Getting Some Mojo
By Alan Soclof
3 BIG STORIES
1. Getting Some Mojo
Mojo, a company making a stock market for professional atheletes, announced a $75M raise led by Thrive Capital. Other investors in the deal include Tiger Global and Alex Rodriguez and his business partner Marc Lore.
There have been hundreds of ventures trying to make this vision a reality. Why will this one succeed?
Three reasons: Money, big name investors, and the founders’ business experience.
To the best of my knowledge, there has never been a venture that tried to make the sports stock market a reality with this much funding behind it. Many past startups have either tried to bootstrap their way to success or secured significantly smaller funding rounds.
The massive number of followers and eyeballs that big name celebrities have through social media is off the charts. A-Rod’s role as a significant investor in this deal proves management understands this—and his platform should be a serious boost to Mojo.
Vinit Bharara, Mojo’s CEO, has seen serious success as an entrepreneur in a similar field. Bharara sold a marketplace for trading cards business for $5.7M to Topps in 2001. Then he founded and sold a company to Amazon valued at $540M. Vinit is big time.
Prediction: Mojo will be the first company to successfully create a stock market for athletes. (Which would mean I might need to start a second newsletter!)
2. Dilution is Not the Solution
Capchase is a really cool company that just raised an $80M Series B led by 01Advisors. The company provides non-dilutive capital to companies with recurring revenue.
Simply put, if a SaaS business has a $1M contract with a client over a 3 year-period, Capchase will pay the company several hundred thousand dollars up front, enabling the company to use those funds to fuel business growth, make hires, etc.
Capchase has worked with over 3K companies, helping them access over $2B in funding. The company also recently launched a BNPL silo, as well as a (relatively) high-yield banking solution.
Should VCs be nervous about the rise of a company like Capchase?
Yes and no.
On one hand, no—there are so many quality companies looking for funding, specifically outside of recurring revenue industries.
However, if the rise of Capchase continues, significantly less funding would be available for SaaS and other recurring revenue companies, which in many ways offer the most upside to VCs.
The most successful VCs in these industries will likely be the ones that can show founders the value they bring outside of their capital, like their industry expertise and connections.
Also, the Capchase model reminds me a lot of beatBread, a company that we featured in Newsletter #10. beatBread is a platform that enables up and coming artists to receive upfront funding for a percentage of future revenue over a limited period of time.
People are making a ton of money by creating alternative, non-dilutive ways to fund businesses.
Side note: There’s something very ironic here about a company that offers alternatives to VC funding, but just raised $80M from VC.
3. Getting Things Mooving!
Moove, an African FinTech company that provides vehicle financing to drivers of ride-hailing services, announced a $105M SeriesA led by Speedinvest, Left Lane Capital, and thelatest.ventures.
Africa is home to 1.2 billion people—3.5x more than the US—yet only sold 900K cars, compared to 17M in the US. Wild.
Moove looks to bring more cars to Africa by enabling people to either buy or rent a Moove vehicle without a significant upfront payment. Rather, Moove takes a percentage of the driver’s Uber ride fees until the car is fully paid off.
Will Moove be a big winner?
A winner, yes. Big winner? We shall see.
The company’s financed vehicles have completed over 3 million rides and the company’s revenue has seen 50% month-over-month growth since last August.
Moove will have serious competition as they look to expand outside of Africa, as alternative car purchasing options is an incredibly competitive industry. Additionally, it’s important to realize that the raising of $105M ($65M in equity and $40M in debt) increases the risk profile of the investment significantly.
While reading about Moove, I could not stop thinking about this great quote from my Workweek teammate Nicole Casperson, writer of FinTech newsletter WTFintech:
“I truly believe that FinTech can change the world for the better by giving people more access to tools that promote financial freedom.”
As I mentioned earlier, we shall see what Moove’s future holds, but what I do know is Nicole is spot on (as usual) regarding FinTech.
CHART OF THE DAY
- In my eyes, this chart represents a massive shift that occurred in the VC world during the pandemic. As almost all meetings with founders went virtual, it no longer mattered where teams were located, and travel convenience was therefore not a factor.
- A majority of funding will still go to the big cities and VC hubs, but the investment in smaller, more unconventional states is here to stay.
What They Do: Celebrity personal care products
Amount Raised: $11.2M seed round
Lead Investors: Forerunner Ventures and Initialized Capital
The Rundown: A-Frame is a company founded by actor Hill Harper focused on creating personal care products for A-list celebrities.
The company has worked with some of the biggest celebrities including:
- John Legend – skin care line
- Dwyane Wade & Gabrielle Union – baby care line
- Naomi Osaka – sun care line
And a whole lot more. A-Frame is just another example of celebrities looking to create businesses around their strong brands, and Harper has built a phenomenal infrastructure that allows A-Frame to reap celebrity benefits.
What They Do: Creatives-focused job platform
Amount Raised: $8M new funding
Key Investors: Thirty Five Ventures, Tornante Company (Michael Eisner), Link Ventures, Kevin Yorn (lawyer for Scarlett Johansson and Matthew McConaughey)
The Rundown: It feels like I write about a new industry specific job platform almost weekly. This one is for the creatives space and features over 2K of the biggest brands in the industry, including Nickelodeon, Discovery, Comcast, PBS, and others. These companies are hiring for creative positions in animation, video editing, branding, and more.
One of the key differentiating factors of the platform is how it promotes creatives’ portfolios as a key part of the hiring process.
Why will this company see great success? The names behind it—not only the key investors mentioned above, but also the original investors including Shari Redstone, chairman of Paramount, and Aryeh Buorkoff’s LionTree, arguably one of the most powerful banks in the world of media.
What They Do: Platform for connecting lawyers and plaintiffs in the personal injury space
Amount Raised: $6.9M seed round extension
Lead Investors: Divergent Capital and Charge Ventures
The Rundown: Justpoint has found success in a really interesting niche and offer value to both plaintiffs and lawyers. Through Justpoint’s predictive analytics, plaintiffs are able to find the lawyer that is the best fit for them. Lawyers alternatively are able to quickly understand a plaintiff’s case, and have the platform handle back office tasks.
The company works with over 1,000 law firms in 33 states with a database of over 300,000 historical claims. With these funds, Justpoint will expand into other areas of the law, looking to make the legal process easier, more equitable, and just for all.
What They Do: Looking to disrupt
Amount Raised: $5.2M series seed 2
Lead Investors: American Family Ventures and MassMutual Ventures
The Rundown: Pandella looks to disrupt the life insurance market by offering a highly intuitive experience for consumers where they can secure a plan in minutes, without a medical exam.
Legacy industries like life insurance are incredibly disruptable, and a big reason why I think Pandella will be successful is their founder and CEO Bob Gaydos, who’s worked in the health benefits industry for decades. This is likely what American Family and MassMutual are thinking too.
What They Do: Bringing generative AI to e-commerce
Amount Raised: $1.1M seed round
Lead Investors: Inovia Capital, AIX Ventures, Forum Ventures
The Rundown: The e-commerce revolution is real and many companies are taking a bite at the apple! Bloom is a company that looks to bring artificial intelligence to the e-commerce experience by pixel tracking consumers’ actions on a website, then personalizing them to each consumer. This leads to an increase in sales for e-commerce companies with zero action needed on their end.
E-commerce sites using Bloom have seen an increase in conversion rates of 5-14%. This company is in the right place at the right time and will be an interesting one to follow!