Marketplace Memo #2
2B Airbnb guests, Toast and Uber partnership, Amazon playing defense while Temu to make $50B this year, marketplace trends and more!
Hi, it’s Colin! Welcome to Take Rate. I am excited to have you join the 2,300+ marketplace founders, operators, and investors who subscribe. Join the fun! 👇
👋 Welcome to the second edition of the Marketplace Memo. My goal is to share curated news, content, and stories I am seeing related to marketplaces with a splash of color from me. Please enjoy and share with others!
This post was brought to you by…
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End of Year Vibes
Last week, I talked to two notable marketplace investors and got two wildly different worldviews. One conversation was very optimistic about the future of marketplaces and emphasized that now, more than ever, is the time to invest in them. The other was a more sober and tortured view that they love marketplaces, but there haven’t been any new breakout marketplaces in the past couple of years (at least in the West).
My two cents is that both are right. Marketplace strategies and opportunities as we know them are largely in decline, but that doesn’t mean that there aren’t new surface areas for marketplaces to appear. Marketplaces are the nucleus of capitalism and they aren’t going anywhere. I hypothesize we will see a resurgence in marketplaces in the era of AI, but it will look different than we might expect. The playbooks of Airbnb and Uber are no longer fit for the new era, and the technology window driving those marketplaces has closed. We are entering a new era, and the only constant is change…
More to come on this topic at the start of 2025, but for now, let's finish off 2024.
The Highlight of the Week
I am about two months behind in sharing this news, but I felt like it got glazed over with no media coverage (at least that I caught). I don’t know if these are unique guests, but to put this in perspective, as of mid-2022, there were 8+ billion people worldwide. When consumer marketplaces hit, they hit BIG and continue to compound.
News
“Toast and Uber Expand Partnership, Helping Restaurants Reduce Costs and Reach More Diners with Commission-Free Delivery” - Distribution, distribution, distribution. Toast is a classic example of a SaaS-enabled marketplace model. They started with SaaS and created a system of record for the restaurants. They now leverage real-time prices, availability, and ordering to power their Toast Local marketplace. In this context, Uber is DaaS or Delivery as a Service, a commodity competing with Doordash. Toast
BestBuy launching a marketplace - This is no surprise given the success of captive marketplaces by popular consumer retail brands. However, this is the second time for the electronics retail giant. They are building it on Mirakl. LinkedIn
“Creator Startup Strikes Deal to Help Anyone Launch the next Feastables” - Pietra a sourcing marketplace for consumer brands, backed by a16z, Founders Fund, and M13, acquires Factored Quality. Factored Quality is a marketplace connecting brands with quality control and compliance professionals. This is a platform play to stack marketplaces. Founder’s announcement on LinkedIn here. The Information (Paywall)
“Sabre CEO Talks Change: ‘It Was a Business in Need of Transformation’”
“If we’re going to thrive in this new world, that’s about bringing incremental and new value to our two-sided marketplace, and that requires innovation and becoming really good at go-to-market. And we had to learn new muscle memory over the last couple of years.”
For those who don’t know, Sabre is the connective tissue for travel, creating the GDS, which connects airlines and hotels with travel sellers like agencies. The company is right to be concerned with disruption, as it was started in 1960 as a spinout from American Airlines. By tech standards, they are a legacy player and operating in a space where innovation is coming and needed. The Southwest Airlines software fiasco, while not Sabre, made it clear that legacy software was holding back American travel with significant economic consequences. Skift
“Amazon Haul Demand Outstrips Supply” - Amazon Haul is Temu-light and seems to be a strong focus for Amazon because Temu is putting up big numbers fast. Disruption can come at you fast. More below… Marketplace Pulse
The Temu two-fer…
“Temu Opens Online Marketplace to All United States Sellers” PYMNTS
“Temu's Takeover Is Now Complete” Wired
Temu is coming for Amazon and is projected to do $50B in marketplace revenue this year after launching in 2022! Who said consumer marketplaces were dead?
“Amazon Wants Merchants to Sell Everywhere Except Temu” - Amazon is seeing the growth, the writing on the wall, and fighting back. The Information (Paywall)
Founder of Loop Golf announces the launch of TeeTimeTrader, a marketplace for trading tee times. LinkedIn
Fundraising
Jome Raises $9.8M in Series A led by Geek Ventures, with participation from U.Ventures, Toloka VC, and Forefront VP. Jome is a marketplace listing new home constructions and aggregating additional data using AI. Yahoo! Finance
Hostaway raises $365M at a $925M valuation from General Atlantic, a notable backer of Airbnb. While not a marketplace, they allow property owners/managers to list across multiple marketplaces. TechCrunch
Did I miss one? Email colin@yonder.vc with the subject line “Fundraising Announcement” to be included.
