Knock Knock Who’s There?
By Alan Soclof
3 BIG STORIES
Knock Knock Who’s There?
EasyKnock, the leading residential sale-leaseback platform, raised a $57.2M Series C.
EasyKnock, enables consumers to unlock the equity in their house by selling their house to the company and then renting their house back from the company
The company has been on fire:
- Increased their new customer base by 200% in 2021.
- Hired a new CFO, Debbie Schleicher, who has experience in preparing companies for IPOs and big exits.
How big can EasyKnock become?
The company will dominate in residential real estate, and from day one have displayed their desire to enter other areas of real estate, displayed by the company’s acquisition of a farm land leasing company with a similar business model in 2016.
What is more intriguing to me here is the principle behind EasyKnock – unlocking locked up, once inaccessible equity.
This principle will be huge. Where else can we see this trend playout?
Private investments – where employees, angel investors, etc. can sell their once locked up equity in a stock market like a private market.
The #1 company trying to make this vision a reality is Forge, who recently SPACd at a $2B valuation.
Key stats on Forge:
- $10B transaction volume since inception
- ~400K registered users
- 400+ private companies on platform
In the long run, I think Forge will be a big winner. The SPAC? Maybe not.
A $2B valuation with only $123M in projected FY 2021 revenue and losing a lot of money in the process? Yikes.
Prediction: By 2030, there will be a private equities market that closely resembles the stock market.
2. An Apple Branch
Branch, the enterprise mobile growth and attribution platform, raised $300M in funding at a $4B valuation.
Simply put, this company enables their clients to track the effectiveness of their marketing campaigns across every channel in one location.
Branch has over 500 employees and has partnered with over 100K brands since it launched in 2014.
The company’s clients reach over 3B monthly users globally. Some of the brands they work with include: Adobe, Buzzfeed, and Yelp.
What if I told you Apple is Branch’s best friend currently?
Branch loves Apple because of the recent data privacy laws that have greatly changed the ad market.
CAC has dramatically increased due to these changes as the advertising targeted at consumers is significantly less accurate.
This is why companies like Branch are in a strong position. Although the quality of the company’s tools has decreased with the change in data input, the value that they provide to clients has increased significantly.
Branch has two serious competitors:
- AppsFlyer – raised a $210M Series D in 2020
- Adjust – raised $227M in 2019
I think the biggest winner of the bunch will be AppsFlyer? Why.
AppsFlyer is the leader in Connected TV (CTV), AKA – streaming, as they work with the top providers in the space like Roku and FireTV.
I feel that CTV will be the biggest beneficiary from the Apple privacy law changes as platforms like TikTok, Instagram etc, relay on Apple’s platform while CTV, in most cases, does not.
3. Beats By Bread?
beatBread is massively disrupting the music industry and the company now has $34M to fuel this disruption after completing a seed round last week.
beatBread is a platform that enables up and coming artists to receive funding without giving a significant amount of future earnings away – which currently is the case with record labels.
The company makes their money by charging a small, limited fee on songs for a limited amount of time.
What is the major takeaway from this? How will this impact the Spotifys and Apple Musics of the world?
Prediction: beatBread will be acquired by Spotify
Here is the vision:
Spotify has established themselves as one of the most dominant distribution platforms on the planet.
But then there is Apple Music.
A Spotify acquisition of beatBread could give them a significant advantage as Daniel Ek’s company could start launching “Spotify Artists”, create exclusive events, and early releases etc.
Wondering how the music labels would react to this? I don’t think they would care at all. There is precedent for this with Roku.
Roku has quickly become the dominant platform for streaming in the US and the world. In the US specifically, in 2020, 38% of new TVs sold were Roku TVs.
Roku still recognizes the power of proprietary content and has bought TV catalogs, started producing exclusive movies, and there are rumors they could even buy a movie studio.
How have Netflix, HBO Max, etc. reacted to this? By doing nothing at all. There are plenty of eyeballs and enough money to go around for everyone.
Distribution is undefeated. What this move would do is clearly make Spotify > Apple
When I talk to investors, am always sure to discuss recognizing companies that are taking out the middle party. This is the future of business and the main attraction to Web3.
It will have massive implications on the music industry. But first, let’s discuss the key trend here: Take the middle party out, and more profits for both sides. This is why Web3 is so promising as it often does just that.
This could actually be huge for Spotify and Apple Music, if they succeed as they would have much greater pricing power than they currently do.
