&
Online marketplaces: entering the next phase.
Supported by
Unveiled at the Marketplaces Conference May 2020 Disclaimer.
This report (hereinafter referred to as the ”report") has been prepared by Dealroom.co
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Building and scaling Pan-European seed stage Seed stage venture capital fund marketplaces globally venture capital fund in Europe beyond
Adevinta’s venture arm 150+ new investments 143 new investments supports entrepreneurs since 2013 since 2013 financially and operationally $1.1B+ raised by portfolio since $4.5B raised by portfolio since 2013 2013
Investments & operations: Selected investments: Selected investments: Online Marketplaces: Outlook on 2020 and beyond
Key takeaways.
Digital adoption has been Recent months have shown By unlocking supply, the next rapidly accelerated by Covid- how online marketplaces generation of marketplaces can 19 crisis. But the big digital have become part of society’s play a role in solving some of wave is still ahead of us. critical infrastructure. society's most pressing issues.
Everything was already moving online. Now this is The Covid-19 crisis has demonstrated how critical Mobility – Many European cities including Paris and London happening even faster. Online marketplaces have a online consumer services and technology are for have unveiled ambitious plans to reduce congestion. This combined value of $814 billion globally. The biggest many aspects of society and the economy. We’re means expanding mobility options for everyone consumer categories are still largely undigitised. entering a new phase in the ongoing evolution of Housing – shortages, access to home ownership and online marketplace models. sustainability are key themes Covid-19 has created short-term winners and losers. Healthcare – Consumer healthcare, heavily regulated, is But the more structural impact is that trends that Startups are colliding with the offline world, its increasingly embracing telemedicine, AI, connectivity and were already under way have been accelerated. 58% regulations and its laws of physics, which sometimes predictive diagnostics of consumer marketplaces could be well positioned impact unit economics. The crisis may also impact Work – big corporates are embracing remote work. The rise to navigate the crisis, while another 23% might funding sources for startups, leading to an increased of freelance, gig & passion workers means a growing share of experience a sharp “V-shaped” recovery. focus on profitability. workers relying on match-making and distribution platforms for income as they work from home.
Page / 4 The Future of Online Marketplaces | 2020 Edition SECTION 1
Digital adoption is accelerating.
Everything was already moving online. Now this is happening even faster. Online marketplaces have a combined value of $814 billion globally. But the real opportunity is still ahead of us. While segments like travel and fashion have gone digital, the biggest consumer categories are still largely undigitised. Covid-19 has created short-term winners and losers. But the more structural impact is that trends that were already under way have been accelerated Digital adoption is accelerating Nearly 90% of consumer spending goes to housing, healthcare, food, mobility and education. Most markets are still largely offline, but seeing rapid digital adoption, driven by Covid-19.
Consumer spending Global startup & scaleup activity Europe Global Digital Offline
Housing Already researched online but still transacted offline. New models like $3.1T Rent & mortgage 65%, Interior & $8.2T iBuying and fractional ownership could help digitise further maintenance 16%, Energy 18%
Health Gov’t funded 64% (1), Insurance $1.9T $7.8T Covid-19 impact Rigid market, but Covid-19 has opened the floodgates to innovate fast premiums 22%, out-of-pocket 14%
Food Groceries 53%, Alcohol & $2.4T $6.0T Covid-19 impact Was slow to migrate online (<10%) but now digitising fast tobacco 30%, Restaurants 17%
Mobility Consumers still spend 90% on car ownership. The remaining 10% of $1.2T Car purchase 34%, Fuel & $5.0T mobility is mostly booked online. maintenance 56%, Public 10%
Education Education still 90%+ offline but starting to digitise (1) $1.0T Covid-19 impact? Gov’t funded 87% $5.0T Lock-down could open the flood gates Out-of-pocket 13%
Travel Online penetration around 50%. But even “offline” part is mostly $0.6T Flights 33%, Packaged $3.0T researched online and booked via email/phone travel 33%, Hotel 33%
Online penetration around 1/3 in most developed countries. But Gone $0.6T Fashion $2.2T Covid-19 impact? digital
Source: Dealroom analysis based on data from Eurostat and World Bank. 1. Government funded is added to consumer spending here since consumers still decides/influences where to buy healthcare. 2. Estimate based on top-10 most valuable companies in the sector. Combination of public and private valuations.
Page / 6 The Future of Online Marketplaces | 2020 Edition Digital adoption is accelerating Online marketplaces have combined value of $814 billion globally. But the real opportunity is ahead of us. Housing, health and education are still mostly untapped.
Consumer spending Global startup & scaleup activity Europe Global VC invested since ‘13 Combined market cap (2)
Housing Rent & mortgage 65%, Interior & $3.1T $8.2T $15B $66B maintenance 16%, Energy 18%
Health Gov’t funded 64% (1), Insurance $1.9T $7.8T $25B $46B premiums 22%, out-of-pocket 14%
Food Groceries 53%, Alcohol & $2.4T $6.0T $35B $178B tobacco 30%, Restaurants 17%
Mobility Car purchase 34%, Fuel & $1.2T $5.0T $65B $181B maintenance 56%, Public 10%
Education Gov’t funded 87% (1) $1.0T $5.0T $1B $9B Out-of-pocket 13%
Travel Flights 33%, Packaged $0.6T $3.0T $20B $168B travel 33%, Hotel 33%
Fashion $0.6T $2.2T $10B $57B
Source: Dealroom analysis based on data from Eurostat and World Bank. 1. Government funded is added to consumer spending here since consumers still decides/influences where to buy healthcare. 2. Estimate based on top-10 most valuable companies in the sector. Combination of public and private valuations.
