Venture Bytes #70 – Online Grocery Delivery Service – The Next Frontier

on March 30, 2021

Please see attached the latest edition of Venture Bytes from Manhattan Venture Research. The two lead articles in this edition are very topical.

The first lead article, Online Grocery Delivery Service – The Next Frontier, is our take on the grocery delivery market. We believe this segment of the online delivery market is largely under penetrated, and far from a zero sum game despite the presence of major retailers.

The second article, Cannabis Sector Riding on High, is our outlook on the sector. The space has been buoyed by optimism that there will be additional marijuana deregulation following positive comments by politicians on decriminalizing it, and roughly 11 million new people that can legally access recreational cannabis following successful ballot measures in Arizona, Montana, South Dakota, and New Jersey.

Venture Bytes #69 Spotlight on Online Education Gets Brighter

on February 23, 2021

Spotlight on Online Education Gets Brighter Online education programs have come a long way since their start in the early 1990s. The global online education market is projected to grow at a 5-year CAGR of 9.2% to $319 billion by 2025 according ResearchandMarkets, a market research firm. Deeper internet penetration across the world, growing adoption […]

Venture Bytes #68 – Looking Ahead to 2021 – Top IPO Picks

on February 23, 2021

As we leave behind a turbulent year in many respects, we are looking forward to 2021 with renewed optimism. Our top-IPO picks for 2021 lead off our lead article, followed by the second article, which throws some light on the spectacular rise of SPACs and what to expect in 2021.

2020 was the biggest year for IPOs since 2014, even after excluding SPACs. According to Renaissance Capital, the average IPO in 2020 returned 75%, the best performance since the late 90s bubble years.There are still more than 500 unicorns in the private market and roughly 71 companies have selected bankers or filed confidential paperwork to go public, according to market data from CB Insights. A major silver lining during this pandemic has been a deeper recognition of secular transformational technologies and trends. Our top picks for 2021 reflect these technologies and trends.

Special Purpose Acquisition Companies or SPACs have been on a tear. According to Goldman Sachs, there were 219 global SPAC IPOs as of December 18, 2020, raising a total of $73 billion, outpacing the $67 billion raised via IPOs, and considerably above the aggregate amount raised in 2019. Will 2021 be another banner year for SPACs? Very likely so given the spate of recent announcements, including the newest SPACs sponsored by Softbank. That said, with over 3 times the total number of SPAC IPOs in 2020, the percentage of SPACs that can find suitable targets will likely decline in 2021 due to the 18 to 24 month time limit, and increased competition.

Venture Bytes #67 – Prop 22 – A Win for the Third Way

on November 23, 2020

Prop 22 – A Win for the Third Way California’s Prop 22 ballot measure passed with a 58% majority, or 6.7 million votes. The initiative exempts gig companies from Assembly Bill 5 law to classify their workers as employees. Instead, the companies will provide gig workers with improved conditions, such as an earnings guarantee of […]

Venture Bytes #66 – Palantir Technologies – Well Primed for its Public Market Debut

on November 23, 2020

Palantir Technologies – Well Primed for its Public Market Debut After operating for 17 years in the private market, Palantir Technologies is ready to make its debut in the public market. The company is scheduled to list its shares on the NYSE on Wednesday, September 30. Is the company ready to meet the demands of […]

Venture Bytes #65 – Airbnb Pulls the Trigger and Tees Up For Its IPO

on November 23, 2020

Airbnb Pulls the Trigger and Tees Up For Its IPO Airbnb has announced that it has filed paperwork for its initial public offering. The company did not divulge any financial details or the timeline for its public market debut. The fourth quarter appears to be the most probable date given the flow of events. Given […]

Venture Bytes #64 – Palantir Steps Out of The Bunker

on November 23, 2020

Palantir Steps Out of The Bunker After 17 years as a private company, Palantir Technologies has finally filed (confidentially) to go public . Palantir is considered one of the most secretive Silicon Valley companies, with clients including the U.S. Federal Bureau of Investigation and the Central Intelligence Agency. While the company has a number of […]

