Hello, hello! 👋🏻👋🏻
I’ve been thinking about how to evolve this format to make it even better. The first few issues of Tidbits were all organized around themes (e.g. E-commerce, retail, etc). In a way, Tidbits began as a low hurdle way of grouping together a bunch of ideas around a common theme when I didn’t feel like I had enough material for a longer post.
However, over time it’s become less themed simply because each issue includes something in most of the running categories. While I think this has come about naturally (there’s a lot that’s interesting out there, and I don’t think it makes sense to exclude interesting pieces simply to tighten each issue around a core theme), I do think it makes each Tidbits issue a bit less distinctive.
I’d like to change that.
Starting with this issue, I’m experimenting with / expanding the opening section (this section that you are reading) to include a discussion of a core theme or company or concept that hopefully brings back more of that thematic flavor that’s been diluted over time.
As always, thanks for reading! Comments and questions are always welcome. And if you know of anyone that might be interested in what I write, please do share.
Bytedance – China’s Third Large Ecosystem? The World’s Third (or Fourth…or First?) Large Ecosystem?
While there are many large and interesting ecosystems out there, the one that has been the most fascinating to me over the last 5 years has to be Bytedance. I love Sea, but nothing comes close to the near impossibility of what Bytedance has pulled off and appears to be pulling off.
Given that Bytedance is not a public company, I am very likely not an expert on Bytedance and possibly highly mis-informed about what goes on there, so take everything I say with a grain of salt…but with that said, I have followed the company since 2016 when it was still just known for its AI newsfeed product, Toutiao, rather than Douyin / TikTok. At the time, I was growing increasingly concerned about Toutiao’s impact on Baidu (back when Baidu was still considered part of China’s holy tech trinity, BAT – Baidu, Alibaba, Tencent). I’ve had the wonderful opportunity to meet the company on several occasions over the years, including the company once inquiring about potentially investing in them when their last funding round still valued them at “only” $20 billion (this was shortly before the company raised money in October 2018 at $75 billion valuation). Sadly private market investing logistics was a bit complicated at the time and hence did not happen, which is especially painful since Bytedance appears to be looking to go public at potentially $400 billion valuation soon-ish.
What struck me as fascinating about Bytedance even as early as 2016 is that it’s one of the few companies that view themselves not in terms of assets or products or services, but core capabilities. For Bytedance, that core capability is AI and algorithms.
This focus on core capabilities is something that I’ve seen really in only a few companies. I’ve written about a few of them including Apple, Tesla / SpaceX, Amazon, and Nvidia.
What I’ve said before, I still 100% believe in:
Most companies tend to think of themselves as owning a bunch of assets, but the most interesting companies in the world are always the ones that think of themselves as having some sort of unique capabilities. Assets eventually degrade, but companies that understand and think of themselves as having core capabilities will correctly focus on continuing to improve those capabilities in ways that escape their peers.Source: Capital Flywheels – World’s Two Most Interesting Companies Today…or the Intersection of Computation, Energy, and Human History
It’s interesting to consider this concept, especially looking back on the arc of Bytedance’s development. Bytedance was once just a newsfeed (also – it likely inspired Apple News, which is popular but nowhere near conquering the world)! Had it viewed itself as simply a product or service company, today there might be no “Bytedance” at all. There might be no Douyin or TikTok. Had the company been product- or service-focused, we might be talking about Toutiao trying (likely unsuccessfully) to be a super app with messaging, fintech, mini programs, ads, and a bunch of stuff jammed into it. Maybe it might work…but maybe not!
But Bytedance knew itself better than most others know themselves. And they knew that what might make them special is their focus on AI and algorithms.
This is not as easy or straightforward as it seems. Google is an AI company. Google probably has better AI than anyone including Bytedance. But Google is not (at least to my outsider eyes) an AI company. It’s a services and product company. And for this reason, it’s never been a surprise to me that Google has made very limited progress in actually doing much that is mainstream interesting with their AI technology (maybe driverless cars changes my view on this, but we’re still likely some time away from actual mainstream deployment).
