🥯 DoorDash + Instacart = (private) billions
Hey Snackers,
One place you never thought you'd hear described as "breathtaking": LaGuardia Airport. The NYC icon, long regarded as "disgraceful," just opened its new central terminal after a $4B makeover. Looks like a WeWork that ate an art gallery.
After a 3-month rally that saw the S&P 500 gain 45%, stocks had their biggest weekly loss since March. Markets plunged on Thursday on grim forecasts from the Fed and some coronavirus spikes.
On the pod: To make sure Gen Z still uses “Photoshop” as a verb, Adobe just launched a consumer-facing app — Our 15-minute pod is looking at how Adobe is finally meeting consumers where they are - in their selfies.
Instacart and Doordash deliver multi-billion dollar valuations (and we miss out)
Felt cute, won't delete later... Instacart and Doordash have never looked more attractive. In the corona-conomy, food essentials are everything and delivery is key. As the #1 market leaders in grocery and restaurant delivery, Instacart and Doordash take the essential delivery cake.
- Coming in hot: And impeccably-timed. They're leveraging their moment of sexiness to raise big money. Investors think lockdown-life habits will stick, even as the economy reopens.
- Instacart just raised $225M, delivering itself a $13.7B valuation — big bump from its last one ($7.6B in 2018).
- DoorDash is close to sealing fresh funding that would value it at $15B (up from $13B in 2019).
Can I get a slice of that pie?... Negative. Over seven years ago, Instacart and Doordash started raising money from private investors for their adorable little startups. In 2020, they're still private and still fundraising, but their businesses have exploded:
- 57%: Instacart's share of the US online grocery market in April. That eclipses Walmart, which plunged to around a 25% thanks to Instacart's rise.
- 45%: DoorDash's share of the food delivery market in April, up from 35% in November. That #1 status is even more solid after Grubhub decided not to combine with Uber Eats.
Companies stay private longer. Public investors miss out... Investors get FOMO when public stocks soar, but with private stocks it's just SUMO (Straight Up Missing Out). Companies have stayed private for longer, so public investors can't access early growth (and soaring valuations). Back in the '90s, Amazon went public just 3 years after its founding. Today, Uber took a decade to IPO, and the stock has fallen since. After 12 years, Airbnb still isn't public.
Who's up...
To infinity, and Elon'd(er)... Tesla investors felt rocketship vibes as the stock hit an all-time high — production of Elon's Semi truck is ramping up. Shares surged past $1K for the first time ever, making the e-car icon the world's 2nd most valuable carmaker (juuust shy of Toyota). For reference: Tesla sold 368K vehicles last fiscal year. Toyota sold 8.96M. Shares have now dropped 9% since last week's peak.
Cannabis side-hustle... Scotts Miracle Gro's sales surged as WFH'ers stocked up on its gardening and lawn care products. But Scotts' cannabis-growing side hustle was the real winner: the hydroponics-focused Hawthorne division helps producers grow weed with water (no soil needed). Hawthorne's sales nearly 2X'd in 2019, jumped 51% last quarter, and are expected to grow another 45%-50% for the full year 2020.
...and who's down
Downward dog on the earnings... Lululemon fell 8% after the athleisure darling reported a 17% quarterly sales plunge. Lulu's flexible ecommerce biz wasn't enough to swallow the hit from corona-closed stores. As of June 10th, 60% of Lulu's 489 global stores have reopened. All are expected to open by the end of June — but Lulu's not expecting a return to yearly sales growth until the end of 2020.
When the suave British accent swoops your crush... Uber's potential marriage with Grubhub is off after a European delivery giant swooped in. Anglo-Dutch Just Eat Takeaway is acquiring Grubhub for $7.3B. Uber shares dropped 8% when its food delivery consolidating dream evaporated. An Uber Eats/Grubhub merger would've made it the delivery leader with half the US market — progressive politicians weren't thrilled about the idea, which reportedly doomed the merger's chances. Now Postmates could be Uber's consolation prize.
What else we’re Snackin’
- Visualize: The racial wealth gap in America — assets held by race (in a handy visual).
- Pose: 5 tips from a chiropractor to save your back while WFC (work from couch).
- Explore: The 10 most expensive cities to live and work abroad (surprise: Ashgabat, Turkmenistan is #2).
- Wake: "Extreme Night Owls" — when you go to bed so late that it's embarrassing to talk about.
🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.
This Week
- Monday: Earnings expected from Tata Motors
- Tuesday: Consumer spending report for May. Earnings expected from Lennar, Oracle and Groupon
- Wednesday: Report on US housing starts and building permits for May
- Thursday: Weekly jobless claims. Earnings expected from Carnival and Kroger
- Friday: Earnings expected from CarMax
Disclosure: Authors of this Snacks own shares of Uber, Tesla, and Lululemon
ID: 1215668