Page / 7 The Future of Online Marketplaces | 2020 Edition Digital adoption is accelerating Mobile app data shows user base growth in less digitized categories such as education and groceries. App downloads growth: January 2020 vs March 2020
Education Groceries & Meal kits Food delivery Neobanks Mobility
284% 266%
126% 103% 99% 79% 65%
29% 23% 21% 13% 13% 10% 8% 8%
(23%) (31%) (32%) (33%) (28%) (28%) (32%) (33%) (43%) (39%) (39%) (43%)
(52%)
VOI
Tier
Lyft
Bird
Uber
Lime
Glovo
Picnic
Ocado
Cabify
Preply
Monzo
Brainly
Remind
Revolut
Grubhub
Uber EatsUber
Deliveroo
ClassDojo
SnappCar
DoorDash
Postmaes
HelloFresh
Blue Apron Blue
MoneyLion
Share NOW Share
Metro Metro bank Google ClassroomGoogle
Source: Dealroom.co analysis of SimilarWeb data.
Page / 8 The Future of Online Marketplaces | 2020 Edition Digital adoption is accelerating It’s not just about spending money online. The digital consumer is managing work, banking and (re)schooling also online.
$17 trillion $17 trillion income expenses & savings (work and other)
Income from assets Lending/Investing Net savings €35tn in assets €7tn debt (77% mortgages) Income from assets Communication Fashion Recreation Travel Services Social benefits Reschooling Remote working Education
Mobility ◀ Banking & financing ▶ Gig & passion Freelance work $12 trillion Health economy expenses
Food Wages Jobs marketplaces
Housing
Source: Eurostat (EU28) and Dealroom analysis.
Page / 9 The Future of Online Marketplaces | 2020 Edition The impact of Corona virus on marketplaces Covid-19 has led to a divergence into winners and losers. Current share price as % of share price in January 31
S&P 500 -100% -75% -50% -25% 0% 25% 50% 75% 100% 125% 150%
Meal kits HelloFresh ◆ ◆ Blue Apron
Tele health Ping An Doctor ◆ ◆ Teladoc Pharmacy Zur Rose ◆ ◆ Shop Apothekee Pet food PetMeds ◆ ◆ Chewy ◆ Zooplus
Groceries Meituan ◆ ◆ Ocado Food delivery GrubHub ◆ ◆ Delivery Hero
Horizontal Alibaba ◆ ◆ Amazon ◆ Pinduoduo
Freelancing Freelancer ◆ ◆ Upwork ◆ Fiverr
Fashion ◆ ASOS ◆ Farfetch ◆ Boozt Fashion Furniture Lauritz ◆ ◆ Home24
Job search Recruit Holdings ◆ ◆ DHI Group ◆ Scout24 Car search CarGurus◆ AutoTrader ◆ ◆ Carvana Mobility Lyft ◆ ◆ Uber
Group sale Groupon ◆ ◆ MySale Group
Travel Webjet ◆ Expedia ◆ ◆ Booking◆ TheTrainline
Property search Purplebricks ◆ Rightmove ◆ ◆ Zillow
Lending OnDeck ◆ ◆ Funding Circle ◆ EverQuote
Source: Dealroom.co analysis. Yahoo Finance.
Page / 10 The Future of Online Marketplaces | 2020 Edition Digital adoption is accelerating Segments, like micro-mobility, face short-term impact but might experience a V-shaped recovery once lock-downs end. Events, restaurants and air travel could face a prolonged impact.
Structural positive B2B Nutrition D2C marketplaces food Both Structural and cyclical impact, because crisis is Telehealth accelerating a trend that Some categories have seen a Expert / Online groceries was already underway. steep decline in usage but On-demand Passion economy Meal kits could face a sharp V-shaped office space Farm-to-table recovery once the lock-down Car sharing Online dating Online ends (e.g. micro-mobility) Gaming Micro-mobility education Resale fashion White collar / marketplaces Mental health Fashion Freelance Recycling Sports at home marketplaces Streaming Car sales Non-health Food delivery insurance video/music Short-term negative Short-term positive Real estate Lending Public Job search transportation Air travel & hotels Restaurant booking Offline retail related Possible prolonged impact Events with L-shaped recovery in categories such as air travel, hotels, ride-hailing and services related to offline retail Prolonged negative
Source: Dealroom.co.
Page / 11 The Future of Online Marketplaces | 2020 Edition Digital adoption is accelerating 58% of consumer marketplaces could be well positioned to navigate the crisis, while another 23% might experience a sharp “V-shaped” recovery.
