Thread by @_inpractise

This is a fantastic question

What company did you pass on in 2020 and why?

https://twitter.com/S_curvecap/status/1344663271199150081

For us, online food delivery was one area that we spent a lot of time on but couldn't take a strong view on.

$JET $UBER $DASH

A core part of our process at IP is to understand the end game market dynamics.

What are the planes of competition today vs 3-5 years time?

And what about the company's moat today, if any, will remain in the future competitive end game?

We found the food delivery end game uncertain for a few reasons:

1) Three parties are involved in a transaction: delivery driver, restaurant, and platform.

3 players to feed = lower margin and higher volume to breakeven.

2) Online marketplaces + 1PL dynamics convergence: all players were merging to a hybrid model of marketplace + logistics.

Is it easier to chip away at a marketplace with a 1PL model or vice versa? The fact it varies by region makes it even more complex.

$DASH growth and economics would suggest they prove 1PL can chip away at $GRUB marketplace for eg BUT it’s not clear how this scales to cities or more rural areas which matters for valuation

3) Selection is key but as players merge to hybrid models, selection converges across platforms.

It also wasn’t entirely clear if restaurants prefer 1 or multi platforms.

4) Long run, $AMZN WFM and partnership with Deliveroo + grocers buying meal kit providers and offering online grocery themselves makes the landscape more uncertain to the value proposition of food delivery.

We are still following the industry and would love to hear where we might be missing something!