C2V Sep 2021 Notes from the Trenches

U-S-A!  U-S-A!  U-S-A!  Big month for America as the Ryder Cup is finally back where it belongs, and in record-breaking fashion, no less.  That was fun (even if we had to hold our national nose and root for Bryson for a couple days). 

No offense to our English readers, but this is what a cup coming home looks like:  

We were planning to share our broader thesis around Retail Tech this month, but with Tom Brady’s imminent return to Foxboro, Chris and Matt just weren’t in the right emotional place (a watery-eye hattrick isn’t out of the question between the standing ovations when TB takes the field and later breaks the all-time passing record, as well as when the Patriots lose by 30). 

So look out for that next month while we instead introduce you to our second Fund II investment in OneShop…. 

… a Retail Tech company.    

Our Latest Investment

OneShop is a customer engagement platform designed to drive repeat visits and virtual sales for fashion and jewelry boutiques by providing real time customer data analytics and direct connectivity capabilities to in-store sales associates and managers via a simple and intuitive mobile interface.

OneShop solves a number of fundamental problems for higher-end retailers, including:

  • 80% of boutique retail sales are repeat business, but retailers are still manually reaching out to customers, mostly from memory, to drive these sales

  • 90% of customers are never communicated with after they leave a store

  • Some estimates put the resulting missed revenue opportunities at 40% of annual sales

OneShop’s platform integrates its CRM system with each retailer’s POS database to populate and update client purchasing data in real-time, allowing sales personnel to quickly access customer histories and preferences via a mobile app, and push new product ideas via SMS or email messages that include a 1-click purchase option which is executed through OneShop’s white-labelled webstore.

OneShop is currently serving more than 50 retailers in over 150 locations and our reference checks with several of their current customers were among the most glowing we’ve heard for any product, including some fairly staggering ROI metrics:

  • One customer said they quickly realized that, pre-OneShop, they had been routinely failing to contact 50 - 75% of repeat buyers when new items in their preferred brand or product lines became available

  • Multiple customers reported double-digit same-store sales improvements almost immediately after onboarding OneShop, including one who actually told us “OneShop should cost more”

In addition to its sales enhancement features, OneShop also provides store managers and headquarters staff with sales efficiency metrics by location, brand, product, salesperson, etc.

We’re excited to see where OneShop goes as they increase their sales outreach and continue to add new features (including upcoming integrations with inventory management systems).

Portfolio Company Job Openings

Portfolio Companies in the News

Other C2V News

Chris joined the head of Dentons family office practice to discuss family offices’ activity in early-stage venture.

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C2V Aug 2021 Notes from the Trenches

Happy summer! We’re keeping it light this month as we (and hopefully all of you) take our first real vacations since before we knew what a coronavirus was.

As we take in the great outdoors from Maine to North Carolina (and a brief detour to Red Rocks), here are some C2V goings on to look forward to over our coming newsletters:

  • Investment number two from our second fund

  • The launch of our first pre-seed feeder fund

  • A couple of Series A rounds for our portfolio companies

  • 18 months of grueling Jazzercise classes finally culminating in the launch of Chris’s new TikTok dance channel

(Okay, one of those might not really be coming – we just wanted to see if you’re still paying attention).

Until then, enjoy your remaining summers, stay safe and if you haven’t already, please, please get vaccinated (if not for you, than for society at large).

Portfolio Companies in the News

Other C2V News

Chris put out another episode of his Superpowers Podcast. He chatted with Andy Dunn, the co-founder of Bonobos, and discussed the human behind the engineer.

Chris also joined Sam Frankfort on Dentons’ Family Office Intel Podcast.

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C2V July 2021 Notes from the Trenches

What a month!  The Bucks win their first title in 50 years, Giannis Antetokounmpo completes another incredible American immigrant rags-to-riches story and after years of, um, foreplay, Jeff Bezos, er,  penetrates the Kármán Line, besting the, uh, length of rival billionaire man-boy, Richard Branson by 10 miles after Branson’s voyage, um,  prematurely climaxes at 55 miles above the earth, in a pair of flights that were definitely about pushing the boundaries of science and human exploration and not merely history’s most expensive, er, rocket-measuring contest… 

… right?

Let’s just move on.

Follow Up on Beginning of Year Predictions 

At the beginning of every year, we make predictions for what will happen in the Tech Industry throughout the year. Usually, we review these predictions at the end of the year, but this year we wanted to do a mid-year check in to see where we hit the nail on the head and where we missed.  So…

Definite Hits

  • Mass consolidation of large media-tech companies, and those startups that could not get funding in 2020 or lacked product

  • Masterclass meets next-generation mentorship platforms to support a dispersed tech and founder community looking for guidance and answer

  • All aspects of insurance, home, life, and auto get challenged by new players.  