Consumer health (590) Education (340) Gaming (115) Groceries (90) 22% Net positive 2,643 startups
Delivery (560) Fashion ecommerce (1,269) While collar jobs (140) Passion economy (70) 36% Defensible 4,004 startups
Lending (232) Banking and insurance (120) Micro-mobility (109) 23% Proptech (544) Short-term impact (V-shaped recovery) 2,561 startups
Mobility (830) Events (367) Blue collar jobs (320) 20% Travel (836) Prolonged impact (L-shaped recovery) 2,447 startups
Source: Dealroom.co 1. Based on the number of venture-backed marketplaces.
Page / 12 The Future of Online Marketplaces | 2020 Edition Digital adoption is accelerating Many startups have shown agility to pivot, providing value beyond the immediate crisis.
Category Pivot
Ride-sharing Groceries and medicine (1-hour delivery)
Uber Direct (pharmacies and pet shops) Ride-sharing Uber Connect – P2P courier service
Scooters for food and medicine delivery Micro-mobility App now shows take-out options
Restaurant ordering (B2B) Help restaurants launch direct-to-consumer programs
Restaurant booking Reserve grocery shopping appointments
Online Experiences Accommodation booking Launched long-term rental
Book a musician for events Personalised music messages by popular artists
Re-sale fashion Posh Stories: video shopping
Source: Dealroom.co analysis of public statements.
Page / 13 The Future of Online Marketplaces | 2020 Edition SECTION 2
Marketplaces entering the next phase.
The Covid-19 crisis has demonstrated how critical online consumer services and technology are for many aspects of society and the economy. We’re entering a new phase in the ongoing evolution of online marketplace models. Startups are colliding with the offline world, its regulations and its laws of physics, which sometimes impact unit economics. The crisis may also impact funding sources for startups, leading to an increased focus on profitability. The evolution of online marketplace models Marketplaces have continued to evolve in order to unlock new markets.
1990s 2000s 2005-2010 2010-2015 2015 Next?
Aggregate supply Vertical specialisation …. …. ongoing quest for new niches … Transactional marketplaces On-demand & location-based … … super apps Managed marketplaces ???
Gen Z
‘98 Responsible consumption
Regulated services
B2B marketplaces ‘06
(1) ‘05 Passion economy Mobile-first video shopping
1. A term coined by a16z.
Page / 15 The Future of Online Marketplaces | 2020 Edition The evolution of online marketplace models As innovation pushes boundaries, the definition of “marketplace” is being stretched.
Customer Transaction incl. Logistics Demand acquisition Listings payment & software tools Own inventory Production Supply
✓ Homes, cars, Listings Asset light, profitable Low revenue per user jobs, horizontal
Transactional ✓ Still asset light, higher take-rate Travel, delivery, Traditional Traditional marketplace marketplaces Possible long-term strategic disadvantage freelance
Full-stack ✓ Control over user-experience On-demand marketplace Operational risk, requires market density services
New age New Market maker ✓ Create new supply, verify quality Temporary trade Homes, cars,
marketplace (iBuying) Capital intensity & risk, requires homogenous market on the books jobs, products
✓ Same-day delivery of goods, control over user experience eCommerce Fashion, groceries High capital intensity, low margins
Cosmetics, food, models Direct-to- ✓ Own entire product identity / experience / sometimes with physical stores banking, wellness, consumer High capital intensity, limited assortment CompetingB2C lifestyle, eyewear
Page / 16 The Future of Online Marketplaces | 2020 Edition The evolution of online marketplace models Plus size rounds and record funding had become the norm in recent years, driven by an abundance of venture capital. Expectation that we’ll see much less of them in 2020.
Global VC investment in marketplaces $74B Rest of World $1B $400M $271M $250M $206M $231M Series E Series F Series B Series D Growth Equity Series D
$58B $56B $54B Asia $41B $3.3B $3B $1.5B $1.5B $1B $800M $40B Growth Equity Series F Series H Series D Series G Series D $26B $36B $25B ??? $29B North America Other ▶ $2.6B $2.3B $1.3B $1.3B $1B $1B $22B Growth Equity Growth Equity Growth Equity Growth Equity Series H Late VC Asia ▶ $12B $22B $18B $21B $14B Europe North America ▶ $11B $11B $1B $800M $575M $568M $550M $800M Growth Equity Growth Equity Series G Series D Series C Series D Europe ▶ $7B $9B $4B $6B $5B $7B 2014 2015 2016 2017 2018 2019 2020
Source: Dealroom.co
Page / 17 The Future of Online Marketplaces | 2020 Edition The evolution of online marketplace models Abundance of venture capital led to the rise asset heavier models. The pendulum may swing back to asset light models. Asset lighter Asset heavier
Food delivery
Used cars
Mobility
Media
Banking
Healthcare
Housing
Travel
Jobs
Second-hand fashion
Inspired by a slide from Sonalide Rycker (Accel Partners) presented at the Marketplaces Conference 2018.
Page / 18 The Future of Online Marketplaces | 2020 Edition The evolution of online marketplace models Unlike asset light marketplaces, full-stack marketplaces often have challenging unit economics. And there’s a renewed push for profitability in venture capital markets.
