Introducing: The Greene Street Observer from Activant

Dear Founders, Partners, and Friends,

Welcome to our inaugural Greene Street Observer. We will provide monthly updates and our latest observations, thoughts and happenings in the technology markets. 

The NASDAQ was up 10.7% last month, the best performance for the month of January since 2001. The parallels between the current environment and the dot com bust are astounding. As a longtime observer of markets, they continue to confound and change directions faster than Zuckerberg changes his view on the Metaverse.

In the private markets, the early stage – Pre-Seed, Seed and Series A – is as robust as it was in 2021. Fewer companies and more capital have allowed this simple supply and demand dynamic to hold prices at elevated levels. At the later stage, we are seeing massive weakness, as there is ample supply of companies and very little capital. The $290B of “dry powder” we see widely quoted from Pitchbook and others is largely a fiction in our opinion. There are a few things afoot that are making that number go "poof" like a smoke bomb was dropped, as tech investors and LPs attempt to escape the crime scene of 2021. First, most of that capital will be pointed at existing portfolio companies as investment firms attempt to defend indefensible valuations. This could reduce the amount of dry powder in half. Second, it is wildly backwards looking, and much of that capital has been earmarked for other items, and third, once you account for fees and further reserves, the actual amount of the overhang could be less than $50B in our estimation. 

What this spells, in our opinion, is a much slower private market at the later stages, and pricing volatility. What is important for founders in this environment is to sort growth while managing burn, in addition to choosing the right capital partner - which was a forgotten priority in the go-go days of the last five years. All the obvious aside, volatile environments are when decks get restacked. For companies with the balance sheet fortitude, intelligently leaning into product and distribution is the order of the day in our boardrooms.

It is in times like these that companies can get ahead. Leaning into one’s business in a tough environment is easier said than done, but with the right partners, the right strategy, now is the best time to grab the brass ring.

Let's go! 🚀

Steve Sarracino, Founder & Partner

We started the year strong with four exceptional events in January:

1. On January 6th, we held Cocktails and Canapés on the vineyard to celebrate our office in Cape Town, which is dedicated to conducting deep sector-focused research.

2. January 16th, we hosted a gathering of commerce tech leaders on the occasion of NRF for a Happy Hour at the Electric Lemon in Hudson Yards.

3. The day prior, we welcomed Activant portfolio company NewStore and their ecosystem for breakfast at our NYC office before embarking on a store tour of their nearby customers Burton and Marine Layer to see NewStore’s omnichannel platform in action.

4. Our 9th Annual General Meeting reflected on Activant’s milestones over the past year and looked forward to many exciting things to come. We were fortunate to have the CEOs of our portfolio companies Bolt, Celonis, Sardine, Better, Truework, and Bolttech join us on-stage.

Thank you to all that could join us for what proved to be a jam-packed month of events. But we’re just getting started!

Next up, we’re excited to host a happy hour focused on Women in Tech next Thursday, February 16th, in New York. Want to stop by? Apply to attend below!

The secret is out: Activant Research is here. Our goal is to provide deep, focused research on the fastest-growing and most transformative sectors in tech. From commerce enablement to fintech, supply chain, enterprise software, and beyond, we’re proud to have Rob, JJ, Jono, and Rebecca leading the charge.

At the end of last year, we published our first four research reports. To recap:

1. An overview of the enormous opportunity in B2B Commerce: Why it’s the $100 Trillion Market Technology Hasn’t Been Able to Crack - Until Now.

2. And within the B2B Commerce sector, a two-part deep dive into the fast-emerging space of B2B Checkout. We walk through why there’s never been a truly digital checkout experience in B2B, but how that’s changing fast. See Part 1 and Part 2 for the full story.

3. A survey of the complex world of Logistics & Supply Chain, in which we outline what we see as the 7 biggest problems and opportunities in the space, and the fast-growing technology companies tackling them.

If you have feedback on our research, we’re all ears - please get in touch by rep. We’re excited to say that this is just the beginning for Activant Research, with lots more to come - stay tuned.

Portfolio News

1. bolttech, the leading insurance exchange, announced their Series B round at a $1.5B valuation.

2. Better launched their One Day Mortgage, which allows buyers to get a Commitment Letter for their mortgage in a single day, rather than weeks.

3. Bolt unwrapped their striking new identity, which emphasizes their lightning fast checkout

4. NewStore founder and CEO Stephan Schambach outlined what he sees as the three biggest challenges for retail in the next 30 years in Forbes, and how brands can adapt and thrive.

Activant News

1. Our partner David Yang appeared on The Future of Supply Chain Podcast to discuss why we think every company will become a supply chain company.

2. Our founder and partner Steve Sarracino appeared on CNBC to give his perspective on the private capital markets and what it means for startups and crypto in 2023.

3. We welcomed two amazing new team members: Matilde Cascella joins us as an analyst on the investment team, and Anna Drenckhahn joins us as an assistant controller. We're thrilled to have them on team Activant.