Week Five: Whole Lotta Money

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Housekeeping

Welcome to the fifth edition of Venture Vantage. We’ll be exploring topics related to tech and the venture ecosystem.

I’m back in NYC, and man, it’s cold. Not excited for it to get even colder.

This week will be following the same format as last week, just without a highlighted topic. It’s been crazy busy with Tech Week, travels, and some in-person meetings.

As always, please?hit me back?with feedback and comments—I’m constantly seeking ways to make this newsletter a more valuable read.

Diving right in and keeping things brief:

The Meat & Potatoes

I’m skipping The Meat & Potatoes this week, as there’s plenty of news and deals to cover.

News, Deals, and Pretty Things

Harry Stebbings snags $400M

Context:

• Harry Stebbings is the host of the 20VC podcast.
• He interviews investors, operators, founders, and executives to pull back the curtain on the world of entrepreneurship. It’s a great podcast, and I’m a big fan.
• Harry launched his third fund about four months ago.
• He raised the entire $400M fund in these past four months.
• This third fund will invest in seed and Series A rounds of US and EU-based companies.

Vantage:

• The biggest takeaway from this is that publicity is key. Most people don’t believe in you because they don’t understand what you’re doing.
• I truly believe that when it comes to the world of venture, being public about your investments, learnings, philosophy, network, etc., is key to a) good quality deal flow and b) raising funds. People like Harry Stebbings, Nichole Wischoff, and others are proof of this.
• There’s something to be said for being quiet, unassuming, and under-the-radar, but I honestly believe that is a much harder path to go down for those without significant track records of success.

Narvar’s new CEO

Context:

• Narvar, a post-purchase experience platform, just hired a new CEO. Her name is Anisa Kumar.
• Kumar joined Narvar in 2021, and prior to being the CEO, was the Chief Customer Officer.
• There is very little information available about Narvar’s past performance. What I could find is that they did $22M in revenue in 2020. They’ve raised about $64M since that point in 2020, when they raised $30M for their Series C, setting the valuation around $345M.
• I can only imagine they experienced explosive growth during COVID, and are probably doing 5x+ the revenue of that time.
• If my prediction is true, Narvar has already secured unicorn status.

Vantage:

• The company cites that Kumar was hired to help the company achieve the next phase of innovation and growth. Narvar was founded in 2012, and is a venture-backed company. My assumption is that this “next phase of growth” is prepping the company for an IPO.
• The IPO markets may not be quite ready for Narvar today, but it’ll be Kumar’s job to have the company primed for when the right time comes along. Kumar is an experienced operator, but this is her first CEO position. She certainly doesn’t have any experience taking a company public.
• The reason I’m predicting an IPO is because shares are going for around $3 on the secondary. This doesn’t mean diddly squat on its own, but what that means for IPO forecast is that there’s enough information about share price publicly available to suggest investors are itching for an exit. Narvar is a 14-year-old venture-backed company that has done really well, and unless shares are free-flowing on the secondary or there’s a good tender offer on the table, I have a feeling that the investors are itching for an IPO. DPI is more important than ever before today, especially as funds of that vintage struggle to outperform the S&P.

Celebs go from tequila to non-alcoholic beer

Context:

• Tom Holland released his new non-alcoholic beer company today, called BERO.

• In the past, the “go-to alcohol venture” for celebrities has been tequila:
• George Clooney has Casamigos.
• Carlos Santana has Casa Noble.
• Nick Jonas has Villa One.
• Michael Jordan has Cincoro.
• The Chainsmokers have JAJA.
• Guy Fieri has Santo.
• The Rock has Teremana.
• Lebron James has Lobos.
• Adam Levine has Calirosa.
• Kendall Jenner has 818.
• Mark Wahlberg has Flecha Azul.
• It’s a big departure from the norm for Tom Holland to decide to launch a non-alcoholic beer to compete with brands like Athletic Brewing Co.
• Non-alcoholic beer is the fastest-growing beverage category in the US.
• A 6-pack of BERO is available directly online for $15.98. That’s certainly a premium price point.
• John Herman drives the venture as the CEO. He was previously the CEO of C4 Energy.
• Imaginary Ventures and WME are backing BERO.