% Operating profit margin (sales minus all operating costs) 80% Rightmove Traditional marketplaces 60% ✓ Lower upfront capital ✓ Rapidly scalable eCommerce Booking.com Delivery Hero 40% Inferior user experience ✓ Greater control over logistics Just Eat Thin (but positive) margins Deliveroo (London) Uber ridesharing Inventory risk 20% Takeaway Grubhub Airbnb Yoox Zalando Asos – Uber / Lyft Farfetch (20%)
(40%) Full-stack marketplaces Deliveroo (group) ✓ Superior user experience (60%) ✓ Stronger moat (= defensible) WeWork Challenging unit economics (80%) – 10% 20% 30% 40% 50% 60% 70% 80% 90% % Contribution margin (sales minus cost of goods, sales & marketing) Source: Dealroom analysis of company financial statements.
Page / 19 The Future of Online Marketplaces | 2020 Edition The evolution of online marketplace models New marketplace models focus on unmet demand from Gen-Z / millennials and unlock scarce supply, such as in regulated services and programming.
Sustainable lifestyle & Future of work & Regulated services circular economy passion economy Clothes Food waste reduction Teaching Nursing
Retail / Hospitality workers Meat alternatives Freelance:
Shoes and accessories Baby-sitters
Programming: Other products Recycling
Podcasting & publishing Veterinary
Source: Dealroom.co
Page / 20 The Future of Online Marketplaces | 2020 Edition SECTION 3
Mobility in a jam?
Large parts of mobility have been brought to a near- complete stop, resulting in thousands of layoffs, due to the Covid-19 crisis. But what will the recovery look like? Many European cities including Paris and London have unveiled ambitious plans to reduce congestion. This means expanding transportation options, also to relieve public transport. European households spend 91% of transportation costs ($1.2 trillion) on car ownership. This will likely drastically change over the next ten years. Mobility in a jam? A tale of two rivals: Uber has made a come-back as it’s better equipped to weather the storm with a mode diversified approach to mobility & logistics. Share price performance Opportunities January 31 20% ▪ Avoid busy public transport
10% San Francisco, $56B ▪ Uber acquired Lime for $170M (70% below last round0
0% ▪ Meanwhile, Intel acquired Moovit – a urban traffic data company – that counts Uber as a client. The technology of -10% Moovit will be used to enhance Mobility-as-a-service offering of Mobileye (acquired by Intel in 2017). -20% ▪ Focus on growing categories such as food delivery and
-30% medicine. Uber is also in talks with GrubHub ▪ Favourable micro-mobility legislation: The UK government -40% San Francisco, $8.4B is planning a £250m investment in its cycle lanes and plans to fast track e-scooter trials. Transport of London planned -50% to make London one of the largest car-free zones in any capital city in the world -60% Challenges -70% ▪ Due to lockdown and social distancing, the demand for on- -80% demand passenger rides has plummeted 18 Nov 19 13 Dec 19 07 Jan 20 01 Feb 20 26 Feb 20 22 Mar 20 16 Apr 20 11 May 20 ▪ Lyft and Uber lay off almost 1,000 and 3,500 staff, respectively. Source: Dealroom.co and Google Finance as of May 15 2020.
Page / 22 The Future of Online Marketplaces | 2020 Edition The digitisation of consumer markets Mobility platforms have created value of over $200 billion so far, mostly by ride hailing companies like Uber, Didi and Lyft.
Car sales / Sharing/ Hailing Micro-mobility Long distance iBuying Subscription
Combined market cap of top-10 companies $156B $23B $8B $6B $4B
Examples
Cities embrace micro- Consumers seek People avoid shared/ People avoid public Expand into delivery mobility to reduce Opportunities liquidity public transit transit congestion
Reluctance to share Social distancing Social distancing More working from Macro deteriorates Hygiene concerns Challenges becomes norm Hygiene home
Source: Dealroom.co for private . Yahoo Finance for public market cap data as of May 16 2020.
Page / 23 The Future of Online Marketplaces | 2020 Edition Mobility in a jam? Urban landscapes are changing fast. Mobility platforms have been sprawling.
EUROPEAN VC INVESTMENT AMERICAS EUROPE ASIA
$375M $259M Micro-mobility $46M $6M $17M $32M
2014 2015 2016 2017 2018 2019
$471M
Mobility $166M $140M $135M $74M $40M
2014 2015 2016 2017 2018 2019
$140M Car sharing / $79M $42M $41M renting $10M $19M
2014 2015 2016 2017 2018 2019
$986M
Long distance $299M $273M $164M $145M $40M
2014 2015 2016 2017 2018 2019 Source: Dealroom.co.
Page / 24 The Future of Online Marketplaces | 2020 Edition Mobility in a jam? European households spend 91% of transportation ($1.2 trillion) on car ownership, while keeping the car idle 90% of the time.
