25 February 2022 | Investments
Is PrimaryBid Worth a Bid?
By
3 BIG STORIES
1. Is PrimaryBid Worth a Bid?
PrimaryBid is a company that enables retail investors to participate in IPOs as well as secondary offerings.
Over the weekend, the company announced a $190M round led by SoftBank through Vision Fund 2.
The platform is mostly restricted to people and companies that are UK-based. PrimaryBid is working through the US regulatory system and looks to launch by late 2022 or early 2023.
Do I think the company can succeed stateside?
Alan’s Angle:
I’m skeptical.
The American financial system is just not set up this way. The top companies that will IPO or look to do secondary offerings will have over-subscribed demand.
It’s more likely than not that many of the companies that raise money on a platform like this will be ones that struggle to find institutional money— aka, companies that likely are not worthy of retail investment.
PrimaryBid has this quote on their site: “Capital markets transactions are no longer just about raising funds: they’re about raising funds fairly.”
In theory I love it, but in practice, I don’t think that is the game Wall Street plays.
PrimaryBid has an uphill battle.
2. Spotter Secures The Bag
Spotter announced a $200M Series D, led by SoftBank Vision Fund 2, to help fuel their mission of helping creators scale their YouTube channels faster.
The company’s approach is to value YouTubers’ expected library earnings over time and offer them ~80% of those long-term earnings upfront. This enables creators to invest in their channel or even diversify their income streams.
Spotter currently has deals in place with some of YouTube’s biggest creators like MrBeast, Dude Perfect, and Like Nastya. Spotter hopes to invest ~$1B in creators by mid-2023.
Alan’s Angle:
I absolutely love Spotter’s approach as it really looks to do what all the best deals do: benefit both sides. Specifically, what’s most attractive about working with Spotter is that the deal is a 5-year lease – meaning creators still own their content in the long run.
Some issues here:
- Spotter’s deals can be overwhelming for creators
- Significant long-term commitment
- Largely for established creators with big followings
A company I am watching out for that addresses these issues is Playworks. Playworks creates and curates AVOD/FAST video channels, one of the hottest streaming segments in the market, for YouTube creators.
This enables YouTubers to generate additional revenue and gain viewers on platforms like Roku, Samsung, Vizio, etc. with significantly less commitment than Spotter requires.
Prediction: On fire since they raised a $2M seed round in 2019, I expect to see a Series A from Playworks later this year.
Bonus Point: Aaron Debovise used a similar model earlier in his career where he would value movie libraries and offer sums of money upfront to smaller studios when he worked at JPMorgan. Nothing pumps me up more than when people use their past experiences to start a new company.
3. ZenJob + Handshake?
ZenJob is a European-based company that looks to connect students with large companies looking for part-time employees. Earlier this week the company closed a $50M Series D funding round.
This company has been executing extremely well. They currently have:
- 2,500 companies
- 10,000 locations
- 40,000 workers using the platform monthly
And they accomplished all of this while only being launched in two European markets. The company raised $30M Series C ~2 years ago.
ZenJob is at the right place at the right time as side hustles/part-time jobs are exploding:
- In pre-pandemic UK, 40% of full-time workers had a side hustle
- In the US, 70% of college students work while enrolled in college
Why mention the US—ZenJob is in Europe, right?
Alan’s Angle:
Because this is a global opportunity, and I think there is a marriage to be made in the space.
M&A Alan: HandShake should acquire ZenJob
In Newsletter #4, I broke down Handshake, a company that aims to become the Linkedin for college students, aka a professional network for people that are not expected to have experience.
Handshake is crushing it with $100M expected ARR in 2022 and a $200M funding round in January.
Why this would work for Handshake:
- Gives them a launching pad into Europe
- Could embed Zenjob “gig” platform within Handshake to take service to the next level
- Strategic move to significantly differentiate them from LinkedIn
- Could incorporate unique ZenJob features like payout: workers get half their salary within 72 hours of work
Why this would work for ZenJob:
- They would get some serious cash
- They’d no longer need to worry about serious competition from the likes of Jobandtalent and Job Today
- Global expansion overnight
Easy as 1-2-3.
Prediction: HandShake acquires Zenjob (or a competitor) for $2-3B as the company gets closer to its near IPO.
