💸 Corporate America’s VC-fication
Hey Snackers,
Amazon’s Alexa is coming to your eyeballs: smart-contact-lens maker Mojo Vision announced plans to test Alexa Shopping List on its contacts interface. Blink twice for bell peppers.
Stocks continued their downward trend for the week as investors digested Fed chair Powell’s hawkish comments from Wednesday. Speaking of hawkish, yesterday the Bank of England made its biggest interest rate hike in 33 years.
Dick’s Sporting Goods debuts a $50M fund as the VC-fication of corporate America continues
From soccer cleats to term sheets… Dick’s Sporting Goods just joined the big leagues of a new sport: venture capital. Yesterday the retailer launched a $50M VC fund called DSG Ventures. Dick’s plans to use the in-house fund to invest in new sports products and tech.
- The first investment round includes women’s-sneaker brand Moolah Kicks, sports-gear marketplace SidelineSwap, and youth sports biz EL1 Sports.
- #SportsSynergy: DSG Ventures plans to also offer non-financial support, like distribution through Dick’s stores — a win for both Dick’s and the startups it invests in.
Everyone’s a (venture) capitalist… An old-school sporting-goods chain might seem like an unlikely source of VC funding, but corporate venture capital (aka: CVC) has a long history. Chemical giant DuPont became the first big CVC when it invested in fledgling automaker General Motors in 1917.
- Very big: Since then, titans like Google, Intel, GE, and J&J have become major CVC players. In 2020, CVCs invested more than $70B — a quarter of all VC funding that year.
- Very varied: Corporate VC arms exist across lots of industries, including construction (Caterpillar), convenience (7-Eleven), travel (United Airlines), and meat (Tyson). This year even crypto exchange FTX launched a $2B VC fund.
VC can act as discounted R&D… Instead of spending big to develop new products and tech, corporations can invest in smaller companies that’ve already created them. That could yield financial benefits like IPO returns and strategic wins like product partnerships. General Mills’ VC arm helped launch Beyond Meat, and Google Ventures backed GitLab, Slack, DocuSign, and Toast. Dick’s hopes to do the same with sporting goods, but it’ll be up against Nike, Adidas, and Under Armour — all of which have VC divisions.
Crypto firms like Galaxy Digital eye layoffs as DeFi dreams struggle with CeFi realities
Decentralized pain… Crypto financial services firm Galaxy Digital is reportedly considering cutting one-fifth of its staff as crypto winter's freeze sets in. Galaxy is seen as a bellwether for the industry because its business services bitcoin miners and crypto traders, and it invests in blockchain projects like polygon. Galaxy's not alone in its cuts:
- Bit-axed: This week, crypto exchange BitMex announced layoffs of up to 30%.
- Sadder: Web3 studio Dapper Labs said it's cutting 22% of its 600-person team.
- DCGone: Crypto conglomerate (and CoinDesk parent) DCG laid off 10% of staff.
Misery loves coin-pany… and this party's crowded. It's not just crypto fintechs feeling the squeeze of record inflation and spiking interest rates. Stripe announced yesterday that it'll lay off 14% of its workforce. Layoffs are often forward-looking — a sign that companies expect more slowing growth or falling earnings. This week the cofounder of Tezos, a proof-of-stake blockchain, said crypto winter is "only going to get worse." More cost cuts could be coming.
The future of finance is still tied to the present… Crypto companies want to revolutionize the financial system with decentralized finance (DeFi). In the meantime, those companies are still accountable to investors, boardrooms, and centralized finance (CeFi) realities. Since crypto is still viewed by many primarily as an investment opportunity (not a transactional currency), the industry has to deal with today's rising interest-rate reality that’s dampened demand.
The Crypto Catch-Up…
- 🖼️ Showy… Instagram's got the NFT bug. The Meta-owned platform said some users can now mint and sell NFTs. But Meta didn't launch its own blockchain — at least to start, any selfie NFTs will live on polygon.
- 📸 Flashy… Hello, 401(k)rypto? A survey of millennials and Gen Zers with 401(k)s found nearly half wish they could incorporate crypto into their retirement account. Fidelity moved to include bitcoin in some 401(k)s this year.
- 🤖 Techy… Twitter may be crypto's social home, but Kraken's vying for real estate. A subsidiary of the crypto exchange launched a new platform dubbed Cryptowatch Social. Think: BTC price charts with built-in viral sharing.
What else we’re Snackin’
- Grande: Starbucks reported record sales for last quarter as Americans spent more per trip (think: pumpkin cold brew + cake pop). But profit plunged 50% as Starbs invested in its workers and stores.
- Vacay: A day after Airbnb posted its best quarter, Marriott joined Hilton in lifting its annual profit forecast. Consumers are still splurging on travel experiences despite cutting back in other categories.
- Freeze: Apple is said to be pausing nearly all corporate hiring while Amazon halted hiring for corporate roles, showing that even the biggest companies haven’t been spared from the fallout of high rates and inflation.
- Vaxing: Moderna shares fell after the mRNA icon disappointed on quarterly expectations, and the company lowered its sales outlook for the year, blaming supply snags. Earlier this week Pfizer boosted its Covid-vax outlook.
- Krispy: Kellogg lifted its outlook after sales grew 9% as consumers stocked up on Frosted Flakes, Eggos, and Pringles. It’s a trend we’ve seen with Big Food: sales staying strong despite price hikes.
Friday
- Earnings expected from: Enbridge, Duke Energy, Dominion Energy, and DraftKings
Authors of this Snacks own: bitcoin and matic and shares of Apple, Amazon, Google, GM, Moderna, Twitter, and Starbucks
ID: 2575462