Car ownership is expensive: Cars: 78% of distance travelled 91% of transportation costs and 62% of trips (1)
$1.2T Public transport, Biking ▶ ▶ 2% 1% taxis, ride-hailing $0.1T Public transport ▶ 9% 16% 3% Walking ▶ 26% Fuel & maintenance ▶ $0.7T ~60% of car trips 91% = are less than 8 km (1) $1.1 trillion spending on car ownership 78% Cars ▶ 62% We could see car trips increase as Purchase ▶ $0.4T consumers avoid shared mobility.
Expenses Trips Distance travelled
Source: Dealroom analysis of Eurostat and Department of Transportation (UK) data. 1. Department of Transportation of The United Kingdom (2018). NHTS data for USA.
Page / 25 The Future of Online Marketplaces | 2020 Edition Mobility in a jam? Cities are looking to optimise for clean, congestion-free transport. micro-mobility could prove a green option for social distanced travel. Carbon emissions (in gram per kilometre per passenger) ▪ cities including Paris and London have unveiled Walking ambitious plans to reduce car congestion ▪ Significant gains by transitioning to greener Bike/eBike version within same modal
Tram/train ▪ eScooters are greener than most alternatives
Traditional ▪ Early reports suggest eScooters replace cars in a Scooter eScooter scooter third of cases. Often combined with public transport. In the US, one out of every three car Bus eBus Diesel bus trips is less than two miles long ▪ Governments can restrict car use but need to Car Plug-in-hybrid Gasoline car provide alternatives
Airplane Long-haul Short-haul ▪ Train and eBus are much better than flying
– 50 100 150 200 250 300
Source: Dealroom.co, Lufthansa report, Sifted.eu
Page / 26 The Future of Online Marketplaces | 2020 Edition Mobility in a jam? The industry is preparing for possible “peak car” happening in the next five years, absorbed by sharing services. Incumbents need a platform strategy. Maintain high hygiene of shared scooters and Peak car scenarios Car hailing bikes. A good example:
Cars in use in Europe Wheels partners with NanoSeptic
Peak car: 2022-2025 360M Historic trend self- 296M Car sharing 264M 285M ING Bank ‘19 scenario
- Regulation & taxation - Car sharing & hailing - Micro-mobility - Autonomous driving Scooter sharing
58M RethinkX scenario
Bike sharing 2014 2018 2035
Source: Dealroom.co, Eurostat, RethinkX, Drake Star, ING Bank.
Page / 27 The Future of Online Marketplaces | 2020 Edition Mobility in a jam? Autonomous driving could become a game changer for mobility and mobility marketplaces.
▪ 80% of top 10 manufacturers plan highly autonomous vehicles ▪ >40% of models announced by 2021 will have electric powertrains ▪ Truck platooning on the road expected by 2022 ▪ Cars becoming more connected
Autonomous cars EV charging infrastructure
Vehicle cyber security
Autonomous trucks
Car connectivity
Source: Dealroom.co.
Page / 28 The Future of Online Marketplaces | 2020 Edition Mobility in a jam? As electric vehicles go mainstream and autonomous driving gradually becomes prevalent in more places, the entire value chain is impacted.
Car Distribution Maintenance Used car Insurance Fuel Parking manufacturing & financing & services sales
Source: Dealroom.co.
Page / 29 The Future of Online Marketplaces | 2020 Edition 60+ by the time of publishing)
Mobility in a jam? The main players are relatively young, but well capitalized and equipped to scale internationally. (1) Acquired Jan 2020
Year founded 2017 2017 2018 2018 2018 2018 2018
HQ USA USA Germany Sweden Germany Germany Netherlands
Total equity €706M €627M €55M $136M $136M €65M €50M funding
Estimated 1,400+ 1,100+ 400+ 400+ 500+ 70+ 90+ employees
Estimated rides 2M 15M 18M+ 1.5M - (since launch)
Cities (#) 120+ 100+ 33 30 60+ 14 4
USA, Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, USA, United Germany, France, Chile, Colombia, Czech Republic, Kingdom, Portugal, Portugal, Spain, Portugal, Spain, Spain, Austria, Denmark, Finland, France, Spain, France, France, Germany, Portugal, Spain, Countries France, Italy, Switzerland, Belgium, France, Italy, Germany, Greece, Hungary, Israel, Germany, Italy, Austria, Denmark, France, Austria, (names) Belgium, Germany, Norway, Sweden, Belgium, Italy, Mexico, New Zealand, Norway, Israel, Poland, Chile, Norway, Sweden, Denmark Norway, Sweden Denmark, Finland, Poland, Portugal, Romania, Sweden, Austria, Finland UAE Singapore, South Korea, Spain, Belgium Sweden, Switzerland, UAE, UK Source: Dealroom.co 1. Excludes the numbers for JUMP bikes
Page / 30 The Future of Online Marketplaces | 2020 Edition SECTION 4
Housing: searching for the key to digitally unlock the world’s #1 consumer market.
Housing (mortgage, rent, maintenance, energy) is the #1 household expense. People already look for properties online, but the rest of the market is ripe for innovation. Fractional ownership and iBuying are slowly changing that. Housing shortages, inaccessibility to home ownership and sustainability are key themes. What’s next in Real estate? Innovative models removing friction such as iBuying have quickly become a main category of real estate marketplaces.
