#1/2020

“When you think back on your life and you look back over the course of your lifetime, you're not gonna think,"I wish I spent more time on the internet. I wish I spent more time at work or sleeping," It's gonna be,"I wish I spent more time with the people I love."
• Gary Lewandowski

Presto News

Vilnius-based GoRamp lands €120K to grow its real-time logistics platform from StartupWiseGuys, Presto Ventures and an angel investor (startups-eu.com)
  • We are happy to announce our investment in GoRamp, startup offering a real-time logistics platform for manufacturing and retailing companies that connects all supply chain members.
  • The startup calculates the added value of its product by three key indicators 70-4-20: up to 70% automated human manual tasks, up to 4 times faster information exchange across the logistics chain and up to 20% reduced logistics costs.
  • Explanation: Our smallest investment so far that might start a new strategy of investing smaller amounts into more companies and letting current investors + angels lead the investment.

Deals

Proptech startup HqO raises $34M Series B to bring tenant experience (TeX) to commercial real estate market (techstartups.com)
  • HqO’s technology unifies all of a building’s tenant-facing technology, amenities and conveniences into a single platform.
  • Currently has 70 million sqft of buildings (cca 6.5 million m2) and offices in Boston, New York, London and Paris.
  • Opinion: HqO is 2-year old startup and competitor to our portfolio company Sharry. HqO’s success shows that the market is mostly untapped with a lot of potential for fast growth.

Midnite raises $2.5M for its e-sports betting platform from Makers fund and Betfair executives (techcrunch.com)
  • Betting provider focused only on e-sports that built its platform completely in-house. To other providers e-sports is just another tab while for Midnite it is main business.
  • Wagering on e-sports is expected to exceed $12 billion by the end of 2020, making betting already one of the fastest growing verticals within e-sports.
  • Opinion: We believe in the growth of esports and especially betting markets and we are currently looking at few startups related to it.

TeleVet Raises $2M to Facilitate Digital Vet Appointments (builtinaustin.com)
  • Texas-based TeleVet was created to streamline this vital relationship between pet practitioners and pet parents through booking and seamless communication via texts, e-mails and video calls on its platform and app.
  • Total spending on healthcare for US pets is expected to exceed $16 billion this year.
  • Opinion: We believe this is a great combination of taking a concept that works in other industries (spa, healthcare, mental health…) and adjusting it to a growing albeit smaller sector.
  • Pets are another sector we are interested in and currently looking at several startups in it and looking for experts/consultants that can help us to evaluate them.

India’s HomeLane raises $30M to expand its one-stop shop for interior design (techcrunch.com)
  • Helps property owners furnish and install fixtures in their new apartments and houses by working with interior designers who provide product suggestions, price quotes and 3D pictures.
  • Existing investors Accel Partners and Sequoia Capital participated in this round.
  • Presto is intensively focused on this sector and we are in advanced discussion with one similar company.

Salamanca-based Beonprice raises €2.5 M to boost its AI-driven revenue tool for hotels (eu-startups.com)
  • Technology utilises an AI-driven index to assess a hotel’s reputation and market position. From here, Beonprice gives effective rate strategy recommendations to maximise a property’s RevPAR (Revenue Per Available Room).
  • 8-year old startup works with over 2,000 properties in more than 30 countries.
  • In a market where only 16% of hotels currently use a Revenue Management System.
  • Opinion: We definitely believe in future of such tool as one of our startups, Yieldigo, also works with AI price recommendation for retailers.

News

Vector, a satellite launch company that raised $90 M from VCs files for Chapter 11 bankruptcy (spacenews.com)
  • One of Vector's major investors, venture fund Sequoia, withdrew its support for the company because of concerns about how the company was managed. That came as Vector was working on a new funding round, and Sequoia’s decision had a domino effect, causing other investors to back out.
  • Vector's assets will be sold to Lockheed Martin for no more than $2.5 M.
  • Opinion: Vector's story highlights the danger of having high profile investor in the company. When they back out, other investors see a red flag and company can go bankrupt.

Tesla Motors is now America's most valuable car company of all time (cbsnews.com) + 100 page Tesla reality check (plainsite.org)
  • Tesla is worth around $90 billion which is more than Ford and General Motors combined while negative profits compared to $15 billion yearly profit for these competitors.
  • Over a 100 page negatively biased report documenting the entire story of Tesla was released by Think Computer Corporation. Very interesting reading that I would recommend especially to startup founders.
  • When Peter Thiel replaced Elon Musk as CEO of Paypal after his six months tenure, he described Musk as “the man who knew nothing about risk”.

Reading

Startup Growth and Venture Returns: What We Found When We Analyzed Thousands of VC Deals (angel.co) + full report (angel.co)
  • Conventional investing wisdom tells us that VCs should pass on most deals they see. Research indicates otherwise: At the seed stage, investors would increase their expected return by broadly indexing into every credible deal.
  • Simulations on 10-year investing windows for seed-stage deals suggest fewer than 10% of investors will beat the index, even if those investors have skill in picking deals.

SoftBank’s and its Vision Fund troubled investing year (techcrunch.com) + Memo From Zume CEO Says No More Pizza, Just Packaging (crunchbase.com)
  • Wag!, Uber, Brandless, WeWork, Compass, Fair, Katerra, OneConnect, OYO, Getaround and Rappi are among the startups that are facing layoffs and are having trouble.
  • Zume deep dive: In October 2017 Zume raised $48 M at $170 M valuation in Series B without revenue. Softbank came year later with $375 M investment with $2.25 B valuation (13x valuation multiple) again without significant revenue. Zume made one acquisition of startup Pivot Packaging in June 2019, this startup had no money raised from investors. Now Zume decided to abandon their own businesses and focus only on packaging.
  • Opinion: Zume did not have a proven product and I believe they should be raising significantly less money trying to prove the concept and not going all-in on research.
  • Opinion: Mentality of “why not just raise more money” is not good. It raises expectations for a startup that is now not going to get anywhere close to this valuation or investment required. Thus they cannot finish their pizza businesses and have to pivot to pizza packaging.
  • Opinion: This also highlights the danger of raising a lot of money from such a prominent investor. When Softbank started having trouble at few of their startups thus problems with raising Vision Fund II, they focused more on being involved in the startups and turning them towards profitability. Softbank has a major share in the startups due to their outsized investments and also a brand name; hence they could dictate next steps to the startup. This also had consequences for startups that are doing relatively well, but have to lay off part of the workforce (sub 20%) and also startups not in Softbank portfolio such as CafeX (Zume for Coffee) and Lime.

In case you are interested in helping us with evaluating some companies and industries or you just want to discus any of these articles, feel free to reach out to Roman from Presto Ventures at roman@prestoventures.com or Linkedin.

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