A presentation of the latest trends in marketplaces and why we are still at the very beginning of their evolution in every major category including food, real estate, cars, jobs, home services and lending
3. FOUNDERS
Fabrice Grinda
• Forbes #1 Ranked Angel Investor
LANGUAGES
BACKGROUND
Jose Marin
LANGUAGES
BACKGROUND
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FOUNDER FOUNDER
Zingy Aucland IG Expansion
4. IN A NUTSHELL
VENTURE CAPITAL
• Pre-seed / Seed / Series A focus
• Average investment size $400K
• Global strategy: Active in U.S., Europe, LatAm, India
• 80+ investments per year
• 65% new investments + 35% follow-ons
• Do not lead rounds or join boards
• Co-invest with larger funds we know and trust
COMPANY BUILDING
• Build 1-2 businesses from scratch per year
• Invest $2.5M to $5M per company
• Executive chairman role
• Hands-on role in product, marketing, hiring, strategy &
fundraising
• Expertise in scaling using TV advertising
(FJ has bought over $1B of TV ads)
• US focus but have built companies in Europe + Brazil
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5. INVESTMENT HEURISTICS
Verticalization of horizontals
Transition to supply pick marketplace
B2B marketplaces
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Does it meet our thesis?
Storytelling skills
Grit and tenacity
Demonstrated passion
Metrics driven and analytical
Attractive unit economics (actual or theoretical)
$1b+ potential enterprise value
Low disintermediation risk
Market leader potential
Scalable and capital efficient
Growing market
Attractive price relative to team,
traction, and market opportunity
Is the team compelling?
Is the business attractive?
Are the deal terms reasonable?
6. NET INVESTMENT TRACK RECORD
REALIZED GAINS UNREALIZED GAINS
# OF INVESTMENTS
313
AVG. INVESTMENT
$466K
AVG. HOLDING PERIOD
3.3 Y
IRR
70.9%
INVESTED
$30.8M
As of December 31, 2018. Includes FJ Labs LLC investments. MOIC is based on last round valuations. 6
MOIC
5.7X
CARRYING VALUE
$176.0M
INVESTED
$146.7M
MOIC
2.0X
CARRYING VALUE
$290.9M
AVG. INVESTMENT
$224K
# OF INVESTMENTS
132
AVG. HOLDING PERIOD
2.6 Y
IRR
30.1%
7. We follow and invest
in the evolution of
marketplace models
MARKETPLACE MODELS AND INVESTMENT THEMES
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10. EVOLVING FROM DOUBLE COMMIT TO MARKETPLACE PICK
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Double commit SupplyDemand
Buyer and seller interact
to agree to T&Cs
Demand pick
Marketplace pick
SupplyDemand
SupplyDemand
Buyer originates
transaction
Marketplace picks
the supplier
Marketplace
11. B2B MARKETPLACES
Examples
High Margins of
20%+
High Average
Order Value
High
Recurrence
B2B Marketplaces have attractive characteristics that
makes them more resilient
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13. FOOD IS UNDERGOING MASSIVE SHIFT TO OFF PREMISE CONSUMPTION
On Premise Revenues
(grocery shopping & dine-in)
Off Premise Revenues
(pick-up & delivery)
14. VERTICALIZATION OF ON-DEMAND FOOD
Verticalization happens around discovery,
trust, convenience and priceHorizontals benefit from the growing demand
Managed delivery for
business lunch
Discovery platform for
pick-up
Managed delivery for
authentic food
Discovery platform for
local pizzerias
Discovery platform for
discounted pick-up
15. NEW MODELS ARE FOCUSING ON OFF PREMISE CONCEPTS
High upfront costs
On-premise experience first
- physical storefront -
Not flexible to changes:
one kitchen, one brand, one menu
In-house customer comes first
Off-premise experience first
- digital storefront -
This Model works as long as
food is still hyper-local and
physical space is needed
This Model works when
cultural habit shifts to
mobile-first world (like China)
Digital presence is needed
Low upfront costs
Out-of-house customer comes first
Flexible to changes:
multiple brands from single kitchen
16. OFF-PREMISE EMERGING MODELS
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- Smart industrial kitchens
rented out to restaurants
- High-flexibility and easy
expansion for current brands
- Merit based: Low-cost barrier
to entry for new brands
- Players provide shared space,
infrastructure, and SaaS
- Brands renting dark kitchens
or using existing underutilized
restaurant space
- Players in the space usually
take charge in providing the
brand, raw-materials,
customer acquisition, and
delivery support
- Cooking-on-the-go
renovated and sold with
healthy margins
- Players in the space
provide well-equipped
vehicle with a cooking
space, and often an app
Dark Kitchens Virtual Restaurants Autonomous Restaurants Fleet
19. OVERVIEW OF IBUYER MODEL
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The iBuyer model requires getting involved in every step of the transaction
20. SUCCESS FACTORS FOR IBUYER MODELS
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- Mortgage market for buyers
- Debt capital market to fund
homes up to ideally 90%+
- Culture of home ownership
- High broker fees
- High % of transactions going
through brokers
- High complexity transaction
- Long time to close
transaction (90+ days)
- Availability of low priced
assets that can be
renovated and sold with
healthy margin
Every market Efficient markets Inefficient markets
23. FRONTIER CAR GROUP IS BRINGING THE AUTO1 MODEL TO EMERGING MARKETS
Frontier Car Group is bringing the Auto1 model to
emerging markets
Auto1 model has proven successful in Europe
Not clear which
markets are fully
operational
Initial target
markets
24. SUCCESS FACTORS FOR CAR MODELS
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Information sources and use
Incumbents
- Absence of wholesale
marketplaces
- Low penetration of largest
incumbents
Financing
- Social acceptance of credit
- Credit scoring system
- Access to credit
Macro factors
- Market size
- High and/or increasing car
ownership
- Price differential across
regions
- Potential for pricing models
built on proprietary data set
26. SUCCESSFUL JOBS MARKETPLACE MODELS
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Blue collar
Full Time Jobs Staffing / Gigs Vertical Marketplace Pick
White collar
27. SUCCESS FACTORS FOR JOB MARKETPLACE MODELS
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Regulatory
- Employer responsibility for
insurance/pension/sick
leave/…
- Ease of hiring/firing employees
Macro factors
- Industries which require rapid
hiring/firing of large amounts of people
(e.g. ride sharing or oil & gas for
staffing)
- Job churn in the market
- Unemployment rates
29. VERTICALIZATION OF HOME SERVICES MODELS
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Horizontal services marketplace
New verticalized and transactional competitorsHorizontals still dominate the bulk of home
services models
Managed marketplace
for home maintenance
and repairs
B2B marketplace for
construction materials
Managed marketplace
for home renovations
Managed marketplace for
restaurant renovations
31. VERTICALIZATION OF LENDING MODELS
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… followed by a second wave of startups
that address specific client needs
The first wave of fintech challengers brought
significant disruption to the market …
Banking for self-
employed freelancers
Pay-as-you-go smart-
phone purchasing
POS financing for
veterinary clinics
Better returns for
online shopping
Lending for
produce farmers
32. SUCCESS FACTORS FOR VERTICAL LENDING MODELS
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Better understanding
of customer needs
• Faster decision
making
• Targeted UI/UX
• Higher approval
rates /lower cost
Better customer
experience
Customer Needs Vertical Fintech Edge Outcome
More business + more data
ProducePay for farmers
ScratchPay for vets
ClearBanc for freelancers