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The DL - Accolade IPO, Race to $2T, Slack vs. Microsoft, and Harvard's New Streaming Service

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Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
 
July 13 · Issue #56 · View online
The DL
Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.

This week’s issue covers Seattle’s first IPO in 2020, a $2T poll, Slack vs. Microsoft, and the value of streaming services.

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Seattle's First IPO in 2020 🎉
Accolade went public on July 2, and it was Seattle’s first IPO of the year! Geekwire wrote a great article on the IPO and interviewed Accolade’s CEO, Raj Singh.

Here are some highlights:
  • This is Raj’s second ever job! His first was co-founder and COO at Concur ($8.3B sale to SAP in 2014)
  • Accolade was founded in 2007, but Raj and two other Concur executives took over as CEO, CPO, and President in 2015
  • Since 2015, the company has raised ~$140M of venture capital and grown revenue to ~$133M
  • Their product helps employees at large companies better understand and utilize their health benefits, with the help of health assistants
  • Their largest customers are companies like Comcast, American Airlines, Lowe’s, and State Farm, whose health plans have 1.7M+ members
  • After filing their S-1 in February (on the same day as ZoomInfo), the entire IPO process was conducted remotely

Accolade is now trading under the ticker $ACCD, and the current market cap is ~$1.7B (up ~60% from the initial offering price). Congrats to the Accolade team on this incredible journey and a successful IPO!

Who will reach $2T first?
ATHs all around!
ATHs all around!
As the tech companies each hit all-time highs, good time to check in and ask DL readers… which company do you think will reach a $2T market cap first? (just click to vote)

Slack vs. Microsoft
It's super confusing how everything in tech is called "vertical" or "horizontal," and here's another type of vertical/horizontal to add to your repertoire
It's super confusing how everything in tech is called "vertical" or "horizontal," and here's another type of vertical/horizontal to add to your repertoire
Stratechery wrote a great article this week on the future of Slack. He starts by going back to that time Slack took out a full page NY Times ad to throw shade on Microsoft Teams (and points out that now Teams has 75M DAUs, while Slack’s last reported number was 12M).

He says the obvious reason that Teams succeeded was that Microsoft gave it away for free. And then, just like Facebook created Insta Stories so that its users would never have to try out Snapchat, Microsoft was able to keep its customers off of Slack and never had to convince them to “switch.”

While many people in tech world love the idea of “best of breed” apps for everything, Microsoft has shown that bundles can create a situation where the whole is greater than the sum of its parts (especially during a time when IT budgets are getting cut).

He goes on to argue that Slack expanding “horizontally” by allowing organizations to communicate with one another on Slack makes much more sense than trying to compete with Microsoft on becoming a “vertical” productivity platform. And that’s why Slack is releasing Slack Connect.

I think the strategy makes sense, but Microsoft has a product called Outlook that already works “horizontally” across any organization. Of course email isn’t chat, and it seems like the the vision for Slack Connect looks more like Bloomberg chat than email. It’s an exciting goal, so let’s see if it works!

Other stuff Dan's talking about
📝 New YC Terms - Ok, so everyone is hating on Harvard for moving to remote classes but charging full tuition. But what about YC moving to fully remote AND lowering the valuation of all of its startups? Thoughts?
Emerging Tech Brew - Great newsletter with bite-sized updates on what’s happening in startups and technology. Here’s a recap of Q2’s tech trends, and a general recap of the crazy first half of 2020
🔨 Seattle Startup Toolkit - Fantastic set of resources for PNW founders curated by pre-seed investor, Kirby Winfield
🍲 “Soup Tube” - Hilarious Reddit post from r/relationships from someone who is looking for advice on how to tell her boyfriend she doesn’t want to invest in his idea - Soup Tube. Not easy being a startup investor! 😝

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About me: I work as an investor at Madrona Venture Group, a Seattle-based venture capital firm that has been early partners with companies like Amazon, Smartsheet, Apptio, and Redfin.
If you have thoughts, questions, or comments, hit reply! If you’re new, check out some of the DL’s top articles from the last few months:

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