📱 Big Tech’s app store battle

Teddy Roosevelt was born in New York, but the “trust busting” (pro-antitrust) US president owned a ranch in North Dakota.

Now, more than a century since his presidency, the state is making headlines again in the anti-monopoly space.

According to the New York Times, North Dakota’s senate is set to vote on Bill 2333, which will “stop Google and Apple from forcing companies in the state to hand over a share of their app sales.”

The standard cut is 30% of sales…

… and in 2020, the practice brought in a combined $33B for Apple and Google.

Last year, Apple reduced its take to 15% for companies making less than $1m. But it’s not just the commission at issue: Apple doesn’t allow apps to be downloaded outside of its app store (Google does).

Ultimately, the bill is meant to attract companies to the state and help address the sheer dominance that Apple’s iOS and Google’s Android operating systems have across billions of smartphones.

Apple’s defense

The iPhone maker has long contended that its closed ecosystem is a benefit to users, ensuring quality, security, and privacy.

The company’s chief privacy engineer testified that the bill “threatens to destroy iPhone as you know it,” per the NYT.

That statement is a bit of a stretch. But it gives a window into how serious Apple is taking the matter — especially as it’s battling Epic Games and Facebook on related fronts.

Many other states are getting into the battle…

… which poses a problem for Big Tech lawyers and lobbyists used to dealing with the federal government (and not 50 “diverse and unpredictable” voices).

Other state battles include:

• Georgia, Arizona, Massachusetts, Minnesota, and Wisconsin are looking at similar app-store legislation
• New York is considering a bill that will make it easier to pursue antitrust cases against Big Tech
• Florida proposed a bill on how social media firms moderate their platform’s content
• Maryland just enacted a law that will tax online ads for companies making more than $100m

Add to this the big antitrust cases against Facebook and Google, and it looks like this advice attributed to President T. Roosevelt is being heeded: “Complaining about a problem without posing a solution is called whining.”

You’ve heard of the space race… but have you heard of the 30-minute delivery race?

In the US, one of the top contenders is goPuff — a vertically integrated company that delivers items typically found in convenience stores in 30 minutes or less. Items include over-the-counter medicine, baby food, and alcohol.

To date, goPuff has raised $1.35B and is valued at nearly $4B. Now, its sights are expanding to the UK with a potential acquisition of the UK’s Fancy Delivery.

Delivery race, you say?

SoftBank-backed goPuff is a heavyweight in the delivery space. Delivering to some 500 cities, its end-to-end supply chain includes a fleet of in-house trucks, micro-fulfillment centers, and product suppliers.

GoPuff is eyeing international contenders as it expands beyond the US, including:

• Gorillas in Berlin
• Dija and Weezy in London
• Cajoo in France

In contrast to goPuff, Fancy is a young grasshopper: It launched in late 2020 after graduating from Silicon Valley’s Y Combinator and currently operates in 4 cities in the UK.

The acquisition at hand

According to TechCrunch, the deal will be announced within the next few weeks. Fancy would likely be acquired in an all-stock deal.

Previously, goPuff has shown its appetite for expansion, recently acquiring behemoth alcohol retailer BevMo for $350m.

Gotta imagine that the response to any company trying to enter the space is: goPuff yourself…

It’s one thing to debate someone online when they’re 3k miles away and won’t come knocking on your door.

But it’s a different story when they live 2 houses down from you.

Nextdoor, the hyperlocal social platform used by 270k neighborhoods in 11 countries, is now apparently a hotbed for COVID-talk.

Vaccine discussions on the platform have gone viral

There were 400m+ views of COVID-related posts on NextDoor in January and vaccine-related topics experienced major upticks since November, with “distribution” up 3,000%, “timeline” up 1,262%, and “safety” up 524%.

Neighbors are also discussing brands playing roles in vaccine distribution, with mentions of Albertsons (+2,245%), Kroger (+2,226%), and Safeway (+1,251%) experiencing big upticks.

But it’s not all neighborly chitchat

Nextdoor is struggling to address misinformation, a reportedly rampant issue that has turned some neighborhood groups into contentious information battlegrounds.

On a more positive note, public health agencies are using Nextdoor as a hyperlocal megaphone to announce vaccine distribution plans and health guidelines.

That’s great, though ideally when the pandemic ends we can switch back to Nextdoor being the platform neighbors use to borrow eggs.

The special purpose acquisition vehicle (SPAC) hits Europe.

Bernard Arnault, the chairman of luxury conglomerate LVMH and the world’s 3rd-richest man ($150B+) will form a SPAC to “hunt for deals in Europe’s financial services sector,” per CNN.

While SPACs have exploded in the US, the funding vehicle has been relatively quiet in Europe. This may break the silence.

Arnault has been at the helm of LVMH (Louis Vuitton Moët Hennessy) since the late 1980s.

In the decades since, he’s built a $320B+ luxury giant. As of 2019, LVMH now boasts the following:

• 70+ luxury brands in fashion (Louis Vuitton, Christian Dior, Fendi, Celine), wine and spirits (Moët, Hennessy, Dom Pérignon), perfumes (Dior, Guerlain), watches and jewelry (Hublot, Tag Heuer, Tiffany), and selective retailing (Sephora)
• Revenue of ~$65B (and profit of ~$14B)
• 4k+ stores and ~140k+ employees

LVMH operates much like Warren Buffett’s Berkshire Hathaway: The conglomerate makes strategic acquisitions, allocates capital across its subsidiaries, and lets them operate largely independently.

We’ll soon find out if Arnault’s Midas touch works in fintech.