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Ultra delivery

Another great Sacra article to slowly read and think through the whole ultrafast delivery phenomena!

Read here the whole thing

Today, there is a new crop of companies looking to push the envelope on shipping even further. Dark store-enabled, “ultrafast” delivery companies are getting funded and expanding across Europe, Asia, Russia, South America, and the United States.

Their big brand promise is 10 to 15 minute delivery—or “faster than you can,” as the tag line for Gorillas goes—on grocery items.

With dark stores in densely populated urban areas on the back-end, and armies of delivery people on bikes and scooters for the last mile, they’re betting that delivering items in just 15 minutes can be as powerful a wedge as Amazon’s promise of two-day shipping was in 2005.

The strategy is largely out of the same playbook as other on-demand apps—capture customers, consolidate control over a high-frequency behavior, expand and cross-sell to other higher-margin categories. But their challenges are significant as well, from spoilage rates on grocery to hard-to-predict inventory requirements and building relationships with upstream suppliers.

Key points

  • Ultrafast delivery services operate out of 3,000~ square foot dark stores in urban core areas. That enables 10-15 minute delivery within their .75-1 mile service radius, as well as reducing supply chain costs and minimizing spoilage.
  • Dark store profitability is measured with contribution margin, which excludes fixed costs. With $25 average order value in a mature ultrafast dark store with 500 orders per day, we project about 13% contribution margin.
  • In 2020, the growth of the online grocery market rapidly accelerated in the United States. The share of all grocery spending that took place online grew from 5% to 7%, with $96B in total online sales for the year up from $62B the previous year.
  • We expect the total volume of online grocery sales in the U.S. to continue to grow, hitting $192B by 2025. 60% of people bought more groceries online during COVID and said they plan to buy groceries online at the same frequency or more often in the future
  • The ultrafast vision is to replace the local grocery store the way Uber disrupted car ownership. By turning groceries into something summoned at the touch of a button rather than something planned and scheduled, ultrafast services want to change how we shop entirely.
  • But the economics of ultrafast are hard, and micromobility is a cautionary tale. Both are capital-intensive industries with no customer loyalty, low switching costs, and limited network effects.
  • Non-perishables with a high premium on fast delivery are where the ultrafast model makes most sense. Convenience store-type products like detergents, tobacco, phone chargers and grocery staples have low spoilage and consumers want to get them quickly, which fits the dark store model.
  • Ultimately, CVS ($110B) and 7-Eleven ($42B) should be ultrafast’s real targets, not Kroger ($28B) or Albertsons ($9B). Online grocery is a massive challenge both in logistics and demand generation, and ultrafast services are better off building a better convenience store than challenging for the whole of the online grocery market.
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End to begin

“What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from.”

Ontem foi o meu último dia na Sonae IM e Bright Pixel.
 
Uma viagem de 2.054 dias onde pude voltar às minhas origens (voltar a viver perto da família na cidade onde nasci, no Porto) e onde fiquei irremediavelmente mais conectado ao mundo (por via das viagens a vários países, das inúmeras pessoas que conheci em todos os cantos do mundo, e fiquei ligado ao que mais inovador se faz em termos de tecnologia hoje em dia). 
 
Fiz parte de uma equipa que já investiu em mais de 35 empresas espalhadas pelo mundo, incluindo as 15 empresas que ajudou a fazer nascer através do papel da Bright Pixel no early stage. Uma equipa que tem a cultura de não divulgar muito os seus múltiplos sucessos enquanto investidores de capital de risco tecnológico de Portugal para o mundo.
 
Cresci muito e está agora na hora de partir para outros voos no mundo do capital de risco. Em breve darei novidades!
 
