🚀 Is Discord worth $10B?

Plus, Chipotle announces a startup investment!

Mar 28, 2021

Online consignment store ThredUp went public on Friday, closing the day up 42% from its listing price. As the chart above illustrates, the company has scaled dramatically since CEO James Reinhart came up with the idea at Harvard Business School (we found a fun interview he gave to the student newspaper!).

ThredUp is different from companies like Poshmark and Depop in that users don’t transact directly with each other - it’s more like The RealReal. As a seller, you ship your items to ThredUp and they handle inspection, photography, pricing, and listing. For each item sold, you get a cut of the payout (% you receive varies based on the price).

This model means that ThredUp has had to get good at opening distribution centers around the country that process, store, and ship items, as well as handle returns. It’s an operationally complex business that’s more similar to Amazon than to your typical tech marketplace. We’d recommend checking out the S-1 if you’re curious about how the company has introduced automation and how this impacts the margin per order.

The company did $186M in revenue last year (14% YoY growth), and processed nearly 4M orders from 1.2M active buyers. The average buyer visited the site six times a month (!) and placed just over three orders during the year. Interestingly, ThredUp estimates that only 39% of its buyers and 34% of its sellers are millennials or Gen Zers.

news 📣

💻 YC graduates 300+ companies. Startup accelerator YC held its biannual Demo Day this week, with a total of 319 companies presenting (virtually) to investors. This is YC’s first-ever batch with more than 300 companies, and also the first cohort with half of the startups located outside the U.S. By industry, B2B software & services dominated (46% of the batch), followed by fintech (15%) and then consumer (14%). If you’d like to learn more about the companies, you can check out YC’s database.

✉️ Slack opens Connect DMs. You likely know Slack as a tool for intra-company communication, but the team has been quietly building features to replace your entire inbox. Last June, Slack added cross-company channels to enable easier collaboration with partners, customers, and vendors. This week, Slack made it possible to DM users from other organizations by simply adding their email address to a message request. Following backlash around the potential for harassment and abuse, Slack removed the ability to customize these invites.

📈 Growth companies raise mega-rounds. A few fundraises to highlight:

Telemedicine startup Ro announced a $500M Series D. The company delivers care directly to consumers (and doesn’t accept insurance), but has built its own pharmacies to offer medications at a comparable price to the average copay.
On-demand delivery company goPuff raised a $1.2B round at an $8.9B valuation (a 2x markup from September!). goPuff primarily offers convenience store items like alcohol and snacks, but plans to expand into a broader range of products.
VR gaming platform Rec Room became a unicorn, raising $100M at a $1.25B valuation. The company has 1M monthly active VR users (largely teens) and primarily monetizes via in-app purchases - revenue grew 566% in 2020.
Blockchain analytics startup Chainalysis announced a $100M round at a $2B valuation. The company helps government agencies and other organizations monitor crypto activity, ensure compliance, and investigate crimes.

📸 Dobrik departs from Dispo. It was a tumultuous week at Dispo, the photo-sharing startup co-founded by David Dobrik. Following allegations of sexual assault against a former member of Dobrik’s Vlog Squad, sponsors distanced themselves from David. Spark Capital, which led Dispo’s Series A, announced it would “sever all ties” with the company and ensure the firm will not profit from the investment. Dobrik stepped down from Dispo shortly after - the Dispo team tweeted that they “support David’s decision” and unequivocally believe survivors of assault. Read more from Axios here.

The funding market just keeps heating up, with VCs now competing against hedge funds, angel syndicates, and…Chipotle?

This week, Chipotle Mexican Grill announced its investment in autonomous driving startup Nuro, which raised a $500M round at a $5B valuation. Nuro received California’s first permit to deploy (and charge for) an autonomous vehicle service on public streets. If you’re a CA resident, self-driving burritos may soon be in your future!

what we’re following 👀

Robinhood has confidentially filed to IPO, while WeWork is going public via SPAC.

a16z’s Marketplace 100 list highlights changes in consumer behavior due to COVID.

