2019: Week 4

A lot of coverage this week on Transportation (EV, AV, Scooters) and Food

Munchery shuts down operations in LA, New York, and Seattle (link)

• Founded in 2010 raised $125mm in venture money, reaching $300mm valuation
• Laid off 257 employees or ~30% of workforce in May after shutting down in Seattle, Los Angeles, and New York to double down effort in SF
• Wasted ~16% of the food it makes. Most restaurants waste 4-10% of food it makes
• Tried various strategies from ready-to-heat meal delivery service to meal recipe and ingredients service (2015). Then launched $8.95 subscription plan for people who order several times a month
  • Difficult to handle all elements of experience from sourcing, cooking, delivering
  • Relied too much on marketing to boost revenue. Bringing in customers through steep discounts does not make a sustainable customer base
  • Trouble hanging on to customers
• On-demand food delivery business is tough overall:
  • Sprig (shut down May 2017, after raising ~$60mm in funding)
  • Maple, Spoonrocket, Ola, among others

Central kitchen model – brutal economics BUT food delivery startups still a hot space (link)

• Chowbus, think Grubhub but specifically Asian food / more brick and mortar places (HQ in Chicago)
• Only 15% of restaurants are on Grubhub and Uber eats, leaving much more room for expansion
• Will expand to other cuisine in the future (Mexican and Italian)

Kaia Health gets $10mm support for AI-powered management of chronic pain (link)

• App-based approach to chronic pain management
• Alternative to painkillers using mobile technology to deliver “mind body therapy” for musculoskeletal (MSK) disorders
• MSK / chronic pain is best dealt with therapy, but expensive service – only 2% of patients who need it have access. 98% use treatments against acute pain like painkillers and surgery
• Uses computer vision to determine accuracy of movements (sensor-free, unlike Hinge Health)
• 250,000 users currently

The case against behavioral advertising is stacking up (link)

Apple just dismissed more than 200 employees from Project Titan, its autonomous vehicle group (link)

• 200 employees dismissed from Project Titan (stealthy autonomous vehicle group)
• Focused instead on software component
• Isn’t the first time Apple cut back on EV/AV development

Electric Scooters – There are a ton of them (link); (link)

• Flash, mobility-focused company is starting with powered scooters
• Scooters going through first winter of deployment with large fleets. New data evidences cyclical demand in bad weather
  • Bird scooter rides dropped 23% from October to November, fell additional 27% in December
  • Lime ride transactions (proxy for scooter rentals) declined in the U.S. by 27% from October to November, and further 17% in December. Run rate in December of between $250mm and $300mm in revenue ($20mm or $25mm a month vs $40mm a month expected)
  • But, comparable service – NYC Citi Bike shows only 35% decrease in ridership in winter months. There are people who rely on these services for routine commute. BUT, scooter locations aren’t fixed, so hard to make using scooters as a commute a routine habit. Facts prove this – only 26% of respondents say their primary reason to rent a scooter was for more regular trips like from work, school, or public transit. 41% say it’s for fun
  • Device infrastructure isn’t where it needs to be either for commute / bad weather service. Perhaps scooters that have three or four wheels in colder climates, etc. (as suggested by Jump’s CEO Ryan Rzepecki)
• Regulation is also hitting scooters hard. 8/15 densest cities in the U.S. don’t permit scooter rental firms to operate
• Optimists think that for a company with only 15 months of traction, >$100mm run rate is amazing
• In order to keep going, scooters need to prove to be a sustainable business
  • Less vandalism and loss
  • Longer scooter usable life time
  • Easier to charge / maintain
  • Device infrastructure feasible for bad weather
• Recent rounds of scooter funding
  • Yellow (Brazil) raised a $63 million Series A in September 2018
  • TIER Mobility (Germany) raised a €25 million Series A in October 2018
  • Beam (Singapore) raised a $6.4 million Seed round in October 2018
  • Wind Mobility (Germany) raised a $22 million Seed round in November 2018
  • Vogo (India) raised a $100 million round in December 2018, and more money in January
  • Dott (The Netherlands) raised a €20 million round in December 2019
  • Blue Duck Scooters (USA) raised a $5 million venture round in January 2019

Tech & Infrastructure – Smart Highways (link)

• Smart highways could have the opportunity to turn from serving a singular purpose in being the backbone of various countries’ transportation systems to providing additional value add through generation of power, safety feature implementation and gathering of key datapoints (big data!!) for transportation administrators
  • How traffic happens (link) – Imagine optimizing data to avoid traffic!!
• Full integration with smart vehicles
• Major roadblocks: cost, bureaucratic interference, true energy output, and sustainability
• China will be first with flexible bureaucracy specific to technological implementation, strong manufacturing power, lead in solar power production
  • Announced plans to build 161km road in eastern Zhejiang (link)
  • Integrated safety features to support autonomous driving tracked with sensors, Internet of Vehicles system, and solar panels

Lightning Motorcycles – Market for EV, not just cars (link)

• “Live to Ride” days are winding down
• Motorcycle industry has been in the doldrums since post-recession. Shrinking American buying demographic
  • New bike sales dropped 50% since 2008, sharp declines by everyone under 40
• Strike motorcycle from Lightning Motorcycles to come out in March in two versions, carbon and standard
  • $500 reservation deposit for standard (retail price starts at $12,998), $10,000 for carbon
  • 150 miles on single charge (35mins), top speed of 150 MPH
• Harley Davidson has similar concept electric motorcycle (LiveWire – link)
  • Costs nearly double of Lightening Motorcycles, but specs seem comparable (0-60 in 3 seconds, 110 miles on charge)
  • Can reach 80% of charging capacity in 40 minutes
  • No clutch no gears
• Other comparable electric motorcycle companies have existed, not many have succeeded
  • Brammo and Mission Motors tried and failed
  • Alta Motors (raised $45mm in VC, ceased operations October 2018 due to financing struggles (link)
  • Energica and Zero Motrocycles