From the Dow hitting a record 30,000 to Amazon revealing their next level of global domination and the official kickoff of the holiday shopping season…
It was a week worthy of a recap.
Here’s what you shouldn’t have missed (I won’t tell if you did):
- German Company Doubles Down On Its Takeover of the Publishing Industry
- Big Players Go Shopping For Food Delivery Startups
- A Look At This Year’s Supergiant Rounds
- Mental Health Apps: A New Fixture in Digital Healthcare
- Tech Company Successes Drive Public Markets Through End-of-Year Rally
- Amazon Is Taking Over Another Part of Your Life: Healthcare
I’ve made it easy for you and broken each down for you in my latest edition of Angel Insights.
Bertelsmann is a media, services, and education company that operates in around 50 countries worldwide.
Now, the German company is doubling down on its takeover of the publishing industry.
Bertelsmann acquired Penguin Random House in 2017. After the deal, it clocked in as the fourth largest book publisher in the world in terms of revenue—$4.15 billion in 2018.
The big news this week is Bertelsmann’s acquisition of publisher Simon Schuster from ViacomCBS for $2 billion. This is another act of consolidation in the publishing industry and one that will swing even more publishing power towards the German giant.
Simon & Schuster publishes some of the world’s bestselling authors, including Dan Brown and Stephen King.
Following the deal, Bertelsmann will hold nearly a third of the US publishing market by revenue.
The deal is so big in the publishing world that critics have raised antitrust concerns and have said that post-acquisition, Bertelsmann will exert too much power in specific genres, particularly hardcover fiction.
Bertelsmann remains confident and unphased and is moving forward with the deal anyway.
Big Players Go Shopping For Food Delivery Startups
HelloFresh is another German company whose conquest into the U.S. markets has made headlines.
The publicly listed meal kit provider just bought up a relatively unknown food delivery startup called Factor 75 for around $277 million. This marks the third acquisition of food delivery startups by HelloFresh in just two years.
HelloFresh is now the leading meal-kit provider in the U.S. in terms of market share. It, like its competitors, has been rocketed forward by the pandemic. HelloFresh saw 70% year-over-year growth between Q3 2019 and 2020.
There have been many other developments in the booming food delivery space.
Just a few weeks ago Nestlé bought Freshly for a whopping $1.5 billion. Back in June, Takeaway.com beat out its rival Uber in a bidding war for Grubhub.
Right now there are several big names in food delivery that are battling it out for market share. We are seeing loads of consolidation as acquisitions happen left and right.
Amazon Is Taking Over Another Part of Your Life: Healthcare
Amazon has been testing the waters in the healthcare industry for years, but just this month it decided to cannonball right in.
Its latest service is called Amazon Pharmacy.
If you haven’t heard already, Amazon will now be offering prescription medications on its online marketplace.
Doctors can send prescriptions right to Amazon to be delivered to the patient. Prime users without insurance can land huge discounts on meds—up to 80% on generic ones and 40% on the name brands.
Additionally, patients can call up Amazon pharmacists over the phone 24 hours a day to get info on their conditions and medications.
Previously, Amazon bought a drug-delivery startup called PillPack for $1 billion. Now it’s clear that this was in preparation for Amazon Pharmacy.
Its other steps into healthcare include launching its brand of over-the-counter medications and creating a health-monitoring wristband called Halo.
With e-commerce, direct-to-consumer sales, and all types of delivery on the rise, we can now see Amazon’s plan for the future—to be a one-stop-shop for virtually all of your needs.
This Year’s Supergiant Rounds and the Future of Private Funding
In 2020 we saw an incredible number of “supergiant” rounds of funding.
VCs and private equity firms have become more comfortable sticking with and investing in late-stage companies that show extreme potential.
We are seeing more and more rounds top $100 million or more as private companies push back the chance to go public to fully establish themselves first.
Firms that frequently contribute to these supergiant rounds include Tiger Global, Softbank Vision Fund, Temasek Holdings, Alibaba Group, and DST Global among others.
According to Crunchbase, 2020 has seen 539 supergiant rounds so far. This represents $142 billion invested or around 55% of all dollars invested.
Now for some companies that pulled off supergiant rounds this year…
Reliance Jio is an Indian telecom company that raised $20 billion this year with multiple rounds above $100 million. Its investors include Google and Facebook.
Chinese tutoring platform Yuanfundao took the number two spot for total funding—$3.2 billion. This incredible amount was raised in just three rounds, each for $1 billion or more.
Two American companies, Waymo and Rivian, had their own super-years, raising $3 billion and $2.5 billion, respectively.
The future of our private markets is hard to predict.
These long-running funding rounds for hundreds of millions are certainly attractive to the right companies, but with the strong performance of tech stocks on the public market and the surge of SPACs that offer a quick and easy path to public, we could see a shift away from supergiant rounds.
Mental Health Apps: A New Fixture in Digital Healthcare
Mental health startups have opened up a new opportunity within healthcare.
Spring Health, a startup that helps companies give their workers mental health benefits, just raised $76 million in a Series B round led by Tiger Global.
Meanwhile, a young startup, Matra Health, raised new funding for its remote therapy service for teens and young adults to the tune of $3.5 million.
Mental healthcare system provider, Headway, raised $26 million about a week ago in a Series A round with GV leading the charge.
Finally, Talkspace, an online therapy app, is working on a possible sale.
This pocket of activity shows a niche within healthcare that is incredibly fast-moving. As Amazon has shown us, healthcare is becoming totally digital fast and consolidation is essential to make it work.
Q4 of 2020 has already seen 1,539 rounds of healthcare funding that raised around $21.8 billion in invested capital. This is well ahead of previous records.
And specifically with mental health investments, we have seen a growth in deal volume since last year.
Tech Company Successes Drive Public Markets Through End-of-Year Rally
We just had a week of broken records and impressive growth for tech companies and their public markets.
Even with Dow Jones futures and S&P Futures seeing a small dip this past Wednesday, Nasdaq 100 futures managed to rise.
The same week, the Dow Jones Industrial Average rose 1.5%, topping the 30,000 level for the first time in history, in part from great performances from leading stocks like Apple, Microsoft, and Salesforce.com.
Other tech stocks like Tesla, and its Chinese rival Nio, hit all-time highs.
Corsair Gaming and Palantir, both recent IPOs, sailed above 100% of their recent buy points.
And for the year so far, the S&P 500 is up 12.5%, the Dow is up 5.3%, and the tech-heavy Nasdaq is up an amazing 34.1%.
The markets have performed exceedingly well through the pandemic due to top-performing technology companies.
Just like in the private markets, the public markets pulled through and even thrived due to this innovation.