Picking up where I left off yesterday. If you didnât have a chance to give that a read yet, you can find it here. Figured out the formatting a bit more :)
Below youâll find 3 companies from Demo Day 2, and the trends I believe they illustrate.
1. Microverse, and ISAs-as-Default
Microverse is offering $0 upfront technical education, provisioned remotely. Unlike other programs, Microverse is almost entirely peer-to-peer, significantly reducing the cost of education while also forcing students to practice soft skills like collaboration across cultures.**
If thereâs one company I wish I could have invested in from the past few batches, itâs Lambda School (S17). While others may have raised at higher valuations (Brex, W17), few others have captured the imagination so fully, particularly around such an impactful idea. While there were other Income Share Agreement-based (ISA) programs before Lambda, the companyâs strong brand, vocal leadership, and focus on remote education seems to have lit the for others to follow.
In doing so, Lambda has also brought attention to ISAs as a financing instrument. As little as two years ago, offering education at no upfront cost felt like a real differentiator, but with companies like Flockjay (sales school), Modern Labor (theyâll pay you to code), Propel (security professionals) coming to market, and incumbent code schools expanding their financing options, ISAs are quickly becoming the de-facto way to pay for non-institutional adult education. I expect it to find its way onto more traditional campuses soon.
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*Also in this batch:Â Blair, Juno (previously upfront cost, moving to ISA)
** Technically, Microverse uses a slightly different instrument, an ICL. While operating with a slightly modified structure, the principle is the same.
2. Coco, and Latamâs Moment
$8B in remittances sent to Venezuela is spent on food, per year. Given that the BolĂvar devalues by ~20% daily, recipients are losing a fifth of the value of their money every day they donât buy their groceries. Coco cuts out this exchange, allowing users to send groceries as remittance. Instead of receiving money and buying food, recipients pick up food provided by their overseas family at partner markets.
Earlier this year, one of my friends in VC said something to the effect of, âI think the Latin American marketâs getting hot.â A few months later, Softbank announced a $5B âinnovation fundâ to invest in the geography. Given that, $1.98B was invested in the region by all funds in 2018 (up ~2x year-on-year), that decision will significantly move the market.
YC seems to see the same potential as Masa, with 14 companies (by my count) coming from and serving the region. With some VCs shifting attention from China to Vietnam and Singapore in an attempt to chase hyper-growth, others may be better served looking closer to home.
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*Also in this batch:Â Mipos, Flux, Covela, Mudafy, Apurata, LAIKA, Kuarti, Alana, Tranqui Finanzas, Valiu, Vitau, Zippi, InEvent (founded in Brazil, now operating internationally)
3. Curtsy, and the Catalyzing Effect of Rent the Runwayâs Success
âThe buy/sell app for clothes,â Curtsy gives their Gen Z audience a simple way to buy and resell clothing.
Though the company has been around since 2009, the past 12 months have seen Rent the Runway (re)enter the public consciousness. This seems to have been primarily driven by the success of shifting to a subscription model, and their subsequent $125MM Series F, announced March of this year. Whatever the cause, a host of insurgents have sprung up to bring their spin on apparel ownership to market. Companies like Wardrobe, VillageLuxe and Tulerie have chosen to take on the RTR behemoth by going peer-to-peer (users borrow from each otherâs closets); The Rotation (s/o Zach) and Seasons are serving men; Curtsy is focused on Gen Z and re-sale. While the âbuy/sellâ verbiage suggests Cursty will resemble Grailed, StockX or Rebag more than RTR, I think the companyâs focus on mass-market apparel suggests it will be leveraged less by the super-users that trade bags and sneakers in order to turn a profit, and more by those looking for a way to own less, but access more. By any other name, that sounds like rental.
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*No others in this batchâŚ