And it is likely Bytedance’s focus on its core capabilities that has allowed it do nearly the impossible so far – Disrupt the fairly stable but aggressive duopoly between Tencent and Alibaba in China. Bytedance has somehow made itself relevant in a way that scares the leading two players without much help.
Bytedance is becoming a very relevant and viable 3rd ecosystem in China.
For those that follow China’s tech space, they will also be aware of other emerging ecosystems that have become relevant in recent years. Like Meituan (local services, delivery). Like Pinduoduo (social e-commerce). But these players had some support (both in Tencent ecosystem). Like Didi (mobility)…before it ran into government issues.
Bytedance has achieved greater scale than any challenger ecosystem with arguably less help than any and all of the others.
That’s what has made Bytedance interesting, but what continues to make Bytedance interesting is just how unique its positioning is not just within the China market, but globally.
Bytedance is not only carving out relevance in the China market, Bytedance’s TikTok is also highly relevant outside of China.
TikTok alone potentially makes Bytedance the third or fourth largest ecosystem outside of China (behind Google, Facebook, and possibly Apple depending on whether you view Apple’s ecosystem in the same vein).
But that’s only if you want Apples-to-Apples comparison. The real unfair comparison is the union of these two sets (China and Global ex-China). Maybe I am getting starry-eyed, but is there any company that has the potential to dominate quite literally globally? Most Chinese companies (even Tencent and Alibaba) have very limited footprint outside of China. And most US tech ecosystems have no access to China. In a way, Bytedance is the only company (other than Apple) to have the whole world as its addressable market. But unlike Apple, Bytedance serves everyone.
And if Bytedance’s ambition and vision in China can serve as a roadmap (and its success fighting against Tencent and Alibaba as street cred), Bytedance is potentially on its way to far greater relevance than even the most optimistic people realize.
Here are some examples:
* TikTok owner ByteDance ramps up local services expansion, squaring off against industry leader Meituan
Tech unicorn ByteDance is ramping up its challenge to Meituan, operator of China’s dominant food deliveryprovider, through its short video-sharing platform Douyin, the sister app of TikTok, in a move that will expand the country’s e-commerce market for local services.
Douyin, which started its local services foray in 2018, is now providing a service covering “local eateries, drinking, fun and entertainment” to its 600 million daily active users (DAUs), showing popular destinations in a city in the form of video clips and offering discounted prices under its “group [purchasing]” strategy.
The service has a dedicated channel for many Chinese cities on the platform, offering users with coupons and admission tickets to restaurants and hotels. Douyin encourages users to upload videos that endorse places they like, which its algorithm promotes to their target audience. It has also tested a new mapping feature for users to locate various dining and entertainment establishments, according to local media 36Kr.Source: SCMP
Meituan is by no means an easy target. Meituan has full control over the local services and food delivery industry with strong control over the couriers necessary to make it happen. Bytedance certainly does not aim low.
* Leaked ByteDance Memo Shows Blockbuster Revenue Projections
As ByteDance Ltd. prepares for a historic initial public offering, an internal memo leaked showing TikTok’s owner aims to grow advertising sales in China 42% and triple the size of its e-commerce business this year.
The internet titan is seeking to increase ad revenue for its China-based businesses including Douyin and Toutiao to 260 billion yuan ($39.8 billion) this year from 183 billion yuan in 2020, according to the memo seen by Bloomberg News. The target excludes short-video sensation TikTok. It’s also aiming for e-commerce gross merchandise value of as much as 600 billion yuan, up from 170 billion yuan last year.
If ByteDance hits its sales goal, its Chinese arm will have done in nine years what it took Facebook 13 to achieve, and that excludes TikTok and other businesses abroad. At $40 billion, the nascent ad business would be roughly twice that of YouTube’s.Source: Bloomberg
You know how incredible $40 billion of ad revenues is? Most numbers in tech are so big most people don’t know how to mentally comprehend what the numbers mean anymore. But $40 billion is a lot, even in tech where big numbers are the norm.
This chart probably brings it home:
And these numbers are only for Bytedance China. The TikTok ads hasn’t even started. And Bytedance only started monetizing Bytedance China about 5 years ago.
