Batch brew #13

VSaas, unicorn endangerment, AutoGPT and some history and geography lessons

Hey, the Caffeine Capitalist is here again! ☕

Vertical saas, unicorn endangerment, AutoGPT, VC market update and history through geography? This issue is packed so grind at least 14grams of coffee for your morning chemex, sit down and take a sip with us!

6 minutes and 37 seconds this time.

Welcome to almost 50 new subscribers from the last Batch! 🙏🏻

Dept. of Tiny Thoughts

"The vertical SaaS wave will become a tsunami"

- Bessemer Venture Partners

SaaS is turning from horizontal to vertical, think about it for a second. The statement above reflects the powerful impact that vertical SaaS solutions have on various industries. The so called vSaaS creates an edge by targeting specific market segments and addressing their unique needs, these solutions offer tailored, efficient, and streamlined services.

Supporting data? In a study by McKinsey & Company, vertical SaaS companies exhibited a Compound Annual Growth Rate (CAGR) of 30% between 2016 and 2021, outpacing the 20% CAGR for horizontal SaaS companies in the same period. This growth can be attributed to their ability to deeply understand and solve the distinct challenges of each industry.

Instead of giving you a long explanation, spend a minute looking at the illustration below:

vSaaS by A16Z

So, where do you see low hanging fruit with vSaaS? Any industry problems come to mind?

You can read more about vSaaS for example here. 

Dept. of Insights

1. Unicorn species endangered?

It is mid april. Finally we have some numbers about the VC activity in the Q1 of 2023 from CBInsights, fresh out from the oven! So how does the venture market look like? Take a sip first.

In a nutshell:

  • lowest number of IPOs in almost a decade. 86 globally the last quarter. Out of that, 56 in Asia, 16 in US and 11 in Europe.

  • lowest number of new unicorns in last 6 years. According to CBInsight 13, according to Pitchbook 18 (guys please sync on that).

  • 7,024 VC deals closed in Q1’23 globally, a 12% decline from the previous quarter and the lowest tally since Q2’20

  • Global venture funding reached $58.6B in Q1’23, a 13% drop quarter-over-quarter (QoQ). Back on pre-pandemic levels

Not a disaster, we are getting back to normalised numbers after the insane bump in 2020-2021 due to pandemic and cheap money on the market and this will ultimately clear and stabilise the market.

According to Pitchbook there are 1279 active unicorns globally with $690b of total raised VC capital and cumulative valuation of $4 trillion. How many are from Europe? Around only 13%. North America being the leader with 67% of all.

CBInsight reports just 13 new unicorns, Pitchbook 18 but for both platforms the Q1 this year was the lowest in the past years. But quality over quantity, there are some really interesting new ones.

Our favourite or most anticipated one? Check them out

2. Have you heard of the latest buzz in the AI world?

Say hello to AutoGPT, an experimental open-source attempt to make GPT-4 fully autonomous. While ChatGPT feels like old school, AutoGPT is the next big thing in AI.

AutoGPT is an open-source program that uses Large Language Model "thoughts" to achieve any goal you set for it. Think of it like having your own AI agent - give it a goal and watch as it comes up with an execution plan and takes action. The possibilities are endless: AutoGPT can help you find the best deals online, manage your social media, provide financial analysis based on real market data, and much more. The power of AutoGPT lies in its ability to autonomously achieve any goal you set for it, making it a powerful tool for businesses, researchers, and anyone looking to streamline their workflow and improve decision-making.

As Harsh Makadia said in his Twitter thread, killer features of AutoGPT are:

  • 🌐 Internet access for searches and information gathering

  • 💾 Long-Term and Short-Term memory management

  • 🧠 GPT-4 instances for text generation

  • 🔗 Access to popular websites, platforms

  • 🗃️ File storage, summarization with GPT-3.5

We gave AutoGPT a test drive, and while it's not quite ready for prime time yet due to its limited experience and data set, we're excited to see where this new technology is headed. With its promising features and potential to revolutionize the world of AI, we'll definitely be keeping a close eye on AutoGPT and any future developments. Who knows, in the near future, AutoGPT could be a game-changer for businesses and researchers alike, helping to streamline processes, improve decision-making, and drive innovation across a range of industries.

You can try it by yourself here, but you need ChatGPT 4 API key.

Dept. of Twitter Thread Research:

1/ Too bored with business content only? It's always nice to dig deeper into history, geography or geopolitcs as well for full context. Dig deeper in this twitter thread to understand history much better.

2/ When we already opened geography and geopolitics... Andrej is currently reading a great book by Ray Dalio - Principles of dealing with the changing world order. It was published in 2021 but nowadays during current economic crisis and increasing interest rates it is even more timely relevant. Check the video summary below.

Dept. of Visual Research:

Have you ever though about visualising your life as a set of rows? Bit of a stoic ending to this week's issue. ☕

Life of an American by Waitbutwhy

News from our portfolios & where to shake hands:

  • Podim is coming up again soon, 15-17th of May to be precise. Slavo and part of the ZAKA.VC team will be there, so let's grab a coffee!

Do you enjoy this type of content? We blew through 1250 subscribers, but we want to grow further and the best way you can help us is to share The Caffeine Capitalist in your community using the button below:

Enjoy your coffee fresh, allocate capital, repeat! See you in 2 weeks 👋

The Caffeine Capitalist is a bimonthly newsletter written by Slavo Tuleya, Andrej Petrus & Martin Nemecek. It is written in partnership & in support from ZAKA.VC and Chop Chop Ventures.

What do you think of this issue? We are still collecting feedback on our new layout, suggestions welcome!

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.