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Hello from NYC! It's been a busy week of meeting with founders, friends and more while catching some NFT NYC events, the NBA Draft, and some good New York bagels and lox. Now it's back to the Left Coast!
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 👋.


📱 650.468.9543
📸 @crossovervc 

On my whistle...

🚨 Portfolio Alert: Enara Collects $6M to Combat Obesity
This week we are proud to officially announce the latest investment out of the Crossover fund: Enara. Enara is a digital weight management platform tackling the obesity epidemic by offering existing healthcare practices "Obesity Clinics as a Service." This week the company announced a new $6 million in Seed stage funding. This is the first reported round of financing for the Silicon Valley-based startup.

We were first introduced to Enara founder Dr. Rami Bailony out of Stanford and UCSF back in March and were immediately blown away by his deep understanding of the obesity epidemic and his unique perspective on how technology can be leveraged to help people lose weight and keep it off. And more than that, his understanding of why current approaches within today's healthcare system fail.

The great investors over at Sequoia Capital are famous for asking founders pitching them "Why Now?" Novel approaches to diet and weight loss are certainly nothing new. But for Enara, there are multiple Why Nows. First, the disease has reached a crisis level, with more than a third of the US population categorized as obese, and U.S. medical spending on obesity was nearly $173 billion, with the medical costs associated with treating obese adults clocking in at $1,861 higher than those for people without the condition. And with 50% of Americans reportedly on a diet, and only 5% actually losing weight, clearly the existing approaches aren't working. Secondly, in 2013 under the Affordable Care Act (ACA) obesity was officially recognized as a disease for the first time that could be coded (aka reimbursed) for insurance. And finally, in 2021 there was a major breakthrough in FDA-approved drugs that effectively treat obesity as part of a care solution, and alternative to bariatric surgery. 

So we've got a massive and growing health epidemic of crisis proportions, regulatory changes that re-imagine the payment model for treatment, and breakthrough drugs approved by the FDA. The problem? While the ACA mandated coverage for obesity care, for every 1,000 medicare members with obesity, only 7 receive treatment. That's only 0.2% utilization!

With the "Why Now" accounted for, the Enara team has assembled a team of the best experts in the treatment of obesity and are combining a tech-enabled treatment regimen (weight loss) with a software platform to help connect clinicians with billing and insurance (utilization) and instead of trying to walk the expensive path of a direct-to-consumer, Enara is building a "obesity clinic in a box" that taps into the existing healthcare providers that patients are already seeing, and then enables on-the-spot enrollment into the obesity program. Enara runs the program, handles the billing, and shares with the clinic the revenues on the backend.

It's still very early days for Enara, but we are thrilled to be part of the journey and working with Dr. Rami and the team to help build a profitable business that has the double-bottom-line of helping combat one of the biggest health epidemics currently threatening our country (and beyond).

(more here).


Magic Eden Rockets to Unicorn Status for NFT Marketplace
This week, San Francisco-based NFT platform Magic Eden announced a new $130 million in Series B funding at a reported $1.6 billion to build an NFT marketplace on the Solana blockchain. This brings the nine-month-old startup's total funding to nearly $160 million.

When most people think of NFT marketplaces they think of OpenSea or new marketplace launches from incumbent crypto players like Coinbase. Magic Eden differentiates itself by focusing on Solana-based transactions which typically have lower transaction (aka "gas") fees than Ethereum, where OpenSea is the dominant player. Today Magic Eden is estimated to be responsible for more than 97% of all daily Solana NFT transactions. Further, the startup also powers NFT marketplaces for third parties, thus creating opportunity for differentiated revenue sources.

The crypto markets have taken a beating in recent weeks, and NFT values have steadily declined. And in spite of the hype and parties at NFT NYC, there is definitely a sense that some of the air has been let out of the balloon.

The team and investors in Magic Eden are clearly focused on the long-term promise of NFTs, even if these early iterations have been limited in commercial scope, fraught with security breaches, and subject to pump and dump schemes. Magic Eden has begun to focus on gaming NFTs and is exploring other ways to play a key role in the tokenized economy beyond selling digital artwork. 

