Despite a rough Friday, SaaS had a good week with WCLD up ~3.58% to $29.79.
It’s been a busy week in tech given the the summer doldrums:
Amazon announced they will buy One Medical for 3.9b. For a tech company, Amazon’s mega-acquisitions are surprisingly low-tech (Whole Foods and MGM are their other largest purchases).
Snap bombed earnings, sending their stock down 39%. The online advertising market appears to be softening, which also sent down share prices of other online ad stocks such as Google, Meta, and Pinterest.
Which brings us to SaaS. Are we headed to a slowdown? One of the better anon tech accounts that I follow on Twitter thinks so:
This sentiment is becoming more widespread every week. Even if fundamentals are strong, this could end up creating a self-fulfilling prophecy.
Podcast recommendation of the week:
The Odd Lots podcast interviewed Silicon Valley Insider & prolific angel investor Jason Calcanis. (Odd Lots podcast)
The interview covered a lot of ground, including Jason’s view on the current market environment for early-stage investing:
I'm not happy about a downturn, obviously, but I am extraordinarily optimistic about the returns we'll see on the companies we invest in over the next three years.
Interesting read of the week:
Another sign of the market conditions - hedge funds and late stage tech investors such as Atreides are flocking to create funds to invest in structured equity & credit. (Bloomberg)
Atreides plans to launch the fund, which will have flexibility to invest in structured equity rounds and take public companies private, in coming weeks. Rivals including Coatue Management and Viking Global Investors already have begun raising vehicles dedicated to convertible or structured equity wagers.
These investor-friendly structures were unthinkable in the blazing hot market of last year. Atreides is “only” down 11.5% on the year - much better than man of its peers - which likely creates the LP goodwill to launch the new fund.