Fractional ownership €1B
Source: Dealroom.co
Page / 32 The Future of Online Marketplaces | 2020 Edition What’s next in Real estate? Innovative models removing friction such as iBuying have quickly become a main category of real estate marketplaces.
Share price performance January 31 Challenges Seattle, $10B 60% ▪ According to Zillow: New listings are down 39% YoY. For high-end homes the lists are 46% down. 40% ▪ Rightmove and Zoopla listings started to increase again Seattle, $2.4B as of April 18 2020. Still far from pre-covid19 levels, but 20% there is positive sentiment across agents.
0% Shirley (UK), $136M
-20% Opportunities
▪ Web traffic is returning to pre-covid19 levels. -40% London, $5.3B ▪ Consumer seeks liquidity
-60%
-80%
-100% 18 Nov 19 18 Dec 19 17 Jan 20 16 Feb 20 17 Mar 20 16 Apr 20 Source: Dealroom.co
Page / 33 The Future of Online Marketplaces | 2020 Edition What’s next in Real estate? US-based iBuyers are well capitalized compared to their European counterparts.
Last valuation(1) Total equity funding Age & Location Number of metro areas in operation Has Trade-in program
$3.8B / Series F $1.5B 2014 / San Francisco 21
$1.0B $435M 2015 / New York 7 Yes
$1.7B / estimate $363M 2015 / Gilbert, USA 12 Yes
2006 / Seattle $1.8B / public €124M 10 Entered iBuying: 2017
2005 / Seattle $7.8B / public €79.1M 21 Entered iBuying: 2018
£80-120M / estimate €77.6M 2015 / London 1 (London)
€210M / estimate €35M 2017 / Madrid 3
€80-120M / estimate €29.1M 2017 / Milan 2 (Milan and Rome)
€56-84M / estimate €18.7M 2017 / Barcelona 3
€48-72M / estimate €13.7M 2017 / Helsinki 7
€80-120M / estimate €1M 2016 / Paris 1 (Paris)
Source: Dealroom.co 1. Private valuations are based on Dealroom’s estimate.
Page / 34 The Future of Online Marketplaces | 2020 Edition What’s next in Real estate? The created value by fractional ownership marketplaces remains relatively small, but the application of blockchain would accelerate growth in the space.
First wave: Location Year founded Total funding(1) Type • Illiquidity of real estate market: large upfront capital USA 2013 $111M Loan requirements and regulations for investing abroad. • Marketplaces have facilitated asset-backed lending and investing, which has brought some transparency. Germany 2014 $65M Loan
Second wave: UK 2014 $29M Loan & Equity • Blockchain will speed up tokenization of real estate USA 2013 $27M Loan & Equity assets and enable seamless transactions of ownership. • It will also lower the transaction costs and settlement time. UK 2010 $16M Loan & Equity • Smart contracts and easy ID verification.
Estonia 2013 $1.4M Loan
Other
Source: Dealroom.co 1. Publicly disclosed equity funding data. 2. Publicly disclosed information on provider’s website.
Page / 35 The Future of Online Marketplaces | 2020 Edition SECTION 5
Healthcare: 10 years of change have happened in a few weeks.
Consumer healthcare, heavily regulated, is increasingly embracing telemedicine, AI, connectivity and predictive diagnostics. A trend started by pressures from ageing populations, spiralling costs and staffing shortages, has been accelerated by the pandemic. What’s next in consumer healthcare? Consumer healthcare startups have a combined value of $68 billion which is still small compared to the overall market opportunity.
Source: Dealroom.co
Page / 37 The Future of Online Marketplaces | 2020 Edition What’s next in consumer healthcare? Consumer healthcare startups have a combined value of $68 billion which is still small compared to the overall market opportunity. Share price performance Opportunities January 31 500% Mountain View, $5.8B ▪ COVID19 forced governments and patients to reimagine how healthcare is delivered, pushing telemedicine into the mainstream. 400% Frauenfeld (CH), $1.6B ▪ Years of digitization in a matter of weeks: Doctolib surveyed its customers: 74% of doctors said they’d 300% continue using video consultation after the pandemic passes, and so did 80% of patients. In March Teladoc reported 15,000 requested visits per day (50% increase). 200% Venlo (NL), $1.3B ▪ Remote monitoring used to detect and treat patients prematurely is here to stay. Demand for product 100% offerings such as Livongo surge amid COVID19. Purchase (USA), $13.7B 0% Challenges
▪ Increased competition from unconventional players -100% Shanghai, $15.5B such as Apple, Google and Zoom. ▪ Non-Covid healthcare takes a big hit -200% 18 Nov 19 18 Dec 19 18 Jan 20 18 Feb 20 18 Mar 20 18 Apr 20
Source: Dealroom.co
Page / 38 The Future of Online Marketplaces | 2020 Edition What’s next in consumer healthcare? Healthcare is among the least digitised industries.But for some areas, Coronavirus has forced 10 years worth of change in a matter of weeks.