* TikTok owner ByteDance boosts investment in Roblox-like video game platform in race with Tencent to create the metaverse
ByteDance, owner of the short-video app TikTok, has increased its investment in Roblox competitor Reworld by nearly 100 million yuan (US$15.3 million), according to people familiar with the matter, as the company seeks its own so-called metaverse platform in its escalating rivalry with video game giant Tencent Holdings.
Amid an aggressive push into gaming, ByteDance has been seeking to take on Tencent across all genres, using both in-house development and investments. A resulting bidding war has pushed up the valuations of small, independent Chinese studios in China.Source: SCMP
Everyone knows Tencent. Everyone (starting to) know the concept of the metaverse. Bytedance wants that, too.
And it’s starting to make itself heard:
This also comes on the heels of Bytedance’s acquisition of C4-Games and Bytedance’s acquisition of Moonton. Not only does this increasingly put Bytedance into direct competition with Tencent at the consumer level, it also puts Bytedance into direct competition with Tencent at the supplier level in terms of acquisitions and inking relationships with promising game studios.
Moonton is the latest example of an independent Chinese gaming studio whose valuation has skyrocketed on the back of a bitter bidding war between two of China’s biggest internet companies. Beijing-based ByteDance has been aggressively moving into gaming in a bid to further monetise its vast user base, horning in on a market long dominated by Shenzhen-based Tencent, which operates the world’s largest video game business by revenue.
However, the battle for Moonton, the developer of team-battle game Mobile Legends: Bang Bang, came at a steep price, which two sources familiar with the deal said was worth US$4 billion. Accepting ByteDance’s offer also meant breaking one with Tencent that Moonton had signed just days before, according to the sources, who asked not to be identified.Source: SCMP
#1 Xi’s Next Target in Tech Crackdown Is China’s Vast Reams of Data
Until recently, China’s megafirms like Jack Ma’s Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have operated in a similar way to U.S. counterparts Facebook Inc. and Alphabet Inc., harnessing user data to refine an expanding array of digital services. Since more data leads to better products, the tech platforms often become natural monopolies — giving them enormous wealth and power that also opens the door for abuses.
More U.S. lawmakers have started calling for legislation to break up the American firms, but so far those efforts have failed to gain much traction. Europe has focused mainly on giving users more control over data and levying hefty antitrust fines against companies like Google.
China, by contrast, is going further than any other country to rein its tech behemoths. Xi last month declared his intention to go after “platform” companies that amass data to create monopolies and gobble up smaller competitors. China’s regulators followed up by slapping a record $2.8 billion fine on Alibaba for abuse of market dominance, and gave dozens of other top internet companies a month to rectify anti-competitive practices.Source: Bloomberg
I feel like a broken record.
The geopolitical fights of the future are all country vs tech.
There are really two angles to this. The west is still focused on economic impact of tech power. But tech power goes beyond that. The evolution of tech is directly undermining the power that enables government operations and legitimacy. China likely recognizes this and is ahead of the curve. The west will likely eventually follow. Maybe not in the same footsteps, but certainly recognizing the same issues.
#2 Biden Eyeing Tax Rate as High as 43.4% in Next Economic Package
President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6% to help pay for a raft of social spending that addresses long-standing inequality, according to people familiar with the proposal.
For those earning $1 million or more, the new top rate, coupled with an existing surtax on investment income, means that federal tax rates for wealthy investors could be as high as 43.4%. The new marginal 39.6% rate would be an increase from the current base rate of 20%, the people said on the condition of anonymity because the plan is not yet public.Source: Bloomberg
Only affects people with $1 million or more in income. I don’t have numbers in terms of income distribution vs capital assets held, but I suspect most capital assets are held by people that do have more than $1 million (simply because of compounding and how power laws work).
The market reacted pretty sharply when the headline initially hit, but has since recovered. Will be interesting to see if this makes it through Congress, and how the market adjusts. This change effectively equalizes long-term gains tax against short-term gains tax. The US government currently offers lower taxes on long-term gains because (historically) it assumes this will incentivize long-term investments. But it turns out that really only rich people like to invest long-term. Most retail investors and small money investors love short-term trading. Leaving aside the merits of short-term trading vs long-term investing, it’s easy to see why people think this is not fair…I wonder if wealthy people will start to do short-term trading, too, simply because there will no longer be a tax penalty for doing so or if the wealthy stick with long-term investing because it might be the better path to long-term wealth.
