Warby Parker filed for a direct listing this week! The company was one of the first VC-backed D2C brands, and many in the industry were eager to get an inside look at its financials. I did a tweetstorm teardown of the S-1, but to summarize the key learnings:

• Revenue only grew 6% in 2020, largely due to the company’s reliance on brick-and-mortar stores. But it bounced back in H1 2021, with 53% YoY growth.

• Gross margin per order is ~60%, while contribution margin (incorporates marketing and selling costs) is ~20%. Unit economics are in the chart above.

• Acquisition cost per order climbed nearly 50% last year. Acquiring customers online is getting increasingly expensive for many brands!

• The company is not yet profitable - it broke even in 2019, but the net loss margin widened last year.

One of the remaining Qs is how public investors will value the company. Brands tend to trade at lower multiples than software businesses do - the margins are much thinner, revenue isn’t recurring, and it’s harder for them to maintain high growth rates. At scale, these brands will theoretically spit out less free cash flow for every dollar invested in the company.

However, digitally native brands hope to unlock higher multiples. They’re typically growing faster than their retail-oriented counterparts, and aim to have better margins (especially if they don’t have many brick-and-mortar stores). You could argue that their customers will be more valuable over time, as they’re acquiring millennial and Gen Zers who are coming into purchasing power.

Other public eyewear retailers trade at 2.5-4.5x LTM revenue, but Warby Parker is probably hoping for a multiple closer to FIGS, a D2C scrubwear brand that went public earlier this year (and is now trading at 17.5x LTM revenue!).

news 📣

🛍️ Shopify + TikTok. Shoppable videos are coming to TikTok, thanks to a partnership with Shopify! Shopify merchants with TikTok business accounts will be able to tag their videos with links to buy the featured products. They’ll also be able to add Shopping tabs to their profiles. Worth noting that this still doesn’t allow individual creators to sell products - I think this type of social commerce is the future of creator monetization!

⏪ OnlyFans changes course. Video platform OnlyFans walked back its plan to ban sexually explicit content. This ban was reportedly motivated by the fact that banks and payment processors (e.g. JPMorgan, Mastercard) didn’t want to work with the company, making it difficult to pay creators. OnlyFans didn’t announce which partners it will now work with, but said that it has “secured assurances necessary to support our diverse creator community.”

🤑 Amazon + Affirm = $. Buy now, pay later platform Affirm (which IPOed this year!) is bringing installment payments to Amazon. Within the next few months, Affirm will become a payment option on most Amazon purchases over $50. This isn’t Affirm’s first rodeo - the company also has major partnerships with Walmart and Peloton (which drives 30%+ of Affirm’s revenue). It’s been a busy few months for BNPL businesses, as Square acquired competitor Afterpay for $29B.

📱Apple settles with developers. The legal battle between Apple and third-party developers is coming to a close. Apple has now agreed that developers can contact users via email about payment options outside the App Store - which would allow them to avoid the 30% “Apple Tax.” Many see this as a win for Apple, as the company made few concessions and is still banning alternative in-app payment systems (which would be most convenient for consumers).

what i’m following 👀

Lerer Hippeau is hosting the Gen Z VCs Summit on 9/17 - I’ll be speaking on a panel about building a brand & content strategy!

A pre-teen made $400K in two months by selling NFTs.

How much has YouTube paid out to creators over the past few years?

Interested in network effects? Andrew Chen’s The Cold Start Problem is now available for preorder!

Olivia wrote this week about the “TikTok spike” - a new phenomenon where early stage startups suddenly see explosive user growth thanks to TikTok. It’s (fairly) easy to get hundreds of thousands, or even millions, of views on TikTok with a video demoing your app - even if you have no followers. But if these viewers convert to downloads, you might actually have a big problem!

Why? Many of these users likely won’t retain, and they’ll make your metrics look bad. There’s a reason startups take a targeted approach to onboarding early users - they want people who are highly engaged, which means that the content and community need to be relevant to them. To achieve this, many startups initially focus on a certain demo (by age, location, interests, etc). FB starting at specific colleges is a perfect example of this!

But if you have a video go viral on TikTok, it will reach millions of people. It’s almost inevitable that some of them won’t be a good fit, and they’ll churn. This can make it hard to fundraise. Investors want to see that: (1) your user base is consistently growing (not just a one-time spike), and (2) you’re able to retain these users.

This isn’t an entirely new problem - something similar can happen to startups that launch on ProductHunt, get a TechCrunch feature, or have a successful Kickstarter campaign. But this is particularly true on TikTok given how large the audience is and how fast videos spread!

Have you ever downloaded an app after seeing it on TikTok?

👍 Yes, I do this a lot!

🤷‍♀️ Probably once or twice

❌ No, I’ve never done this

😵 I don’t watch TikTok

jobs 🎓

On Deck - Program Director Recruiter (Remote)

Coinbase - Ventures/Ecosystem Associate (Remote)*

Contrary - Head of Growth (Remote)*

FreeWill - Partner Success Specialist (Remote, NYC)

JLL Spark - Investment Associate (SF)

B Capital Group - Pre-MBA Associate, Healthcare Team (SF)

The David and Lucile Packard Foundation - Investment Analyst (Los Altos)

OMERS Ventures - Associate (Palo Alto)*

Book of the Month - Associate Product Manager (NYC)

Hometap - Associate Product Manager (Boston)

*Requires 3+ years of experience.

internships 📝

Contrary Capital is now recruiting Venture Partners for the 2021-2022 academic year - applications are due 9/17.

Gridwise - PM Intern (Remote)

Brex - Summer 2022 Ops Rotational Intern (Remote)

Pepper - Marketing Intern (Remote)

Robinhood - Talent Brand, Market Ops Interns (Menlo Park)

Bytedance - Innovation Product Design Intern (Mountain View)

Pearpop - Digital Strategy Intern (LA)

Anthos Capital - Summer 2022 Consumer Trends Intern (Santa Monica)

FIGS - Social Media Intern (Santa Monica)

Capsule - Growth Intern (Atlanta)

Afterpay - Sales Intern (NYC)

puppy of the week 🐶

Meet Tokio, a one-year-old Chow Chow who lives in Madrid.

Tokio enjoys playing in the water, showing visitors around Madrid, and avoiding the heat as much as possible (relatable!)

Follow him on Instagram @soyunchow!

Hi! 👋 I’m Justine Moore, an early stage consumer & SMB investor. I’m currently Head of GTM at Canal. Thanks for reading Accelerated. I’d love your feedback - feel free to tweet me @venturetwins.