1Mby1M Virtual Accelerator Investor Forum: With Fabrice Grinda, Founding Partner at FJ Labs (Part 4)

Sramana Mitra: What are your predictions on post-COVID trends? What are you seeing and predicting? What kind of businesses would you like to invest in the post-COVID era? 

Fabrice Grinda: Crises, in general, are extraordinary accelerators of underlying trends. They are also extraordinary generators of productivity growth. If you examine the 20th century, the Great Depression was the time where we had the highest productivity growth in the US.

This is because necessity is the mother of invention. Of course, there was a lot of suffering that came with it. If you look at the most interesting defining companies in the last decade, Uber, Airbnb, and WhatsApp all came out of the 2007 to 2009 recession.

For Uber, that was when you had the labor pool willing to be drivers to have a second job. For Airbnb, you had people that needed incremental income. They were willing to let people in their homes for the first time.

The same thing is happening here. We are seeing a fundamental acceleration of e-commerce. Before COVID in the US, e-commerce had a 15% penetration of overall commerce. It has grown to 25% now and I don’t see it going back. We are just scratching the surface in telemedicine. Now, we have 25% of the population who have tried it.

Online education was only in its infancy. Now, it’s accelerating steadily. If we look at our portfolio, despite terrible human suffering, most of our startups are doing extremely well because the underlying trends have been accelerating. In food delivery, for instance, we are seeing that sector multiply by as much as 6x in a few months.

Those trends will not change. We are not going to go back to the underlying base level. With that said, we are investing aggressively in everything towards the digitization of commerce, health, education, and remote work. For remote work, there will be a return to the mean even though greater flexibility is going to become the norm.

There are a few sectors that are negatively affected that we are not investing in right now because the time between a series A and a series B is about 18 months. If the company does not have the ability to get to the next stage, then it’s mostly going to die.

If you are in tourism, travel, and events, you are penalized by COVID. Many companies in our portfolio in this sector saw their revenues fall by 95%. If I do a set order, 95% of the portfolio is doing better than before, half doing extremely well, and then 10% is a total disaster.

We want to continue investing in line with the continual digitization of commerce, health, education, gaming, and remote work.

Sramana Mitra: Thank you for your time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Fabrice Grinda, Founding Partner at FJ Labs
1 2 3 4