#3 Binance, the world’s largest cryptocurrency exchange, is launching an NFT marketplace
Cryptocurrency exchange Binance revealed plans on Tuesday to introduce its own marketplace where users can create, buy and sell digital collector’s items known as NFTs.
Binance, which is the world’s largest crypto exchange by trading volumes, said its platform would operate two markets: a premium venue for top auctions and exhibitions and a standard trading market that anyone can use to mint new tokens.
The premium segment would take a 10% cut from the proceeds of major auctions, Binance said, with 90% going to artists. The day-to-day trading market will charge a 1% “processing fee,” while creators “will continuously receive 1% royalty,” according to Binance.
Binance’s NFT feature is set to debut in June. The company has launched a landing page that will let artists contact the firm about potential partnerships.
The move marks a challenge to Gemini, the crypto exchange founded by Tyler and Cameron Winklevoss. Gemini operates its own NFT marketplace, Nifty Gateway, which has hosted auctions from big names like Eminem and Grimes. It would also open up a new revenue stream for Binance, which has benefited considerably from the surging interest in bitcoin and other digital currencies.Source: CNBC
Okay, I will avoid discussing the merits of NFTs as an investment, but I do have to say, it’s a pretty interesting concept. And while people can get hung up on the investment aspect of NFTs, I assume most people will “get it” if NFTs are simply marketed as a donation to your favorite creator or an article of consumption.
And Binance is really lowering the barrier to entry here!
What I want to know is:
1/ Do NFTs survive this coming flood of NFT creation as an investment? Seems like soon anyone can create one. Maybe even my mom. When supply expands really fast, you should think about where prices might go (probably not up or not up as fast as you think unless demand also expands really fast in lock-step).
2/ If NFTs are just simply a way of donating to your favorite creator or a token of appreciation, do fans prefer NFTs as the vehicle if NFTs do not appreciate? For example, maybe I want to support my favorite artist. Do I want an NFT? I think I would personally prefer private backstage access or something like that. But this does not have to be an either / or consideration.
My conclusions continue to be: Great for artists. Maybe good for consumers. Questionable for investors.
My mom periodically goes to the casino and loses money all the time. I once asked her why does she even go if she loses money. She said – You think I’m trying to make money! I’m just paying for entertainment. It’s like going to watch a show or watch a movie. I don’t expect to come out any richer from any of those activities either.
Maybe that’s what NFTs are.
#4 Facebook: WELCOMING DOWNPOUR INTERACTIVE TO FACEBOOK
Dante Buckley, Founder and CEO of Downpour Interactive, has stood out over the last several years as a source of inspiration within the VR industry thanks to the stellar success of Onward, a multi-platform multiplayer MilSim. Onward launched as a multiplayer game long before social became a breakout VR trend and, accordingly, Downpour Interactive leads the VR industry as a best-in-class example of a developer working in tandem with its loyal community to create the best possible social and gaming experience. Today, I’m honored to share that Downpour Interactive is joining Facebook.
As part of the Oculus Studios team, Downpour Interactive will expand upon its ethos of creating stand-out games that evoke the human spirit and give players a “downpour” of emotion. We’re so happy to welcome them to the family.Source: Facebook
Facebook is becoming a game company?
Facebook becoming Tencent of the VR era?
AR / VR will be a reset not unlike what phones did to the PC world. Change is always easiest when the field is green. But I’m not sure if this means Facebook will change its business model or its culture.
#5 Afterpay Unveils New ‘DROPSHOP’ with Exclusive Early Access to Nike Air Max
Afterpay (ASX: APT), the leader in “Buy Now, Pay Later” payments, today announced the launch of ‘The DROPSHOP by Afterpay.’ This new global platform unlocks exclusive access to limited edition merchandise, offers and experiences that are only available with Afterpay. The DROPSHOP will connect Afterpay’s millions of customers with the best brands and retailers in the world – giving shoppers instant access with the ability to use their own money and pay over time. Available throughout the shopping season, The DROPSHOP is a place customers would line up for – but don’t have to.