Venture Bytes #63 – Pandemic Accelerates Wide-Spread Adoption of Plant-Based Meats

on July 17, 2020

Pandemic Accelerates Wide-Spread Adoption of Plant-Based Meats The growing popularity of plant-based meats is getting a strong boost during the COVID-19 pandemic. The sudden spotlight on animal-borne illnesses, reinforced by the COVID-19 pandemic, on the back of a rising vegan population and increasing awareness of the nutritional benefits of plant-based sources of meat are proving […]

Venture Bytes #62 – Delivery Companies Hit the Sweet Spot

on July 17, 2020

Delivery Companies Hit The Sweet Spot With surging demand, increasing proliferation of delivery providers and food aggregators, and growing investor interest and involvement, the sector has practically been basking in the sun. Online food delivery growth is expected to outpace restaurant sales, hitting a 5-year CAGR of 18% from 2018 to 2025. Restaurant sales in […]

Venture Bytes #61 – The Future is Now for Telemedicine

on July 17, 2020

The Future is Now for Telemedicine The future of an advanced telemedicine system is now. While telemedicine has been around in some form or the other since the 1950s, the current COVID-19 crisis has moved the needle in terms of its true value. Social distancing, which is expected to be the new normal for the […]

Venture Bytes #60 – Can DoorDash Deliver a Strong IPO? Odds Favor It

on March 19, 2020

In this edition, the first lead article is on DoorDash’s IPO filing and the second is on the Space Economy. DoorDash filed confidentially on Friday, February 28 for its initial public offering, reopening the window for app-based customer-focused mega unicorns after a short lull. While the odds are stacked against it, as they are for all unprofitable start-ups, we believe DoorDash may buck the trend by showcasing itself as the largest, best of breed delivery company in North America, with a clear path to profitability.

The second article takes a peek at the space economy that is gradually taking shape. It is expected to expand to multi-trillion dollars in the coming decades. While that’s still a long way from where the industry is today, a number of developments are pointing in the right direction.

Venture Bytes #59 – Spotlight on Stripe Gets Brighter

on March 19, 2020

The first lead article, Spotlight on Stripe Gets Brighter, is on the expected increased spotlight on Stripe following the wave of consolidations in the fintech space. The 11-year old fintech unicorn has raised $1.3 billion in seven rounds to date, sports a $35.3 billion private market valuation, and is ripe for its own initial public offering (IPO). Even if it decides to hold off on the IPO, we expect the company to be an active participant in the ongoing M&A activity in the payments space.

The second article, Autonomous Cars Front and Center at CES 2020, touches on three displays at the CES show in Las Vegas that we believe captured broadly the latest developments in the autonomous car market – particularly the electronics in the car and various concept cars. Given that cars are transitioning toward electric powertrains, autonomous driving technology and connected online infotainment experiences, the attraction of autonomous cars was obviously strong and expected to get stronger over the coming years.

Venture Bytes #58 – Could Direct Listings Become the New Normal? Highly Likely

on December 11, 2019

The two lead articles in this edition are very topical. The first one, Could Direct Listings Become the New Normal? Highly Likely, is our take on the direct listings as the way forward. This follows the recent filing by NYSE with the SEC to change the rules so that private companies can simultaneously go public through a direct listing and raise new cash from public market investors. We believe the proposed rule change, if approved, will very likely move the direct listing needle in its favor.

The second article Expecting a Strong and Rational IPO Market in 2020, lays out our expectations for 2020. We believe the outlook is strong and coming on the back of 2019’s hits and misses, the expectations and valuations will be much more rational.

Venture Bytes #57 – 5G Will Spur a Tidal Wave of Innovations

on November 15, 2019

The first lead article is on 5G and the tidal wave of innovations it is expected to unleash, particularly in the areas of healthcare and the Internet of Things. The second article is our take on the recent hiccup in the IPO market even as 2019 is on track to be the most lucrative year for exits in over a decade.

