#14/2020

“One of the weird side effects of 100% remote work is that we lose the signalling and "seriousness" of business travel as a way to confer priority and legitimacy. It's much harder to buy your way into someone's schedule now.”
- Alex Danco

Deals

Vela Games raises $3.1M for player-first co-op games (venturebeat.com)
  • This current round will accelerate delivery of the studio’s first title, a unique new genre of gameplay Vela is calling Multiplayer Online Co-Operative, or MOCO for short.
  • One of three founders explains: Players want to play with their friends, which adds a social element. Secondly, players really aspire to master or improve their skills and abilities. So they want these deep, meaningful mastery curves that they can sink hours into and continually get better and feel like they’re getting better. And then finally, the third core motivation is to feel good to achieve things that are meaningful.
  • Opinion: The gaming industry is shifting to much broader audience by focusing more on cooperative and social games and we are actively looking at this industry because we want to be part of it.

Speakly language app nabs €900K to turn you into a polyglot (eu-startups.com)
  • Speakly is a language learning app that uses a unique scientific approach based on the real-life statistical relevance of words and sentences. The company has researched and developed this type of language learning approach for several years and it offers evidence-based 5x faster and 10x more affordable studies compared to traditional methods.
  • Founders speak 7 languages each.
  • Presto: We were initially in discussion with Speakly when they wanted to raise a lower amount but they had great numbers and now is a good time to be in business like this, so I am not surprised they expanded the round.

News

Airbnb Paying More Than 10% Interest on $1B Financing Announced Monday (wsj.com)
  • The loan comes at 10% + LIBOR which is more than a lot of junk bonds before current crisis. 
  • Investors also received warrants that can be converted to stock at valuation of $18 Billion that’s almost 50% haircut from recent valuations of $31 Billion and $35 Billion.
  • Opinion: It is interesting to see that a company that already had $2 Billion in cash needed to raise one more Billion with a terms that are terrible for them. Airbnb does not need money only for itself but also for its superhosts and people making living on the platform because the inventory could significantly decline with crisis if they default on their mortgages and airbnb would lose a significant part of its competitive advantage after crisis.
  • This is in contrast to Slack that is publicly traded in different sector but also unprofitable. Slack raised $750 million for 0.5% interest and convertible to equity at a price 27.5% higher than a week ago (this is also 15% higher than price pre-crisis).

Reading

Highly recommended: Premonition - post pandemic future (subpixel.space)
  • Culture:
    • Under quarantine conditions, there is less opportunity to physically signal one’s participation in a culture, so clothing and conspicuous consumption matter less. Instead, public lifestyle display and subcultural posturing will happen primarily online.
    • Social interaction is moving online into new types of communities and subcultures possibly heading towards 20 - 1000 members social micro-networks. 
  • Brands:
    • Building brands around shared ownership with customers will probably be increasingly important. Expect to see more crowdfunding, patronage, community, and membership-based go-to-market strategies which make ownership an explicit part of the brand experience. It means that people can own a piece of the future that they want to happen, which makes it more likely that it will happen. And when it does happen, it's theirs.
    • We’ll see more brands which do not hold any assets whatsoever, but are simply groupings of individuals giving themselves a name and a presence.
  • Retail:
    • While some restaurants will re-open, we will not see a significant return of retail to cities. With the economy in recession, people will not have the money or inclination to spend on goods. At the same time, some communities that formed online during this period will want to find each other and continue in new meeting places in town.
  • Entertainment:
    • Expect an increase in online sexwork (pornhub community, onlyfans), and sexwork-adjacent activity (NSFW illustration, e-girling, feet pics, findom).  We’ll also see the continued unbundling of Patreon into segment-specific interfaces with specialized features.
  • Tools & Platforms:
    • This situation is forcing us to understand how to retrofit and combine existing technology in new ways to accommodate different social and professional needs. For instance, using Figma has occasionally been used as a place to hang out in and draw, but we’re now seeing furthermore inventive uses.
    • We will probably see Zoom competitors emerge in the next 2 months that serve the JTBD of online collaboration and online socializing much better than Zoom does.
    • More self-organizing friend groups and professional networks are using video calls and enterprise chat as a way to socialize. As a result, many individuals will suddenly begin to experience their interactions as content that can be public and monetized (ie. podcasts). Which is interesting because right now when people are not commuting, the podcast consumption is lower.
  • Opinion: I see major potential in focusing on trends like influencers, sex-themed startups and startups with increased community participation and adoption plus partially community-driven sales. Unfortunately most of these startups will be B2C, and thus be hard to fund without traction in CEE. They will be probably created in the US where the infrastructure for it is much better, the competition from VC for startups is much higher and the US VCs have higher risk profiles and are more moonshot focused than in CEE.

Three Things I'm Seeing Among Currently Profitable Traders (traderfeed.blogspot.com
  • Relying on others - the successful traders are connected to carefully selected information sources and continually updating their views on what they are trading. 
  • Flexibility - they have made a quick adaptation to the higher volatility environment, with specific adjustments each day.
  • Mindset - the successful traders view the current markets through the lens of opportunity; the not-so-successful traders are viewing markets through the lens of risk.

How Not to Be Stupid (fs.blog)
  • I defined stupidity as overlooking or dismissing conspicuously crucial information.
  • In the United States every year, there are roughly 30,000 fatalities from automobile accidents. 210 to 440 thousand people die every year in the United States from hospital error.
  • Seven factors making people stupid: 1) Being outside your normal environment or changing your routines. 2) being in the presence of a group. 3) being in the presence of an expert or if you, yourself, are an expert. 4) doing any task that requires intense focus. 5) information overload. 6) physical or emotional stress, fatigue. 7) being in a rush.


Graph how previous crises impacted valuations of deals (medium.com).   

In case you are interested in helping us with evaluating some companies and industries or just 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.

Comments

Popular posts from this blog

#10/2020

#16/2020

#7/2020