By Alan Soclof
3 BIG STORIES
1. Getir Done!
Last week, instant grocery delivery startup Getir announced a $768M Series E funding round at a $11.8B valuation. It was led by Mubadala Investment Company and included investments from Tiger Global and Sequoia Capital.
Getir promises to deliver your groceries within 10 minutes. The company started off in Turkey, where it operates in every city, and now has a presence in 48 cities in the US and Europe. Getir has over 1,100 warehouses and 40 million total app downloads worldwide.
Yes, this round included investments from Tiger Global and Sequoia Capital—however, I would have definitely passed on this investment.
First, the competition is off the charts:
- Deliveroo – London-based online grocer that IPOd @ ~$10B last year
- Gopuff – Philly-based online grocer that most recently raised @ $40B valuation
- Gorillas – Berlin-based online grocer that raised $1B @ a $2.1B valuation last year
And there are many more including Zapp, Cajoo, and Flink as well as a massive push from Uber into the grocery delivery space.
Second, unit economics: Historically, grocery stores have had pretty rough economics. Check out these grocers’ gross (pun not intended) margins (in percent):
- Sprouts Farmers Market: Low ~30s
- Krogers: Low ~20s
- Whole Foods: Mid ~30s
Deliveroo is now publicly traded, so we have some specific insight into the approximate margins of the grocery delivery business which, based off of my calculations for Deliveroo specifically, was 27% in 2021, down from just under 30% in 2020.
Third, collapse of valuations:
Deliveroo went public in March of 2021 and is down 55% since. Maybe you can blame this on the headwinds that growth stocks are facing, but as we all know, this trend is coming to the private world as well – and this sector too.
In January, Gopuff hired Goldman Sachs to advise the company on a possible $40B IPO. With the collapse of the IPO market, these plans are now on hold. However, according to the New York Post, private shareholders of the company are struggling to sell their shares at a $15B valuation!
The Post also said a Gorillas investor is struggling to sell their shares at a $2B valuation, even though their last round valued the company at $3B. Craziness!
With so much uncertainty around valuations, macro headwinds, and what appears to be a business with difficult economics, I would not invest my hard-earned money or investors funds into Getir.
2. Autobrains vs. Mobileye
Autobrains, an autonomous driving technology company, announced a $120M Series C led by Temasek.
Autobrains claims to have unique technology in the self-driving landscape by creating AI that is built to closely mirror the neural networks of the human brain.
The company feels this gives them a distinct advantage in solving the most unique and rare circumstances that autonomous vehicle software engineers have struggled to provide solutions for. (For example, if a car is going to get into an accident, should it hit a car or a light pole?)
The company views Mobileye as their main competitor. Mobileye is the self-driving tech company bought by Intel in 2017 for $15.3B that also recently announced their plans for a $50B IPO.
Mobileye vs. Autobrains: who is my winner?
Mobileye is already a massive business with significant scale. The company already has their technology in 45 to 50 million vehicles globally and did $1.4B in revenue in 2021 with $460M in gross profit.
Autobrains, on the other hand, is planning to launch their phase one technology in 2023 and phase two technology in 2024. Simply put, Mobileye is lightyears ahead.
Additionally, I think it’s hard to overemphasize the power of having Intel as the majority owner of the company—one of the greatest technology companies ever. With the ~$200B Intel struggling to keep up with other chip manufacturers like AMD and Nvidia, their incentive to see Mobileye succeed will be massive.
At the same time, this doesn’t mean Autobrains cannot achieve success. If their technology is as good and revolutionary as they say it is, the market is young enough to see massive success.
Prediction: Autobrains’ rollout will take longer than expected, and Mobileye’s headstart will help them become the AWS of autonomous driving.
3. Mori = More Food!
Mori, a company focused on extending food shelf life, announced a $50M Series B1 led by Prelude ventures.
The company uses an all-natural, patented solution that includes water, salt, and heat and doubles produces’ shelf life. Mori already has approval to use their technology in the US, Mexico, and Costa Rica.
How big could this be for the food industry?
Bigger than the invention of sliced bread.
In the US alone, 108B pounds of food is wasted annually, which equates to more than $408B. Globally, that number increases to a whopping 1.3B tons and over $1T. A solution like this could decrease the amount of food wasted significantly.
The pricing power that I would expect Mori to have would be very significant. There is one problem, however: there’s already a giant in the space named Apeel.
Apeel, a company that uses plant-derived lipids and glycerolipids, raised a whopping $250M @ a $2B valuation. Of the many big-name institutional investors, Oprah and Katy Perry invested too!
To bring things full circle to the last story, I want to note how big this could be for companies like Getir, Gorillas, and the other grocery delivery companies. The unit economics of the business could shift significantly and be a big boost to the outlook of these companies.
CHART OF THE DAY
Mental Health Explosion
- The amount of money globally that went toward mental health ventures increased 139% Y/Y up to $5.5B!
- Additionally, 2021 saw a record-breaking year for exits in the mental health M&A space, with 43 in 2021 vs. 23 exits in 2020
- This space will continue to stay scorching hot, and that is amazing. However, I wish all of this funding came years ago.
What They Do: Platform for in-home product testing
Amount Raised: $7M seed round
Lead Investors: First Round Capital
The Rundown: Highlight is a comprehensive platform that allows companies to easily find, test, and engage with consumers in their desired demographic in a simple manner. With over 30K product launches annually and a 95% fail rate, Highlight has a massive opportunity in front of them.
Since launching last year, the company already works with over 100 partners from startups to enterprises like Nestle, Procter & Gamble, Estee Lauder, and many more.
What They Do: Asset-sharing platform for transportation vehicles
Amount Raised: $4.2M seed round
Lead Investors: Koch Disruptive Technologies
The Rundown: We’ve all heard about the wild supply chain issues, and REPOWR thinks that they have one of the answers. REPOWR is a platform that gives some of the biggest transportation companies—like Swift, Knight Transportation, US Xpress, and more—the ability to communicate and lease each other’s vehicles when they are not being used.
The company estimates that there is over $45B of opportunity in underutilized transportation vehicles. With a platform to collaborate and optimize on, both enterprises and consumers could benefit.
If this means I get my new bed quicker than 4.5 months from now, I’m all in.
What They Do: SaaS company focused on wood preservation
Amount Raised: $3.2M seed round
Lead Investors: MaC Venture Capital
The Rundown: Cambium Carbon created a SaaS platform that connects people that have leftover wood (construction workers) with people that need wood (craftsmen).
Not only has their platform created significantly more profit for every party involved, but they’re also making a significant positive impact on the environment by keeping wood out of landfills. The company already has 140 suppliers in-network.
Companies like Cambium Carbon make me feel alive!
What They Do: AI solution to optimize warehouse operations
Amount Raised: $2M pre-seed
Lead Investors: Newfund Capital
The Rundown: Rabot uses a computer vision solution to optimize the packaging process in complex, high-volume warehouse environments. The e-commerce opportunity in the US is massive, with over $800B+ in sales.
Rabot has seen significant success with existing customers:
- 80% reduction in order resolution time
- 100% increase in warehouse employees’ productivity
This is a company to watch.
What They Do: Blockchain auditing and consulting
Amount Raised: $1M seed round
Lead Investors: N/A
The Rundown: HashEx is a top-notch crypto/blockchain consulting firm that uses proprietary data tools to research, audit, and consult for various companies operating in the Web3 universe.
This seed round will specifically be used to fund the growth of AnalytEX, their blockchain analytics platform, which already has over 5,000 customers.
HashEx has already worked with some of the biggest names in blockchain like Hurricane, Koda, NiftyLabs, and more.