June 28, 2020
Online marketplaces entering the next phase
1. Digital adoption is accelerating
- People have formed new habits in new categories like groceries, education and healthcare
- Mobile app data shows rapid digital adoption (especially in education and groceries)
- Events, restaurants and air travel could face a prolonged impact of lockdown
- Many startups have shown agility to pivot
Uber -> Uber Direct (pharmacies) + Uber Connect (P2P delivery) Airbnb -> Online experiences + Long-term rental
- Online marketplaces have combined value of $814 billion globally. But housing, health and education are still mostly untapped
2. The evolution of online marketplace models
- Marketplaces have continued to evolve in order to unlock new markets (responsible consumption, regulated services, b2b marketplaces, passion economy)
- As innovation pushes boundaries, the definition of “marketplace” is being stretched
- Abundance of venture capital led to the rise asset-heavier models. The pendulum may swing back to asset-light models
- Unlike asset light marketplaces, full-stack marketplaces often have challenging unit economics + there’s a renewed push for profitability in VC markets
- New marketplace models focus on unmet demand from Gen-Z / millennials + unlock scarce supply, such as in regulated services and programming
3. Mobility in a jam?
- Mobility platforms have a combined market value of over $250 billion, of which 84% from ride hailing and on-demand logistics
- While mobility apps have gone mainstream, European households still spend 91% of their transportation budget on car ownership
- As economies re-open, will dense metro areas become even more congested, or less?
- Marketplaces are innovating not just mobility itself, but the entire mobility value chain
4. Unlocking real estate
- Innovative models removing friction such as iBuying have quickly become a main category of real estate marketplaces
- The created value by fractional ownership marketplaces remains relatively small, but the application of blockchain would accelerate growth in the space
5. What’s next in consumer healthcare?
- Consumer healthcare startups have a combined value of $68 billion which is still small compared to the overall market opportunity
- Healthcare is among the least digitized industries. But for some areas, Covid-19 has forced 10 years of change in a matter of weeks
- Healthcare is among the least digitized industries. But for some areas, Covid-19 has forced 10 years of change in a matter of weeks
- Consumer booking apps are going mainstream, allowing for instant access to information and service
6. The future of work & education
- Online job markets are dominated by LinkedIn and Indeed globally, and regionally by dominant local job portals
- Hiring has slowed down. Meanwhile, freelance platforms are up
- 162 million independent workers in the USA & Europe earn ~$3 trillion per year. That’s 20-30% of the total workforce, which could approach/exceed 50% within the next ten year
- Changing workplace: repetitive work is automated, talent is re-trained and better matched with employers, even remotely. Covid-19 will accelerate those trends
- As the job market slows due to recessionary pressures, vertical job marketplaces will play a major role in the rehiring process, with more efficient and cost-effective matching
- Match-making is expanding from gig-economy to passion economy
- Traditional universities are becoming increasingly unaffordable. US tuition fees outpace salaries
- Lambda intends to enrol 10K students in 2020, which implies $300M in ISAs. That would create a market share of around 50%
Lambda trains people to be software engineers for free in exchange for a share of future income (e.g. an Income-share agreement). Share typically is 17% for 2 years (applicable only when annual gross income is above $50k)