Keep March 19th open on your calendars because KingsCrowd founder and CEO Chris Lustrino will be participating in a webinar with Statista’s Head of Finance David Szopinski. It’s going to be an awesome discussion about crowdfunding, trends in startup investing, and portfolio diversification. Register for free here!
The Business Buzz
Where are they now? This week both Airbnb and DoorDash released their first earnings report since going public. And they kind of make a yin and yang pairing with each other. Airbnb’s net loss last year was the largest the company had seen in five years — by a lot. Total damage? More than $4.5 billion. But it’s worth noting that more than half that amount came from costs associated with the company’s IPO event in December. Despite that dire loss, Airbnb did manage to turn a profit in Q3 last year. With many workers going remote, some people opted to travel locally and work from a nearby Airbnb instead of their homes. But overall revenue for 2020 was still 30% weaker than 2019’s figures — not terribly surprising.
And then there’s DoorDash. The food delivery company reported its Q4 revenue numbers, which grew from almost $300 million in 2019 to $970 million last year. Those figures did beat analyst estimates, a boon for the company. But DoorDash’s net loss also more than doubled from 2019 to 2020. And similar to Airbnb, it only had one profitable quarter last year.
All of that may make the two companies sound somewhat similar. But the real disparity comes in when you consider their 2021 outlooks. Airbnb is hopeful that travel will resume as vaccinations increase (but remote work continues) — and investors seem to share that confidence. The company’s market cap makes it more valuable than Marriott International, Hyatt Hotels, and Hilton Worldwide combined. Meanwhile, DoorDash is expecting its rampant growth to slow this year as people return to restaurants and bars in person. And its shares dropped 10% yesterday in response to the news.
Rebels with a cause. You’ve heard about GameStop and r/WallStreetBets. Now get ready for the Silver Squeeze and r/WallStreetSilver. The Silver Squeeze movement is aiming to buy up as much physical silver as possible. Why? Because they believe that the amount of silver bullion is far less than the amount of paper-based trading that happens. It’s similar to GameStop in that Silver Squeeze proponents believe that the market is ‘short’ on silver — and that by stockpiling the metal, silver’s price will rise substantially. The movement is still too young for its effectiveness to be judged. But it might be worth keeping an eye on.
The Private Market
Another crowdfunding success story. A company that’s soon to go public raised its initial round of funding via equity crowdfunding nearly nine years ago. Any idea which one it is?
Crypto exchange Coinbase raised more than $260,000 in a seed round that was crowdfunded — though not through an online platform, as this predated the introduction of online Regulation Crowdfunding. And almost a decade later, Coinbase is preparing to go public via direct listing. The steadily growing popularity of bitcoin and other cryptocurrencies has made the exchange a crypto unicorn. In 2020, it reached full profitability and saw more than 130% growth. And most recently, Coinbase was valued at an astonishing $100 billion — an amount that could increase once shares go on sale. The exact date of Coinbase’s public debut is not yet known.
L is for liquidity. This week Netcapital announced a partnership with Rialto Markets. Netcapital is one of the top platforms for startup investing. And Rialto Markets is a broker-dealer that operates an alternative trading system (ATS). So in this partnership, Netcapital is planning to use Rialto’s ATS to increase liquidity and distribution for startup investors on the site. Rialto will benefit from increased issuer volume and a better chance at reaching profitability. Exact details on the functionality or availability of these features haven’t been outlined yet. But it’s still a pretty exciting occurrence that bodes well for the continued growth and innovation of the online private equity markets!
An exclusive network for accredited investors. Netcapital wasn’t the only platform with an exciting announcement this week. Republic also unveiled some new features coming to its site — the Deal Room. The Republic Deal Room is a private network for accredited investors that’s meant to connect them with each other and a wider set of up-and-coming startups seeking investments. Republic cited the need for underrepresented founders to receive more investments as a major influence in creating this network. Republic wants to broaden startup investing beyond just Silicon Valley and VC firms. And it views bringing accredited investors from across the country into contact with a wide group of startups as a necessary step towards that goal.
The Fun Stuff
When history gets literally rewritten. To wrap up Black History Month, I want to share something with you that I only found about earlier this week. My freshman year of college, I read Sojourner Truth’s famous speech, commonly known as “Ain’t I a Woman?” And I remember some of my classmates struggling with the heavy dialect of the speech. Well, it turns out that the version I and my peers read isn’t at all an accurate transcription of the speech Truth gave at the Women’s Rights Convention in 1851. In fact, what I read was a version that was rewritten by a white woman 12 years after the speech was given. And the differences are stark.
