2020: S-1s, Hedge Funds, and Course Correction

  • Wave of S-1s: DoorDash, Asana, Gitlab, Credit Karma, Airbnb (?)
    Casper, the direct-to-consumer (D2C) mattress company (or sleep-tech if you may), recently filed to go public on NYSE under the symbol ‘CSPR’. It has raised a total of $340 million in the private market from New Enterprise Associates (NEA), Target, IVP (Dropbox, Slack, Snap, Twitter). More on this soon.
  • Investments in overlooked sectors:
    I feel 2019 was a great year for coffee and in general a lot of D2C players. I am hoping 2020 will be more about fitness-tech models, sales-tech and maybe other antiquated industries (real-estate, industrial tech, etc).
    Lack of capital infusion in the aforementioned sectors over the past few years has led to un-encouraging sentiments, hence hindering new entrants to experiment and play the field. What should help in this mission? New avenues of liquidity opening up to nurture and increase the ‘seed’ pool, either in the form of more focussed VCs, ie — Builders.VC, or more domain focussed nano-funds and super-angels.
  • Policy changes, for better or for worse:
    We already ushered into 2020 with Uber, Lyft, and Postmates’ ruffle with California’s gig-economy law, but I am hoping that 2020 will entail some positively catalyzing changes in some parts of the world at least.
  • Hedge Funds scooping up VC deals:
    The Indian startup ecosystem has seen a renewal of faith from Hedge Funds in 2019 and 2020 could be equally or more interesting? Tiger Global already made a blockbuster debut with Byju’s for $200 million last week! Irrespective of market speculations, I am guessing that a lot of repeat founders will end up attracting Hedge Funds to come in even earlier than their usual late-stage rounds.

How 2020 has already not been the greatest so far:

  • New year, massive lay-offs: As some of the Softbank Unicorns are currently under-going an internal purge, I cannot imagine how 2020 must-have taken-off for thousands of employees globally. Zume (360 employees), Oyo (1,800 employees), Rappi (~6% of its staff to be laid-off), and GetAround (150 employees). Is this how businesses will continue to concede to a course correction in 2020?
  • Softbank reneging term sheets:
    Axios reported that Softbank has pulled few ‘mega-round’ term-sheets, insinuating that Vision Fund may be tightening its investment elasticity. My concern is for those Soonicorns who modeled their growth playbooks to get themselves into Softbank’s radar and may now feel stranded 😬

Substack is killing it!

(Substack allows writers like myself to host and run their email newsletters. It has raised a total of $17.4 million from A16Z, Funders Club, Y Combinator, and others)

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