Big fat exits. These people are smart. Hunting for unicorns.
Nerd-fest
Hi there,
This past weekend, I attended the Berkshire Hathaway annual meeting. It was on my nerd bucket list for a while, and it didn’t disappoint.
There is a lot to like about Warren Buffett and Charlie Munger’s philosophy about business building, but the thing that struck me the most was how much technology kept coming up in their comments and in the Q&A.
Below are some interesting things that came up including:
Our 22 lessons from Jeff Bezos’ letters has been much more popular with our readership, but don’t sleep on the Buffett lessons. They are definitely worth a read.
And now, some research…
The thrill of the hunt
As of May 5, there were 344 private unicorn companies valued at $1B+ around the world. A total of 2,018 disclosed investors have backed them over the years.
We take a look at which investors have backed the most unicorn companies — and which could see big returns if they exit at their private market valuations. Check it out here.
Tesla getting into auto insurance
On the question of automakers — specifically Tesla — getting into insurance, Buffett flatly said it’s as likely as P&C insurers getting into auto manufacturing.
He went on to say that the biggest risk to Geico, a Berkshire Hathaway company, is not the automakers, but Progressive. He added that he expects Geico or Progressive will soon take over the #1 spot from State Farm, and that is where they should focus.
Five US venture-backed tech companies have already gone public this year, raising $6.6B in total funding and exiting at a combined valuation of ~$48B.
As Uber prepares for its IPO — with a share price range that would value the company at up to $90B — 2019 is slated to be the biggest year for US VC-backed tech IPO exits ever.
A frequent thread of questions revolved around Berkshire’s now sudden embrace of technology (it has taken a major stake in Apple).
One interesting question was around whether it feels like Berkshire missed Amazon or Apple earlier, and Buffett responded that Google was really the one it missed.
He said that Berkshire saw that Geico was having great success acquiring customers using Google and so it should have realized the power of Google, but it didn’t. He did so in his typically self-effacing way.
BYO packaging
Canadian grocery chain Metro recently announced that it will let customers bring their own reusable containers to buy certain food items.
We break down why this decision matters and examine how other CPG companies are responding to consumer demand for more sustainable packaging. Clients can read about it here.
Totally brill
We asked 11 leaders one question: What technology or business model will have the greatest impact on the consumer sector in the next 3-5 years?
The topic of Kraft Heinz came up a lot and Buffett discussed the migration of power from brands to retailers which has hurt companies like Kraft Heinz. We talked about the power of private labels here. Buffett didn’t seem to believe that Kraft Heinz missed trends as much as it overpaid for them. His belief in brands remains unshaken.
Buffett and especially Charlie Munger didn’t have nice things to say about private equity, which they argued was a deceitful asset class. Their relationship with 3G Capital, with whom they did the Kraft Heinz deal, also highlighted some misalignment of incentives between Berkshire and its PE partners.
Berkshire owns Nebraska Furniture Mart. A questioner asked if the “customers first, profits later ways of Wayfair” are hurting their holding in Nebraska. Buffett deflected on this one. It was one of the few times he didn’t address the question-at-hand at all.
Come on in
Launching a fintech startup is easier than ever thanks to a surge in B2B infrastructure development.
From KYC to cross-border payments to API search, we mapped out 60+ companies breaking down barriers to entry for fintech startups.
Carta ($1.7B valuation) is the latest fintech unicorn after a $300M Series E round. (We included Carta in our list of 50 Future Unicorns, and wrote about the company in a recent client note.)
The news doesn’t stop there.
CEO Henry Ward will be joining us at Future of Fintech (June 11-13, NYC) to discuss how the company is helping businesses manage equity online, expanding its client base, and growing in a competitive market.
Buy a ticket to Future of Fintech and hear from 70+ speakers across 3 stages. Ticket prices go up May 15.
The Industry Standard
CB Insights data is the most trusted by those in the industry and the media. A few recent hits.
BYO packaging
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