Investment opportunities in the new normal

Investment opportunities in the new normal
AirTree Investor Summit
John Henderson & Kevin Lu
September 2020

2
“There are decades where nothing happens;
and there are weeks where decades happen”
- Lenin
AirTree | September 2020

Covid19 GDP impact
is real and
pronounced...
3
Source: International Monetary Fund’s Real GDP Growth Tracker, as at 04.08.20
Annual % Change in Real GDP

… yet equity markets
seem oblivious
4
Source: Yahoo Finance, ABS and US Bureau of labor statistics as at 04.08.20
ASX 200 vs AU Employment to Population Ratio

Equities being driven in large part by tech
Reﬂecting a much larger market opportunity
Source: S&P 500 Data as at 05.08.20
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In an environment of rapid change, startups will ﬂourish
TotalReturnPerformance

However, the real economic pain is surely yet to come...
AU consumer spending buoyed by stimulus and super
Source: illion & AlphaBeta (Part of Accenture) - Based on a weekly sample of the transactions of c. 250,000 Australian consumers
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Weekly index of consumption per person, 100 = normal weekly base excluding Xmas
Crisis Supplement
& Easing
Stimulus
2nd Stimulus,
Super withdrawals
Total
spend
Discretionary
Essentials

Average masks
much sharper
impacts in some
sectors
7AirTree | September 2020
Source: Alphabeta.com/illiontracking/ as at 19.08.20
Consumer spending by category
(Weekly index of consumption)

In a socially distant world, physical becomes digital
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Source: McKinsey Digital Pulse Survey, COVID-19 June Briefing Materials
The tailwind behind technology just became a gust
Consumers are accelerating adoption of digital channels ... … and so are B2B decision makers
% of respondents on their digital adoption, by industry, during Covid (n=4,127) % of respondents on importance of digital sales interactions post Covid (n=3,618)

So, conversations today:
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2. Internet models ﬁnally work everywhere
3. E-commerce was a wave; now it is a tsunami
1. A remote-ﬁrst world
5. eSports are the new Sports
4. The creator economy

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Remote tools are growing at an unprecedented pace
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Zoom - daily meeting
participants (free and paid)
Source: Business Insider
Slack - paid customers Microsoft Teams - daily
active users

Software to support remote work
Illustrative software categories smoothing the path away from the ofﬁce
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Knowledge Economy
Culture & Comms
Global HR & Payroll
Design Creator Tools
IT/Compliance
Note, logos in colour have been backed by AirTree

But not everyone can work by Zoom
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Lockdown impact by income bracket, USA
Source: Jefferies
Backing solutions for the economically disenfranchised is an even bigger opportunity. And it’s the right thing to do.

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In a socially distant world, we need new solutions
Health and Education are colossal sectors and alarmingly slow to adopt technology
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1. Healthcare: Waiting at medical
centre for GP
2. Education: Lectures in the
classroom
Telehealth; remote diagnostics
Remote teaching and tools
Covid-19 is the digital kick in the butt these (and other!) sectors desperately needed

Healthcare will embrace technology (at last!)
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Telehealth Connected
Devices
Applying
A.I., M.L
● Telemedicine is faster,
delivers better quality,
and always always
cheaper than traditional
systems
● Internet connected
monitoring devices,
when deployed
alongside telemedicine
enhances efﬁcacy of
diagnostics and
treatment
● Automation will
continue to aid our
thinly stretched
resources, by reducing
workload and improve
quality of data
capture/analysis

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Education: what is the new norm?
Harvard Business School Online (HBX)

Accelerated
adoption of digital
learning
infrastructure
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90% of the world’s school population is currently
learning from home
has seen +158% teachers onboarded YTD
AirTree
investment
Source: WSJ,’‘The Pandemic Sent 1.5 Billion Children Home From School. Many Might Not Return. June-20’“

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3. E-Commerce was a wave; now it is a tsunami

E-commerce was
a wave; now it’s a
tsunami
5 years’ growth in 3 months
(Australian E-commerce Penetration)
Source: ABS as at 04.08.20

We are seeing
the impact ﬁrst
hand

China, UK, and
South Korea are
leading indicators
of where Australia
could be in 2-3 yrs
Source: UBS as at 04.08.20
Global E-commerce Penetration Surging

23

There’s never been
a better time to be
a solopreneur...
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Source: Manofmany.com, BBC.com
Top Podcasters
(2019 Earnings)
Joe Rogan
Dave Ramsay
Dax Shepard
$30m
$10m
$9m
Top Youtubers
(2019 Earnings)
Ryan Kaji
Nastya
Jeffree Star
$26m
$18m
$17m
AirTree | September 2020 24

… as Passion economy tools compete to empower individuals
These emerging platforms are enabling individuals to better monetize their talents
Newsletter Writer
Podcaster
Course creation
Virtual Coach
Examples of Passion Economy ToolsGig Economy Passion Economy
On-demand platforms
commoditizing providers
Marketplaces showcasing
individuality
Commoditised physical
products or services
Wide variety of digital
products & services
One-time revenue Ongoing audience revenue
vs
25
Hat tip to a16z

Creator economy tools
empower individuals
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$17m
Hat tip to a16z
Type of Work Example Creator Tools
Designers
Audio Content
Creator
Newsletter
Writer
Video Course
Creator
Virtual
Teacher/Tutor
Podcaster

27

Physical sports
are being
digitized, fast
Source: Forbes, Business Insider
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550k
(2018)
2.4m
(2020)
User Growth
User Growth
446k
(2019)
866k
(2020)

… creating more
opportunities
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Source: Forbes
Running
Rowing
Weights
Yoga

The much bigger
story is eSports.
Gaming is the
new social
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Source: Epic Games 2020

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Gaming and culture intertwine
24 April 2020
12.3m people
concurrently
experienced
Fortnite’s virtual
concert with
rapper Travis
Scott

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Welcome to the Metaverse
“The Metaverse is going to be some sort of real time 3D social medium where
instead of sending messages and pictures to each other asynchronously, you’re
together with them and in a virtual world and interacting and having fun
experiences which might span anything from purely games to purely social
experiences.”
Tim Sweeney, CEO Epic Games

Recap
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3. E-commerce was a wave; now it is a tsunami

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The world is changing

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We invest in world changers
“The Metaverse is going to be some sort of real time 3D social medium
where instead of sending messages and pictures to each other
asynchronously, you’re together with them and in a virtual world and
interacting and having fun experiences which might span anything from
purely games to purely social experiences.”
Tim Sweeney, CEO Epic Games
Canva
First Partnered: Feb 2015
7 Investments

36
Thank you
john@airtree.vc
kevin@airtree.vc
@johnhenderson
@kevin_jy_lu
John Henderson
Kevin Lu

Investment opportunities in the new normal

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