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Hello from beautiful Sunriver, Oregon, where I'm enjoying some quality family time and honing my Uncle skills. We will be taking the next 2 weeks off from the 2-Minute Drill but will be back with a fresh issue on the 28th.

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Welcome to the 2-Minute Drill -- a curated selection of the week's hottest stories from the world of tech, all in 2 minutes.


As always, shoot me a note to learn more or if you just want to say 👋.

-Noah  


✉️ noah@crossovervc.com
📱 650.468.9543
📸 @crossovervc 

On my whistle...
FIRST DOWN


 
The Reviews Are In: Bounty Nabs a $4.7M Seed Round
The reviews are in, and it turns out that product reviews are hot right now. After covering video review platform Flip two weeks ago, this week Miami-based startup Bounty announced $4.7 million in seed funding to help TikTok influencers make money from their product reviews. This is the first reported round of funding for the 2021-founded startup.

As we noted in our coverage of Flip, people love buying things online, and even more than that, people love to take selfie videos of everything they do in their daily lives. So it should come as no surprise that a new wave of startups are looking to help bring these two passions together to enable shoppers to discover new products via short-form video reviews from real customers and creators to get paid for promoting them.

Here's how Bounty's approach works. TikTokers sign up with Bounty and are sent a list of eligible products from brands partnering with Bounty to get more exposure. The user buys the product and then receives a special link to get paid when they post a review on TikTok and tag #bounty in the caption (this is how the startup can detect that the review has been fulfilled and the user can get paid their proper bounty). One thing to note is that because the TikTokers are getting paid to leave the reviews, the videos must be tagged as "sponsored" so that they are in compliance with FTC guidelines. 

Users can earn up to $10 per 1,000 views on TikTok with a sliding scale as the view count increases and as the video stays up over time. The startup reports that it currently works with 30 brands and has a long waitlist of interested parties. It worked with 14,000 creators in beta testing and reports that some of the top creators earned around $3,000 per month.

One thing to watch is the delicate balance between Gen-Z consumers wanting authentic reviews of products and the fact that these individuals are paid to leave the reviews. Certainly it creates the incentive for creators to promote products and help them get more exposure, but the balancing act will be to do so in a way that still feels authentic such that it will actually drive value (ie purchases) for the brands. One guess is that the quality of content will naturally be better if the creator authentically likes and uses it, but that remains to be seen.

(more here)
SECOND DOWN


 
Boatsetter Sails Off With $38M for "Airbnb for Boats"
This week Miami-based boat rental marketplace Boatsetter announced a new $38 million in Series B funding as it looks to build the Airbnb for boats. This brings the 2013-founded startup's total reported funding to $65 million.

After the initial rise of "sharing economy" startups Uber and Airbnb there was a mad rush of founders and venture funding into "Uber or Airbnb for X" startups. Most struggled to scale or raise enough ongoing venture funding to support subsidized costs, but the underlying idea of optimizing yield from fixed assets still holds true. And out of this we have seen companies like Outdoorsy (RVs) and Boatsetter (boats) continue to scale.

Boatsetter is essentially Airbnb for boats, enabling boat owners to rent out their craft when they are not in use to those looking to set sail for a day out on the water. Part of the reason why this is so appealing to boat owners is that the cost of maintaining a boat is particularly expensive, including maintenance, storage, taxes, docking, and more. Using a platform like Boatsetter, owners can help recoup some of those costs.

We had the opportunity to meet Boatsetter founder Jackie Baumgarten at one of our Crossover Dinner Series events in Miami last year, and like many other startups, the impact of Covid was actually a boon for the business. With other sources of entertainment and venues closed, people flocked to the idea of renting a boat with friends and getting out on the water. According to the company, there are now more than 50,000 vehicles available on the platform in more than 700 locations from Miami to San Francisco, with over 20,000 makes and models of craft listed.

Of course, Boatsetter is far from the only startup tackling this market but has been acquisitive in recent years as a part of its growth strategy. And much like Airbnb's expansion into local experiences, Boatsetter also offers up-sells for everything from dining to fishing.

So if you need me, I'll be over here seeing if I can rent out the History Supreme.

(more here)

THIRD DOWN


 
Locket Locks Down $12.5M for Photo Sharing App
I'm having flashbacks to the early-mid 2010s when it felt like every week there was a pitch for a new photo sharing app. But with Instagram dominating, and then Snapchat and TikTok coming along to offer their own social media spins, the volume of social photo sharing apps dried up.

But with all the initial focus on pushing your photos and content to the whole wide world, there has recently been a pull back with a new generation yearning for authenticity and more meaningful sharing with only those close to you. Enter Locket, the latest startup to focus on building a social network focused on just those closest to you in your life.

After shooting to the top of the App Store charts, this week the young startup announced $12.5 million in Seed stage funding. The app is built using Apple's widget system--which is typically used for tidbits of information like news and weather--but instead repurposes it for a private social network based on photos. Using Locket, users can post photos directly to the home screens of up to 20 of their closest friends and family. No fancy filters, no flexing for the world to see -- just sharing good old fashioned photos with those closest to you.