Ageing population Connectivity and AI change the game in Staffing and funding shortages diagnostics and prevention Breakthroughs in drug discovery and Governments starting to embrace Data collection & AI treatments technology, make room for innovators Pre-emptive & remote monitoring
Telemedicine & online booking Diagnostics Drug development with AI
Pharmacies Connected health sensors Genomics
Source: Dealroom.co.
Page / 39 The Future of Online Marketplaces | 2020 Edition What’s next in consumer healthcare? Consumer booking apps now allow for instant access to information and service.
Others
Founded 2007 2014 2014 2013 2011 2013
Funding $223M $900M $244M $267M $140 $635M
Valuation $1.8B $7.5B $926M / estimate $1.1B $528M / estimate $2.0B
Booking V V V V Telemedicine V V V V
AI help V V
SaaS for doctors V V
Pharma V V
Poland, Turkey, Spain, UK, Rwanda, Canada Italy, Czech Republic, USA China Nordics, France, UK, Spain France, Germany to expand in: USA, China, Middle Countries Mexico, Brazil, Colombia, East Argentina and Chile
App downloads(1) 265M 1,2M 1.2M
Source: Dealroom.co 1. Sensor Tower, when available.
Page / 40 The Future of Online Marketplaces | 2020 Edition SECTION 6
The future of work has become… just work.
The rise of freelance, gig & passion workers means a growing share of workers relying on match-making and distribution platforms for income as they work from home. Working from home creates a level playing field for freelancers and passion economy. Put Co-living and co-working in RE
The future of work & education Online job markets are dominated by LinkedIn and Indeed globally, and regionally by dominant local job portals.
Source: Dealroom.co
Page / 42 The Future of Online Marketplaces | 2020 Edition
Freelancing €2.2B The future of work & education Online job markets are dominated by LinkedIn and Indeed globally, and regionally by dominant local job portals. Share price performance January 31 Opportunities 100% Tel Aviv, $1.8B ▪ Freelance platform Fiverr is at an all time high ($1.9B
80% market cap) after posting strong Q1 results and gave a positive outlook
60% ▪ Santa Clara, $1.6B Working from home levels playing field for freelancers
40%
20% Sydney, $182M Challenges 0% ▪ Hiring has slowed down significantly
-20% Tokyo, $52M ▪ Freelancers might look for stable jobs again and temporarily stop on-demand projects -40%
-60% 18 Nov 19 18 Dec 19 18 Jan 20 18 Feb 20 18 Mar 20 18 Apr 20
Source: Dealroom.co
Page / 43 The Future of Online Marketplaces | 2020 Edition
Freelancing €2.2B The future of work & education 162 million independent workers in the USA & Europe earn ~$3 trillion per year. That’s 20- 30% of the total workforce, which could approach/exceed 50% within the next ten years.
The rise of freelance workers Growth drivers: (USA plus Europe) ▪ 42% of millennials (18-34) work freelance (Upwork). Millennials will form 75% of the 685M 648M global workforce by 2025 Independent workers today ▪ The number of independent workers in the European Union rose by 24% between 2008 ▪ 20-30% of workforce in USA & Employees and 2015, from 7.7 to 9.6 million (1). The gig economy in the UK doubled in size between Europe, including freelance and gig Employees economy (=162M people) 2016 and 2019. It now comprises 4.7 million Freelance could increase workers (2) ▪ to >50% of workforce, On average, work 17 hours per week according to Upwork and make $20-25 per hour. ▪ The Intuit 2020 Report estimated that 80% of Freelance large corporations plan to increase the use of ▪ Implies $1.3 trillion earnings in USA >300M+ freelancers in the coming years and another ~$1.5 trillion earnings in Freelance >50%+ Europe 162M ▪ Rise of freelancers earning $1M (Passion 20-30% Economy)
2017 2027
Source: Mix of data from Upwork (USA data, and 2027 projections), McKinsey (USA & Europe status quo data) and assumptions by Dealroom.co 1. IPSE 2. TUC & University of Hertfordshire
Page / 44 The Future of Online Marketplaces | 2020 Edition The future of work & education Changing workplace: repetitive work is automated, talent is re-trained and better matched with employers, even remotely. Covid-19 will accelerate those trends.
Skills mismatch & reschooling need. Need to better match supply & demand. University degree losing importance. War for top talent. Student debt crisis.
Source candidates: Jobs search: Get inspired: Courses:
Reschooling:
Distributed teams: Automation:
Source: Dealroom.co
Page / 45 The Future of Online Marketplaces | 2020 Edition The future of work & education As the job market slows due to recessionary pressures, vertical job marketplaces will play a major role in the rehiring process. Specialized product features can make the hiring process more cost-effective and improve matching.
Hospitality Retail Healthcare Software Construction
Source: Dealroom.co
Page / 46 The Future of Online Marketplaces | 2020 Edition The future of work & education Match-making is expanding from gig-economy to passion economy.