Vantage:

• Celeb backing has largely been one of the fastest ways to gain brand recognition. They do an amazing job of driving sales.
• It’ll be interesting to see how Holland and Herman choose to differentiate BERO in a growing and crowded space. Beer is one of those things that is a delicate balance between beer and taste, so it should be fascinating to see who they select to go after as their target audience. Does the product aim to replace alcoholic beer at a bar, luxury food service, or will they go for the premium at-home better-for-you consumers?
• WME Ventures, one of BERO’s investors, is the corporate venture arm of William Morris Endeavor (now called WME-IMG). They almost exclusively provide funding to their clients’ ventures, similar to Connect Ventures (a joint VC project between CAA and NEA).
• It’ll be interesting to see how CPG-heavy the portfolios of these celebrity-specific funds are, and if their returns truly are outsized compared to other funds in the space.

Deals that caught my eye

This is a new segment. I’m taking after TradedVC and just mentioning funding rounds of some cool companies that have recently closed.

• Praxis just closed $525M of financing for their new city. They aim to build an internet-native city with a physical presence somewhere in the Mediterranean.
• As BIA once said, “It's a whole lotta money in this motherf*cker.”
• Koloma just raised a $50M Series B to go after green geologic hydrogen technology. This could be huge for the green energy movement, and huge for energy infrastructure.
• Arbital Health & Quartet just joined forces to advance value-based care in the mental illness space. Together, they will be driving Quartet’s Whole Health program.
• Cymbiotika, a D2C science-backed supplement company, just closed $30M in debt financing.
• SynthBee raised $20M in their seed round, led by Crosspoint Capital Partners, to launch a product that leverages AI to maximize human creative output. Details on what exactly the company does are vague, but we go back to this week’s theme: Whole Lotta Money.

These deals represent all three areas that Fortify invests: human health, the future-of-work, and infrastructure. These deals excite us about the three categories we invest in, and signal that “venture funding is soooo back.”

White Hot

Human Health:

• Drug-free solutions for erectile dysfunction and premature ejaculation. It's not a comfortable thing for most people to talk about, but companies like Hims have proven how massive the space is.
• Technologies that facilitate IVF and make the process easier, like Baibys.
• Tools and technologies that help assess DNA aging. Oxidization of DNA is one of the major factors that causes us to age, and technologies that assess how rapidly DNA is actually oxidizing will be essential in the longevity movement.

Future of Work:

• Bimanual robots that can help improve industrial efficiencies. This can be in a variety of settings, from unpacking groceries at a supermarket to packing orders in a warehouse.
• Rapid IT diagnostics tools that would drastically cut down the work time of IT staff. Think of an OBD-II port for entire network systems—and a scanning device that could accurately tell IT staff where and what an issue is.
• I think that companies who offer really solid benefits packages that employers can purchase will do really, really well.
• Companies like JOON are competing in this space.
• I would argue that employee benefit plans are at the intersection of health and FoW.
• I remember reading an article (I think it was this) not long ago that talked about how, compared to Europeans, Americans give a lot more to their jobs and also expect a lot more from their jobs. This trend is only continuing.

Infrastructure:

• The infrastructure that supports the eventuality of electric trucking. There’s a massive shortage of charging stations and support for these new trucks.
• Companies that have the ability to make pre-fab data centers, from exterior walls to wiring looms and electrical supply.
• Storm-proof infrastructure, from more resilient building materials to backup power systems for homes and businesses. The aftermath of Hurricane Helene and Hurricane Milton proved how necessary this is in certain regions.

Some cool stuff on my radar

• Skylight, the picture frame company, just launched Frame 2. The frames are more customizable than before, and the Frame 2 has a better screen than the predecessor.
• It’ll be interesting to see how it does compared to Aura, and how they differentiate themselves in the market.
• The new DJI Air 3S drone is super cool. But apparently, US customs are giving them a hard time about drone imports.
• Crazy to see how far DJI has come in the last few years, from consumer drones to electric bikes. I remember the days when they only made really, really prosumer products.
• Analogue launched a 4K “retrofit” of the Nintendo 64. I am too young to feel nostalgia, but cool nonetheless.

Closing

Thanks for taking time out of your Wednesday to read. I’m running to go shake a Lulav and Etrog!

As always, you can find me on?X?and?LinkedIn, and I’d love to hear from you via?email. Whether it’s talking startups or just shooting the shit, I’m always happy to connect.

Onto the next!

//Eli