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🚀 Disney+ takes the streaming 👑
Plus, why can't we just have fun on the Internet anymore?
🏎️ Disney+ overtakes Netflix. When Disney launched its streaming service three years ago, many questioned if it would be a costly mistake. Now, Disney+ hit an important milestone: it overtook Netflix in # of subscriptions. It’s worth noting that Netflix costs more, and the company likely still has more unique subscribers than Disney. However, Disney+’s continued gains (beating investors’ expectations) is impressive and poses a true threat to Netflix’s dominance.
✍🏻 Axios gets acquired. Big news (pun intended) in the media world! VC-backed digital media startup Axios announced that it is being acquired by Cox Enterprises for $525M. Axios, which was founded in 2016, raised $55M but has “always been profitable.” The deal is being heralded as a win for digital media, a space that has struggled to achieve $500M+ exits. As a point of comparison - BuzzFeed, which went public in late 2021, is currently trading at a ~$275M market cap.
📊 Earnings updates. It was another big week for tech earnings! The updates:
Coinbase suffered from broader weakness in the crypto market - net revenue dropped 31% QoQ (and 61% YoY). The company’s investor letter noted that its core base of U.S. retail customers aren’t churning from the platform, but are trading less frequently given the fall in crypto prices.
Digital health company hims & hers saw an 87% YoY increase in revenue, with 800k+ patients now subscribing to one of the company’s offerings tackling health issues (e.g. hair loss, birth control, anxiety). According to CEO Andrew Dudum, the company expects to reach profitability within the next year.
Allbirds reported a 15% YoY increase in net revenue but a steep drop in gross margin (56.1% to 36.1%). This was mostly due to a write-down in apparel inventory (translation: it’s not selling). Co-CEO Tim Brown noted that the company “went too deep on leggings, an incredibly competitive category.”
💸 AppLovin bids for Unity. There was some unexpected M&A excitement last week. AppLovin, a mobile ad tech co that went public in 2021, made an unsolicited bid to buy gaming engine Unity for $17.5B. The price represents an 18% premium to Unity’s market cap pre-bid. Here’s the drama - Unity has been planning to merge with ironSource, an AppLovin competitor, but the deal hasn’t been completed (and is now at risk). Unity’s board is now officially rejecting AppLovin’s offer.
what we’re following 👀
Why the income-share model favored by career bootcamps is under scrutiny.
This week in strange M&A - TikTok’s parent company bought a hospital chain!
Pew Research reports on the big shifts in U.S. teen social app use from 2014 - 2022.
This week, we’re taking on a big topic - the hype cycle of the Internet. There’s now a fairly clear trend: a topic or incident starts to get attention on social media. The organic content snowballs, triggering big creators and even professional media to jump in. At some point there’s a backlash - the classic “we’ve gone too far” - and then a backlash against the backlash, with people questioning why we can’t have fun on the Internet anymore. And then, with no resolution, the topic dies.
A classic example of this was the great Facebook outage of 2021. It felt like everyone on the Internet took to Twitter to share jokes and memes (check out the blue checks in this comment section 👀). Then, a few hours in, the backlash started - how could people be joking about an outage that impacted millions of small business owners? And just as we approached the backlash to the backlash, Facebook returned.
A more recent example is Alabama sorority rush week, or Bama Rush. Bama Rush hit it big in summer 2021, taking over TikTok with thousands of videos and millions of views. Unusually for an Internet trend, Bama Rush Tok had a natural “cooling off” period after recruitment ended last August - but came roaring back in the past week.
This year, it wasn’t just sorority members and PNMs (prospective new members) making videos. Commentary accounts sprung up to rate outfits and predict who would be “running home” to which houses. Data scientists created leaderboards based on video engagement. Brands staffed teams to comment on #RushTok videos, and sent thousands of dollars of inventory to PNMs with the hopes of getting featured. Perhaps most dramatically, production companies are making Bama Rush documentaries - with rumors of sending girls into houses with mics! 👀
As we’d expect in the hype cycle, there’s now a backlash (and it’s coming from both pro and anti-Greek life viewers). Former sorority actives are sharing stories about how Greek life discriminates against lower-income women and women of color, as Alabama sororities were not desegregated until 2013. And on the flipside, sorority supporters say the level of scrutiny and pressure put on PNMs is inappropriate. Why are grown adults treating college freshmen like characters in a TV show?
We don’t know how Bama Rush Tok will end - though based on this natural hype cycle, we’d predict not well. To us, the more interesting “meta” question is: now that Internet culture has become an industry, where does it end? Similar to how a meme dies faster the more people pile on (remember The Weeknd at the Super Bowl?), it feels like we have increasingly less time to enjoy something before it blows up (in a positive way) - and then blows up (in a negative way).
Shippo - Strategic Partnerships Associate (Remote)
Nike Valiant Labs - Investment Research Analyst (Remote)
Pulley - Associate (Remote)
Volt Capital - Investment Analyst (SF)
Vial - Biz Ops Associate (SF)
Fifth Wall - Associate, Climate Tech (SF, NYC)
Worklife VC - Investment Analyst (LA, SF, NYC)
Legacy - VP Strategy & Chief of Staff* (NYC)
WHOOP - Associate Product Manager (Boston)
Wittington Ventures - Associate (Toronto)
*Requires 3+ years of experience.
Morning Brew - Commerce Intern (Remote)
Attentive - Client Strategy Intern (Remote)
PagerDuty - Biz Ops Intern (Remote)
Twitch - Engineering Intern (SF)
Zip - Software Engineering Intern (SF)
Epic Games - Summer 2023 MBA Corporate Strategy Intern (Cary, NC)
Pair Eyewear - Social Media Intern (NYC)
Fanatics - MBA Intern (NYC)
Palantir - Summer 2023 Path Intern (NYC)
🚨 Flare is a new, venture-backed app reinventing group chats! They’re looking for student interns and ambassadors to help spread the word on campuses this fall - email email@example.com to learn more.
puppy of the week 🐶
Meet Logan, Tow Mater, and Oakley, three Newfoundland brothers who live in Massachusetts.
They enjoy playing with their mountain of toys, enjoying the air conditioning, and swimming in their kiddie pools.
Follow them on Instagram @twoandahalfnewfs!
All views are our own. None of the above should be taken as investment advice. See this page for important information.