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🚀 The aftermath of SVB
Plus, was it the biggest week yet for consumer AI?
💰 Startups handle SVB fallout. You may have noticed Accelerated’s absence last week - it was a busy time in the startup world, to say the least! Silicon Valley Bank, which banked thousands of startups and venture funds, was put under receivership by the FDIC after a run on the bank. Accounts were (temporarily) frozen - causing many companies to scramble to cover payroll, and creating mass concern around the 96% of SVB’s deposits held above the $250k federal insurance guarantee.
Last Sunday, the government announced they would make all depositors whole, which lessened but didn’t fully end the panic. Signature Bank was also put into receivership, while trading was halted on First Republic and dozens of other regional banks. SVB formally filed for Chapter 11 bankruptcy protection on Friday, which will allow them to resume operations outside of the FDIC while looking for asset buyers.
More to come on this story - and a huge shoutout to all the startup founders and employees who were put through so much chaos over the past few weeks and persevered!
💻 OpenAI, Midjourney, and Microsoft launch major upgrades. It was a big week for AI. Here’s what got released:
OpenAI released GPT-4, the newest version of its large language model that generates text. GPT-4 is available to use via OpenAI’s own ChatGPT interface, but has also been integrated via API into apps like Duolingo (practice conversations with an AI avatar) and Joy (generate your wedding vows).
AI image generator Midjourney released V5, which allows users to create more photorealistic images - including, finally, accurate hands! Midjourney’s last iteration (V4) came in November - and V5 represents a significant step up in image quality and accuracy.
Microsoft unveiled Copilot, a new AI assistant for Office users to help with everyday tasks. Copilot has been described as an “omniscient version of Clippy” - it can generate proposals from spreadsheet data, slide decks based on design criteria, and summarize Microsoft Teams meetings, among other features.
🛑 TikTok faces government pushback. The last few months have brought increasing regulatory scrutiny for TikTok due to national security concerns. The app faced bans by U.S. state governments, publicly-funded schools, and eventually the federal government (on work devices) in late 2022. Since then, the UK government, Canadian government, and European Union have followed suit.
This week, the pressure ratcheted up after the Biden administration threatened to ban the app nationwide unless Chinese parent company Bytedance spins off its ownership. CEO Shou Zi Chew will testify in front of Congress next week.
what we’re following 👀
Google Glass is shutting down - for the second time.
A new dating product is using AI to automate swiping and messaging.
TikTok is letting users reset their “For You” feeds.
In January, we wrote about Temu - a new discount-oriented shopping app that was taking the U.S. App Store by storm. At the time, Temu had been #1 on the charts for 12 of 15 days in 2023. The app has since extended this lead - holding the top spot for 69 of the last 75 days!
Temu is a marketplace that offers ultra-discounted items across categories, from patio chairs to lipstick to power drills. They use aggressive promo codes (e.g. $30 off $60) to get users on the app, and items ship from mostly Chinese manufacturers. This is similar to apps like Wish, which is now a public company. But unlike Wish, Temu aggregates all the items in your order, does a quality control check, and sends them in one package. And the app has an AI-powered, hyper-personalized feed that surfaces products based on your interest, similar to TikTok.
Temu is the U.S. subsidiary of publicly traded Chinese shopping company Pinduoduo (currently at a $116B market cap). This explains why they’ve been able to spend so aggressively on customer acquisition - on the App Store, via creator partnerships, and through two Super Bowl ads, at $7M each. Within seven months, Temu has reached 50M U.S. downloads, a milestone that SHEIN and Wish took 3 years to accomplish!
There’s been a lot of skepticism around Temu, and much of it is valid. Of course you can acquire new users with “dirt cheap” products, which are discounted even further for new users signing up with promo codes. The company has also been accused of paying for positive App Store reviews, to try to mask real negative reviews from users who have complained about product quality of shipping times.
But is the experience good enough to get users to come back? What happens when Pinduoduo stops pouring on the marketing and discount dollars? To get to the bottom of this, we pulled anonymous credit card data from ConsumerEdge, which tracks not only spend but also user retention. Per ConsumerEdge’s data, Temu sees significantly higher spend retention than similar apps like Wish, AliExpress, and SHEIN.
This means users are coming back more frequently - and spending more over time. The average Temu new user cohort is spending 60% of their original purchase value in their second month on the app, compared to 15-25% for the competitor apps we mapped above. This data is still early (the oldest cohorts have only been on the app for 5-6 months), but we’re curious to see how this trends, especially in an uncertain macro environment that has caused an overall slowdown in consumer spend.
Whatnot - Strategic Finance Analyst / Associate (Remote)
Niantic - Pokemon Go PM (Bellevue, WA)
Coinbase - Associate PM (SF)
Munich Re Ventures - Investment Associate (SF)
Hadrian - Product Manager (LA)
Point72 Ventures - Deep Tech Associate (NYC)
Datadog - GTM Strategy & Ops Associate (NYC)
Forum Ventures - Investment Associate (NYC)
Charlie Health - Growth Strategy Analyst (NYC)
Harry’s - Associate Brand Manager, Innovation (NYC)
Roo - Digital Marketing Intern (Remote)
Zuora - Global Partner Ecosystems Intern (Remote)
Plaid - New Business Associate Intern (Remote)
thredUP - Product Eng Intern (Oakland)
Descript - Influencer Marketing Intern (SF, Remote)
Roblox - MBA Marketing Manager Intern (San Mateo)
a16z - Growth Business Strategy & Operations Intern (Menlo Park)
Coco - Consumer Growth & Marketing Intern (Santa Monica)
Casper - Strategy & Innovation Intern (NYC)
puppy of the week 🐶
Meet Mika and Sofia, a cat and dog sibling duo! Mika is a six-year-old Shiba Inu, and Sofia is a three-year-old British shorthair / golden chinchilla.
They enjoy staring out the window together, basking in the sun, and playing on the carpet.
Follow them on Instagram @mikushka2017!
All views are our own. None of the above should be taken as investment advice. See this page for important information.