Podcasting Sell your courses:
Passion Photography economy Publish your content: Teach:
Experts: Salary White collar / experts Programming: Search: Freelance:
Tasks: Healthcare/nurses:
Hospitality: Blue collar Riding:
Informational value Transactional & match-making Full-stack
Source: Dealroom.co Vertical integration
Page / 47 The Future of Online Marketplaces | 2020 Edition SECTION 7
Education What’s next for education? EdTech startups had a surge in usage during Corinavirus, but what happens when students go back to campus? Share price performance January 31 Opportunities 80% Santa Clara, $7.8B ▪ The pandemic has forced hundreds millions of students
60% to learn from home, putting tech companies at the forefront of making remote education possible
40% ▪ Herndon (USA), $985M Push towards remote learning ▪ Intensive Bootcamp learning model gained momentum 20%
0% Farmington (USA), $2.9B Challenges -20% ▪ Retain users as social distancing goes away. Convert freemium users. -40% ▪ Some households lack technology to access remote -60% learning
▪ Established schools move curriculum online -80% 22 Nov 2019 22 Dec 2019 21 Jan 2020 20 Feb 2020 21 Mar 2020 20 Apr 2020
Source: Dealroom.co
Page / 49 The Future of Online Marketplaces | 2020 Edition
Freelancing €2.2B What’s next for education? Following COVID-19, the lines are now blurred between physical and digital classrooms.
Access to learning materials on-demand Interactive learning materials Using video to maximize student Promote student collaboration Personalised and tailor-made curriculum achievements Guide self-discovery and student for maximum impact Mentoring becomes more important engagement
Online learning platforms Gamified learning Knowledge sharing & Collaboration
Mentoring & Tutoring
AI-driven learning
P2P knowledge sharing Student assessment
Source: Dealroom.co.
Page / 50 The Future of Online Marketplaces | 2020 Edition What’s next for education? In the USA, tuition fees have massively outpaced salaries. Meanwhile, concerns arise whether university is best preparation for today’s workplace.
2.8x Public university tuition fees
2.4x Private university tuition fees
1.0x 1.2x Early career salaries 1.0x Minimum wage
1987 2004 2016
Source: Dealroom.co.
Page / 51 The Future of Online Marketplaces | 2020 Edition The meteoric rise of Lambda School, the Income Share Agreement based coding school
What is Lambda? Founded in 2017 by Austen Allred. Backed by Y- The meteoric rise of Lambda School combinator, Bedrock. Total funding of $44 million What does it do? Trains people to be software engineers for free in Employees exchange for a share of future income. Share typically is 17% for 2 years (applicable only when annual gross 806 income is above $50k). ISA is available only to students living in the USA. 554 How big is it? 2,700+ students enrolled as of 2019, and growing at 10 percent a month. In 2019 increased lifetime earnings by $945 million. Lambda intends to enroll 10K students in 252 2020, which implies $300M in ISAs. 216 73 Why is it interesting? University model is failing students. Model could possibly solve skills mismatch $1.5 trillion student debt market. 40% of student borrowers are expected to default by 2023. The average student debt for college 2017 2018 2019 graduates is $29k. Launched in San Increased course Expand in Europe Who else does ISAs? Universities: Purdue University, University of Utah, Francisco with 1 6- offering following and Canada, and Clarkson University month course. Seed & Series A offer courses on (Online) courses: Make School, IronHack, General Backed by Y- cybersecurity Assembly combinator following Series B Business loans: Uncapped, Pioneer
Page / 52 The Future of Online Marketplaces | 2020 Edition What’s next for education? Lambda intends to enroll 10K students in 2020, which implies $300M in ISAs. That would mean Lambda's market share is around 50%.
Total value of new Income-sharing agreements in the USA Companies offering Income-sharing agreements
Location Year founded Total funding $600M
New York 2011 $154M
$450M San Francisco 2017 $48M
San Francisco 2012 $15M $300M San Francisco 2013 $13M
$150M Madrid 2013 $7M
Berkeley 2017 $4M
$0M 2015 2016 2017 2018 2019 2020 Other
Source: Dealroom.co and Edly.
Page / 53 The Future of Online Marketplaces | 2020 Edition Methodology Methodology.
Venture capital investment Valuation Data source
Investment numbers refer to venture capital The combined valuation of startups based on their Dealroom’s proprietary database and software investment rounds such as seed, series A, B, C, …. market cap or latest transaction value. Transaction aggregate data from multiple sources: harvesting late stage, and growth equity rounds value is realised from exit or implied unrealised public information, user-generated data verified by valuation from the latest VC round, which is either Dealroom, data engineering. All data is verified and It excludes debt or other non-equity funding, lending announced or estimated by Dealroom based on curated with an extensive manual process capital, grants and ICOs market-based assumptions for dilution. Most underlying data from the report is available Buyouts, M&A, secondary rounds, and IPOs are online via https://startupmap.iamsterdam.com/ treated as exits: excluded from funding data For more info please visit dealroom.co or contact Investment rounds are sourced from public [email protected] disclosures including press releases, news, filings and verified user-submitted information
Page / 54 May 2020 | startupmap.iamsterdam.com Identify the world’s most promising companies.
Ivan Draganov Lotf Belych Laura Rodriguez Daniel Cavallari Matteo Renoldi Marketplaces Lead Fintech Lead Healthtech Lead Tech Ecosystems Lead Energy Lead [email protected] [email protected] [email protected] [email protected] [email protected]
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