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In June 2021, "Oatly priced its initial public offering at $17 per share, giving it an implied valuation of $10 billion."
10 billion dollars for an oat drink company. We're way overdue a correction on tech stocks, the time for free, cheap money is over.
Oat drink is tech? I am sometimes amazed how people can position a bog-standard business as 'disruptive tech'?
Explain how this works?
The Saudi Sovereign Wealth Fund has a bunch of oil money. It's known to be an oppressive regime. It buys a bunch of Uber stock with that money, and its name is now in the cap table.
Everyone saw every transaction. Its name is still clearly there.
It also doesn't need to turn, say, drug money into carwash profits, to avoid suspicion from tax agencies, because it is the tax agency; it's sovereign.
And even if I'm not the Saudi Sovereign Wealth Fund, but a private individual, and I want to launder money, I don't see how buying Uber shares helps me do that, because I will still need to have gotten the cash from somewhere, and buying shares creates no pretext for where that cash might have come from.
Unless there's a wash trade thing going on? Where legitimate actor A buys shares to keep the price up, while illegitimate secret ally B sells shares, in order to transfer wealth from one to the other?
I don't think that's what you're saying though.
So what, really, do you mean?
Honestly I'm assuming this is just one of those rhetorical things that we say but haven't really thought about. But if there's meat there, I'd like to know.
The question is...have the good times ended? Or is there just too much money out there desperately searching for ridiculous sized returns and the money train will get back up and running shortly. Anything other than spending that money on gov't infrastructure or social services.
I honestly can't decide if this is savvy or stupid. Basically the CEO's know that tech companies get outrageous valuations so even if they are say a commercial landlord (WeWork) or a oat milk manufacturer, they will bring in a tech department, build an app and a shiny website, start an engineering blog, and then probably work on some pointless but tangentially related project which most likely uses AI, Blockchain or some other hype tech.
These companies have been getting crushed for the past 6-12 months. Oatly is down 83% YTD. The economy has been tightening for months. I think you're a few steps behind the financial machinations in progress.
Similarly my understanding is that Cambly had a hard time raising their early round because all those VCs already knew English.
(This in no way justifies that valuation but I wanted to randomly chime in here.)
I don't mind it because of thinking that having a bit of it in every other cup of coffee is poison, it's more that the aftertaste is less enjoyable than straight espresso or an americano now that I notice it.
Time to give soy lattes a try, lactose intolerance is a literal PITA.
Edit: Personally I think the key to fast progress is better and better whitebox modelling of the body. More diagnostics and sensors to rapidly detect and respond to issues. When that is in place, we can do more fearless experimentation, secure in the knowledge that if something trends bad we can catch it quickly and abort / reverse.
I do not share your optimism, because you forgot about economy, investors and shareholders driving science forward, not viceversa. The primary goal for public companies is to increase revenue and market share, not creating healthier food than nature, if unhealthier food sells more.
Also, I do not share the hubris that science wins over nature. We have evolved to thrive on what exists in nature, it is not logical to assume we would thrive more with something we are not evolved for. Especially when profit, not health, is the primary driving force.
I guess I'll keep eating real meat and real vegetables.
Unless it's science to scale up tradition food systems and abandon the unhealthy food system we have today.
Whew that was taxing to write in HNglish.
My man, look at your second paragraph, even the high tech mitigation strategy you came up with is what can be done in short enough term to be part of a product development process, it won't change anything from the situation now.
The problem is not acute toxicity that is measurable in the short term, we have that nailed down or else people would be dropping dead fulminated from new Oreo flavors, but rather very long-term effects, sensors to respond rapidly will do nothing when the problem is what your diet does to you over the course of years.
The culprit is being pinned down as the high concentrations of linoleic acid, but this is all in hindsight, after decades of having people consume these things, there's absolutely no way you'll be able to run a controlled experiment for something like this even with gizmos that measure everything that you, right now, think you should measure.
Heck how are you going to know which of the technological marvels that people are consuming all the time is the one to blame?
when I first started learning about, I was not aware of all the intricacies of food: all the minerals, and vitamins and flavanols, fiber and countless other things that make up "real food". I think people tend to simplify food into just a few small variables (like protein and vitamin C) and think that's all there is to it. And it's nowhere near that simple. No matter how much I dig, there's more and more things to understand about a given food. Asking industry to produce better food than nature is like saying, I want to score higher on this test than the grading rubric. It just doesn't make sense.
I think the future should be making normal natural healthy foods accessible to more people. Why don't we have apple trees, fruit trees and citrus trees in every park and next to every sidewalk? this shouldn't be hard thing to accomplish.
Vehicles have air conditioning but that doesn't make motor companies appliance companies or HVAC companies either.
It depends on what the company's core value proposition is. Toyota's is clearly a car company. Tesla is now more of a car company, but there was a time when they had no or few cars but still had the battery and driving tech. Their valuation and promise was of bringing a new technology to the world, rather than a physical product.
So how did VCs get that so wrong other than turning a blind eye to the obviously terrible business models and investing because of their moral beliefs?
I sort of expect the market to solve these things. Someone placed a bet, once we process the hell out of soy and make it behave like a hamburger, the entire world will be willing to pay more money for a burger that might not be healthier but will have less saturated fat and no animal product in it. They raised some capital, proved they could build the product, spent and invested to get it in stores and fast food restaurants. Along the way they probably bumped into numerous issues scaling a food enterprise but somehow have managed to stay pretty close to the mission. Turns out that might be a bad bet. What if the veggie burgers were cheaper? What if you have to use GMOs to achieve that price point? Or maybe the idea isn’t that great or the product has some deficiencies, maybe those can be repaired. That’s why we do it.
Was the investment because of “moral beliefs” or because it takes billions to get a food to that market? The TAM here is interesting too, it just well distributed which is what makes it expensive.
Yes, it is. All the stuff you wrote makes 0 sense in the context of what we are discussing, I suspect you are very deep in the bubble.
>Was the investment because of “moral beliefs” or because it takes billions to get a food to that market?
You don't invest in something "to get it to market". You invest in something to make money. Food is a notoriously difficult and unprofitable market.
* This tastes almost as good as real meat, and better than some shitty burgers I've had. With some development it'll be indistinguishable.
* I'm not a vegan myself, but vegan products are a growth sector so we can make money there. I've heard veganism is popular with young people who worry about the environment, so the fact none of my 60-year-old golf buddies are vegan doesn't mean it's not a good opportunity.
* The world's population is rising, and countries like India and China have a growing middle class. Even ignoring veganism and environmentalism, demand for meat is likely to rise. A company with good quality substitutes and the ability to increase production fast could be well placed to capitalise on this.
* Lab-grown meat could revolutionise how we eat - why shouldn't every steak be perfectly marbled A5 Wagyu Ribeye, if it's being 3D printed in a lab? People who invest in the right company could make a fortune! This company isn't precisely that, but they've got a product I can taste right now, and it tastes pretty good to me.
* I need to polish my reputation, with some ethical investments to counterbalance all that money I've given to scumbags and scam artists. I'll invest the loose change I found down the back of my couch in this burger company.