Up & Right

Apr 21

Mobile-Payments Startup Square Discusses Possible Sale -

On the topic of capital efficiency, Square hasn’t exactly been the model to emulate. At some point profits really do matter and Square is caught in a transition where they need to move from showing top line (near zero margin) revenue growth to some measure of profitability, which means changing their business model. Square can no longer simply talk about the laundry list of value added services they could sell, now they must sell them and profitably at that — Square Register, Square Cash, Square Loans etc. It is a race against time before they run out of cash. Might some big company buy them even if they never prove out their business model? Sure. Would I, if I were an acquirer, want to pay a premium for a company like that? Probably not. That’s a risky bet.

I love Square’s vision for payments so I’m sincerely hoping they figure it all out soon. They have enough access to cash I don’t doubt they can.

Birchbox raises $60 million -

Birchbox has to be one of the most capital efficient high-growth e-commerce startups of all time. ~$100M of revenue from $12M previously raised. Well done.

Apr 18

The real reasons why Walmart and Facebook are entering the money transfer space | PandoDaily -

Walmart the disruptor. You have to love that. Money transfer and remittance is heating up and this is all just the first volley in what will be a non-zero sum war. I suspect consolidation and M&A will occur soon. We (@RRE) already sold Venmo and Braintree but I bet Azimo, Boom, Remitly, Xoom, etc are/will be on many acquirers minds’ soon.

Apr 17

Instacart Raising at $400M -

Not making a judgment on their valuation as I don’t know their fundamentals but sometimes it feels like the internal monologue of venture is one word long and right now it is: “FOODFOODFOODFOOD”

Apr 16

Zoosk Form S-1 -

Wow, Canaan Partners owns 32.4% of Zoosk. That’s a huge ownership stake for a startup that has raised a ton of cash. As a venture investor I give Canaan a lot of credit for being able to maintain that ownership (usually not very easy to do).

Bitcoin promoter Shrem indicted -

I think the world of tech startups can feel like a game at times, removed from the real world and consequences because a lot can be accomplished sitting in front of a screen without having to get one’s hands “dirty”. I’m not going to opine on Charlie’s innocence or guilt and do not intend to, but I do wonder if Charlie would have done the things he’s accused of having done if he had been forced to do them IRL. My guess is he would have behaved differently IRL. (See: blog comments versus in person conversation)

Apr 15

Forecast New York - Sales Leaders of the Future -

The Forecast Club sales leadership day sponsored by my portfolio company Base CRM will be in NYC Thursday evening. Check it out.

Amazon Says No to Accepting Bitcoin, Maybe to Building an Amex or Visa Competitor -

Amazon is most definitely not taking BTC anytime soon. What’s the upside for them? Not much. Lots of downside. Amazon would be more likely to issue an AmazonCoin than use something beyond their control.

On the other hand, Amazon bringing their near zero % gross margin world domination marketplace approach to bear on credit/debit against V, MA & Amex, now that is interesting.

My guess is they would partner with Discover. There are probably some other plausible paths for them too including doing a better job of promoting Amazon Payments to merchants and buying Stripe. Other thoughts?

Jeff Bezos To Amazon Payments Team: Move Faster -

Amazon is getting ready to re-tool and expand Amazon Payments:

"The payments industry has been waiting for years for Amazon, with its 215 million credit cards on file, to flex its muscles. Apparently, CEO Jeff Bezos has been, too.

Industry sources have recently told Re/code that Bezos has identified payments as one of the top areas of focus and investment for Amazon…”

There are also rumors Apple with its 300M+ credit cards on file is looking to do the same. Despite many false starts, you have to assume Google is reinventing Google Wallet and Payments as well. Hard to predict who will win this battle of juggernauts (Amazon, Apple, Facebook, Google) but I’m pretty sure the next 24 months will be interesting.

Facebook targets financial services -

Facebook is entering remittance and money transfer:

"Not content with being just a platform to host cat photos and status updates, Facebook is readying itself to provide financial services in the form of remittances and electronic money."

Facebook already has the global network of users and is now looking for additional ways to monetize them.