| | | | | The Weekend Pitch | June 20, 2021 ![]() | | Presented by Deloitte | | | | | In the 1980s movie "Wall Street," Gordon Gekko was a ruthless corporate raider who famously rationalized that greed is good. If Gekko could reappear as a venture capitalist in the 2020s, he might hold up Amazon.com as the digital age's model of his maxim.
Hello, dear readers. I'm Alexander Davis, and welcome back to The Weekend Pitch. You can reach me here. | | | | | |  | | (Osman Orlan/Getty Images) | | | Amazon's rise from an upstart online bookseller into an empire spanning retail, media, cloud computing, logistics and much more is a movie-worthy saga of a superpower steamrolling its way through two decades of essentially unchecked growth.
Until now, perhaps. After years of standing tall at the forefront of the digital commerce revolution, Jeff Bezos' company could soon be at a crossroads if Washington's new class of policymakers have their way.
But before we get into the antitrust battles to come, a quick bit of context on the dealmaking picture.
So far, 2021 is shaping up to be a banner year for VCs placing bets tied to the global ecommerce ecosystem dominated by Amazon. A series of mega-deals has sunk hundreds of millions of dollars into ecommerce holding companies like Thrasio and Acquco, which gobble up scores of so-called Amazon third-party brands to run them at a larger scale.
In recent days, still more capital has been put to work on that Amazon-centric strategy, making up a hefty chunk of the roughly $30 billion that investors have pumped into ecommerce deals in the first half of 2021, according to PitchBook data through this week.
That puts the venture market well on its way toward matching the all-time annual fundraising record of $56 billion across the broad swath of ecommerce companies.
Investors in the first half of the year have written many of the biggest checks to ramp up global ambitions of on-demand delivery platforms, specialty retailers and direct-to-consumer brands. You can read more about the trend in PitchBook's Emerging Tech Research Q1 Report.
Towering over them all is China's Xingsheng Selected, a last-mile delivery powerhouse that amassed $3 billion in a single round that was put together in February by investors like Tencent, Sequoia China and KKR. And in March, Philadelphia-based instant-delivery specialist GoPuff lined up $1.15 billion in a deal backed by Baillie Gifford, D1 Capital and others. GoPuff said Thursday it will acquire rideOS, a logistics and fleet-management startup, in a deal that TechCrunch reported at $115 million.
At the same time, companies like Thrasio are aggressively fundraising to roll up a portfolio of hot-selling Amazon third-party vendors into one massive brand holding company. Walpole, Mass.-based Thrasio has raised $850 million across two rounds this year alone and is reportedly in talks to go public through a SPAC deal with Michael Klein’s Churchill Capital V.
A gaggle of startups with a similar strategy has also been busy fundraising in 2021. SoftBank-funded Perch picked up $775 million, and Y Combinator-backed Moonshot Brands just this week pulled in $160 million. The data shows investors remain bullish about riding the Amazon wave.
Meanwhile, the prospect of unbridled growth for Amazon—and for fellow tech giants Google, Apple and Facebook—turned gloomier this week on the matter of fending off antitrust regulators' challenges to their market dominance. President Biden's choice to lead the Federal Trade Commission is Lina Khan, a fierce critic of big tech who is set to be the most progressive and activist-minded regulator to oversee the agency in many years.
Corporate mergers are likely to face a higher bar for approval under Khan. The new FTC and its allies in Congress are also expected to advocate for aggressive policies to curtail the overwhelming power that Amazon wields over competitors in its core and adjacent markets. For her part, Khan has been a leading proponent of breaking up tech giants. "One feature dominant digital platforms share," she wrote in an article in the Columbian Law Review in 2019, "is that they have integrated across business lines such that they both operate a platform and market their own goods and services on it."
Khan's era at the FTC is taking shape at a particularly flush time for investment in companies that theoretically could be targeted by Amazon as competitors or as potential takeover targets. Amazon on some occasions has undercut third-party brands by becoming a direct seller of the same products. Similarly, Facebook has rolled out a series of features that mimic technology made by smaller startups, a practice that Khan herself has cited as evidence of harming innovation.
In trying to rein in big tech giants, Khan and her allies may only be able to accomplish so much while Washington is so closely divided. But the fact is, she's no longer just an observer of policy and now holds power to make it. That in itself is a difference. Or, to put it in Gordon Gekko-like terms, "If you aren't inside, you're outside." | | | | | | | | | | | | The future of the fintech expansion-stage ecosystem | | After the fintech explosion of the 2010s, what's next for the expansion-stage ecosystem within the sector as the 2020s kick off?
The latest edition of Deloitte's Road to Next series zeroes in on this select arena, reviewing which companies look poised to become category front-runners and where the forefront of the next wave of innovation in fintech lies. Additional highlights include: - Datasets summarizing key dealmaking trends
- Insights from Deloitte leaders as to first-mover advantages in regulation
- A spotlight on the B2B payments ecosystem
Read it now | | | | | | | | | | | | | | | | | | |  | | (Dan Kittwood/Getty Images) | | | Less than three months after the lackluster IPO of food delivery startup Deliveroo on the London Stock Exchange, another tech giant is pinning its hopes on the UK, this time with a direct listing by Wise, a remittances company. - Wise's pending deal comes at a time when VC-backed IPO exit value in the UK is at an all-time high—$14 billion across 12 public offerings this year—with Deliveroo ($7.8 billion), cybersecurity company Darktrace ($2.1 billion) and Centessa Pharma ($1.4 billion) leading the way.
- Performance so far has been mixed. Deliveroo, which was the first big VC-backed tech IPO after the UK finalized its divorce from the EU, saw its stock plummet 30% on its first day of trading. Darktrace did better in its debut a month later with its shares jumping 40% out of the gate.
- The UK has made no secret of its desire to attract tech listings and burnish the City of London's status as a post-Brexit European tech hub. To this end, it has revised its listing rules and introduced dual-class share structures to allow founders to retain more control after going public. This is something that both Deliveroo and Wise have taken advantage of.
- Wise isn't the first fintech to go public this year (PensionBee raised £59.6 million in its London IPO in April) but it may yet be the biggest. Wise's deal could be an important bellwether for investor appetite for future London listings, which could include other fintechs such as challenger banks Monzo and Starling.
| | | | | |  | | (Andriy Onufriyenko/Getty Images) | | | | | ... That after private equity exits nearly slowed to a halt for much of last year, investors have taken advantage of 2021's economic rebound by selling to corporations flush with cash. | | | | | | An anonymous donor turned a tiny Pacific coast town without a bank into the world's biggest bitcoin experiment. Up next? The entire country of El Salvador. [Bloomberg]
How Blackstone built the perfect pandemic portfolio in real estate. [Fortune]
With the rise of remote work, developers are hoping to lure in young talent and revive mill towns in North Carolina. [The New York Times]
Club deals may be back, but asset owners are still skeptical for many reasons. [Institutional Investor]
In Silicon Valley, "disruption" is giving way to "building." But what exactly is being built? [The New Yorker]
In Scott Kimball, the FBI thought it had found a high-value informant who could help solve big cases. Instead it got lies, betrayal and murder. [The Atavist] | | | | | | This edition of The Weekend Pitch was written by Alexander Davis, Adam Lewis, Andrew Woodman and James Thorne, and was edited by Kate Rainey and Liana Scarsella.
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