The first drop, in partnership with Finish Line, will give U.S. Afterpay consumers early access to a limited edition Nike AIR MAX 90 in a black, orange and silver color-way. Shoppers can try on the sneakers virtually via an innovative new Snapchat augmented reality (AR) Lens- and Afterpay the shoes in just a few clicks through FinishLine.com.
Afterpay has joined forces with Snapchat for this inaugural launch to power The DROPSHOP with this fresh way of shopping – via AR. Afterpay has seen the impact that the pandemic has had on the way consumers interact with products, and shoppers have adapted to new ways of experiencing their favorite fashion and beauty items. Snapchat has pioneered a new way of doing this through their AR technology, making them the perfect launch partner for Afterpay.Source: PR Newswire
The Paper Portfolio currently has a position in Afterpay, a leading BNPL player from Australia (but the largest geography for them is now the US). This evolution makes a lot of sense to me and has been sort of predictable, but not clear to me how other investors will view this changing narrative. On one hand – Afterpay is moving into adjacent territory. On the other hand – Afterpay (and all BNPL players) are starting to recognize the dangers of just being a payment method.
#6 Mastercard to Acquire Ekata to Advance Digital Identity Efforts
Trust is the key ingredient to conducting digital commerce. Central to creating trust in a digital world is the ability to prove your digital identity – who you are, whether you are interacting in person, online or in app.
Ekata works with a wide range of global merchants, financial institutions, travel companies, marketplaces and digital currency platforms. The company uses insights to deliver unique scores, data attributes and risk indicators that businesses then use to make more informed decisions. They help their customers identify good consumers and businesses and bad actors in real-time during online account opening, payments and variety of other digital interactions.Source: Mastercard
Payments and identity. Payments is identity.
#7 Amazon is loosening its grip on customers and letting some sellers reach out to them
Amazon is quietly rolling out a way for some sellers on its site to engage with shoppers, in a move that represents a departure from its historically tight controls over customer data.
Last week, Amazon began piloting a tool that enables U.S. companies that are part of its Brand Registry program to email marketing materials to shoppers who have opted to “follow” their brands. These companies can then notify those shoppers when they launch a new product or promotion.
The follow button is featured in areas such as a businesses’ store page and videos on Amazon Live, Amazon’s livestream shopping platform.
Businesses have been requesting that Amazon launch more services to help them build more durable relationships with shoppers on the site, said Fahim Naim, a former Amazon employee who now runs e-commerce consultancy eShopportunity.
On Amazon, which hosts millions of products, it’s crucial for brand owners to be able to stand out among a sea of competitors. To that end, the company has increasingly launched new tools or improved existing ones, such as Amazon Stores, which are akin to a landing page for businesses, or Amazon Posts, which is an Instagram-style, shoppable feed of lifestyle product images. Amazon has also given companies more tools to personalize their product listing pages, such as interactive videos.Source: CNBC
This is a very interesting change.
There are a lot of ways to read this. Maybe Amazon is feeling pressure from competitors and feels it needs to open up the ecosystem more, especially to address its weakness in helping consumers and brands form new connections. Right now, presumably, most people go on Amazon to buy products from brands they already know. To the extent they are buying things that are not from brands they know, they probably have no intention to know the brand at all (e.g. white label utility goods). But most of what makes commerce sing is the branded stuff, and Amazon is not the first place people go for branded goods.
Alternatively, Amazon is very good at playing 3D chess. Its whole business strategy is to create the best operations at every level and open it up to even outside competition. Maybe this is just another way that Amazon is positioning itself so that it wins even if it loses in e-commerce. If a brand can do a better job wooing consumers off-Amazon, great! But use Amazon as the backend for transaction completion and logistics and fulfillment.
#8 Facebook Earnings + Commerce
Facebook reported some blow-out numbers. No recession here.
But what really struck me is how increasingly front-and-center commerce is for Facebook. Zuckerberg seems to suggest that Commerce is now a pillar for the future alongside AR / VR.
