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2021 is going to be another glorious year for e-commerce.
It is that time of the year when most of us are looking back at the “total addressable market” estimates to plan for specific campaigns. Unlike us, if you had your 2021 kick off in Q3, bless your soul. You are an enlightened being.
For the rest of you, for whom e-commerce is a strategic market, I have a question — have you built your total addressable market (TAM) and serviceable addressable market (SAM) estimates for 2021 considering how things evolved in 2020?
It’s important to understand the underlying business model dynamics of companies and visualize TAM from those perspectives.
For most of us, research is a mind-numbing, repetitive exercise of clicking through links on Google until they all turn purple — at which point we start seeking the simplest possible explanation. For e-commerce, addressable market estimates come in the form of headlines from platforms like Shopify. The company quotes a merchant count number in its earnings calls and that becomes the basis for guesstimating the current TAM of e-commerce companies.
The other, rather simplistic approach is to look at the user-base count from several databases that publish tech platform-level user stats.
In reality, the simplest answer is not the right answer.
Mind the gap
Let’s take e-commerce shopping cart installations. Shopify, Magento, WooCommerce, BigCommerce and others publish installation numbers that run into millions.
Here is the dichotomy that should frame your TAM discussions.
E-commerce is long-tail heavy. Yes, there are millions of merchants, but e-commerce revenue is a fat-tail phenomenon — meaning, a disproportionate amount of e-commerce revenue comes from a few tens of thousands of companies.
PipeCandy publishes bottom-up TAM estimates with detailed data cuts by technology, logistics and payment system adoptions by firms across revenue tiers across all major markets. One of the common misconceptions we see in how firms misinterpret TAM estimates is that they equate revenue to spend potential.
Twitter only announced its acquisition of newsletter platform Revue two days ago, but the company has already begun to integrate the product into the Twitter.com website. It appears “Newsletters” will soon be the newest addition to Twitter’s sidebar navigation, alongside Bookmarks, Moments, Twitter Ads, and other options. The company is also readying a way to promote the new product to Twitter users, promising them another way to reach their audience while getting paid for their work.
These findings and others were uncovered by noted reverse engineer Jane Manchun Wong, who dug into the Twitter.com website to see what the company may have in store for its newest acquisition.
According to a pop-up promotional message in development she found, Twitter will soon be pitching a handful of Revue benefits, like the ability to compose and schedule newsletters, embed tweets, import email lists, analyze engagement and earn money from paid followers. The messaging was clearly in early testing (it even had a typo!), but it hints at Twitter’s larger plans to tie Revue into the Twitter platform and serve as a way for prominent users to essentially monetize their reach.
Currently, the “Find Out More” button on pop-up message will redirect Twitter users to the Revue website. Wong found.
In addition, Wong noted Twitter was making “Newsletters” a new navigation option on the Twitter sidebar menu. Unfortunately, it was not shown on the top-level menu where you today find options like Explore, Notifications, Messages or Bookmarks, but rather on the sub-menu you access from the three-dot “More” link.
Twitter is working to include the “
Newsletters” item in the menu in the web app, which shows the popup about @revue above pic.twitter.com/ATaXDGr0zc
— Jane Manchun Wong (@wongmjane) January 27, 2021
The tight integration between Revue and Twitter’s main platform could potentially give the company an interesting competitive advantage in the newsletters market — especially as Twitter has already dropped hints that its new audio product, Twitter Spaces, will also be used as a way to connect with newsletter subscribers.
In its announcement, Twitter referred to “new settings for writers to host conversations” with their readers. That likely means Twitter users would be able to not just publish newsletters with the new Twitter product, but also monetize their existing follower base, find new readers through Twitter’s built-in features, and then engage their fans on an ongoing basis through audio chats in Spaces. Combined with its lowering of the paid newsletter fee to 5%, many authors are rightly considering the potential Twitter advantages. If anything at all is holding them back, it’s Twitter’s less-than-stellar reputation when it comes to successfully capitalizing on some of its acquisitions.
Twitter declined to comment on Wong’s findings, but we understand these features are currently not live on the website. Wong told us she hasn’t found any indications of Revue integrations in the Twitter mobile apps just yet.
Coinbase plans to go public by way of a direct listing, the company announced in a blog post today.
The cryptocurrency exchange was founded in 2012 and allows users to buy and trade decentralized tokens like bitcoin and ethereum. The company has raised over $540 million in funding as a private company.
Last month, the company shared that it had confidentially filed an S-1 with the SEC, we still haven’t seen those financials but we now know that they have opted out of the traditional IPO process. Direct listings have been slowly gaining popularity and given some of the most recent first day pops from tech IPOs, it’s unsurprising to see a company like Coinbase which is likely flush with cash thanks to recent gains in the cryptocurrency market opt for a path to public markets that involves less fuss.
Updating
Source: https://techcrunch.com/2021/01/28/coinbase-is-going-public-via-direct-listing/
According to a new report in the WSJ, WeWork, the co-working juggernaut that saw its attempt at a public offering blow up in spectacular fashion in the fall of 2019, might become a publicly traded company by merging with a blank-check company.