  • Robotics companies will find more of the 3-D (“dirty, dull, dangerous”) jobs to replace.

  • AR, VR, and XR adoption for brands and advertisers continues to be slow

  • Consumers take back their privacy rights

In particular, we nailed the onslaught of new InsurTech, Robotics and Startup M&A (though we should have added “buying growth” to the list of M&A rationales).

Definite Miss

  • COVID-19 will force the increased use and acceptance of surveillance technologies

We can’t get people to take a free vaccine, even when it comes with a complimentary beer, so this is clearly a bridge too far.

Still in Play

  • 5G will cause cord-cutting to accelerate, and cable companies will be in serious trouble.

  • Voice commerce will become more popular and widespread

  • We will see a mega bubble burst in 2021 including a bankruptcy from at least one late-stage, private “unicorn.” 

We’re probably a year early on cord cutting acceleration and widespread voice commerce, though C2V portfolio company Blutag is making nice inroads with the latter, and the late-stage/public tech bubble continues to inflate but red flags are piling up, including falling bond yields, narrowing stock market breadth, a resurgence of Covid cases coupled with an alarmingly under-vaccinated US populace, and inflation/Fed rate hike fears.

Our Latest Investment

Our team is pleased to announce the very first investment from our second fund, C2 Ventures II, in OmniX Labs’ oversubscribed seed funding round.

OmniX Labs delivers analytics for businesses with vehicle interactions, B2B SaaS subscription service planning to expand into new markets and further develop technology platforms. To date, the company has focused on the car wash industry, with more than 1,200 locations across the U.S. subscribing to their service.

OmniX Labs’ platform synthesizes interactions at businesses with brick-and-mortar locations delivering analytics to better understand, target and upsell customers. In addition, the SaaS subscription service enables businesses to predict future sales and demand patterns, while reducing fraud and gaining operational efficiencies.

We are thrilled and honored to work and partner with co-founders Anoop Kanthan and Muthla Al-Sayer. Read more about it on Yahoo Finance and Alleywatch or listen to Anoop speak about it on Cheddar

Portfolio Companies in the News

Portfolio Companies Hiring

Other C2V News

Alex Cruz tells his story of how he rose to International DJ and Producer status with no formal music education on the latest episode of the Superpowers Podcast. Listen wherever you get your podcasts and subscribe.

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C2V June 2021 Notes from the Trenches

Welcome friends!  We hope you’ve had time to dry your eyes after Denmark’s stirring group stage win over Europe’s real-life movie villains only nine days after its best player nearly died on the pitch.  If that doesn’t make you love sports, nothing will.  

To the newsletter!

NFTs and a Fateful Meeting with Virginia

It’s hard to believe that the infamous dot-com bubble popped more than 20 years ago, but I still have two distinct memories from that time period.

One was the incredible run of TV ads, including an absolute murderer’s row of E-Trade spots (Side Effects, Blow’d Up, this Super Bowl gem... suffice it to say, this is a YouTube rabbit hole worth going down).  The other was in late 1999 when CNBC’s Power Lunch cut to commercial with, “Coming up next, the members of the hit band Train are day traders!”  I distinctly remember thinking in that moment that this had to be a market-top signal.  Turns out the Train Omen was only a few months early as the NASDAQ peaked the following March.   

Why do we bring this up?  The other day a friend sent me this article: Joe Exotic from 'Tiger King' is selling his first NFT collection from his prison cell.  Now, we know next to nothing about the NFT markets, but fads are fads and this can’t be a positive signal.  

You’ve been warned.  Tread carefully.  

Our Latest Investment

As our LPs and regular readers know, technology that addresses inefficiencies in legacy industries is a core focus for C2V and there are few industries suffering more from administrative inefficiency than the US healthcare space.  In fact, most estimates of administrative waste in US healthcare put the annual cost at anywhere from $100 billion to $300 billion.

Enter Medmo, a MedTech software platform focused on the scheduling, reporting and administration of medical imaging services, a $100 billion annual market.  

As with much of the US healthcare market, the interface between doctors and independent imaging centers (which make up 40% of the total market) is entirely manual and highly inefficient, and is a meaningful contributor to overall healthcare cost inflation.  

For doctors’ offices, Medmo’s software removes the need to schedule patient tests via phone and email and receive results via fax (remember those?), saving millions a year in administrative costs, while also connecting them with more locations, improving both the patient experience (via more scheduling flexibility) and cost (via low, fixed cost pricing options).     

