AWM Ventures Recap: Q1 2021

Dear Clients,

As 2021 advances and the recent challenges continue to fade we want to take the opportunity to provide an update on a few of our venture capital investments and highlight our upcoming fund.

As the economic picture continues to brighten an optimistic energy has spread throughout markets so far this year. The successful rollout of vaccines in the US and elsewhere has provided the comfort and confidence for expanded re-openings. Despite the challenging environment, many of our venture investments weathered the pandemic and associated economic impact quite well while those in harder hit industries remain well capitalized and were able to use the time to bolster their business models and position themselves well to benefit as economies open up. You will find highlights of a few portfolio companies and some of the more recent investments below.

Overall, the US venture industry, and private markets in general, remain very attractive areas to invest capital. As a result, there is more and more money flowing into the space. This is great for VC firms and founders who are looking to raise money but it serves as a great reminder to us that access to top tier firms and our network, and the opportunities that they provide is more valuable than ever. It gives us confidence that we are not just allocating to the private markets just to say we do, rather, we are making investments that are truly best-in-class and accessible to a select group. And we apply this philosophy to our newest fund – AWM Venture Fund II (see details below).

Sincerely,
AWM Ventures

Brandon Averill; Erik Averill; Justin Dyer and Robert McConchie

AWM Venture Investment update May 2021

In partnership with Next Play, AWM Ventures Opportunity Fund made three investments to close out the year: FIGS, Step Mobile, and Platform Science. We have included an investment memo for each below. Next Play has made two additional investments, Welcome Technology, and a small seed investment in Grow Radical, bringing the total portfolio to 10 companies.

Turning to our newest fund, AWM Venture Fund II is already off to a great start with a recent investment in Bombas, which we will dig into in future reports. We will also continue to invest with Next Play Capital in the fund. Our target allocation is to invest up to 80% in Next Play’s newest fund and the remainder in direct company opportunities.

Company Updates, an Executive Summary

Hippo - Hippo offers modernized insurance coverage for the way homes are used today.

Hippo announced it will go public in mid-2021 through a merger with a SPAC, backed by Silicon Valley heavyweights Reid Hoffman and Mark Pincus, in a deal that gives the merged entity a pro forma enterprise value of $5 billion. (up 3.3x from our Series D investment at $1.5bn). Hippo is one of several “insurtech” companies looking to reinvent the insurance industry, which has lagged in embracing technology. The start-up employs more than 400 people; it has raised $709 million in capital to-date.

Lime - Lime is the global leader in micro mobility, offering electric scooter and bike rentals in over 100 countries around the world.

Update – Lime launched e-mopeds in Washington, DC, and Paris this February. Generated positive free cash flow through the 3rd and 4th quarter of 2020 after optimizing the operations of its two-wheeled vehicles and cutting costs at their main headquarters. All this ahead of plans to exit markets in which they were losing money. For cities surveying their public transit options, there’s a renewed appreciation for “open-air single passenger forms of transportation.” (Andrea Ellis, CFO) With these improvements and further shifts in trends, they are on pace to be fully profitable in 2021.

Solugen - Solugen applies industrial biotechnology and green chemistry principles to re-design the production of a variety of end-use and novel chemicals.

Update – The company managed to double revenue year-over-year in 2020 despite the pandemic and significant market headwinds. Solugen’s 10kta plant is on track to open in Q2 and will start scaling up, which will double both gross margins and volume. In Q4 2020, the company raised a $33M convertible note led by Temasek and filled out by insiders like Refactor. Solugen plans to raise a large $100M+ Series C in late 2021 to further scale their mini-mills and bioplastics products. As the world looks to move away from oil and its byproducts to reduce greenhouse gas emissions and slow down or reverse global climate change, the chemicals industry is in the crosshairs as a huge target for disruption. Solugen made the
YC Top Companies List for 2021.