She made a huge bet on Tesla… and it worked


October 7, 2020

PLUS: The dentist office is getting Insta-friendly.
October 7, 2020
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The Big Idea

This investor made a bet that Tesla would be a $1T+ company… and it’s paying off big

Over a year ago, Cathie Wood — founder of asset manager ARK Invest — said that Tesla could be a $1.4T company, including an autonomous Tesla taxi fleet worth $1T on its own.

According to Forbes, this wild prediction brought on ridicule from seasoned Wall Street voices. (TBH, it sounded a bit cray.)

At the time, $TSLA’s market cap was hovering around $40B. Well, Musk Daddy’s EV maker is currently worth $386B — and Wood is laughing at the haters.

Betting big on innovation

Ark Invest’s key product is its thematic ETF offerings.

According to ETF Database, Ark has the top 5 performing ETFs over the past 12 months, including:

  • ARK Genomic Revolution (ARKG), which includes Invitae (genetic testing) and CRISPR Therapeutics (gene editing)… up +101% this year
  • ARK Next Gen Internet (ARKW), which includes Tesla (a meme factory disguised as a car company) and Roku (streaming)… up +95%
  • ARK Fintech (ARKF), which includes Square (payments) and Mercadolibre (Latin America ecommerce)… up +71% 

“Coronavirus has catapulted our innovative platforms into high gear,” Wood tells Forbes.

ARK Invest is not like other Wall Street firms

It makes all of its research available on its website and keeps a real-time log of its trades.

The firm’s hiring practices are also atypical.

While the Goldmans of the world hire MBAs, ARK targets talent with specific industry expertise (e.g., molecular engineering) and empowers them to identify the next hot trends.

The firm’s growth has been explosive

Since the end of 2016, ARK has seen a nearly 100x increase in its assets under management (AUM) — from $307m to $29B.

Forbes estimates that — based on management fees — Wood’s personal wealth from ARK totals $250m, an impressive feat considering that, in the early years, she had to dig into her savings to keep things afloat.

What’s next?

More cowbell innovation.

Analysis from Hardfork shows ARK has recently increased its portfolio weightings in Slack, Teladoc, Taiwan Semiconductors, and — drumroll — Tesla!

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Snippets
  • G Suite is now called “Google Workspace” for some inexplicable reason (well, it is explicable: Google wants to merge Gmail, Chat, and Docs to challenge MS Office).
  • RIP, Eddie Van Halen: The “Mozart of Rock Guitar” passed away yesterday at 65, following a battle with throat cancer.
  • Facebook just announced a massive ban on groups, pages, and accounts associated with QAnon.
  • Microtargeted ads aren’t all that effective — and WIRED makes the case that they could be the next big tech bubble.
  • Nothing screams “please help my work-life balance” like these new Slack-branded Cole Haan sneakers.
Fighting Fakery

‘Streaming farms’ are Spotify’s newest credibility problem

Let’s say you just dropped a fire new track on Spotify, but only your aunt, brother, and 3 friends are streaming it.

Fear not: For a small fee, you can turn to one of dozens of small companies offering to boost your track with thousands of artificial streams.

These companies, called “streaming farms,” are a huge problem for Spotify and Apple Music: One music industry exec tells Rolling Stone that ~3-4% of all streams are faked — equal to ~$300m in lost revenue.

Streaming farms start out as playlists

Scammers curate playlists of a client’s songs and then let loose a bunch of bots that run through the tracks on loop for weeks at a time.

According to music marketing agency Venture Music, streaming farms are employed by both independent artists and major labels, who use them to “to push their releases further up the charts.”

Sometimes artists are sucked into this economy against their will. Venture Music tells The Hustle, “The vast majority of our current clients (now 40 total) have unknowingly found their way onto botted playlists this year.”

2018 catapulted streaming farms to prominence

That year, Spotify discovered that a Bulgarian scammer was behind 2 of its most popular playlists: “Soulful Music” and “Music From The Heart.”

“Soulful Music” had a whopping 467 songs (almost all by randos) and nearly all of the streams (~72m) came from 1.2k bot accounts.

In the end, the scammer made off with an estimated $1m+ in streaming revenue.

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Those Pearly Whites

The dentist’s office is getting an Insta-friendly makeover

If your biggest problem with going to the dentist is that the offices aren’t very glam, you’re in luck.

Tend, a startup that wants to make your stodgy old dentist more hip, just raised $37m to expand its sleek offices from its base in New York to Boston and DC.

Out with the hospital lights, in with the aromatherapy

You can think of Tend like the regular dentist’s cool aunt who won’t stop talking about her herbal medicine cures on Instagram. A few of its features:

  • Extra quiet drills and dental equipment to tamp down your anxiety
  • Scents of your choice to keep you relaxed
  • A well-lit bathroom, curated for perfect mirror selfies
  • A TV screen above the dental chair for Netflix streaming

All the other dentists are busy going mobile

Most other startups have focused on getting dentists to hit the road: Companies like Henry and Lydian have invented high-end offices on wheels.

Their business is with mostly corporate clients. Back in the Before Times, Henry would roll up to your company’s HQ, and you could get your teeth checked in between meetings.

Tend, by contrast, is committed to the old-school dentist setup. The only place like it is Dntl Bar, another New York-based company that describes itself as a “spa-like” alternative to the dentist office.

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Mmm, crunchy

Why are VCs paying $300m+ for an insect farm?

There’s no way to put this delicately: Tech investors are bugging out over a giant warehouse full of beetle larvae in Amiens, France.

Ÿnsect — the most expensive insect farm in the world — has raised a whopping $372m, and it isn’t even set to launch until 2022.

All those millions are going toward the unsexy business of churning tiny beetles into cheap protein.

There’s a short-term goal, then a long-term one

Most immediately: Ÿnsect wants to feed all those beetles to fish.

Almost 50% of the fish humans eat comes from fish farms, but the dinner we usually serve those fish (anchovies) is expensive to catch. Beetles aren’t just cheaper: There’s some evidence that beetle larvae helps fish grow more quickly.

But big picture, Ÿnsect is trying to expand its beetle protein first into pet food — and then, slowly, into our food.

Ÿnsect already landed $105m in contracts

Ÿnsect is betting that insects might become the environmentally friendly protein of the future.

Once the farm opens its doors, its beetle protein will be headed straight to fish feed behemoth Skretting, winemaker Torres, and plant fertilizer Compo Group.

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