Yesterday was my last day at Sonae IM and Bright Pixel.
A 2.054-days journey back to my roots (living again closer to family in my hometown of Porto) with the bonus of putting me in closer touch with the vast world around us (traveling to several parts of the world, getting to meet incredible people, and above all, in the midst of what is trending in terms of top-notch tech innovation).
I am proud of having been a part of a great team that has already invested in more than 35 startups from different corners of the world, including the 15 that we helped jumpstart through our early-stage efforts at Bright Pixel. A team that has embedded a very low profile in its culture when talking about their multiple successes as venture capital investors from Portugal to the world.
I’ve learned a lot and grew to a point that gives me the confidence and tremendous satisfaction of tackling new challenges in the venture capital world. A truly special project that I’ll disclose very soon!
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The things I’ve seen #2

Enjoy things I’ve seen, read and listened to last week…

Is america “normal” again?

Link to lyrics

Full transcript

Education is so important. A lot more than politics… unfortunately in Portugal we are losing this battle… we should focus on deploying a real strategy and less on politics or marketing big plans that are just promises that never see the day of light…

tech at the service of education – a recent McKinsey research

The Edtech opportunity- an article by dealroom

More thoughts about tech trends for 2021… always a good read!

3 tech trends that COVID-19 will accelerate in 2021

Philosophical teaser that I enjoyed

 

and tools that I had a look at…

 

One last (insanely weird) thing… market games that might end really bad sooner or later…

GameStop playing around with its shares

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Cloud Judgement

The Q3 Report

A very detailed and relevant method of assessing the value of SaaS public companies. Worth a read.

Link to blog post – Cloud Judgement 

“Q3 earnings season for cloud businesses is now behind us. The 61 companies that I’ll discuss here (which is not an exhaustive list, but is still comprehensive) all reported quarterly earnings sometime between October 26 – December 9. New additions to the analysis from Q2 include Snowflake, Asana, JFrog, and Sumo Logic.  In this post, I’ll take a data-driven approach in evaluating the overall group’s performance, and highlight individual standouts along the way. As a venture capitalist, I naturally cater my analysis through the lens of a private investor. Over my ~4.5 years at Redpoint Ventures, I’ve had the opportunity to meet with hundreds of entrepreneurs who are all building special companies. Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback).”

Dive in!

Q2 Report also available here

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helping the small ones

Banking needs to help more small and medium sized companies (SMBs).

Fintech companies entering with solutions that are alternatives to traditional banks are more than welcome…

This a good example!

Liberis, the U.K.-based fintech that provides finance for small businesses as an alternative to a traditional bank loan or extended overdraft, has replenished its own coffers with £70 million in funding. The round is a mixture of debt and venture debt, although the company is declining to disclose the percentage split, so we can likely chalk this up as mostly debt to fund the loans Liberis issues.

Providing the financing are previous backers British Business Investments, Paragon Bank and BCI Europe, along with new partner Silicon Valley Bank  (SVB). It brings the total funding raised by Liberis  to £200 million, including more than £50 million in equity funding. “The new funds will be used to fuel company growth, launch new products and markets, and provide additional customer financing solutions,” says the fintech.

To date, 2007-founded Liberis has provided over £500 million in financing to 16,000 SMEs across Europe, the U.S. and the U.K. (the product is available in five new countries: U.S., Finland, Sweden, Czech Republic and Slovakia). However, lending has really picked up lately, with £250 million lent in the past two years alone.

Link to read more!

 

 

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Inside Pixel HoHoHo

Hit me baby one more time!

I don’t know if you remember, but by this time, last year, we launched 20by20. A brilliant (we believe) initiative that gathered several players from the Portuguese entrepreneurial ecosystem to give their vision on what would be the trends for 2020. As you can expect, none of us predicted that the trend would be … well … hell.

Don’t get us wrong. Our guest writers were actually really good predicting the technological trends and the pandemic accelerated the adoption of some of the solutions we’ve all been preaching about for some time now. Let’s take a quick look to the macro topics highlighted last year:

· 5G – it seemed that the new generation of broadband cellular networks was getting in shape in the beginning of the year, but it seems like we will have to wait a bit more while companies and regulators find a deal. Meanwhile, several industries are already preparing their products with software that benefits from this technology (e.g. ultra connected cars), so, we think it’s safe to say that we’re not that far.

