May
14
2020
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Why we’re doubling down on cloud investments right now

Years from now, people will look back on the COVID-19 pandemic as a watershed moment for society and the global economy.

Wearing a mask might be as common as owning a phone; telework, telemedicine and online education will be more of a norm than a backup plan; and for the global economy, the cloud will have transformed the underlying infrastructure of businesses and entire industries.

COVID-19 is a turning point for the cloud and cloud company founders. For its computing power and as a delivery model of software, the cloud has been embraced as a solution to many challenges that businesses face during today’s economic downturn and recovery. Not only is the cloud industry more resilient than other industries, but the cloud model offers businesses a promising future in the age of social distancing and beyond.

We believe that once founders find shelter in the cloud, they’ll never go back.

Cloud’s resiliency amid historic volatility

Over the past decade, there’s been a massive market shift from on-premises to cloud, as 94% of enterprises use at least one cloud service today. 2020 was already a milestone year for the cloud industry, as aggregate SaaS and IaaS run-rate revenue each crossed $100 billion, and the BVP Nasdaq Emerging Cloud Index (^EMCLOUD) market cap crossed $1 trillion in early February. Yet in a matter of days, as the COVID-19 pandemic spread, fear tore through financial markets.

In early March, public markets experienced the steepest crash in history with volatility we haven’t seen since the Great Recession. The cloud index market cap dropped to ~$750 million and cloud multiples returned close to their historical averages of ~7x while the VIX volatility index spiked to the mid-80s. Both at global highs in February 2020, the ^EMCLOUD and the S&P 500 traded off by roughly 35% by mid-March. Over the next two months, though, the ^EMCLOUD recouped those losses, charging to a new all-time high on May 7.

The cloud index has continued its rise since then, and as of the close on May 11 has a market cap above $1.2 trillion and has returned to the lofty 12x forward run rate revenue multiples from 2019. Similar to Adobe in 2012, we expect many enterprises to transition over to the cloud model, and the index will continue to expand. As we predicted in this year’s State of the Cloud 2020, by 2025 we expect the cloud to penetrate 50% of enterprise software.

Jul
02
2019
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Sam Lessin and Andrew Kortina on their voice assistant’s workplace pivot

Sam Lessin, a former product management executive at Facebook and old friend to Mark Zuckerberg, incorporated his latest startup under the name “Fin Exploration Company.”

Why? Well, because he wanted to explore. The company — co-founded alongside Andrew Kortina, best known for launching the successful payments app Venmo — was conceived as a consumer voice assistant in 2015 after the two entrepreneurs realized the impact 24/7 access to a virtual assistant would have on their digital to-do lists.

The thing is, developing an AI assistant capable of booking flights, arranging trips, teaching users how to play poker, identifying places to purchase specific items for a birthday party and answering wide-ranging zany questions like “can you look up a place where I can milk a goat?” requires a whole lot more human power than one might think. Capital-intensive and hard-to-scale, an app for “instantly offloading” chores wasn’t the best business. Neither Lessin nor Kortina will admit to failure, but Fin‘s excursion into B2B enterprise software eight months ago suggests the assistant technology wasn’t a billion-dollar idea.

Staying true to its name, the Fin Exploration Company is exploring again.

Aug
09
2016
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Tilt dives into one-to-one payments

tilt payments Here’s a sentence you might not have expected to read: a service built around crowdfunding is building in a one-to-one payments option in what might be one of the most increasingly crowded spaces in the U.S. That’s what Tilt, an app geared toward crowdfunding events like parties or travel plans, is hoping will make its service even more sticky and a one-stop destination for… Read More

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