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CHART OF THE DAY
A PropTech Explosion is Imminent
- In 2021, PropTech funding levels returned to pre-pandemic levels with $38B in private funding
- The pipeline of companies being started in this space, like EasyKnock discussed above, is why this is space is just getting started
- Also – how often do you hear about people wanting to do real estate as a side hustle? The people love it.
PropTech isn’t going anywhere – it is just getting started.
What They Do: South Korean online mental health services that include an artificial intelligence chatbot in addition to a therapist.
Amount Raised: $16.7M Series B
Lead Investors: N/A
Why It Matters:
A 2018 Lancet Commission report shared that total mental illness expenditure would reach $16T by 2030 – this prediction was pre-pandemic.
Atommerce is on fire with 1M users, 100 enterprise clients, and a 1,200% increase in revenue from Q1 2020 to Q1 2021.
I am skeptical regarding Atommerce’s approach to using AI as my gut tells me the therapy experience should be human to human and not a heavy AI component – but if it helps, I am rooting for them!
The AI component was incredibly impactful in South Korea, where there is an even worse stigma around mental health than in the US.
As the proceeds from this raise will be used to expand to the US, it will be interesting to see how the AI approach catches on here culturally.
Prediction: Atommerce will see much less success in the US than in South Korea
What They Do: Tax software targeted towards startups that helps the ventures take full advantage of relevant tax credits
Amount Raised: $10M Series A
Lead Investors: Infinity Ventures
Why It Matters:
Every dollar matters for startups, and that is why Neo.Tax is one of my favorites as they help ventures identify up to $250K in startup credits.
The tax space is incredibly packed, but I love the niche focus of Neo.Tax.
A company that will give Neo.Tax a run for its money is Pilot – who raised a $40M Series B in 2019. Pilot is a bookkeeping service where you are assigned a specific account manager for your business.
One of Pilot’s core products is the R&D tax credit. The company’s larger presence and alternative tools should enable them to scoop up many of Neo.Tax’s niche target market clients.
If you are a founder, you have to check these companies out – go get – or I guess save – your money!
What They Do: Platform dedicated to planning outdoor trips with over 50K campgrounds and overnight options in database
Amount Raised: $2.2M seed round
Lead Investors: Storyteller Overland
Why It Matters:
This company is sweet.
There is room for massive disruption in the outdoor activity space, and Sekr, a women and minority funded venture has big aspirations.
Outside of scheduling, the platform includes a serious social component where users can connect and meet fellow Sekrs as well as a campground review dashboard creating a strong community.
Sekr has been on fire since the start of the pandemic:
- 1,530% increase in user sessions from May ’20 to May ’21
- 492% increase in app users from Aug ’20 to ’21
How about a Captain Experience (outdoor activity scheduling platform that I write about in newsletter #7 and Sekr merger? Matchmaker Alan? Love it.
What They Do: Use revolutionary AI technology to dub voices quickly and for TV shows and movies
Amount Raised: $20M Series A
Lead Investors: Insight Partners
Why It Matters:
You know when you were watching Squid Games and you spent the whole show basically reading the subtitles? Deepdub is looking to change that by creating dubbing that is actually good!
The Israeli company has created AI that enables the dubbing of the voices of the original actors into different languages!
Traditional dubbing takes 15-20 weeks to dub a 2 hour movie into another language. Deepdub’s technology? 4 weeks.
Get ready, because you and I are going to be watching international films, in English, and it is going to be sweet.
As the Streaming Wars have heated up, Deepdub is at the right place at the right time: Global content spend hit $220B globally, up 14% year over year – that is a whole lot of dubbing!
What They Do: Manufacture sleep tracking device called “sleepwatch”
Amount Raised: $3M seed round
Lead Investors: N/A
Why It Matters:
Although the sleep market is currently a $90B industry, Bodymatter has a tough path to success.
Why? Because there are so many sleep tracking apps!
- Various Apple Watch apps like Autosleep, Sleep Watch
- Pillow – which uses, you guessed it, a pillow, and a compatible app to track sleep
- General health tracking devices with sleep tracking capabilities like Whoop, Fitbit, Oura – the ring health tracker, who has a phenomenal sleep tracking component (recently raised $100M Series C)
How will Bodymatter differentiate themselves from competitors? How will they make up for starting significantly after their competitors?
We shall see!