CHART OF THE DAY
EdTech Explosion
Source: HalonIQ
- China was investing in EdTech heavily, years before the US did.
- Even after a 2021 that saw the US invest $8.3B in EdTech, China still invested more than $8B than the US from 2010 to 2021
- The most interesting point is just how far European investment is behind US & China, as they only invested $5.5B last decade
RECENT ROUNDS
Minded
What They Do: Prescribe mental health medication online
Amount Raised: $25M
Institutional Investors: Streamlined Ventures, Link Ventures, Tiger Fund
Why It Matters:
COVID-19 created a second crisis — mental health, one our country is totally unprepared for.
- People experiencing anxiety and depression symptoms increased from 11% to 42% of the population
- Only 7% of large network psychiatrists are taking new patients and have an opening within 2 weeks
Minded is in the right place at the right time, offering monthly calls with a psychiatrist, unlimited messaging, and regular prescription refills for only $65 a month.
Keep your eye on Lemonaide, a telehealth company that raised $33M Series B in 2020, making a strong push into mental health. The company now offers online psychiatry treatment for $25 a month.
I expect there will be many winners in the psychiatric telehealth space.
Learn More: Press Release & Company Website
Willow Industries
What They Do: Manufacture cannabis decontamination systems
Amount Raised: $2M Series A
Lead Investors: Panther Group, LAGO Innovation Fund, Phyto Partners
Why It Matters:
There is a ton of legal cannabis being manufactured and consumed, but only one company that offers a decontamination system stricly for cannabis: Willow.
With legal recreational cannabis sales expected to explode from $11.6B in 2020 to over $25.1B in 2025, Willow has a massive opportunity in front of them.
The company already has a strong presence in 26 states and now has their eyes set on a Canada and Australia expansion.
The best part about their technology? Not only does it kill bacteria, it also enhances the shelf life of treated weed.
Willow is a winner.
Learn More: Press Release & Company Website
Fast Break Labs
What They Do: Web3 startup focused on creating the VBA (Virtual Basketball League) where people will be able to manage franchises like a real GM and earn NFTs, crypto, and more.
Amount Raised: $6M seed round
Lead Investors: Patron & Pantera Capital
Why It Matters:
Everyone wants the experience of being a GM of a sports team, and that’s why fantasy sports is a $22.3B industry globally.
Fast Break Labs looks to make a fantasy-like experience, but with a lot more control and the possibility of earning crypto.
There is a serious path to success for Fast Breaks and VBA to follow in Football Manager, a game from Epic Games that enables you to control every aspect of a team like a GM would.
Football Manager sold a whopping 33M copies in 2021!
I might have to check VBA out for myself!
Learn More: Press Release & Company Website
Debbie
What They Do: Debt payoff platform that rewards healthy habits
Amount Raised: $1.2M pre-seed round
Institutional Investors: One Way Ventures, BDMI, TA Ventures
Why It Matters:
American citizens, and America for that matter, are overwhelmed by debt. 59% of Millennials, 48% of GenX+, and 44% of GenZ feel like their debt load is a huge burden.
From a monetary perspective, student debt alone is over $1.73T
In the technology driven world we live in, it is wild that there are not more companies looking to teach people strong skills of how to manage their debt.
This is Debbie’s vision. The company already has a 10K person waitlist in just 4 months.
The company is still a ways away from a full launch, as just this week they launched an invite-only beta.
Learn More: Press Release & Company Website
PropBidder
What They Do: Online bidding marketplace for buying and selling homes
Amount Raised: $1M seed round
Institutional Investors: Lightspeed Ventures, Futureland Ventures, Sequoia Capital
Notable Investors: John Hennessey – Chairman of Google, Ray Wirta – Former Chairman of CBRE, Jon Oringer – Chairman of Shutterstock
Why It Matters:
This is a competitive landscape. There are already companies like Redfin that are doing a ton of sales online, and Jeff Frieden-founded auction.com was acquired for more than $1B.
So why does this matter? The investors.
The Chairman of Google and former chairman of CBRE, a giant real estate company, do not just throw money away.
The difference with PropBidder is the sophistication of the platform. The platform enables agents to automate preferences for multiple bid situations, price reductions, and deadline driven events.
Learn More: Press Release & Company Website