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The Companies To Watch After WeWork
Following WeWork’s unsuccessful IPO (so far), people became more concerned with valuations similar companies – as Morgan Stanley says WeWork’s failed IPO marks the end of an era for unprofitable unicorns and its struggles share eerie similarities to three other market tops throughout history.
In public, the chairman of Softbank, Masayoshi Son commented that WeWork and Uber may be losing money now, but they will be substantially profitable in 10 years’ time.
Meanwhile, there are a bunch of other similar companies of watch and we can see what other investors are thinking.
City Storage Systems (CSS)
formerly called CloudKitchens, or “WeWork for Food”, led by Uber ex-CEO Travis Kalanick, with $150 million funding announced in March 2018.
My new gig… pic.twitter.com/vpD528cdyf
— travis kalanick (@travisk) March 20, 2018
Travis announced that he would be starting a new fund with his windfall from Uber shares sold in its most recent major secondary round. At the time, Kalanick said the new fund — called 10100, or “ten one hundred” — would be geared toward “large-scale job creation,” with investments in real estate, ecommerce, and “emerging innovation in India and China.” CSS has two businesses, CloudKitchens and CloudRetail (controlled with one entity I assume), which focus on redevelopment of distressed assets in those two areas. [Crunchbase]
And in Feb 2019, Travis Kalanick said to plot China comeback with ‘shared kitchen’ business – CloudKitchens in China, partnering with Zhang Yanqi, former COO of ofo.
OYO
also backed by SoftBank, started from assembling hotel rooms under its brand and management system in India.
OYO CEO purchased $2 billion shares of its company this summer at a valuation of $10 billion. After the deal, Mr. Agarwal’s stake in Oyo will rise to 30% from around 10%. Of the $2bn, Mr Agarwal spent $1.3bn on a secondary purchase that saw US backers Lightspeed Venture Partners and Sequoia Capital partly cash out.
And this week, OYO raised another $1.5 billion. The remaining $700m from the previous $2 billion is included in this round.
It also recently announced a $300m investment in the US, where it has 50 hotels.
Besides it core business, OYO expanded into businesses like cloud kitchen (through acquisition of FreshMenu for about $60 million) and co-working as well (through acquisition of Innov8 for $30 million)
The Office Group (“TOG”)
acquired by Blackstone, the traditional and one of the largest real estate players in the work, back in June 2017 for approximately £500m.
But with a different type of investor, TOG might be on the path of growing profits.
Its financial results for 2015 reported its EBITDA up 33% to £15.4m (2014: £11.6m), and revenues up 62% to £54.3m (2014: £33.6m). TOG is London’s largest privately-owned occupier of office space (at least by that time). [leadersleague]
Airbnb
In September, Airbnb announces it will go public in 2020, after WeWork’ delayed IPO.
It reported “substantially” more than $1 billion in revenue in Q3 2018.
Earlier this year, Airbnb sold common shares at a price that values the home-rental startup at roughly $35 billion. The company priced its equity at about $120 per share when it purchased the last-minute room provider HotelTonight for $450 million. [recode]
And in August, Airbnb announced the acquisition of Urbandoor, a platform that offers extended stays to corporate clients.
In June, it launched Airbnb Luxe, another tier besides Airbnb Plus introduced in February 2018.
Uber Card vs. Chase Sapphire Reserve (CSR)
Let’s compare the long-term value here.
Dining & Travel is 3.0x points for CSR and a $1.5x value per 100 points -> essentially a 4.5% reward.
Uber Card is 4% on dining and 3% on Travel.
The difference in annual fees are totally different: CSR is $150 ($450 fees minus $300 travel credit) while Uber Card is -$50. (YES, Negative 50 – Uber Card reimburses $50 each year for any subscription e.g. amazon prime while has $0 annul fee).
Assuming a person spends $5,000 per year in travel and dines for $20,000 per year (around $55 per day), then:
CSR will earn 1.5% premium on travel, so $75 more benefits than Uber Card.
And 0.5% premium on dining, so $100 more benefits than Uber Card.
Uber Card wins as the effective saving in annual fee is $200 while the incremental benefit CSR brings is only $175 with our assumptions.
What’s Up In Beer
An shrinking industry with huge impacts
Also – a report on beer that includes 2011-2016 beer consumption growth by country.
So ~200,000,000,000 liters divided by world population of 7,500,000,000 = 26.67 liters per person annually.
Say a can of beer is 330 ml – then each person is consuming ~80 cans per year.
That is a larger than I expected.
Although beer still needs to compete with wines, spirits and others for total alcohol consumption, it is still the no.1 source of alcohol (worldwide, but varies by country) – the impacts on everyday life are huge!
A better graphic illustration of alcohol consumption can be found here. A few screenshots are listed below.
Trends: to more premium options & to craft beer
In the US, craft beers is a growing sector while the overall beer sales is declining in 2018.
And the number of brewpubs is growing rapidly in recent years in the US.
And stories have been told, for example, Corono has been very popular and growing fast in China.
On a conference call following the release of Q1 2018 results yesterday, Carlos Brito told analysts that AB InBev’s more expensive offerings are doing “very well” in China. He singled out Corona, which became the number one imported beer in China in the three-month period. The brand “[is] growing very rapidly”, Brito added. A-B InBev boasts around a 20% market share in the country, with strength coming from its premium and super-premium brands. [just-drinks.com]
And sales of Budweiser in China overtook those in America in the first half of 2018. [beveragedaily.com]
Corona’s parent company Modelo was acquired by AB InBev in 2012 for $20 billion at an enterprise value to EBITDA multiple of 15.4 times.
