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August, 2020

Everybody is racing to an IPO — even Laird Hamilton’s young “superfood” company

This one is unusual: Laird Superfood, a five-year-old, 100-person, Sisters, Ore.-based startup that was cofounded by famed surfer Laird Hamilton and which makes plant-based packaged beverage products, filed today to raise up to $40 million in an IPO.

We’d reported on this company early last year in large part because it had attracted backing from WeWork, the co-working company that famously made a number of bets that were very afield from its business (including a maker of wave pools) before suffering a major meltdown last fall.

In fact, according to Crunchbase, WeWork Labs provided Laird Superfood with a whopping $32 million — the bulk of the $51 million it has raised altogether, per Crunchbase. (WeWork founder Adam Neumann has said that he surfed with Hamilton in Hawaii.)

At that time, WeWork’s investment was the strangest thing about the business, a largely direct-to-consumer business that makes “superfood” coffee creamers, beverage supplements like “performance mushrooms,” and Peruvian coffee beans, among an assortment of other things like teas and hot chocolate.

This IPO may be even more curious. Founded by Hamilton and another surfer, Paul Hodge, the company is very young to be going public by today’s standards (biotech startups notwithstanding). The company booked $19 million in sales for the 12 months ended June 30, but it lost $9 million over that same period and at the rate it is spending money, including on sales and marketing, it will see a net loss of $10 million this year.

Management says it has $13.1 million in cash on hand and investments. It would have more if it hadn’t spent $7.5 million buying back Series A-1 preferred shares in November 2019 that were purchased for twice that price. (The investor that sold its shares was also relieved of its commitment to fund another $10 million. It’s easy to imagine this was WeWork but we don’t know this.) Because of that outlay, the company actually probably did pretty well last year; it just can’t state it that way.

Still, we’re a little intrigued by this one. The company’s only outside shareholder that owns more than 5% of the company is Danone Manifesto Ventures, the corporate venture arm of the global food and beverage company. It owns 13.4% of the company. Why wouldn’t Danone, which looks to have invested $10 million in the business in April, just buy out Laird Superfood outright?

It could be that there’s much more than meets the eye here (or is reflected in its S-1). We’re certainly not opposed to companies trying to go public much sooner than has been in the case in recent years. The company is probably smart to take advantage of a hot market. We’re just wondering if this food company is completely baked.

Hamilton owns 13.2% of the startup. Hodge meanwhile owns 6.4%. Canaccord Genuity and Craig-Hallum Capital Group are the joint bookrunners on the deal. No pricing terms are included in the filing.

Walmart+ launches Sept 15, offering same-day delivery, gas discounts and cashierless checkout for $98/yr

Walmart today officially unveiled its new membership service and Amazon Prime rival, which it’s calling “Walmart+.” The $98 per year service will combine free, unlimited same-day delivery on groceries and thousands of other items, with additional benefits, like fuel discounts and access to a new Scan & Go service, similar to Walmart-owned Sam’s Club, that will allow members to check out at Walmart stores without having to wait in line.

The service will be available starting on September 15, 2020 nationwide, reaching over 4,700 Walmart stores, including 2,700 stores that offer delivery. Members can choose to pay the $98 per year after a 15-day free-trial period, or they can pay $12.95 on a month-to-month basis.

At launch, the new program promises more than 160,000 items for same-day delivery with no per-delivery fee on orders totaling $35 or more. This is the same value proposition that Walmart’s existing “Delivery Unlimited” program offers today. With the launch of Walmart+, “Delivery Unlimited” members will be moved to the rebranded and expanded service.

In addition to delivery savings, the new Walmart+ membership will include fuel discounts of up to 5 cents per gallon on any fuel type at nearly 2,000 Walmart, Murphy USA and Murphy Express stations nationwide. Walmart+ members will enable the discounts by using the Walmart mobile app, either by scanning a QR code or entering a PIN at the pump. Further down the road, the program will expand to include Sam’s Club fuel stations as well.

Image Credits: Walmart

The Scan & Go membership perk, meanwhile, lets Walmart+ members pay without having to wait in checkout lines — a nice perk to have amid a pandemic, where time in store means time exposed to potential carriers of the novel coronavirus. Using the Walmart app, customers scan scan items as they shop, then pay for them using Walmart Pay for a touch-free checkout experience.