Specifically, says the WSJ, the New York-based outfit has been “weighing offers from a SPAC affiliated with Bow Capital Management LLC and at least one other unidentified acquisition vehicle for several weeks” in a deal that could value WeWork at around $10 billion.
Asked for more information, a spokesperson for the company sent us the same statement that was sent to the Journal: “Over the past year, WeWork has remained focused on executing our plans for achieving profitability. Our significant progress combined with the increased market demand for flexible space, shows positive signs for our business. We will continue to explore opportunities that help us move closer towards our goals.”
The company is also contemplating inbound interest for more private funding, according to a person close to the company.
According to the WeWork spokesperson, WeWork has more than $3.6 billion of cash and unfunded cash commitments, including more than $875 million in available cash and it believes this is “more than sufficient liquidity to weather a prolonged COVID environment.”
WeWork’s CEO Sandeep Manthrani said last fall that WeWork was on track to turn profitable some time this year and that after it hit “profitable growth first,” it would “revisit the IPO plan.” Speaking to reporters in India over a Zoom call from New York, he added, as reported by Bloomberg, that as of October, WeWork was “100% done with rightsizing” after parting ways with 8,000 employees, or roughly one-third of its headcount.
Manthrani stepped into the role of CEO in February of last year, following the ouster of WeWork cofounder Adam Neumann from the company months earlier on the heels of the company’s pulled IPO.
Mathrani previously spent the 1.5 years as the CEO of Brookfield Properties’ retail group and as a vice chairman of Brookfield Properties. Before joining the Chicago-based company, he spent eight years as the CEO of General Growth Properties. It was one of the largest mall operators in the U.S. until Brookfield acquired it for $9.25 billion in cash in 2018.
Mathrani also spent eight years as an executive vice president with the publicly traded real estate company Vornado Realty Trust.
Bow Capital Management is run by Vivek Ranadive, the founder of Tibco Software; in July, it registered plans for a $350 million blank-check company that would focus on acquiring a business in the technology, media and telecommunications industries.
Though there’s been much discussion over the years over whether WeWork is a tech company or much more of a pure real estate play, the company has long insisted it is the former.
This story is developing . . .
Source: https://techcrunch.com/2021/01/28/report-wework-could-be-getting-spacd-soon-too/
GGV Capital, the now 20-year-old venture firm that has long invested primarily in the U.S. and China, just closed on a whopping $2.52 billion in fresh capital commitments across four new funds, it announced this morning.
Much of the money will be invested through the firm’s eighth flagship fund, which has $1.5 billion to plug into startups across all stages. It also closed on $366 million for an opportunity fund to double down on breakout investments (GGV Capital VIII Plus); $80 million for a fund that invites the founders in its network to invest alongside GGV; and a “discovery” fund that closed with $610 million and aims to fund founders around the globe at the earliest stage of their startups’ development.
GGV also recently held a close on its second RMB fund with RMB 3.4 billion, $525 million.
The capital collectively brings assets under management at the firm to $9.2 billion across 17 funds (and by the way, that RMB fund is likely to get a lot bigger, judging from GGV’s first RMB fund, which closed in 2018 with the equivalent of $1.5 billion).
Given the state of venture investing right now, GGV’s haul isn’t a surprise. Money has continued to flood into the asset class fueled partly by low interest rates (institutions are trying to find “alpha”) and the overall growth of the private market over the last decade. Because companies have remained private for so long, VCs have enjoyed much of the upside of their growth and benefited from huge leaps when many of these same companies have gone public.
Of course, not all funds get a sizable piece of the right companies. GGV appears to be fairly adept at writing meaningful checks into startups that matter.
Though it owned less than 5% of some of its portfolio companies, as evidenced in their S-1 filings (Affirm, Airbnb, Peloton, Slack, Square, Zendesk), it has amassed big positions in others, including Opendoor (5%), Poshmark (7.9%), and Wish (6.2%),
GGV, which also invests n Latin American, India, Southeast Asia and Israel, has bets in many still-private companies that are very highly valued, too. Among these is the infrastructure automation company Hashicorp, which raised money at a $5.1 billion valuation last year; the online education company Zuoyeban, which was reportedly valued at $6.5 billion in a round that closed in December; and in StockX, the online resale marketplace that was assigned a $2.8 billion valuation in December when it closed its newest round.
In any case, there’s no end in sight — for now — of a years-long trend of big funds growing exponentially bigger.
Just yesterday, the 25-year-old investment firm TCV unveiled a record $4 billion fund. Late last year, Andreessen Horowitz closed a pair of funds totaling $4.5 billion. Insight Partners also closed its biggest fund to date by a lot last year, a $9.5 billion growth equity vehicle.
One of the few top venture firms to consistently buck the trend has been Benchmark Capital. Last year, it quietly closed on a $425 million fund, which is roughly the same size as most of its previous nine earlier funds.