Venture Bytes #56 – Startups for Startups

on September 16, 2019

The two lead articles are ‘Startups for Startups’ and ‘AB5 Strikes at the Core of the Gig Economy’. With the proliferation of venture capital funding in larger rounds at seed stage and beyond, startups are larger than most tech companies that went public in the 1990s and 2000s. The institutionalization of venture capital and start up funding has also led to robust marketplaces of surrounding services for the startups, specifically in adjacent domains and non-core areas of the key business value proposition. The second article is on the implications of the passage of the California AB5 bill. We believe it is a misguided policy and will hurt employees, businesses and consumers rather than helping them as was originally intended.

Venture Bytes #55 – The Future of Batteries is Aluminium – Not Lithium

on September 16, 2019

The first one, ‘The Future of Batteries is Aluminum – Not Lithium’  makes a case for aluminum-air batteries in place of lithium-ion batteries that are the current go-to batteries for big technology and car companies. The second article, ‘It’s a Bird…It’s a Plane…It’s a Drone!’ looks at the state of drone technology and the timeline for mass commercial deployments.

Venture Bytes #54 – It’s the Data, Stupid!

on July 10, 2019

The first article stays on the theme of autonomous cars that we have been writing about in the last few editions. Our main take here is that we can get autonomous vehicles today, but they will not be safe. In order to have safe AVs, we need at least 10 years of data gathering. AVs use a type of intelligence algorithm called neural networks, and the main characteristic you have to know about neural networks is that they are the most data demanding algorithm out there. The second article is our commentary on the IPO market. We believe there is a perfect confluence of events underlying this strong IPO market. The key question as we enter the second half of 2019 is whether the IPO juggernaut will continue to power ahead? We believe all key indicators suggest the second half will be equally strong compared to the first half of 2019, with enterprise software/cloud companies leading the charge.

Venture Bytes #53 – In the Hunt for the Holy Grail

on June 20, 2019

Reaching profitability is the Holy Grail for the ride hailing companies. The narrative today is that autonomous vehicles (AV) will eliminate the biggest cost component (driver commissions), thereby increasing the take rates and moving the companies closer to profitability. While we believe AVs will accelerate the timeline to reaching profitability, a lot more expenses need to be factored in before we get there. The second article looks at the micromobility business in the face of large investments in this business by the participants. We believe this business in the long run will be net additive to the overall ride hailing business, given its compelling economics and growing demand.

Venture Bytes #52 – Lyft Has AV Mapped Out

on June 20, 2019

The two lead articles are titled ‘Lyft Has AV Mapped Out’ and ‘Digital Ads Surpass Traditional Ads’. Both the articles are topical given the recent IPOs of Lyft and Pinterest. The race to introduce the first commercially viable autonomous vehicle (AV) is on. A number of companies are jockeying to be the leader given the high stakes, particularly for Uber and Lyft, the incumbent leaders in the current ride-hailing market. Handicapping the winner in this race is not easy but early indications suggest that Lyft is ahead of the pack. The second article is highly supportive of Pinterest given its mobile-native platform and digital ad-based revenue model. The digital ad market is on a strong growth trajectory, essentially insulated from the challenges facing the traditional ad market.

Venture Bytes #51 – Lyft to Lift the Hood

on June 20, 2019

The two lead articles in this edition are very topical. The first one, ‘Lyft to Lift the Hood’, is our take on the ride-hailing market and Lyft’s strong competitive position in it, which is essentially a duopoly. The second article, ‘A Hardware Speed Bump for Neural Networks’, highlights the limitations of harnessing the full potential of artificial intelligence.

