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Beyond Meat Go IPO and Non-animal Food Trend

From Vegetarians to non-animal meat-like food, we are entering an age of synthetic foods going mainstream.

Beyond Meat – story and IPO

Beyond Meat (BYNd), a start-up who made the first 100% plant-based burger, filed IPO with SEC recently and will become the first of its kind to trade on Nasdaq.

The founder grew up in Maryland with a family farm business. The company was founded in 2009, with initial operation, and manufacturing in Maryland. The foundational technology was licensed from two researchers in nearby universities. And initially, the company built its presence with Whole Foods Market in mid-Atlantic.

Beyond Meat was funded by venture capitals, including Kleiner Perkins (16.1% pre-IPO stake), Obvious Ventures, among others, totaling $140+ million before IPO. The latest round valued the company at $550 million last year.

The IPO filing indicates a $100 million raise. Currently, the most important product is the Beyond Burger, selling through various grocery chains and other channels, representing 71% of 2017 sales.

Beyond Beyond Meat

Within this space, the most famous startup might be Impossible Foods, sold in many restaurants including The Counter. It raised $114 million this year from investors including Temasek.

Other initiatives include the new plant-protein-based drink by Starbucks, although not a popular offering.

I think for sure in the future food market, the overall percentage of plant-based food will increase and animal-killing will be decreased by a lot. Whether eventually most of the food will be entirely synthesized remains a question for now.

At least in 30-50 years, I think the benefits of non-plant-based food are non-obvious. But the non-animal trend will be more influential and be part of everyone’s life, not just for vegetarians.

A Glimpse into Instagram’s Commercial Efforts

  • I will keep this updated
  • Based on personal ins screenshots

Effort One – Bis/Org official page and promotion

E.g.

Similar to FB’s news feed ads; similar to ads in Wechat Moments, etc.

Effort Two – Ads in Instagram Stories, in three forms: Learn More, Shop Now, Subscribe

E.g.

Currently Instagram hasn’t provide direct shopping/subscription function; it is linking to third-party websites.

But I could see it is possible to bypass Amazon or Apple ID subscriptions.

Effort Three – cosponsored

E.g. (from a public account through search)

This is more like a platform and pairing influencers with businesses. Provide a way for influencer to monetize and change the way businesses used in promotion.

Effort Four – cross suggestion/reference

It is not formally introduced to users. But it is enabled by Instagram’s ecosystem.

E.g., after I followed an independent hotel in Palm Spring, I got three likes from JW Marriott Desert Springs (a nearby hotel).

Also, I got followed by collegehousephilly after following DailyPennsylvania (student-run newspaper at Penn, mostly seen by Penn students); Philly is short for Philadelphia, where Penn is located.

Will keep updating this post.

A Great Symmetry?

A random thought here…

San Francisco = New York City (Manhattan)| in terms of the central hub in west/east, financial and corporate presence, high rise apartments

San Jose (South Bay) = Philadelphia | in terms of specialized industries, lead in Information Age (semiconductor) & lead in Industrial Age

Los Angeles + San Diego = Orlando + Miami + Key west | In terms of weather, travel and entertainment industries, life styles

So California is a semi-country.

In the Age of Services Bundling

The recent departure of Google Cloud’s CEO leads to many discussions on the business models. Specifically, Google Cloud service is usually co-marketed with other enterprise services provided by Google. For businesses that rely heavily on Google’s internet advertising, it feels a combination of a natural need of using its Cloud and an external soft-pressure from Alphabet.

US enterprise cloud business is mainly comprised by 3 companies – Amazon, Microsoft and Google. Amazon is famous for its 7-year head start. However, Microsoft Azure has surpassed AWS in revenue for the first time in Q2 this year.

[Some thoughts on cloud business: with its dominating position in enterprise market, and its Office suite going online with subscription model, Microsoft is definitely capitalizing a lot on the bundling with Azure cloud services. Google definitely wanted to replicate the business model, but found itself lack of comparable presence in the enterprise market – e.g. direct relationships, sales reps. That was probably the reason Alphabet brought in Diane Greene, co-founder of VMWare, in Nov. 2015 with all the enterprise connections and experiences behind her.]

The bundling + subscription is everywhere. Amazon Prime is a bundling, with original unlimited free two-day shipping to Amazon Music/Video/Fresh/Now, etc.; Netflix is essentially a bundling – with some core contents plus other programs; AT&A Direct TV is another example; Square is bundling terminals (POS), employee management…

It is so prevalent that I would like to say that instead of “software eating X”, it is “bundling X and just subscribe together”.

Capitalizing on Fear for Anti-Competition

Following up on the previous post of WSJ buying ads on Twitter, I found an underlying trend to explain it and other similar situations – companies are afraid of the accusations that they are preventing or reducing competitions, especially in the tech industry where network effects is extremely strong and “winners take all”.

Just another example here – Amazon Music putting ads on YouTube.

Fundamentally, there are similar laws around the globe focusing on competition, anti-monopoly and antitrust. Twitter doesn’t want to make the case that it is discouraging other medias’ ads; YouTube doesn’t want to make the case that it is discouraging other music apps’ ads.

It has more profound meanings other than ads. Google was fined in Europe for bundling Android in June with its other services, reducing competitions in services such as search. Going way back, Microsoft’s antitrust case in 2001 is probably the most famous one – a settlement was reached for its bundling of Windows and IE (may discourage other web browsers).