A look at Bitclout, the new crypto social platform that is sparking debate on Twitter.

Inside Medium’s latest pivot and the buyout offered to editorial staff.

If you were an Accelerated reader back in 2019, you might remember getting a survey from us about Discord! At the time, the company was focused on gaming, but we felt that it had the opportunity to serve a much broader range of consumer communities (see graphic above). Since then, the company has shifted further into the mainstream - raising $100M in summer 2020 with the goal of cracking other verticals.

This week, Discord reportedly entered exclusive talks with Microsoft to be acquired for ~$10B. Microsoft is an active acquirer in the community platform space, buying companies like LinkedIn (2016), GitHub (2018), Mixer (2016), and Yammer (2012). In the past year, Microsoft reportedly tried (and failed) to buy both TikTok and Pinterest.

Given Discord’s ubiquity and the company’s last valuation of $7B, you may be wondering why the price isn’t higher. Salesforce paid $27.7B for Slack, which (likely) has a smaller user base - Discord reported an impressive 140M MAUs in December!

However, it’s harder to monetize consumers, especially without ads. Companies will pay for software that makes their employees more productive, but we’re guessing you’ve never paid for a chat app! Despite 3xing revenue in 2020, Discord made only $130M (<$1 per user). Discord also has unique challenges in brand and moderation, with controversy surrounding alt-right groups that have used the platform to organize.

At the $10B price tag, Microsoft’s acquisition of Discord would represent a 77x multiple on 2020 revenue, and would value each MAU at $71. What do you think about the potential $10B price tag for Discord? Click below to let us know!

jobs 🎓

Sonder - Strategic Finance Associate (SF)

Tia - Finance & Accounting Analyst (SF)

Modern Health - Digital Content (SF)

Belong - Product Marketing Associate (San Mateo)

a16z - Marketing Coordinator (Menlo Park)

LaunchDarkly - Product Manager (Oakland)

BCG Digital Ventures - Global Strategic Programs & Campaigns Analyst (LA)

Listen Ventures - Associate (Chicago)

Eniac Ventures - Analyst (NYC)

Perella Weinberg Partners - Investment Banking Analyst (NYC)

Co-op Commerce - Client Success Manager (NYC, SF, Remote)*

Next Gen HQ - Full Stack Engineer (NYC, Remote)

Real - Product Manager (NYC, Remote)

*Requires 3+ years of work experience.

internships 📝

23AndMe - Diversity, Equity, & Inclusion Intern (Remote)

Equal Ventures - MBA VC Interns (Remote)

Ripple - Product Marketing Intern (SF, Remote)

Harness - Marketing Intern (SF, Remote)

Stripe - MBA Revenue Ops Intern (SF)

TheRealReal - Marketing, Engineering, Operations Interns (SF)

Impossible Foods - DTC + Retail Marketing Intern (Redwood City)

WorkBoard - Finance Intern (Redwood City)

The Flex Company - MBA PM Intern (LA, Remote)

GoodRx - Product Management, Data Analyst Interns (Santa Monica)

Block Renovation - PM Intern (Brooklyn)

Air - Customer Success, MBA Strategy & Ops Interns (Brooklyn)

WeWork - WeWork Labs, Marketplace Interns (NYC)

puppy of the week 🐶

Meet Charleston and Mortlach, two Brussels Griffons who live in Ventura. Charleston is three years old, and Mortlach is 1.5 years old.

They love eating popcorn, strolling around town in matching outfits, and running their Etsy store.

Follow them on Instagram at @charleston_the_chewookie!

Hi! 👋 We’re Justine and Olivia Moore, identical twins and venture investors at CRV. Thanks for reading Accelerated. We’d love your feedback - feel free to tweet us @venturetwins or email us at twins@crv.com.

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