Solana itself has taken a beating recently which could raise some concerns for those startups build on its ecosystem. Disclaimer: I hold a nominal amount of SOL tokens personally as part of my crypto portfolio. But one thing that Magic Eden has going for it that many other startups don't is that it reports being cashflow positive. In other words, music to the ears of any investor in a bear market.

(more here)


Wahed Raises $50M for Muslim-Approved Wealth Management
This week New York-based digital financial services startup Wahed is reportedly closing a $50 million Series B round of funding at a $300 million valuation to scale its platform for ethical wealth management. This brings the 2015-founded startup's total reported funding to $90 million.

Wahed differentiates itself from other financial services platform by catering primarily to Muslim customers and enabling them to ethically invest in accordance with their faith. This means, for instance, building portfolios that avoid companies that earn profits from lending, gambling, alcohol, or tobacco which are banned by the Muslim faith.

According to a report by the Islamic Financial Services Board, Islamic banking is on the rise, growing 11% in 2020 and reaching $2.7 trillion in assets. And like other startups focused on ethical investing through their own lens (eg climate), the next generation of wealth is increasingly demonstrating a desire to invest in accordance with their beliefs and morals.

Given the focus on Muslim customers and plans to expand into the Middle East and North Africa, perhaps it's no surprise that the funding was led by Wa’ed Ventures, which is the venture capital arm of Saudi Aramco Entrepreneurship Center.

(more here)


Sesame Opens $27M in Funding for Healthcare Marketplace
Healthcare is one of the sectors most in need of re-imagination through technology, and the latest startup to raise capital to help address affordability is NYC-based Sesame, which announced a new $27 million in Series B funding. This brings the 2018-founded startup's total reported funding to $75 million.

Sesame is focused on addressing the affordability challenge of healthcare for both those covered by insurance and those without insurance alike by creating a medical care marketplace populated by physicians and patients. Like other two-sided marketplaces, consumers (in this case patients) can research and shop for care from physicians, while physicians can provide their listings and enable them to get paid directly in cash without having the hassle and overhead of dealing with insurance claims. This can be offered in lieu of or in addition to their offerings through affiliated clinics.

In addition to helping patients find and book care seamlessly, the use of technology aims to help reduce the costs of healthcare by reducing paperwork and bureaucracy. In particular for specialty care or other services not covered by insurance, connecting directly with physicians can offer a simpler and less expensive route to care. To-date the startup reports that there are over 2,500 healthcare providers on its marketplace and has served more than 150,000 patients.

The Money Quote“Every service on Sesame has a fixed, clear price that the patient pre-pays so there is no collection or credit issues for doctors...Also, they don’t have all the admin requirements that go along with insurance claims.” -- Sesame Cofounder and CEO David Goldhill

(more here)


Talent in Tech: Jackpot
Americans love to gamble. In fact, the U.S. lottery market is estimated to be worth $100 billion annually with 53% of Americans reportedly buying a lottery ticket each year. That's a lot of scratch-its. And to help bridge the gap between offline and online lottery sales, UK-based Jackpot has announced a $35 million Series A round of funding.

Today, only roughly 5% of all lottery tickets sold are digital. Jackpot wants to lead the charge in bringing state-run lottery ticket sales into the digital era. The idea is that instead of looking to offer its own lottery and gaming products--which would subject them to significant licensing and regulatory hurdles--Jackpot simply wants to provide the picks and shovels to let states like New York and Oregon expand their lottery offerings by making it easier to play the games of chance on their phones. And instead of monetizing via wins/losses, it receives a convenience fee on purchases.

While there are a lot of ethical questions (see Wahed, above) tied up in gambling and issues with addiction and impact on those with the least available income to put at risk, it's worth noting that up to 95 cents of each dollar spent on lottery games goes toward key civic initiatives like education and healthcare. Jackpot's promise is that by digitizing state lotteries, it will help increase spend on lottery games and thus bring more money into these civic causes.

Athletes + Entertainers involved include: NBA stars James Harden and Joel Embiid, along with a host of sports executives including Michael Rubin (ex-76ers, Devils), Robert Kraft (Patriots), and Sam Kennedy (Boston Red Sox).

(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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