The desire for a more intimate social network is of course nothing new. One of the more prominent attempts was Path, which was a beautifully-designed private social network launched by former Facebook execs and positioned as an alternative to the "share everything "ethos of Facebook. The problem? Scaling private intimate groups is really hard. Most social platforms traditionally monetize based on ad-driven models that require lots of views and engagement. But if your selling point is intimacy and small groups, an alternate business model is needed to monetize.

It's also worth noting that Locket is gaining traction around the same time as photo sharing app BeReal, which has captured the interest of younger generations entirely because of its focus on authenticity, and as a rejection of the airbrushed FaceTuned culture of Instagram. That startup has also climbed the charts and has seen its valuation skyrocket from venture investors.

With the new funding, Locket plans to scale the team and expand into more features that are natural extensions of the app's core ethos. Whether the startup can scale intimacy and build a valuable business where so many others failed is a big questions mark...but one thing is for certain, there is a massive demand for more authentic and intimate sharing today than there was in the first social network wave.

(more here)

FOURTH DOWN


 
Halliday Picks Up $6M for Play Now, Buy Later for Gaming
By now you've undoubtedly heard of "Buy Now Pay Later" (BNPL) -- the category of fintech startups such as Klarna and AfterPay which enable consumers to purchase items from retailers and pay them off over time with interest. But what about Play Now, Buy Later? That's the premise behind NFT gaming fintech play Halliday, which this week announced an initial $6 million Seed round of funding.

One of the more interesting areas of Web3 development is around the rise of NFT-based games. Often times these games require an NFT as a gating item to play, or offer up-sells within the games in the form of tokens that can provide special powers, cosmetic features, and more. Essentially, Web3 games are creating their own economies--and some, such as Crossover portfolio company Fractal are building the platform to enable cross-game and cross-token exchanges.

Where Halliday steps in is that often these tokens can be expensive. So what the startup does is enables a gamer to purchase the token--with Halliday footing the bill--and play the game, with a requirement to pay it off over time (with interest). What's interesting is that sometimes these tokens can increase in value or evolve based on the gameplay of the user. What's also interesting is that Halliday uses a "wrapped" feature that enables the NFTs to be used by a third party, but still owned and controlled by Halliday to ensure the gamers don't take the token and run. If a user can't pay off the NFT, Halliday can simply reclaim it.

Unlike traditional financial services, Halliday won't report defaults to creditors or harm your credit score. But much like traditional lenders, it needs to be accurate in assessing risk. If it purchases an asset and the user can't pay it off and the asset declines in value, it could find itself in a sticky situation.

The startup is still quite early, but it exemplifies the kind of innovation we expect to see more of as Web3 moves past the initial hype cycle and toward more utility and increasing mainstream adoption of the underlying technologies in the coming years.

(more here)

EXTRA POINT



Talent in Tech: Kitchen United 
Regular readers of the 2-Minute Drill will be well aware of our belief that the transition from on-premise to off-premise delivery-based dining will be one of the defining platform shifts of this generation, and that investment into the technology and infrastructure to support this transition is one of the most exciting sectors of the startup ecosystem.

This week, the latest player to raise capital for infrastructure to support this transition at scale is Pasadena-based Kitchen United. The 2017-founded company announced a fresh $100 million in Series C funding, bringing its total reported capital raised to $175 million.

We last wrote about Kitchen United back in 2019 when the startup was closing its $40 million Series B round of funding. Since then, the startup added strategic capital from Restaurant Brands International, Kroger, and Circle K's parent company and has expanded its locations more than 3x from 6 to 21.

As a refresher, Kitchen United operates "virtual" restaurants which involves the establishment of "ghost" or "cloud" kitchens--those restaurants with no physical storefront that focus entirely on deliver. Unlike other competitors such as Uber founder Travis Kalanik's Cloud Kitchens which looks to primarily support the launch of new virtual-native brands, Kitchen United is more focused more on working with large established chains such as Chick-fil-A and The Halal Guys. In addition, Kitchen United embraces a "food hall" approach where customers can order items from multiple restaurants in a single order, and in some locations even offers a dine-in option for those picking up.

While the sector is undoubtedly exciting, it is also incredibly complex, operationally intensive, and expensive to scale. Staffing remains a constant challenge with high turnover and burnout for those churning out thousands of burgers per day, day after day, in large industrial kitchens, and delivery costs still remain unsustainable for many brands and delivery providers. That said, with the food delivery market expected to expand 10x to $365 billion by 2030, the hope is that these startups and their delivery partners can solve operational challenges and take an increasingly large bite out of this growing market.

Athletes + Entertainers involved include: retired NFL star Peyton Manning.

(more here)
 

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Disclaimer: The content in this newsletter is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It also does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security.



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