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| August 31 · Issue #63 · View online |
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Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
This week’s issue recaps a big week for tech investors, data proving Seattle is better than SF, Amazon’s new product launches, and how to master TikTok .
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Was last week the best week of the year for tech investors? Not only was it YC Demo Day, but a bunch of tech startups filed to go public as well! Here are some links and articles to get caught up on all of the excitement:
Y Combinator
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Demo Day - This was the first fully virtual YC batch (from interviews through demo day). Here are TechCrunch’s notes on all the companies
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Adyn (birth control), Batch (event backup), and Milkrun (local groceries) - Special shoutout and congrats to the PNW startups that did YC!
S-1 Filings
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Snowflake ($242M rev last six months, +133%) - Their cloud data platform sits at the center of several tech trends, and they might be the fastest growing enterprise company, ever. Here’s a good S-1 analysis
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Asana ($142M rev, +86%) - Project management platform started by Dustin Moskovitz, one of the cofounders of Facebook. Here’s a side-by-side comparison of Asana vs. Smartsheet
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Palantir ($742M rev, +25%) - Peter Thiel’s data analytics company. Here’s the Hacker News discussion on their S-1, where people are debating Palantir’s contrarian values
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Unity ($542M rev, +42%) - 50%+ of games are built with Unity, and they are planning to grow into new markets as well. Here’s how they make money and how they compare to other SaaS companies
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Jfrog, Amwell, Sumo Logic, Corsair - Here are some highlights from the rest of these companies’ S-1 filings from Protocol and TechCrunch
Observations
- At a ~20x revenue multiple, there will be $40B+ of market cap created between all of these companies
- The oldest companies in the S-1 list are Corsair (founded 1994) and Palantir (founded 2003), and the youngest is Snowflake (founded 2012). It takes a long time to build a $100M+ revenue business!
- All of the companies are B2B software or gaming. Not a lot of IPO investor interest in consumer right now given market uncertainty
- There were also a dozen SPACs that filed S-1s last week, but it doesn’t look like SaaS companies are very interested in using them to go public
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Based on anecdotal research and close observation of Zoom backgrounds, everyone without kids has left San Francisco to live in random places around the country. And here’s data from Zillow backing that up!
Compared to 2019, there is ~100% more housing inventory in SF, and prices have dropped by 5%. People in Seattle, on the other hand, seem to be sticking around! There is less inventory, and home values have increased 5-8%.
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So last week Amazon came out with a couple new products:
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Amazon Fresh - a 35K sqft grocery store (3x larger than the Go grocery store) that uses a smart cart to do cashierless checkout. Amazon now has six different types of physical stores: Whole Foods, Fresh, and Go grocery stores, book stores, 4-star stores, and pop up stores
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Amazon Halo - a new health and wellness wearable that tracks activity, sleep, body fat, and emotions (through your voice!). I think the voice aspect is creepy now, but my prediction is it will be totally normal (or totally illegal) in 10 years
But really, I’m looking forward to when Amazon announces drone ski resorts. Geekwire uncovered this patent filing for a drone-powered towing system for skiers, surfers, and skaters that can lift users in the air. Can’t wait to yell into my Halo for my Prime Air drone to take me up Mt. Amazon!
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📷 Q2 snapshot - WSJ graphic showing YoY growth for every company in the S&P 500. Furthest left are Norwegian Cruise Lines (-99%) and LiveNation (-98%). Furthest right are L3Harris (+138%) and TakeTwo (+136%) 🚫 #banlife360 - How the CEO of Life360 (location tracking app for teens) went from being one of GenZ’s most hated CEOs to one of the most liked thanks to $20K of advice from TikTokers 💉 COVID recovery - I’ve been checking the superforecaster site every few weeks to see how their predictions are changing on a COVID vaccine. Looks like they are getting more bullish on a vaccine before April 2021!
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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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Seattle, WA
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