Whatnot Unicorns @ $1.5B Val, Gucci Sells $10M of Clothing on Roblox, and Linkedin Launches $25M Creator Program

September 21, 2021 by  wearerockwater

What We’re Reading

5 articles + RockWater analysis to make you a better investor and operator.

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Whatnot Raises Another $150M for its Livestream Shopping Platform, Evolves into a Unicorn
TechCrunch, 9.16.21

  • Whatnot closed a $150 million Series C — its third round of fundraising in 2021 alone. This round pins Whatnot’s valuation at $1.5 billion.
  • This round was funded by return investors a16z and Y Combinator’s Continuity Fund, along with one new firm joining them: CapitalG
  • Founder/CEO sees “thousands” of potential categories they can expand into. One they’re working on right now: NFTs.

The RockWater Take by Andrew Cohen

Our team at RockWater has been bullish on the emerging livestream commerce market for over a year now (check out our first article on the subject here). Ever since then, the livestream shopping market has exploded — over 20 capital raises and launches since 2020 (check out our Watchlist linked here for the full list) — and this raise by Whatnot makes it the first company in the space to achieve a billion-dollar valuation. So what stands out to me? Their rapid growth. Whatnot already has “a couple thousand active livestream sellers” on the platform, and their GMV is up 30x since they raised their Series A in March. As other companies continue to invest in livestream shopping — from startups like NTWRK and PopShop live to behemoth incumbents like TikTok, YouTube, and Instagram — Whatnot’s ascension to “Unicorn” status indicates that livestream shopping market may be the future of social commerce.

 

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LinkedIn Launches $25 Million Creator Program
The Information, 9.14.21

  • LinkedIn announced a $25 million investment in creators with a new accelerator program.
  • The 10-week incubator will include as many as 100 U.S.-based creators for coaching, networking and opportunities to be featured on LinkedIn marketing.

The RockWater Take by Michael Booth

LinkedIn is late to the creator fund party. That said, it’s an interesting approach by accepting creators into an accelerator program that will provide monetary support, content coaching, and collaboration opps (similar to the Clubhouse model). This fund structure is most akin to the VC accelerator model, where LinkedIn is betting on its ability to find diamonds in the rough, as opposed to the more popular “performance / attribution” creator fund structure (used by TikTok, Snap, YouTube, Facebook, and others). How will the accelerator model pan out and what ideas will LinkedIn take from successful VC accelerators (like Y Combinator)? We shall see…

 

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Inside Roblox’s Metaverse Opportunity
Vogue Business, 9.14.21

  • For two weeks, Roblox sold limited-edition digital Gucci clothing and accessories for between approximately $1.50 and $11.25 in equivalent Robux.
  • One Gucci bag, originally sold for about $5.50 on Roblox, resold for more than $4,000.
  • People who purchased Gucci items within Roblox also wear them five hours longer throughout Roblox experiences than they wear other accessories

The RockWater Take by Michael Booth

Gucci knows how to speak to Gen-Z, and other brands need to start taking notes. Their 2 week Roblox pop-up drew 20 million visits and ~$5-10 million revenue — fantastic results for a temporary marketing activation.

 

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HBO Leaves Amazon Prime as WarnerMedia Takes Subscriber Hit
Hollywood Reporter, 9.15.21

  • Amazon is canceling HBO subscriptions on Sept. 15 after the WarnerMedia company leaves its channels service
  • HBO will lose roughly 5M of its subscribers through Amazon Prime Video’s channels platform
  • HBO offered a deal of 50 percent off for 6 months in order to incentivize Amazon-originated users to subscribe and to also bring in new subscribers

The RockWater Take by Chris Erwin

In the beginning it made sense for new streamer launches to validate their business model transition, and minimize capital risk, by leveraging resellers like Amazon Prime, Roku and AppleTV. But controlling the customer relationship, gaining access to valuable user data, and minimizing 3rd party commissions are key strategic moves to scale, and make sustainable, their streamer businesses. Short term pain for long term gain. But the big question is…how much pain can these companies endure, particularly those with heavy debt balances or pushy boards / activist investors. WarnerMedia went to Discovery. Does Comcast divest NBCU next, others? Also, how will moves like this impact future marketing and content strategies to win back customers? –> Heavy discounting, further acceleration of content investment, expansion to new mediums like audio and gaming for subscription differentiation? Which of course, all require more capital, particularly at a time when revenue will take a hit…

 

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Hyundai Motor Rides Metaverse Wave with Adventure on Roblox
Marketing Interactive, 9.2.21

  • Hyundai is launching its Roblox metaverse activation titled “Hyundai Mobility Adventures” in October
  • Users can meet and communicate with one another and experience Hyundai Motor’s mobility offerings in the form of avatars
  • The metaverse includes five virtual zones, each highlighting a different aspect of Hyundai’s mobility technology.

The RockWater Take by Eric Kenigsberg

Car manufacturers are quick to jump on new trends to appeal to young consumers, developing mobile games, like Lamborghini, and activating on Twitch (e.g. Honda, Lexus, Toyota) in the past. Hyundai is among the first to appear in the metaverse (BMW did so recently with its Joytopia activation), and there’s good reason for it. The metaverse is the perfect place to highlight new technologies since the metaverse itself is a new development in the tech space. Roblox’s appeal, as of now, is largely young consumers and that is exactly who Hyundai wants to reach. Building top-of-mind awareness in young consumers will pay off in the long run when these children and teenagers look to purchase their first car. Establishing a digital presence early will foster relationships with the brand that will convert to sales in the future.

 

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If these insights are relevant to projects you are thinking through, ping us at hello@wearerockwater.com. We’re always excited to riff through ideas!

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