June 2020 Monthly News Roundup
By TRAUB On July 06, 2020
We are pleased to share with you our roundup for June 2020. This month we highlight diversity and social inclusion taking center stage, the American consumer's changed relationship with food, and creative business changes as states continue their phased re-openings.
The consumers reentering the world today are very different from who they were when they entered their homes four months ago. As states continue the phased re-opening process, brands reevaluate their turnaround strategies in order to best position themselves for a successful reemergence.
Within the public and private markets, activity began to bounce-back in June as several states began their phased re-openings. Fintech insurance startup, Lemonade filed for an IPO this month. On its first day of trading, the stock insurance tech company opened at $50.06, nearly 73 percent above its IPO price of $29 per share. Used car marketplace, Vroom, also filed for an IPO and set its price range for its IPO between $15 and $17. Despite these positive steps forward in these industries, the ripple effects of the pandemic were still felt in the retail sector as the retail giant, Simon Property Group Inc., announced the termination of its $3.6 billion deal to acquire Taubman Centers Inc.
M&A rebounded slightly in June with Just Eat Takeaway leading the pack with its acquisition of Grubhub in a $7.3B deal. The games company, Zynga acquired Turkey's Peak Games for $1.8B after buying its card games studio for $100M in 2017. In the beauty industry, L’Oréal topped bids with a nearly $400M deal for Thayers. Notable investments this month included: grocery delivery company Instacart ($225M), advance gene therapeutics company Poseida Therapeutics ($110M), Australian design app Canva ($60M), hospitality experience platform SevenRooms ($50M), the newly launched Atlanta-based fund with a mission to help Black entrepreneurs Collab Capital ($50M), meditation app Headspace ($47.7M), concert experience company Wave ($30M), German digital therapeutics app Kaia Health ($26M), smart oven and meal kit service Tovala ($20M), Toronto-based biotechnology company Cyclica ($17M), employee wellbeing platform Tictrac ($7.5M), and property management platforms Doorkee ($5.7M) and Bellman ($4.5M).
Diversity and Social Inclusion Take Center Stage
Over the past four months, CSR (corporate social responsibility) has taken center stage. Now more than ever, consumers are less interested in supporting brands that simply “check the box” on CSR. Instead, brands are being held to a new standard of accountability on their messaging and authenticity. In response to the recent milestone events in the U.S, such as the pandemic and the Black Lives Matter protests, companies across industries pledged their support to foster and empower more diversity within their organizations. The Japanese investment conglomerate, Softbank, revealed $100M fund to invest in founders of color, Disney pledged $5M to social justice organizations, and the CFDA launched plans to make fashion more racially balanced regarding job placement, mentorships and apprenticeships for black creatives. Sephora also pledged to dedicate 15% of its stores' shelf space to products of black-owned companies. Following the nation-wide reckoning, publishing platform, Medium, also formed a partnership with San Francisco 49ers quarterback and civil rights advocate, Colin Kaepernick, to develop projects focused on race and civil rights under the Kaepernick Publishing imprint.
The American Consumer's Changed Relationship With Food
Over the past four months, COVID-19 has disrupted many sectors of America's food chain perhaps most noticeably, the meat industry. The distribution infrastructure that usually supplies beef, pork, and chicken to American grocery stores has struggled as meatpacking facilities became hot spots and were forced to shutter. Yet, this change in the supply chain supercharged the popularity of plant-based products known as "meat alternatives" and made it clear that there is a new wave of interest in American consumers who are ready to add plant-based proteins to their diets. This month, the world's largest meat seller, JBS, embraced plant-based proteins as it unveiled its own line of plant-based burgers. Over the past year, the California-based company, Beyond Meat, has seen its net revenue increase by 141 percent (more than $97M over the previous year) and, this month, set its sights on continued growth by announcing a partnership with Alibaba to sell its products in Alibaba's Freshippo grocery stores. Salt Lake City-based Mercato Partners has also bolstered its efforts to help the restaurant industry by unveiling a $90M fund to invest in profitable restaurant concepts that are looking to scale. As the ripple effects of the pandemic continue in the coming months, more food providers and services will be forced to not only reshape the ways in which they buy groceries or format restaurants, but also to rethink the American consumer's relationship with food.
Creative Business Changes as States Continue Phased Re-openings
As states begin to re-open, businesses reemerge in a changed world. In New York, Saks Fifth Avenue on Fifth Avenue reopened with a new retail strategy that went far beyond hand sanitizer. Saks has taken precautions at every turn inside the store, with ultraviolet lights sanitizing escalator railings, elevators reserved for seniors and differently abled guests, and a number of virtual services, including video chat shopping. The hospitality industry has also seen an interesting shift in the ways in which hotel rooms are being used. Many big hotel chains and independently-owned hotels are renting out rooms from 9am to 5pm to business workers during the day in order to bump up their revenue streams and provide another "work from home" office option. This creative approach has resulted in a new way of looking at the hotel room. With internet access, customer service, fitness centers, a desk, television and reading chair, hotel rooms are now providing remote workers globally a space to regain the sense of work-life balance that they lacked during lockdown.
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