Weekly Market Expectation
Week starting: August 17, 2020
Airbnb Plans to File for IPO by the end of August
- Arguably 2020’s most anticipated tech IPO was Airbnb. But since the pandemic deeply affected the travel & hospitality industry, questions were raised to whether the short-term home rental company would go through with an IPO.
- In March, Airbnb bookings in COVID hot spots collapsed by 96% and the company’s value fell from $31B to $26B. By the time the pandemic hit full force, Airbnb’s valuation had plummeted to $18B.
- The Bottom Line: Airbnb has been private for 12 years and thought the current economic environment doesn’t seem like an IPO primetime, Airbnb has a few differentiators from the rest of its peers in the hospitality industry. Generally cheaper and less crowded than hotels, Airbnb appeals to many consumer’s cost-saving and germ-avoiding pandemic lifestyle. Furthermore, the “Work from Anywhere” movement is picking up as consumers are getting fed up with working from home. Proof of this? On July 8, guests booked over 1M nights of future stays at global Airbnb listings, the 1st time bookings hit that level since March. There’s still a lot of uncertainty in the world with COVID, but it will be interesting to see if and how Airbnb can pull this off.
Impact on Small to Midsized Businesses: A successful IPO would hurt many small to midsized home-sharing businesses who are in the hospitality industry while allowing Airbnb to acquire the cash it needs to sustain itself during these unprecedented times. On the other hand, if this IPO fails, Airbnb would need to find additional ways to raise revenue to keep their business going – allowing more leeway for small to midsize home-sharing companies to retain customers and thus market share.
Sources: Crunchbase, WSJ
Natural Fiber Welding Raises $13M In Ralph Lauren-Led Round
- Natural Fiber Welding (NFW), an Illinois-based start-up that develops technology for making textiles out of plants and natural fibers, received a $13M round of funding led by fashion designer Ralph Lauren Corp.
- In a statement, Ralph Lauren VP and chief innovation officer David Lauren said that part of the corporation’s sustainability strategy is aiming to invest in partners that provide innovative solutions in sustainability.
- Ralph Lauren is planning on increasing its use of “post-consumer cotton” as it works toward sourcing all of its key materials by 2025 and incorporating zero-waste principles across the company. This investment and partnership with NFW will also help Ralph Lauren lower its reliance on non-biodegradable synthetic materials.
- The Bottom Line: Clothing manufacturers typically can’t use recycled cotton for new cotton clothing because the recycling process creates short fibers. But NFW’s innovative technology can turn the short fibers into longer fibers to create cotton fiber yarn for Ralph Lauren all while supporting sustainability in the business.
Impact on Small to Midsized Businesses: Regardless of the industry, sustainability is playing a huge role in today’s society particularly due to consumer preferences. NFW can offer sustainable alternatives to nonrenewable plastics and produce high–value materials from low cost, highly functional naturally occurring fibers. The emergence of NFW means that smaller suppliers and manufacturers in the textile industry need to find other innovative and sustainable alternatives to compete. For smaller fashion and apparel companies, the technology from NFW implemented from Ralph Lauren will also make it harder for them to compete.
Sources: Crunchbase, StartupGP
Microsoft Set to Launch its Surface Duo Dual-screen Android Phone on September 10th
- Since it abandoned its mobile business more than four years ago, Microsoft is re-entering the mobile device space with its Surface Duo, a new dual-screen Android device that costs $1,399. The Big Tech is pitching the Duo as a more useful tool than a conventional smartphone since it enables users to multitask with two separate apps or web pages at a time.
- The device includes two separate 5.6-inch OLED displays (1800 x 1350) with a 4:3 aspect ratio that connect together to form a 8.1-inch overall workspace (2700 x 1800) with a 3:2 aspect ratio. Unlike foldables like Samsung’s Galaxy Fold, the Surface Duo is using real Gorilla Glass, and the displays are designed to work in a similar way to multiple monitors on a Windows PC.
- In a press release ahead of the launch, Windows and devices chief Panos Panay says, “it’s probably one of the sexiest devices we’ve ever built. It does things that single-screen devices can’t do, period.”
- The Bottom Line: With talks of a TikTok acquisition and now the launch of their Surface Duo, Microsoft seems very keen on widening their focus and selling to individual customers rather than only serving business clients. It will be interesting to see how Microsoft’s premium device performs in a less-than-favorable economic environment.
Impact on Small to Midsized Businesses: This new launch has no doubt added fuel to the highly competitive smartphone space. With the big tech players like Apple, Samsung, Huawei, and now Microsoft eating up market share, small to midsized businesses in this space will need to come up with significant differentiators in order to compete.