Now turning to the results. This was another strong quarter, more than 2.7 billion people now use one or more of our apps each day and more than 200 million businesses use our tools to reach customers. And this has been an intense year and I am proud that we continue to deliver value for people and businesses around the world. Over the past couple of quarters, our business has been performing better than we expected. And this is given us the confidence to increase our investments meaningfully in a few key areas that have potential to change the trajectory of the company over the long term. So on today’s call, I’m going to talk about the opportunities that we’re pursuing in augmented and virtual reality and around commerce, business messaging and creators.
Now beyond AR and VR, I’m going to call out some of the other long-term opportunities that we’re really focused on, especially in commerce and business messaging.
Commerce has been growing in our services for a while, but it is becoming a lot more important as the pandemic has accelerated a broader shift towards businesses moving online. In the last year, we’ve seen online storefronts stay open even when physical stores closed and going forward online commerce will continue to offer an increasingly personalized and convenient experience. Commerce ads continue to do very well and drive a meaningful amount of our overall business.
We’ve built marketplace into one of the world’s leading services for people to buy and sell and I am pleased to share today that more than 1 billion people visit marketplace each month. And now we’re investing in building for the future of commerce, so we launched Shops last year, and as I recently shared. we’re there are now more than 1 million monthly active Shops and over 250 million monthly Shops visitors. We are also focused on building more native commerce tools across our apps. We recently updated WhatsApp catalog, so businesses can keep them updated from their computers and to include what’s in stock. We launched carts on WhatsApp last year and people have use them to send orders more than 5 million times. We are also building a broader infrastructure to support commerce. Everything from payments to customer service and support.Source: Facebook 2021 1st Quarter Earnings Call
And these new creator-focused marketplaces look like another interesting area for aggregation:
Facebook CEO Mark Zuckerberg said in an Instagram Live chat with Instagram CEO Adam Mosseri on Tuesday that the company is building new tools to help creators make money off of commerce.
Affiliate: Zuckerberg says Facebook is looking into building an affiliate and recommendation marketplace. The goal of this new product, which Facebook is testing, is to help creators make money for the products they recommend.
Brand Marketplace: Zuckerberg says Facebook is looking into creating a marketplace to match up creators with brands. Mosseri said a marketplace will help the company facilitate more branded content partnerships in a responsible way. “We would love to help creators vet brands,” he said.Source: Axios
#9 Pinterest and Shopify expand partnership to boost social commerce globally
To help merchants around the world easily bring their products online and respond to a growing demand from global consumers, Pinterest is expanding its partnership with Shopify to 27 new countries. The Shopify Pinterest channel is now live in these new countries including Australia, Austria, Brazil, France, Germany, Italy, Spain, Switzerland, and the UK. Now, more than 1.7 million Shopify merchants around the world have an easy way to bring their products to Pinterest and turn them into shoppable Product Pins that are discoverable across the platform. Shopify merchants advertising on Pinterest through Shopify will also have access to Dynamic Retargeting for the first time, which will enable them to re-engage with Pinners who have already expressed interest in their products on Pinterest.
Pinterest is also launching Multi-feed support for Catalogs, a new feature allowing businesses to easily upload their products in multiple product feeds within the same Pinterest Business account. Shopify merchants as well as any retailer with a Pinterest business account are now able to add up to 20 product feeds to their account, each indicating specific local data such as a currency, language or product availability. Multi-feed support for Catalogs gives retailers the opportunity to engage more easily with customers all over the world, allowing them to upload a specific feed for each market they sell products in but also to upload feeds to serve different advertising strategies such as prospecting or retargeting.Source: Pinterest
I love this partnership a lot, and it’s expanding even further.
Outside of the developed markets, Instagram and Pinterest are probably two of the best positioned channels for commerce. And Shopify is going to help power that.
#10 ShopeePay introduces O2O ‘Deals Near Me’ feature
MOBILE wallet ShopeePay has introduced a new online-to-offline (O2O) feature. Dubbed ‘Deals Near Me’, the feature connects ShopeePay users to offline merchants offering the best deals in their immediate vicinity, Shopee said in a statement.
