🐶 DeFi, AppSumo and PetTech… The Seed #13
🌱 Welcome to the 13th issue of the Seed and welcome to our new subscribers!
⚙️The Seed is a weekly newsletter with easy-to-read content focusing on Entrepreneurship, Innovation and Technology. Our slogan: "Growing ideas through seeds of information"
💡 This week's concepts
♾️ What is DeFi?
DeFi is an acronym for "Decentralized Finance". It refers to various financial applications whose aim is to avoid financial intermediaries when it comes to financial transactions.
Decentralized finance comes from the blockchain technology that enables several entities to hold a copy of a history of transactions, meaning it's no longer controlled by a single, central source such as banks.
👉 Some examples
There are various types of tools available in the DeFi space. Some are very similar to centralized finance tools, but others as crypto lending or tokenization, are proper to DeFi space.
The best example in DeFi is the crypto lending and borrowing tool, empowered by the Ethereum network. As a borrower, you can easily borrow cryptocurrencies without intermediaries and lengthy procedures, while the lender enjoys higher interest rates (10 to 17%) than he could get in a centralized space. All these transactions are then recorded in a blockchain.
💪 What are DeFi's current strengths and weaknesses?
First, let's detail its strengths:
DeFi allows a high pace in transactions, that centralized systems cannot.
DeFi offers users more direct control over their money, expanding the use of blockchain from simple value transfer to more complex financial use cases.
Now, these might be some inherent weaknesses:
DeFi can undergo technical risks in a blockchain layer that could lead to false or fraudulent transactions that are irreversible on the blockchain.
Centralized systems are a threat as the global economy is still based on banks and physical currencies.
📈 News and Trends
Some news
🦄 First LatAm crypto unicorn!
Latin America's largest crypto platform, Bitso, announced that it has raised $250 million in its Series C investment round. This brings the company's valuation to $2.2 billion, making it the first crypto unicorn in the region.
🕵️♂️ Insurance fraud detection using AI
Shift Technology, which specializes in insurance fraud detection using artificial intelligence, has closed a $220 million (about €183 million) fundraising round that values the French startup at over $1 billion.
Trends - 10-min groceries delivery service
🛒 10-min groceries delivery? Too good to be true?
Well, you're not the only one who wants to sign up! For some time now, the promise of a 10-minute delivery has been charming all European investors, and American investors shortly before them.
Indeed, over the last few months, we have seen several promising rounds of financing around companies selling the same service: Fast Grocery Delivery. With more than 5 or 6 players emerging in the same city like Paris or London!
Doesn't this remind you of something? The euphoria we have already seen around electric scooters! There is an obvious FOMO (Fear of Missing Out) effect on this business because when you look at the American giants like Getir, everyone wants to back its European equivalent.
🇪🇺 So who are these European equivalents?
Dija, Gorillas, Cajoo, Weezy... These European equivalents come from all over Europe: Spain, Germany, France... and they are leading rounds of financing, each more surprising than the last, like Cajoo and their stunning $7 million in seed funding!
Their objective: to grow faster than their competitors in Europe.
🛣️ But there is still a long way to go.
It's important to understand that this kind of promise (10 min delivery) is a very demanding promise in logistics, structure, real estate, organization...
Beyond the logistical aspect, the competitive environment quickly became very aggressive, and it is objectively difficult to imagine how there could be more than three players in the same city.
There are two difficulties with this promise:
Many risk losing their feathers, and those who know how to pull their cards will be the big winners with massive success at the end!
This article gives you only an overview of this theme, but here is a fascinating article about this trend by the BBC.
❤️ Weekly Crush
A few weeks ago, we presented Lemlist, a bootstrapped startup generating $3.5 million ARR. But how did they get their first customers? By using AppSumo. Here's what you need to know.
📤 What is AppSumo, and how does it work?
AppSumo is a mailing list and a website whose objective is to help entrepreneurs gain initial traction for their products.
How? By proposing exciting deals on software and online services to their readers. It's a win-win situation for entrepreneurs and AppSumo. Entrepreneurs are exposed to 1 million readers (plus online visitors) thanks to AppSumo, which takes 30% of the profit generated. The rest of the profit is split like this: 30% for entrepreneurs and 40% for the marketing expenses.
Here's an example of a current deal on the platform…
📊 AppSumo in a few figures…
2010: AppSumo is created by serial entrepreneur Noah Kagan. Before launching AppSumo, he was employee #30 at Facebook!
2.8 million: Number of total visits on appsumo.com in April 2021*.
$15 million: Yearly revenue from AppSumo newsletter alone! (Information disclosed by Noah Kagan on his Youtube channel).
*Do you want to check the traffic on your favorite website? Go to similarweb.com!
🤔 Should you use AppSumo?
If you want to access exclusive deals on software and online services at a fraction of their regular cost, yes, definitely.
Now, if you are an entrepreneur, the answer is… yes as well. True, usually you only get 30% of the sales. However, as highlighted by many companies on the Internet, you get incredible exposure to early adopters.
For example, this startup earned almost $100,000 and attracted 3,500 customers in 3 weeks by partnering with AppSumo!
🔎 Focus
🐶 PetTech
In Europe, 85 million households have at least one pet.... which represents a considerable market. Moreover these last years there has been an increase of all the sectors intended for humans (FoodTech, HealthTech) and animals... PetTech is here!
3️⃣ The 3 PetTech categories
Pet Food
These are all startups that innovate to produce healthier products for pets, eCommerce platforms, or pet subscription platforms.
Example: Butternut Box
Butternut Box, a London-based fresh food delivery startup for dogs, was founded in 2016 by Kevin Glynn and David Nolan. The idea started because Co-founder David Nolan and his family adopted a dog from a rescue center and soon found it suffered from a few health issues and realized that it was doing better by feeding it healthy ingredients. The startup sells dog food with the best quality ingredients to keep dogs healthier and happier. Butternut Box has so far raised $28 million throughout 5 funding rounds.
Pet Health
Example: Dinbeat
Dinbeat is a Spanish startup that was founded in 2016. Dinbeat is specialized in providing a wearable medical device. The device tracks the most important vital signs of a pet's from a remote wireless monitor and receives an alert to cloud software and push notifications through a software application platform.
… and everything else is considered General PetTech
Example: VARRAM
Korean pet startup VARRAM created the next generation of smart toys for your pets. They make robotic toys using AI to entertain your pets when you are away from home.
🔮Trends and figures
The sector is expected to grow fast…
~4% annually for the Pet Food sector
~7% for the Pet Health sector
Increase in pet humanization
More and more pets are seen as people in their own right. Therefore, pet owners are willing to spend more on their health and well-being.
Covid impact on the sector
Global lockdown led to a spike in pet ownership. The context favored this: people were isolated, and remote work allowed more time to take care of their pets. Covid has accelerated innovation in the PetTech sector.
That's it for this week! Hope you enjoyed it and see you next Friday 🙌
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