For imaging centers, where the vast majority of costs are fixed overhead, filling empty time slots is critical to operating efficiently, and imaging centers are more than happy to allow patients to pay significantly lower rates (as low as $50 via Medmo) in order to fill those slots.   

With such a clear and effective value proposition, we look forward to Medmo’s platform becoming the default referral and scheduling tool for the medical imaging market and playing a meaningful role in reducing overall healthcare cost inflation in the process.

C2V News

We are happy to announce Caroline Johnson as our summer intern, the daughter of Nick Johnson who is one of our LPs.  She has been busy updating our website that’s now filled with new portfolio investments and LPs as well as a look at our founders. Caroline is also running our social media accounts, working on our newsletters, and helping track potential investments.

Portfolio Companies in the News

Portfolio Companies Hiring

Other C2V News

In case you missed it, the Superpowers podcast is back! Season 3 kicked off with Chris’s interview of Kara Goldin, Founder and CEO of Hint Water. You can subscribe here or listen anywhere you get your podcasts.

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C2V May 2021 Notes from the Trenches

Welcome friends! It’s 75 and sunny here in NY, we’re meeting with other humans in person (and we can even see their faces!), we have a new company to talk about and our second fund is nearly up and running. Not even the 28 - 0 shellacking Matt’s softball team took the other night (or their 0 - 4 start) can bring us down.

We’re excited to introduce you to our new company, Copper, but first…

Putting the Unicorn Out to Pasture

According to the internet (so we’re at least 50% sure this is accurate), the first use of the term “unicorn” to describe billion-dollar-plus startups was in a 2013 TechCrunch post by Aileen Lee, Founder and Managing Partner of Cowboy Ventures. Since then it’s had as good a run as any moniker (google the word and you’ll see more links related to startups than to horses with horns), but eight years later, its time has passed.

When Ms. Lee coined the term unicorn in 2013, there were an estimated 39 startups that fit the description; today there are 682, including 50 that first reached “unicorn” status in March of this year alone. The 125 newly minted private unicorns in the first 80 days of 2021 are more than all last year, and that doesn’t include the 51 exits of $1 billion or more in this year’s first 3 months.

Data from CB Insights & C2V Research

Bottom line – there is no longer anything “unusual, rare or unique” (Webster’s definition of a unicorn) about a $1 billion startup valuation.

So where do we go from here?

We suggest changing the $1 billion designation to the “White Tail Deer”:

1) The reaction most people have to seeing a deer in their neighborhood and to reading about that day’s newest $1 billion valuation are similar. You generally stop and admire them for a second (but only a second) and most likely forget about it 10 minutes later.

2) Much like today’s $1 billion startup cohort, in a lot of cities and suburbs there are now way too many deer, most of whom are slowly dying as they fight over a resource pool that can’t sustain them all, gradually destroying their ecosystems in the process, and occasionally running into traffic, causing real destruction and ending up a mangled mess on the side of the road.

It’s not glamorous, but it’s not wrong either. You had a nice run, unicorn, have fun on the golf course.

Our Latest Investment

Copper is a "smart" IoT printer cord containing a tiny Linux computer, that replaces the existing cord connecting any Point-of-Sale (“POS”) terminal to its receipt printer.

This simple swap out of a single cord takes less than a minute to complete and instantly upgrades any legacy POS systems to a cloud-connected platform in addition to adding a QR code to each receipt, enabling contactless payments and bill splitting. Restaurant owners can then access, visualize and download historical sales, SKU and other receipt data by date, customer name, table number, employee, etc., allowing them to optimize their business and menu offerings.

The true genius of Copper’s product, however, is that does not require a full POS system overhaul. Among other advantages this:

  1. Removes a significant barrier to sales conversions, as many restaurants are reluctant to change hardware for a number of reasons, including the non-trivial time and effort required to retrain its low-skilled and highly mobile labor force, and

  2. Allows Copper to partner with both the existing POS hardware providers and payment processors who still control roughly 80% of the market, leveraging them as sales channel partners, rather than having to go to each business directly as Toast, Square and other cloud-data POS companies must do (making scaling significantly easier and more cost-efficient).

Copper’s wifi-enabled smart cable also interfaces directly with third-party online ordering platforms (e.g., Seamless, GrubHub), eliminating the need for multiple hardware devices in the kitchen and the manual step of re-keying online orders into their current POS system.

As brick and mortar merchants increasingly adopt data science tools to help them compete with ecommerce, smart POS systems will eventually become ubiquitous, and we see Copper as a better, more easily scalable version of this than what is currently available.

Portfolio Companies in the News

Other C2V News

The Superpowers podcast is back! Season 3 kicks off this week with Chris’s interview of Kara Goldin, Founder and CEO of Hint Water.

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