Reads
“Technology Windows: The Unseen Force Driving Your Startup” - This is a great post from James Currier at NFX on the “Overton Window” for technology innovation and understanding where your startup might be in that cycle. NFX
Waymo's market share is now equal to Lyft within SF - The future is now, and as you will see below, it is safer. Many issues were noted with the estimations on X, but we are still seeing progress unfold. But wait, there is more… X
“Waymo reduced property damage claims 88% and bodily injury claims 92% compared to human-driven vehicles…” - Tweet from
on the insane claims cost reduction from autonomous vehicles. Having run an insurance program at an auto marketplace, Oudoorsy, I can attest to how much of a cost-center insurance is. This is one of the most exciting developments and under-appreciated aspects of autonomous vehicles for marketplaces that will translate into more competitive pricing for the end consumers. X
Key takeaways from Tony Xu the CEO and Co-Founder of Doordash as tweeted by Warren Shaeffer a new partner at Pear VC. X
1. Deep customer insight wins. Before launching their MVP, Tony and his co-founders met with over 100 restaurants in Palo Alto and discovered that most restaurants received delivery inquiries, but less than 5% could fulfill them. With 1M+ restaurants in the U.S., they saw a clear opportunity to expand the market. DoorDash is now valued at $73B.
2. Early hustle helps. In DoorDash’s early days in 2013, Tony and his co-founders personally delivered orders and printed flyers using Stanford’s printers to save costs. Fun fact: the company’s first name was "Palo Alto Delivery."
3. Some of the biggest outcomes aren't obvious. Much like Airbnb, DoorDash was initially underestimated — it wasn't ranked in the top half of its YC batch.
4. Choose optimism—and have a plan. Despite years of skepticism, Tony and his team focused relentlessly on over-delivering for customers, leveraging insights from their hands-on market research.
5. Retention is the key metric. DoorDash's persistence wasn’t just about grit—it was backed by data. Drivers and customers kept returning, and the team successfully cracked markets their competitors couldn’t.
Flexport has cargo in transit 24/7/365 worldwide - Tweet from CEO and Co-Founder Ryan Petersen. X
The Off-Price Edge - Post from the
team on the opportunities in off-price retail. Tangential but related to the success of Temu.
“The Hidden Cost of Platform Diversification” - This fascinating post looks at the impact of launching Uber Eats in NYC and how it impacted driver supply at Uber by diversifying earnings opportunities and pulling drivers from Lyft. Diversification can be a competitive advantage in the war against multi-homing.
“Marketplace Payments: How to Set Up Payments for Your Marketplace” - Perfect read for those building out their marketplaces for the first time. Sharetribe
Watch or Listen
“Marketplaces Are Getting Harder. Adapt or Die.” -
on the shifting sands of customer acquisition strategies for marketplaces.
“Marketplace Trends” - Optimistic update on what is happening in the world of marketplaces from prolific marketplace investor and OLX founder Fabrice Grinda of FJ Labs. Use the link to read or video to watch. Fabrice Grinda
“Ilir Sela, Founder & CEO @ Slice: How Slice Bootstrapped to $40M GMV & Raised Over $100M” with Nichole Wischoff of Wischoff Ventures. Apple Podcasts
“Starting & Scaling Outschool As A Leading Education Marketplace With Amir Nathoo” with Mike Williams from Everything Marketplaces. Apple Podcasts
“A Masterclass On Marketplaces & Data Science With Ramesh Johari” with Mike Williams from Everything Marketplaces. Apple Podcasts
Marketplace Jobs
Want to see your job listed here? Email colin@yonder.vc with the subject line “Job Posting” to be included or get your job featured!
Thanks for reading!
That is a wrap for the week! As always, please email me at colin@yonder.vc with any feedback or news I missed. Hot tips are always welcome. Please don’t forget to subscribe and follow me on X and LinkedIn for other great marketplace content. If you want to book a call, you can find me on Intro.
This post was brought to you by…
Sharetribe - Marketplace software for founders
Cut 90% of the time and cost to build and launch an online marketplace – without trading off customizability and scalability. Launch in one day with our no-code builder, and extend infinitely with custom code through our API-first developer platform.
About Me:
Colin is a marketplace geek. He is also the General Partner of Yonder, a pre-seed marketplace fund that invests in marketplaces that create new economies. He is a long-time advisor to marketplaces, helping them with product growth, monetization, liquidity optimization, and strategy. Previously, he was the CPO/CRO at Outdoorsy and worked at Tripping.com, Ancestry.com, Justanswer, and the Federal Reserve.
Great coverage. Fabrice's commentary was especially interesting with respect to SMB enablement (s/o Slice) and B2B recommerce -- 2 opportunities that intersect with what we're building. Look forward to future Memos.
I find this intriguing:
"I hypothesize we will see a resurgence in marketplaces in the era of AI, but it will look different than we might expect. The playbooks of Airbnb and Uber are no longer fit for the new era, and the technology window driving those marketplaces has closed. We are entering a new era, and the only constant is change…"
What Airbnb and Uber have done was a huge leap in innovation mixed with perfect timing. They also created new behaviors and trust systems in previously unorganized markets. All happened during massive transformations in other areas of technology. One of the biggest shifts was moving offline transactions to online and increasing the use of mobile phones.
Now AI will enable more efficient operation, but it won't bring as big paradigm shifts. It's hard to believe that only AI shift will be enough for that. Sure, AI can enable complex service bundling that wasn't possible before. But still, it's more about the optimization part. Sure, we are still in the early stages of AI implementation, and beyond personalization use cases will be more to come.
Key question: what fundamental human behaviors or needs remain unaddressed by current marketplaces that AI could uniquely enable? Predictions are always hard until we see something successful in the wild.
Looking forward to your next memo, I'm curious what's on your mind as you have much more experience than I do on this topic.