This concept can be expanded into many fields. And the fear of being seen as anti-competition is deeply rooted in every tech company.

We should see that Apple should welcome YouTube and Amazon Music so that it won’t be charged as anti-competition in music distribution. Apple Music is born with a market share limit.

Other examples – Apple should keep Fitbit with its Apple Watch, Chrome should keep other search engines with Google Search, Amazon should keep those third-party items with its AmazonBasic lines, etc… Uber should keep Lyft, Intel should keep AMD. Disney should be careful for its contents and distribution channels, so does AT&T…

There are many more examples. And this will last in the foreseeable future, maybe until ordinary antitrust law can’t handle new norms. Or, it may lead to excessive capitalization on the law. Basically, the other side will use antitrust as an very effective weapon. It won’t be a commonly used weapon among small companies due to high legal costs and lack of resources to maintain big market share. But it may be used more often by relatively big companies to expand into new fields with meaningful presence, building into conglomerates in the new era.

Stretched Valuation in Ride-Hailing – Uber’s financials and others

Uber reported some 2018 Q3 quarterly financial numbers on Wednesday.

As similar ride-hailing companies across the globe may go public in the coming 2019-2020, here I compiled some publicly available numbers together.

While Uber’s  revenue growth is slowing down, at least it can target a 2019 full year revenue over $15 billion with 25%+ growth rate (an implied valuation multiple of 8x revenue).

Similar for Lyft – at least it needs an annualized revenue of $3 billion (an implied valuation multiple of 10x revenue), which means ~$750 million per quarter. It seems easier to achieve to me in Lyft’s case.

And Didi… its take rate from GMV is said to be much lower than Uber’s (~23%). Assuming a GMV of ¥120 billion in 2019 and a take rate of 10%, Didi will achieve an annual run rate of ~$1,700 million. Then it will be valued at 50x revenue multiple for a $85 billion valuation…

No comments on specific company. But overall, this space seems to have stretched valuation.

However, some other factors need to be counted in, such as low risk of competition (the market structure is mature or foreseeable I would say), the definite future of transportation-as-a-service (with growing market share in overall transportation), upcoming initiatives (e.g. autonomous car services, autonomous on-demand truck, etc.)

It seems that certain future is coming for sure in many investors’ eyes. Or they are just made to believe in it.

Read more on…

3 Thoughts on WSJ’s New “Best U.S. Airport Rank 2018”

Wall Street Journey took an new initiatives to rank the 20 largest US airports by a basket of measurements, including 14 factors and 1 survey.

Here is the link to the WSJ post and a screenshot of top 10 candidates.

Source: WSJ

Some interesting metrics used include Yelp ratings for food, Wifi speed, UberX fare to convention center, etc..

The WSJ’s new ranking is also interesting itself.

Thought 1: Useless (for travelers)

No one travels just because there is a convenient/cheap airport.

People travel when they know where they need to be. Then it doesn’t matter if the wifi speed is slow or not. Gonna be there anyway.

Thought 2: Informative for new business/conference

When a new conference is planned, lots of research need to be done. The airport could be one of the important factors. UberX fare between airport and convention center should be used to choose new venue of events/conferences/assemblies.

But not the other way around.

thought 3: educational for airport operators

The rank might be useful for airport operators to learn how to improve their travelers’ overall experience.

It could be used as KPI for its employees or management team.

It could also be seen as a COMPLAINT.

For example, JFK and Newark airport have a reliability score of 16.5 and 9.5 respectively – out of 100 (Phoenix airport is the highest in reliability with 80.5); Newark airport has a value score of 13.5 out of 100 versus Orlando’s 77.

The writer/reporter or the team behind the rank must be very upset/disappointed with New York’s airports – Newark, JFK and LaGuardia have the three lowest overall score… among 20 airports.

#HowToComplain #InAProfessionalManner

 

Moderna’s Long-waited IPO Filed, Raising $500+ Million

Moderna filed S-1 with SEC last Friday and will become the largest biotech IPO in history.

The record amount of raise ($500 million in current version of documents; I will expect more) just surpassed $421 million (HK$3.3bn) IPO by Innovent. In the past years, the typical size of the largest biotech IPO is around $200-300 million.

Since October, we have seen a series of large biotech IPOs that might also contribute to the money pulled from other biotech companies.

Here is the list of ever-increase IPOs in size since October:

– Guardant Health $238 million

– Allogene $324 million

– Innovent (in HK) $421 million

– Moderna (proposed) $500 million

Hawaiian language

US has no official language on the federal level, according to Wikipedia – very interesting. It seems to me that this is one of the many indicators of US being designed to be an overarching organization.

“There is no official language at the U.S. federal level. However, 32 states of the United States, in some cases as part of what has been called the English-only movement, have adopted legislation granting official status to English. Out of 50 states, 30 have established English as the only official language, while Hawaii recognizes both English and Hawaiian as official, and Alaska has made some 20 native languages official, along with English.”

Hawaiian language

  • The Hawaiian alphabet has 13 letters: five vowels (each with a long pronunciation and a short one) and eight consonants, one of which is the glottal stop called ʻokina.

 

  • Frequently used phrase

Aloha = hello, kindness

Maholo = thank you

Kokua = support

Shaka = hand gesture of extended thumb and pinkie

Lei = necklace made of flowers, shells, leaves, or kukui nuts

Mauka = towards the mountain; makai = towards the ocean.

A hui hou = until we meet again