Deals Near Me uses location-based services to help users discover ShopeePay Vouchers by nearby merchants including cafes, restaurants, and services. Users can purchase vouchers on the Shopee app, and redeem them immediately at participating outlets to enjoy cashback when they pay with ShopeePay, the e-commerce player said.Source: Digital News Asia
Sea / Shopee continues to expand the use cases for their platform. Now Shopee is quite far beyond the boundaries of traditional e-commerce. The addition of local services comes on the heels of their recent expansion into food and grocery delivery in some of their Southeast Asian markets.
So far I am not aware of any e-commerce company globally that has successfully entered local services and delivery. So I wouldn’t get my hopes too high. But maybe Sea will be the first.
The competitors are not pushovers, though. Grab and Gojek are pretty formidable. Both are going public and raising billions of dollars as well.
#11 Grab, the Leading Superapp for Deliveries, Mobility and Financial Services in Southeast Asia, Plans to Go Public in Partnership with Altimeter
The proposed transactions value Grab at an initial pro-forma equity value of approximately US$39.6 billion at a PIPE size of more than US$4.0 billion and will provide Grab with approximately US$4.5 billion in cash proceeds. Grab is a superapp dedicated to serving everyday needs and everyday entrepreneurs. It offers services across mobility, deliveries, financial services and more, in an all-in-one app.
Grab believes it is perfectly positioned to serve the needs of consumers, merchants and drivers in Southeast Asia through its superapp strategy. It offers an ecosystem of complementary services, addressing high-frequency, everyday needs, all through one app. This creates a flywheel effect designed to drive growth while lowering cost of service. The more services offered, the more the choices, and consequently the greater the value to consumers using the Grab superapp. In fact, the proportion of Grab users that use 2 or more services has grown 5 times over the last two years . As consumer spend grows, so do the income opportunities for Grab’s merchant and driver-partners, encouraging more of them into Grab’s ecosystem. This leads to wider selection, better value, and faster delivery times for users, with benefits to consumer loyalty and lifetime value.Source: Grab
Meanwhile, Grab’s key competitor in mobility services, Gojek is in talks to merge with Tokopedia, one of the leading e-commerce platforms in Indonesia.
Sea = Games (Garena) + E-commerce (Shopee) + fintech + maybe food / grocery delivery and local services
Grab = Mobility + delivery + fintech
Gojek = Mobility + delivery + fintech + e-commerce (Tokopedia)
#12 Building Digital Worlds: Snap Acquires Pixel8earth
Snap has confirmed to us that it has acquired Pixel8earth, a company developing 3D mapping technology, specifically based on crowdsourced data.
For the record, Pixel8earth — co-founded by Sean Gorman and Pramukta Kumar, two repeat founders and mapping PhDs — had built a platform where it encouraged people (dubbed “ambassadors”) to join the platform and use their 360 cameras and other cameras to record and contribute information to the startup’s global mapping database. (In that regard, the tech was not unlike what Mapillary, acquired by Facebook, had developed.)
Snap has largely been building its mapping experiences around the idea of using maps to increase and improve engagement with its users. One of the bigger deals it’s made on that front was its acquisition in 2017 of Paris-based startup Zenly, an app that let you opt in to be able to be discovered by your friends on a map. Other mapping acquisitions have included StreetCred, announced in January of this year. StreetCred’s service was shut down after the deal, but it was also based around the idea of crowdsourcing points-of-interest and other mapping data, paying contributors in crypto tokens and putting the information “on the blockchain.”Source: TechCrunch
Another interesting acquisition for Snap that might have very wide implications for Snap Maps. Snap continues to do some really different things with maps.
But what I think is interesting is whether Snap can make a better Google Earth. In a way, Snap Maps doesn’t really compete with Google Maps (or any other maps product for that matter). Everyone else is focused on navigation. Snap Maps is focused on content and what matters to you in the real world.
With this technology, Snap has a low cost way of creating Google Earth. But instead of showing you literally just Earth, it could be (I assume) a personalized version of Earth for you. And better yet, Snap doesn’t have to send cars and backpackers around the planet to photograph the planet. Snapchatters are willingly doing that around the world already!