Walmart two years ago had tested cashierless Scan & Go technology in its stores, but killed the program due to shopper theft. Arguably, fewer people will use Scan & Go because it’s a paid service, which could help store staff better combat the earlier problems.

Image Credits: Walmart

As with “Delivery Unlimited,” the Walmart+ orders are picked by in-store staff then handed off to partners like Postmates, DoorDash, Roadie and Point Pickup for delivery. Not owning the end-to-end experience can cause issues for consumers, however — especially because a poor delivery experience can damage Walmart’s reputation, or because customer service issues can’t be always dealt with directly when a middleman is involved. Walmart has also seen partners come and go, as delivery services ended their relationship with Walmart over the costs involved.

Walmart claims its new program is not a Prime rival. But it could encourage some number of Prime members to make a switch.

“We’re not launching Walmart+ with the intent to compete with anything else. We’re launching it with the needs of customers in mind,” explained Walmart Chief Customer Officer Janey Whiteside.

“Of course, I hope that brings in more customers and makes them more loyal, but when you’re as big as Walmart is — and serving as many people as we are — this is about really doubling down with the customers that we have and getting more share of wallet and more share of mind,” Whiteside added.

Prime is a much more expansive program. For comparison, Prime offers tens of millions of products for two-day delivery, over 10 million for one-day delivery and over 3 million for same-day delivery on orders of $35 or more. Walmart+ is focused more specifically on same-day delivery, as Walmart.com already offers free one-day or two-day shipping on orders of $35 or more without requiring a membership fee.

Prime today also offers a huge array of other perks — like access to free music, video, audiobooks, Kindle books and more. Walmart+ does not.

Still, for many customers, the value in Prime is rooted in its promise of speedy delivery. But at the same time, Amazon has tested the limits of its customer loyalty by steadily raising Prime’s subscription price over the years to now $119 when paid annually, or $12.99 per month. Walmart+ undercuts Prime at $98 per year or $12.95 per month while largely catering to the online grocery shopper — a target market that has rapidly grown during the pandemic. Walmart recently reported the pandemic helped drive its own e-commerce sales, fueled  by online grocery, up 97% in the past quarter.

Image Credits: Walmart

Meanwhile, Amazon’s grocery strategy since its 2017 purchase of Whole Foods has yet to be streamlined. Amazon today continues to offer two different online grocery services, Amazon Fresh and Whole Foods, with a varying array of pickup and delivery options, potentially leading to consumer confusion.

That said, the pandemic has led to massive sales increases for Amazon and Walmart, along with other essential retailers like Target, with all involved reporting stellar earnings in recent quarters.

Walmart’s plans for a new subscription program had previously been reported and a placeholder website has also been live for some time. In August, Walmart CEO Doug McMillon told investors on the company’s earnings call that it was readying the launch a membership program that would be centered around delivery. He noted also at the time how Walmart’s existing “Delivery Unlimited” subscription, launched last year, would serve a “great base of an offer” for the broader program, but didn’t offer a launch time frame.

Earlier reports said the service would include other perks, like access to more grocery time slots, promotional deals and eventually a Walmart+ credit card. The retailer declined to speak to its plans, only saying that Walmart+ benefits would expand over time.

“As is the case with any great membership offering, these benefits are not intended to be static. We will continue to leverage our assets and scale to bring solutions at unprecedented value, all while holding true to the everyday low prices that customers know they can always expect from Walmart,” Whiteside said. “In the future, we will be leveraging our wide-ranging strengths to add additional benefits for members in a range of both services and offerings,” she added.

Twitter’s ‘Quote Tweet’ changes make sussing out online drama easier

Twitter's 'Quote Tweet' changes make sussing out online drama easier

Twitter’s incredibly handy “Retweets with comments” feature is getting a rebranding, as well as becoming a tiny bit more convenient to use.

Earlier this year, Twitter added the option to see retweets that include a comment without having to use an automated account such as @QuotedReplies. Now the feature has been renamed, ditching the descriptive but clunky “Retweets with comments” for the cleaner “Quote Tweets.” 

Quote Tweets also appear between the Retweets and Likes on a tweet now, making the feature slightly less annoying to access. Previously, you had to click to see the Retweets, then click “Retweets with comments” from there. Now, you can just jump straight to the drama. Read more…

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