the best VC ever. He invested in amazing companies like Uber, OpenTable, Nextdoor, GrubHub, Zillow, HackerOne etc. I’m learning so many things on venture capital thanks to his blog and his interviews. Venture Capital will miss him. I’m always fascinated by those stars strong enough to leave at the acme of their career. Chapeau bas. (Wall Street Journal)
Thursday, Apr. 23th: Heartcore, a European early stage consumer focused fund, is launching a pre seed fellowship program. It will invest €100k per founder working on a consumer prototype for a 7% stake in the company. “It’s like Y Combinator for people who can’t leave their house.” It’s hard to have a better description that this quote from Heartcore’s partner Max Niederhofer. (Techcrunch)
2.5m tele-consultation in France and Germany with 872k patients and 31k doctors since the covid breakdown
1k to 100k tele-consultation per day in 1 month
28% users are more than 55 years old
Saturday, Apr. 25th: Bessemer published its 2020 State of the Cloud report. The fund is sharing interesting data points on how cloud is eating the world and is also giving its predictions for 2020. I love the one below stating that cloud companies are no longer coming only from the US. This map put European rising cloud stars at the center (Front, Dashlane and Shift are companies founded by French teams). It’s a good acknowledgment for all the work that has been done by our local ecosystems - even though there is someone at Bessemer who needs to learn its basics of European geographies (just look at where are located French companies Shift, Dashlane and Front). (Bessemer)
Sunday, Apr. 26th: This weekend, I listened to Business Wars podcast series on the battle between Snap and Facebook to become/remain the dominant social network. I love the format. I discovered many anecdotes on the competition between the two tech companies. (Apple Podcasts)
Monday, Apr. 27th: The Financial Times published a paper on Animal Crossing and the interest rate cut on players savings implemented by the Bank of Nook. I told you that this game is a serious matter! The main reason of this cut is not to mimic our worldwide central banks but to prevent players from cheating by changing the date on their console to earn the savings more rapidly. (Financial Times, Nintendo)
Tuesday, Apr. 28th: Partech is raising its third seed fund for a total amount of €100m. It will invest in startups from pre-seed to pre-series A with a focus on six verticals: health, work, commerce, finance, mobility and computing. The fund is already quite advanced in its deployment with 40 investments done. (Techcrunch, Sifted)
Wednesday, Apr. 29th: Shopify is adding one more layer added to its master plan to conquer the world! It’s making a rebranding of its existing package tracking mobile app already used by 16m people. The app is now called Shop and allows you to browse and buy from Shopify indie merchants. (Techcrunch, Turner Novak)
Thursday, Apr. 30th: The BBC, the UK national broadcaster, is working hard during this time to support the country. And it’s working with its 6 PM news bulletin reaching 20m people per week (1/3 of the population). It’s crucial for a media which financing was under questioned by politicians and the citizens before the covid crisis. The BBC was about to lay off 450 people and discussions were undergoing about the annual £3.6bn subsidy paid every year to the national broadcaster thanks to the £175.50 license paid every year by UK households. Besides, the BBC is struggling to reach all the British population especially young and less educated people. (The Economist)
Thanks to Julia for the feedback! 🙏
See you next week for another issue! 👋