一个非主流消费观（2）
上一篇说到通过asset转换的方式，可以把消费的属性改变。
对于体验类型的“消费”，也有相关的理论。
出去玩儿不是消费
这个逻辑的核心在于 – 一般来说，出去玩儿或者其它体验无法像买东西那样变成asset。一个小票或者票根，完全不能达到类似的效果。
解决的办法直到这个十年才算基本形成 – 照片/视频 + 社交媒体。
看上去十分简单和日常，但确实潜移默化地改变着人们的消费观念。一顿饭拍了照再发个朋友圈，就以另一种形式被保存了下来（不仅存在了朋友圈里，也存在了看到的人的印象里）。这可以说是一种intangible asset。
通常来说，食物通过外观（或者背景环境）也可以判断出价位，因此这样的intangible asset也有价值高低之分。标出餐厅名称或者地点可以更加透明地给intangible asset定价。
同时，拍得好不好可以很大程度地影响这个intangible asset的价值 – higher variation than in a bag。
所以近年来愈加流行的说法是没拍照等于没吃。某种程度上就是因为，如果只是吃，就是直接expense掉了。
养成了这样的习惯后会带来一个潜在的改变，即不愿意吃那种发不了社交媒体的。
吃只是体验型消费中的一类。
旅行会产生另一大类更高价值的intangible asset，也往往有更大variation，可能更容易更经常有大于成本的情况，直接带来equity上的gain。
另一个需要考虑的因素是社交媒体的广度。同样的旅行，follower更多的人发出来往往产生更高价值的intangible asset。由此可以带来的后续value，有些可以很直接（比如受邀去体验新开业酒店？）。
「News of the Week」WeWork to withdraw its IPO
WSJ – WeWork Still Needs Cash After Pulling IPO
Dots to connect: valuation of startups, business model of burning money, Softbank’s strategy, similar companies in shared economy, corporate governance, etc.
「Video of the Week」David Rubenstein Interview With John Rogers of Ariel Investments
一个非主流的消费观
觉得有一套消费理念很有趣，用两篇blog来梳理一下
买东西 = 把钱换种方式存起来
买东西不等于传统意义上的消费，或者花掉。比如买一个包，那只是把cash变成了另一种asset。更好理解的是买个房子，假设全款100w买的，那就是cash减去100w，同时fixed asset加了一栏100w的房屋。
按此来推算，打八折买一个1w的包，cash减去8000块，asset的包那栏要加上1w，这是瞬间赚了2000！（equity部分净增加2000）。
这样计算的另一个问题是需要考虑deprecation，即折旧。用得快的化妆品即使先变成了asset也很快被减值。但类似包这样的asset，只要不扔，折旧是很小的。使用者可以在心里给asset安排一个使用寿命，如果每年使用次数很少，甚至不用，实际上每年几乎可以没有“减值”的感觉。一个实际使用1年的asset可以在使用者心中拉成10年。
这样的消费理念计价时不需要完全参考成本。事实上，现在越来越多的例子是asset有一个浮动的market price（非label price/price tag），当消费者逐渐接受，那asset value是要随时根据市场做调整。典型例子，yeezy和AJ。在这样的市场下，depreciation短期内远不如market price的波动明显，那鞋在market里涨价就是赚。
A Fundamental Pitfall In Sports
So human beings won’t evolve fast within 20-50 years, without any genetic engineering.
As we are reaching our limits, it would be very hard to break any records – for those sports that measures speed, height, strength, etc.
But that is what we are all expecting (as audience) and what keeps the sports industry exciting and growing.
So those sports have become increasingly dependent on “outside helps” – including those (e.g. certain drugs) banned by the overseeing committee.
Therefore, there will be increasingly possible that future sports will be driven more by technology development and the supervising body will be more “tolerant”.
What is more, there is always a blurring line between “allowed medication” and “forbidden techniques”.
I will be very interested to see how this conflict/problem will be solved/mitigated.
5G And Glass
Why glass matters in the future?
5G is the buzzword that nearly every industry is talking about. Higher download speed, AR/VR, autonomous driving, industrial IoT – 5G is the future, powering the global economy over $12 trillion by 2035, according to an IHS study.
5G physics
With 5G, we are marching into new radio frequencies, subdivided into Sub-6 (<6 GHz) and mmWave (a wavelength range of 10 mm at 30 GHz decreasing to 1 mm at 300 GHz).
4G radio waves ranging from 700 MHz to about 2.5 GHz range from roughly 40 to 12 cm in length. In contrast, a 5G NR wave at 28 GHz are just 1 cm long. And that’s the lowest end of the mmWave frequencies; 60 GHz signals are just 5 mm in length. [edn.com]
mmWave…
- doesn’t penetrate walls!
This is perhaps the most common issue cited with upcoming 5G networks and it’s true to some extent. Most building materials, such as cement and brick, attenuate and reflect very high-frequency signals with a big enough loss you’re unlikely to receive a very useful signal moving from inside to outside. Even the air produces signal loss, which limits frequencies above 28GHz to about a kilometer anyway. Wood and glass attenuate high-frequency signals to a smaller degree, so you’ll likely still be able to use 5G mmWave next to a window. [androidauthority]
- cant’t get through hands..
- doesn’t work well when it rains..
Corning Gorrilla
https://players.brightcove.net/c54a08de-3d27-4a61-b362-8c3251c67445
Apple included glass back since 2017 models.
Industry Progress
AT&T has introduced its 5G+ service in December 2018 with 12 cities: Atlanta, Charlotte, N.C., Dallas, Houston, Indianapolis, Jacksonville, Fla., Louisville, Ky., Oklahoma City, New Orleans, Raleigh, N.C., San Antonio and Waco, Texas.
And later added 7 cities to that list in April 2019 – Austin, Los Angeles, Nashville, Orlando, San Diego, San Francisco, and San Jose, with Las Vegas the 20th in June and New York City the 21st in August.