· Cybersecurity – definitely a trend, but not a winner. Companies had major difficulties protecting their assets with the transition to home offices. Many still had on-premises servers and had their workers accessing them via VPN. It’s crucial to prevent and people are more aware of that, which led to a hot November for this industry.

· Sustainability – a strong (but no one expected to be this stronger) winner. Airplanes grounded, cars in garages and people consumerism at its minimum level. No one expected this. The planet gained a few days, and so the future generations.

· The gig economy – well… not a good year for it. Let’s skip this.

· Technology at the service of the humans – ding ding ding. Ladies and gentleman, we have a winner! We never saw so many developers, founders, creatives joining forces to create technological solutions to respond to so many different challenges of the societ

So, let’s do it again! Now with a special guest.

As you see, we really liked this concept. So, this year we invited 21 people to set 21 trends for 2021 – introducing 21by21. Excited, yet? First of all, who are they? They are founders, investors, businessmen and women, from different sectors and with different backgrounds. A conclusion that we always find interesting is that, even though we all belong to the same industry, one way or another, all of us have a very personal perspective and that brings value to it.

So, without further ado, the bets for 2021 are on:

·   Sustainability – elected by the second time in a row. No one expects consumer habits to go back to be the same, and people are more severe when choosing brands that show concerns with the environment and a transparent supply chain.

·   Short video will dethrone YouTube – new generations don’t have the same attention span, they don’t need more than a few seconds of video to know the highlights. Let’s see if this is the year of short videos and how influencers and entertainment industries will adapt to that demanding new process.

·   Brain food – mental health is now one of the biggest concerns of people and companies for 2021, and it is expected that more and more consumers will look for products that help them stay focused and fight anxiety, and that more companies will launch products with L-Theanine, caffeine and cannabinoids.

·   Hybrid work – All of us have already experienced the benefits (and challenges) of home office, but organizations are facing some additional adversities in transmitting their culture to their workers, so hybrid methodologies are being highly praised by leaders across industries.

·   Data – 2020 locked us down, so all we had was the internet. Companies collected years-worth of online growth and client & sales data, and they can now use them wisely (if they know how to…).

·   VC investors are hopeful – startups will have a major role in the recovery of economies worldwide and our part as investors is to boost them up. Governmental entities may also find in these private, agile companies a faster way to innovate and solve society’s new challenges.

Last but not the least, we invited a very special guest to participate: AI. GPT-2 wrote a very clear text of what it expects to be the trends for 2021. Curious? We were too.

Read more! and the past editions are also cool!

Thanks to all the participants of this initiative. It couldn’t have been possible without you. Let’s hope we don’t mess up next year too!

Thank you to those who followed our endless thoughts throughout the year. If you want to catch up, you can see what we’ve been talking about here…

March – Investment: “You can do anything. But never go against the family”

April – The unexpected new world

May – The winner takes it all

June – I want damage modeling

July – When the going gets weird, the weird turn pro

August – The bright new days

September – We’re chained

October – The perfect storm

November – Everybody be cool, this is a robbery!

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21by21

A great initiative powered by Bright Pixel!

My two cents… Read the rest at https://21by21.brpx.com/

Nobody could phantom that 2020 would end to be one of the weirdest years of our lifetime… so far.

So, it is really hard to accept the challenge to think and write about what 2021 has in store for us.

What I write below is based on three underlying premises:
First, that the future is mostly already here.
Second, that we can all desire that next year will be hopefully a return to “normalcy”… but it’s highly likely it won’t. The world will not be the same no more.
Third, we are all suffering and just grasping from the fact that the pace of change has dramatically increased and changed gears… right in front of us. We need to hold on… for the ride.

In 2020, we had to change how we live and all thought it would be just temporary… but, next year will we have still to adapt.
In several ways, I think we fast forwarded several trends that were already creeping around us.

