NEWS: Instacart and Klaviyo file for IPO, State of VC exits, AI lawsuits & more | E1798 | Summary and Q&A

TL;DR

Instacart, a grocery delivery platform, faces potential competition from UberEats and DoorDash. Clavio, a marketing automation platform, shows strong growth and profitability. Sarah Silverman and other authors sue OpenAI and Meta (Facebook) for copyright infringement.

Key Insights

• 💪 Instacart's valuation and revenue indicate its strong presence in the grocery delivery market, but competition from other players poses challenges.
• ❓ Clavio's profitability and focus on personalized marketing contribute to its success as a marketing automation platform.

Transcript

maybe we got a little bit too generous in believing the pitch as an industry but not looking at performance and I think people were being funded on their pitches and the promise but not the performance and now it has gone exactly the other way everybody wants to know our performance as LPS we want to know how many customers you have the churn rate ... Read More

Questions & Answers

Q: What is Instacart's current valuation and revenue?

Instacart's valuation is $13 billion, and their run rate for 2023 revenue is $2.9 billion.

Q: How does Clavio differentiate itself in the market?

Clavio focuses on marketing automation and providing personalized marketing experiences through email, SMS, and push notifications. They have achieved profitability and offer a user-friendly dashboard for businesses.

Q: What challenges do Instacart face in the market?

Instacart faces competition from UberEats and DoorDash, both of which offer similar services in the e-commerce and food delivery space.

Q: Why are Sarah Silverman and other authors suing OpenAI and Meta?

The authors claim that their books were used without permission to train AI models, which they allege was stolen from a shadow library of pirated works.

Summary

This video discusses the current state of the startup industry, particularly focusing on IPOs and the LP market. It also delves into the financial performance and business model of Instacart, a popular grocery delivery platform.

Questions & Answers

Q: What has been the trend in funding startups based on their performance versus their pitch?

In the past, startups were often funded based on their pitches and promises, rather than their actual performance. However, this has changed recently, and investors now want to see concrete evidence of a startup's performance before providing funding.

Q: What has caused the lack of venture-backed tech IPOs in recent years?

There has been a significant decrease in venture-backed tech IPOs since the end of 2021. This can be attributed to several factors, including a reluctance from the public markets to invest in these companies and a hesitancy among startups to go public in a down market.

Q: Why are LPs reducing their investment in venture funds?

LPs are tightening their belts and reducing their investments in venture funds for several reasons. One possible reason is a lack of performance from these funds, which leads LPs to reevaluate their commitments. Another reason could be a desire to allocate their capital to other investment opportunities.

Q: How has the LP market affected startup founders?

The tightening LP market has made it more challenging for startup founders to raise funding for their ventures. LPs are being more selective and cautious when considering new funds, which means founders have to work harder to convince them of their potential.

Q: What are the implications of the decrease in venture capital funding?

The decrease in venture capital funding means that there will be fewer dollars available to be deployed in the startup ecosystem. This will likely result in a consolidation of the industry, with some funds closing up shop and fewer opportunities for new startups to secure funding.

Q: How has the COVID-19 pandemic affected the startup industry?

The pandemic has had a significant impact on the startup industry, particularly in terms of funding and IPOs. Many startups have struggled to survive, and the public markets have become more wary of investing in these companies. The industry has undergone a period of adjustment and consolidation.

Q: How has Instacart's valuation changed over time?

Instacart's valuation has gone through several adjustments in recent years. It reached a peak valuation of $39 billion in 2021 but has since been reduced multiple times. Its current valuation is $13 billion, representing a 66% decrease from its peak.

Q: How does Instacart generate revenue?

Instacart primarily generates revenue from fees charged for its grocery delivery service. This is not based on the total value of the groceries delivered but rather the fees it collects from customers. The company has been able to extract roughly 10% of the value of the deliveries made.

Q: What is the trend in Instacart's user metrics?

Instacart has reported strong user metrics, with 7.7 million monthly active orderers spending an average of $317 per month on the platform. The company has seen a steady increase in its user base and average order size, indicating a steady demand for its services.

Q: How has Instacart's advertising revenue grown?

Instacart's advertising revenue has grown significantly in recent years. The number of advertisers on the platform has increased nearly six-fold, from around 1,000 in 2019 to 5,700 in 2022. Advertising revenue has grown eleven-fold, from $67 million in 2019 to $740 million in 2022. It is projected to exceed $800 million in 2023.

Takeaways

The startup industry is currently experiencing a decline in venture-backed tech IPOs and a tightening LP market. This has made it more challenging for founders to raise funding and has led to a consolidation of the industry. Instacart, a popular grocery delivery platform, has faced valuation adjustments but has seen strong user metrics and significant growth in advertising revenue. The company's unique advertising model, which leverages the point of sale, is revolutionizing the way advertisers reach consumers.

Summary & Key Takeaways

• Instacart, valued at $13 billion, delivers $29.4 billion worth of groceries and has a run rate of $2.9 billion in revenue. However, competition from UberEats and DoorDash could pose challenges.

• Clavio, a marketing automation platform, grew rapidly and raised $778 million. They focus on personalized marketing and have achieved profitability. They are valued at $9.5 billion.

• Sarah Silverman and other authors are suing OpenAI and Meta (Facebook) for copyright infringement because their books were used to train AI models without permission.