Few notes on Cat Rock presentation on Just Eat & Online Food Delivery
$JET.LN
$JET.LN
Network effects = high margins and winner takes all dynamics
Logistics players hoovered up supply to widen selection and disrupted fat marketplace margins
Similar to how $amzn disrupted $ebay by owning more of customer journey
Similar to how $amzn disrupted $ebay by owning more of customer journey
CR argue incumbent marketplaces have comp advantage in offering what customers want:
selection + low fees + good UX
This leads to higher mkt share for incumbents with high marketplace penetration
selection + low fees + good UX
This leads to higher mkt share for incumbents with high marketplace penetration
One thing is clear = these are very local markets
You can't generalise due to density, mkt structure / history, culture
You can't generalise due to density, mkt structure / history, culture
It's harder for logistics players to enter marketplace versus incumbent marketplaces entering logistics
It's HARD to recruit restaurants already on $JET $GRUB
It's HARD to recruit restaurants already on $JET $GRUB
The stickiness and loyalty of restaurants to their incumbent marketplace seems very high due to operational complexity
inpractise.com/articles/uber-…
inpractise.com/articles/uber-…
Online food customers are STICKY
Higher CAC to recruit new customers
Higher CAC to recruit new customers
TEV/GMV or TEV/Rev are both incorrect measures to use
Not every $1 revenue is equal if $UBER and DoorDosh are selling bills at 50c
Gross Profit or EBITDA per order is better indicator
Not every $1 revenue is equal if $UBER and DoorDosh are selling bills at 50c
Gross Profit or EBITDA per order is better indicator
CR sees a HUGE runway for $JET
'simple math' implies 35% of population can afford $20 AOV 2.5x per month?
Seems like this would have to be much lower to compete with grocery
'simple math' implies 35% of population can afford $20 AOV 2.5x per month?
Seems like this would have to be much lower to compete with grocery
Interesting chart on how $JET is cheap relative to other fast growing businesses and relative history
10x return with 35% penetration and 35% margins = 135bn equity value
9.5x MOIC in 10 years
static1.squarespace.com/static/5c13f4c…
9.5x MOIC in 10 years
static1.squarespace.com/static/5c13f4c…
Great deck and fascinating industry.
It will be interesting to see how aggressive $uber / dd will be in recruiting incumbent incumbents on $jet $grub
inpractise.com/articles/onlin…
It will be interesting to see how aggressive $uber / dd will be in recruiting incumbent incumbents on $jet $grub
inpractise.com/articles/onlin…
Another point to add that CR didn't mention was that for this to 10x at 35% penetration there needs to be real mkt share won from grocery
this likely requires higher density, lower fees, lower total AOV
inpractise.com/articles/onlin…
this likely requires higher density, lower fees, lower total AOV
inpractise.com/articles/onlin…
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