👻 Snap wants Headspace

Tuesday, July 21, 2020 by Robinhood Snacks | Disclosures

When your phone dies and you have to meditate without Snapchat's help

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Hey Snackers,

When you think of your ideal chicken nuggets, they're not usually 3D-printed by a Russian lab. KFC begs to differ: it's teaming up with a Russian bioprinting company to produce "the meat of the future." In Russia, the 3D-printed chicken nuggies eat you.

All three major stock indexes jumped yesterday. The tech-heavy Nasdaq made the largest gains thanks to big rallies from Amazon and Tesla. Also: the Oxford-AstraZeneca COVID vaccine showed positive results in early testing.

1. Snap and Headspace launch a win-win partnership for Mini meditation

Not just disappearing pics... Snap wants users doing more in its app (besides sending double-chin shots). In 2015 it launched the Discover tab for news. Last year, it launched in-app games. Yesterday, Snap launched "Minis," tiny apps you can use within its chat feature (without having to download anything):

  • For its 1st Mini, Snap is partnering with Headspace, the popular mindfulness/meditation app where a soothing British voice tells you to breathe.
  • Headspace Mini offers six different 3-4 minute meditation sessions with titles like "Just Breathe," "Get Out Of A Funk," and "Me Time" (#sassy). Meditate with friends — or at least, with their Bitmojis.

Win-win brilliance... With Minis, Snap could theoretically let you do 100X more things in-app, which could lead to 100X more engagement — and a lot more ad revenue. By adding a popular partner like Headspace early, Snap can draw users to Minis. By offering itself for free, Headspace gets free marketing and exposure to Snap's 200M+ users. For Headspace, it's all about...

  • "Gateway" Partnerships: Headspace charges ~ $10/month for its app subscription. But it offers free sessions to partners like Nike Run Club and airlines — aka "gateways" for people to get hooked, download its app, and eventually become paying subscribers.

This could be the next (mini) App Store... Call it the Snapp Store. Apple takes a 30% cut of paid downloads, in-app purchases, and subs in the App Store. Developers have long complained, but don't really have another choice. Now Snap is offering a platform to ship mini apps, which could later be monetized.

  • Consumers would rather do multiple things in 1 app than download dozens of apps. China's WeChat thrives with mini apps, and Apple's trying to do the same with "App Clips."
  • Snap reaches 90% of 13 to 24-year-olds in the US. If Minis succeed, developers could turn their attention there to capture the next gen of users.

America runs on Dunkin'... But Uber runs on Google Maps. We don't think much about Uber's underlying GPS while drinking out of a plastic bottle and asking for the AUX cord. However, Uber has Google Maps built into it. Without Google, Uber can't direct drivers, give ETAs, and stop you from asking 'how much longer.' That's why:

  • Uber just inked a 4-year agreement with the tech giant, giving it access to Google Maps for its rides and Eats deliveries.
  • Why Google? Uber said in its IPO paperwork “We do not believe that an alternative mapping solution exists that can provide the global functionality that we require." Apple Maps, burned.
  • From 2016 to 2018, Uber paid Google $58M to use its Maps service. We don't know how big the latest deal is.

More like Pool pricing... $58M is a relatively small sum to pay for a service that essentially powers your app. Especially when Uber did $11B in sales in 2018, and Google did $39B (in just the 4th quarter). Sure, Google's happy with billions of riders subconsciously accessing its Maps. However, it turns out Google and Uber's relationship isn't casual (it's complicated):

  • Google has a 5.2% stake in Uber: Google's venture arm invested $258M in 2013, back when Uber was a private startup. That stake is now worth over 10X more.
  • Mo Equity Mo Partnerships: From 2016-2018, Uber spent $631M for Google ad services.

Big Tech is the "Silent Server" for the digital economy... The true power lies in the utilities you use, but don't necessarily see. Amazon's cloud service, AWS, accounts for nearly 13% of its revenue and also powers the operations of millions of companies from Netflix to Slack to Shell. Google Maps, which runs on Google Cloud, (almost) invisibly powers Uber's operations — and it's expected to deliver Google nearly $5B this year. Tech giants' servers perform essential computing for the apps you love. So they can charge rent that you don't see, but definitely pay for.

What else we’re Snackin’
  • Eggcellent: Cal-Maine, America's largest egg producer, saw sales rise 62% on lockdown-driven egg buying (and quarantine baking).
  • Classy: EBay may sell its classified-ads unit in an $8B deal to focus on its marketplace biz.
  • Crumpet: Walmart tries to sell a majority stake in its UK grocery-chain Asda because it's more into high-growth markets right now.
  • Peep: Ford partners with Intel's Mobileye for its next gen of driving features, including camera-based detection tech.
  • E-ducate: Online learning platform Udemy looks to fundraise at a $3B valuation, while its peer Coursera raises $130M at a reported $2.5B valuation.

🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.

Snacks Daily Podcast

Electric car startup Fisker is going public through a $2.9B acquisition. Don't get too excited: Fisker's ~$40K electric Ocean SUV will be available in... late 2022.

The announcement that really interested us: Fisker will be powering the Ocean with Volkswagen’s modular electric vehicle platform.

Tune into our absurdly digestible 15-min pod to hear why Fisker is taking "the Apple route" — designing, but not actually making.


Disclosure: Authors of this Snacks own shares of Uber, Snap, Alphabet, Amazon, and Apple

ID: 1251898

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