In 2021, we will undoubtedly have to tackle several challenges ahead of us… and there is one thing I take for granted: our lives, for the better and for the worst, will become even more digital.
Namely, due to rising environmental concerns, health related issues, generational shifts and out of sheer and practical necessity… companies and people will do a lot more things in a digital realm.

Work, play, buy, sell, watch, share, collaborate, monitor and control – everything, increasingly online.

Finally, due to my role as an early stage investor, I have to try to have a stance on what might or not be a trend going forward.
For what it’s worth, here go my two cents about several key trends I believe will be picking up even more pace in the near future:

In the B2C world: digital entertainment is on the rise; online gaming and esports are becoming massive; we cannot keep up with pace of the vast array of sharing platforms that cater several niche interests; the way we buy everything is changing, and therefore, e-commerce is in constant flux; sustainability and environmentally driven decisions will impact more and more our daily actions – what we eat, wear, live and how we travel or commute; finally, above all, I feel that people are also a lot more focused on their physical and mental health and overall well-being…
(and all of this will be more and more mobile centric… simply because the zombie-like-neck-down human condition is here to stay, with everybody looking at a glowing device firmly held by one of our hands, whilst we walk pass everything around us…)

In the B2B world: “remotely-more, physically-less” working environments are here to stay; therefore, distributed cloud solutions to flexibly manage everything work process we have in our companies are on the rise; collaborative tools we be in also dire need; so will be cyber security products and services to protect ourselves and our assets from increased vulnerabilities and risks that we will all face; technology to handle contactless or unattended human interactions in customer facing services will be sought for in higher demand; hyper automation and extracting intelligence and decision making from the ever-increasing volume of accessible data is for sure an unstoppable trend.
Trends apart, on a ending positive note, 2021 will simply be what we will individually and collectively make of it!
“Every moment has to be complete in and of itself” (from Naval Ravikant: A Guide to Wealth and Happiness)

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Giving no slack

Last week, and with much fanfare, Slack announced that it would sell itself to tech behemoth Salesforce for a whopping $27.7 billion. By many measurements, this should be an incredible achievement and success story. In reality, it represents a decisive about-face for Slack, which had previously made clear that, despite new competition from Microsoft’s largely copycat product Teams, it wanted to remain independent.

Our free market trades on the assumption that good, innovative products will prevail over less effective ones released by entrenched firms like Microsoft. But Slack’s decision to be acquired by Salesforce indicates that today, the exact opposite is true. Slack is but one of many stories in Silicon Valley of a “defensive” acquisition, where a company is no longer able to compete independently against the tech giants. These giants, armed with nearly limitless funds and extensive client relationships, frequently abuse their advantage and bully smaller upstarts into oblivion. Even Slack, which built an incredibly powerful product and operated with notorious efficiency, could not stay independent in a match-up against Microsoft. And if a company like Slack can’t stand up to the consolidation of corporate power, consumers’ ability to freely choose the best and most useful product is at risk.

To read more…

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Aceleração das Startups

so… this happened…

Juntou-se em debate Alexandre Santos (Bright Pixel/SONAE IM), Maria Moura Oliveira (UPTEC), João Pedro Fernandes (BERD) e Nuno Soares (INOVA+) para discutir a transição de programas-quadro europeus no âmbito de I&I e o crescimento de oportunidades direcionadas para as startups europeias, cada vez mais com foco no acesso a capital e nas fases de demonstração para a aceleração na entrada no mercado.

De acordo com os representantes das startups e o centro de inovação, estes instrumentos de financiamento representam não só uma oportunidade de internacionalização, através da disseminação e visibilidade em canais comerciais, como de networking para venda de serviços e/ou produtos a outra empresas. Apontam-se, no entanto, como aspetos-chave de sucesso a importância da seleção das calls e montagem de projetos sólidos, assentes no envolvimento de organizações com reconhecimento europeu na fase de piloto. Alerta-se ainda que para as start-ups é vital que as candidaturas estejam alinhadas com a sua estratégia de curto e médio prazo.