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Meme talk. Large round for AR/VR. Food delivery fail.
Hola,

When GIFs started popping up everywhere in 2010 or so, many rolled their eyes, but Tumblr built much of its popularity on users posting GIFs (before being acquired by Yahoo for $1B in 2013). And today, GIF search engine Giphy is funded to the tune of $147M and backed by investors like Lightspeed Venture Partners, Betaworks, and General Catalyst. 

Has the same inflection point arrived for another internet media format, the meme? The word “meme,” can mean many different things, but as a format it generally refers to a picture which audiences label with their own message, often to humorous or ironic effect.



Or this one, which is a little inside baseball, but so good:



Meme tech is starting to get funded. Just last month, Me.me, a kind of Giphy for memes which prompts users to search "the dankest memes," raised $1.5M in funding from investors including Arjun Sethi from Social Capital and Peter Rojas from Betaworks.


There’s even a niche cryptocurrency based on the notorious meme called Pepe the Frog — that has $5M worth in circulation (see TWID in data, below). It’s called Pepe Cash.

Similarly Dogecoin, based on another internet meme, has been having problems but at one point in 2014 was so successful that its users managed to band together and sponsor a NASCAR racecar.

It’s easy to discount a “dumb” internet trend or make fun of VCs for betting on them. But today’s stupid fad might fuel tomorrow’s hot startup or $1B exit

 


Have a nice weekend.

Marcelo
@ballve

P.S. Use the code insurgent through the end of today to get $1500 off your Future of Fintech ticket.


This week in data:
  • 6: This week, Alphabet acquired Owlchemy Labs, a VR game developer. The company was previously funded by investors including Qualcomm Ventures and Capital Factory. This move puts Google at 6 acquisitions thus far in 2017. By this time last year, Google had acquired only 3 companies. For real-time updates, check out our Google Acquisition tracker.
     
  • $502M: Improbable Worlds, a development platform for simulation and VR games, raised the third-largest round ever in VR/AR. The giant Series B announced today was led by Softbank and joined by return investors a16z and Horizons Ventures, among others. Clients can click here to see other top deals in AR/VR.
     
  • $26M: New York-based food delivery service Maple backed by celebrity chef David Chang shut down its operations this week, stating the need to “close the Maple operation here in New York and look for a partner with scale.” The company, which raised $26M in total funding, was subsequently acquired by Deliveroo, also a food-delivery service. Here is a look at over 200 other startups that failed and their post-mortems. Food delivery deals have taken a pummeling lately.


     
  • $110M: The amount raised by ed tech company Grammarly in Series A funding from Breyer Capital, General Catalyst, Institutional Venture Partners, SignalFire, and Spark Capital. Last quarter, ed tech startups attracted approximately $545M in funding across 131 deals. Grammarly’s Series A is already the second $100M+ round to a VC-backed ed tech startup in Q2’17 thus far, falling second to Everfi’s $190M Series D last month.


     
  • $2.4B: This week, New York-based luxury fashion corporate Coach agreed to acquire designer handbag and accessories company Kate Spade for $2.4B. Both companies are publicly traded. Coach has aspirations to become a global umbrella brand on the scale of LVMH, which announced plans to acquire Christian Dior in April in a $13B deal. If Coach does try to scale up in the style of LVMH, it may have to change its private markets strategy, having so far been mostly inactive as an investor or acquirer of private companies. 
     
  • $800B: On Tuesday, Apple became the first US company to hit the $800B mark in market capitalization. The company represents 4% of the $21.7 trillion that makes up the entire S&P 500. At this rate, Apple is said to be on track to top the $1 trillion market-cap level later this year.
     
  • $1.2B: Health insurance company Clover Health raised $130M in Series D financing from investors including First Round Capital, GV, and Sequoia Capital. The round brought the company’s valuation to $1.2B, making it the latest addition to our real-time Unicorn Tracker. Clover Health is also found on our market map of fintech companies that have received early-stage investments by smart money investors. 


     
  • $2.2B: In its first-ever earnings call since the company went public in March, Snap revealed a net loss of $2.2B for Q1’17, much of it due to stock-based compensation. Revenue hit $149.6M, missing expectations. The company also said its daily active users rose to 166 million, representing a 36.1% jump, but still lower than the 47.7% increase seen in Q4’16. In light of the call, we updated our research on Snap’s patent activity to see what the company appears to be working on.


     
  • 255%: In the same earnings call, Snap revealed its quarterly operating expense on R&D had shot up to $78M, or 255% more than the same quarter a year earlier. At more than 50% of revenue, that’s an aggressive amount of spending on future bets.
     
  • 26%: The Pepe the Frog internet meme was adopted by the “alt-right” movement during the last US election. Pepe’s creator, comic book artist Matt Furie, symbolically killed the frog last Saturday as a protest act. But Pepe refuses to go away. For example, there’s a thriving cryptocurrency called Pepe Cash, used in the exchange of digital trading cards called Pepe Cards, but also convertible to bitcoin. The price of Pepe Cash climbed 26% in the 5 days in the wake of Pepe’s symbolic killing and is up 781% YTD. There is ~$5M of Pepe Cash in circulation.
     
  • 34: Roughly 34 kids in the US are visiting the ER each day as a result of cotton tip misuse, leading to “impacted wax ... perforations of the ear drum … [and] other soft tissue injuries.” The study, reported this week by Live Science, estimated that between 1990 and 2010, 263,000 children were treated in US hospital emergency departments for ear injuries related to cotton tip applicators.
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