Venture Bytes #50: Are We There Yet?

on March 4, 2019

The first lead article ‘Are We There Yet?’ is our take on the timeline for commercially viable autonomous vehicles. There is no doubt that autonomous cars will one day replace the need for human-driven cars given the safety factor. Until then, which could be anywhere from 5 to 25 years depending on whom you ask, all the pieces of the puzzle still need to come together. The second article ‘AI, ML and the Ripple Effect’ highlights the flip side of artificial intelligence and machine learning technologies in our lives, particularly its potential to widen the divide between the haves and have nots.

Venture Bytes #49 – Onwards to 2019 with Strong Tailwind

on January 7, 2019

The two lead articles are ‘Onwards to 2019 with Strong Tailwind’ and ‘Let the Race Begin – And the Speculation’.

To say 2018 was a remarkable year for IPOs is an understatement. With favorable market conditions during the first three quarters of the year, nearly 200 public offerings were completed rivaling, after a long lull, the strong activity levels in 2014 and early 2000s. More important, of all the companies going public in 2018, 38 were valued at $1 billion or more at the time of their IPO. This made 2018 the year with the highest number of unicorn public offerings since the 2000 dot-com bubble. Looking ahead, 2019 is shaping up to be another remarkable year for technology unicorns.

Lyft and Uber have already announced their plans to IPO in 2019 and a number of others are teeing up for their own IPOs. Whether the rush to the exits is due to tightening market conditions or some other reason, the 2019 IPO pipeline is promising to be remarkable in terms of numbers and size.

Venture Bytes #48 – Online Food Delivery Platforms Kick into High Gear

on November 20, 2018

Online food-delivery platforms have hit their stride if recent funding rounds are any indication. Instacart raised $600 million in early October at a $7 billion valuation. DoorDash raised $250 million last August at a $4 billion valuation, topping its own earlier round of $535 million in March at a $1.4 billion valuation. Postmates raised $300 million in September at a $1.1 billion valuation. UberEats, an emerging leader in the delivery business, should be valued at $20 billion according to Goldman Sachs. To say the online food delivery business is hot will be an understatement.

The second article highlights the key takeaways from the spate of IPOs since the beginning of 2017 to September 2018. We highlighted a number of trends and patterns that we believe are noteworthy.

Venture Bytes #47 – Trade War Redux but This Time It’s Different

on November 20, 2018

‘Trade Ware Redux but This Time It’s Different’. If the ongoing US-China trade war reminds you of the trade war with Japan in the 1980s, you are not mistaken. However the stakes are higher this time, particularly relating to VC investments that have been mutually beneficial over the last 10 years but could get negatively impacted if the rhetoric heats up further.

‘Cashierless Checkouts – Another Shot Across the Bow of Middle Class Jobs’. The cashierless checkout technology is no longer just a possibility. It’s a reality and it’s happening now. While this technology provides business efficiency for Amazon, it comes with major socioeconomic consequences – not all beneficial.

Venture Bytes #46 – NYC Slams the Brakes on New Registrations

on August 27, 2018

The first lead article is titled ‘NYC Slams the Brakes on New Registrations’. The New York City council ruled to place a year-long cap on registration of new vehicles for ride-hailing businesses. This comes against the backdrop of worsening congestion, low driver wages, and the decimation of the once-thriving taxi industry, all of which, the pro-ban lobby believes has been caused by the explosive growth of for-hire vehicles. Leaving the political and socio-economic arguments of this new law aside, if the cap goes into effect, which is likely, we believe the revenue impact to the overall ride hailing market and Uber in particular in NYC will be minimal – roughly 6% of Uber’s total consolidated revenue base.

The second article is titled ‘Going from Copycats to Innovators, Chinese Startups are Turning the Tables’. China is accused of shamelessly cloning U.S. tech firms and business models. According to the New York Times, intellectual-property theft accounts for over $600 billion in losses per year in the U.S. Copy to China (C2C) is a term commonly used to describe Chinese companies copying the business model of successful foreign businesses. But some experts are saying that U.S. companies are now ‘borrowing’ from China more than ever before. Copy to America (C2A) could very likely become the next wave.