Meanwhile, I will have to admit Google Earth’s new time-lapse functionality is pretty incredible. But I question its commercial possibilities.
#13 Nvidia GPU Technology Conference – New Systems and Software + Move into Datacenter CPUs
Nvidia held its annual GPU Technology Conference (GTC) a few weeks ago. There were a lot of announcements.
The biggest surprise is that they are getting into datacenter CPUs. That means they will be executing on 3 major platforms going forward: GPUs, CPUs, and DPUs (data processing units).
One thing that got a lot more attention is their focus on software and bringing AI to enterprises. This has always been something that I think Nvidia is extremely well positioned for, but has always played second fiddle to the hardware.
Too many investors seem to still view Nvidia as a hardware company, but that can’t be further from the truth. AI has potential everywhere, but most companies don’t have the necessary AI talent to make that happen on their own.
Nvidia is quite simply the best positioned player here because they are creating full-stack AI solutions that enable even less sophisticated enterprises to enjoy the fruits of AI. For example, Jarvis is Nvidia’s solution for AI-enabled conversational bots. Merlin is Nvidia’s solution for AI-enabled recommender systems. Merlin allows less mature or less technologically sophisticated commerce companies to adopt recommendation engines that are as capable as the ones used by the mega-tech platforms. Or Clara, which brings AI to the healthcare space (a space, by definition, with limited focus or expertise in AI).
And this is a great slide of how the business model has evolved into three key layers: Hardware, platform software, and application frameworks.
#14 Can Blood from Young People Slow Aging? Silicon Valley Has Bet Billions It Will
Earlier this year, Grifols closed on a $146 million-deal to buy Alkahest, a company founded by Stanford University neuroscientist Tony Wyss-Coray, who, along with Saul Villeda, revealed in scientific papers published in 2011 and 2014 that the blood from young mice had seemingly miraculous restorative effects on the brains of elderly mice. The discovery adds to a hot area of inquiry called geroscience that “seeks to understand molecular and cellular mechanisms that make aging a major risk factor and driver of common chronic conditions and diseases of older adulthood,” according to the National Institutes of Health. In the last six years, Alkahest has identified more than 8,000 proteins in the blood that show potential promise as therapies. Its efforts and those of Grifols have resulted in at least six phase 2 trials completed or underway to treat a wide range of age-related diseases, including Alzheimer’s and Parkinson’s.
Alkahest and a growing number of other geroscience health startups signal a change in thinking about some of the most intractable diseases facing humankind. Rather than focusing solely on the etiology of individual diseases like heart disease, cancer, Alzheimer’s and arthritis—or, for that matter, COVID-19—geroscientists are trying to understand how these diseases relate to the single largest risk factor of all: human aging. Their goal is to hack the process of aging itself and, in the process, delay or stave off the onset of many of the diseases most associated with growing old.Source: Newsweek
The biggest TAM in the world is not tech. It’s not even cancer or disease. The biggest TAM in the world is aging. Anyone that solves that, has the potential to offer the single thing that (I think) everyone in the world will want – limiting the effects of aging.
I have a personal investment in this area (Unity Biotech – UBX), but it’s more of a speculative bet at the moment. The first drug trial failed, which might suggest UBX could be a 0. But whether it’s UBX or something else, some day someone smart will figure this out.
I’ve had a lot of discussions with people about this type of “technology” over the years. I’m frankly always surprised at how few people want this like me. But the hang-up usually seems to be that most people think this means “immortality”. And most people that I speak to do not want that.
But that’s not the promise here. The promise here is that you can live somewhat longer (to 100-150) but with greater quality of life. Many, many more people are living to 90 or 100 these days, but most people are no longer really “living” by the time they are past 70. Mobility declines, eyesight declines, body starts to malfunction. It’s more like surviving. Not really living.
More people are surviving to 100, but few are living to 100.
The research going on in aging field has the potential to change that. I would love to live to 100. I don’t need more. I don’t need THAT much more. But it would be great to have some mobility and quality of life sustainability when I get up past 70.