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Contrary Research Rundown #22: Renewed interest in defense tech, and new memos on Calendly, Instacart and more

Published over 1 year ago • 5 min read

The Research Rundown

American military and intelligence officials have been trying to make sense of three unidentified objects over Alaska, Canada, and Michigan that U.S. fighter jets shot down with missiles on Friday, Saturday, and Sunday last week. In light of the Chinese spy balloon that a US fighter jet shot down off the coast of South Carolina on February 4th, the federal government has become hyper vigilant in flagging floating unidentified objects that might previously have been allowed to pass. The UFO news and the war in Ukraine have put national security and defense top of mind for many in the startup ecosystem.

After years of shunning investments in military and national security-related technology startups, VCs have increased their activity in the sector to help American government initiatives gain the upper hand against new threats from geopolitical adversaries like China and Russia.

More investors are starting to invest in companies whose satellites, drones, robotics, and software can do double duty as military and commercial dual-use technologies. From January to October last year, VCs poured $7 billion into aerospace and defense companies, a massive growth that contrasts sharply with the slowdown in other sectors.

Several defense and space startups are now involved with the American military and intelligence. Since they first started arriving in Ukraine last spring, the Starlink satellite internet terminals made by Elon Musk’s SpaceX have been a vital source of communication for Ukraine’s military, allowing it to fight and stay connected even as cellular phone and internet networks have been destroyed in its war with Russia. Check out our memo on SpaceX.

Hadrian is building factories to accelerate the pace of American manufacturing by delivering parts in less time and on time. Check out our memo on Hadrian to learn more about how it manufactures precision components for aerospace and defense technology companies.

Anduril Industries won its largest contract this year, a $1 billion contract with Special Operations Command, in a victory highlighting nontraditional startup contractors’ potential in a military contracting system dominated by massive corporations. Check out our memo on Andruil.*

Additionally, several large US defense contractors have recently formed or expanded venture capital arms to invest in startups whose technology could have military applications. Investors are responding to the Department of Defense’s calls for the defense industry to develop new technologies to help the United States counter growing threats globally. It is an interesting time to be building technologies in close partnership with the military and intelligence agencies.

Light Memos

Instacart is the leading on-demand grocery delivery company in the US offering a marketplace that allows customers to browse a wide selection of products from local grocery stores, place their orders, and have them delivered to their doorstep. To learn more, read our full memo here.

Chargebee offers a suite of products designed to support the spectrum of recurring revenue management, enabling subscription businesses to capture, retain and maximize revenue opportunities. To learn more, read our full memo here.

Gong is a revenue intelligence platform that captures and analyzes a company’s customer interactions to generate insights that increase revenue, reduce churn, and drive productivity. To learn more, read our full memo here.

Shopmonkey is an auto repair software management platform that simplifies the business's complexities, from appointments, billing, and payments to ordering and inventory management. To learn more, read our full memo here.

Excessive emails, scheduling challenges, and suboptimal meeting timing decrease productivity in the workplace. Calendly is an automation platform that allows users to schedule meetings easily. To learn more, read our full memo here.

Company Stories We're Reading

  • Zoox, the self-driving startup owned by Amazon, carried passengers in its fully autonomous vehicle on public roads for the first time.

  • Walmart plans to close 3 of its US tech hubs, requiring hundreds of workers to relocate to keep their jobs. It will also require all its technology workers to come to the office at least twice a week.

  • Neeva, the search engine startup, expanded its AI search tool NeevaAI, which provides real-time info with citations, to logged-in users in Europe and Canada after a US launch.

  • Apple’s slate of new financial services like buy now, pay later, savings account, and an iPhone subscription program has hit delays.

  • Worldcoin, OpenAI’s Sam Altman’s eyeball-scanning crypto project slated to launch in a few months, is seeking to raise up to $120 million at a valuation of $3 billion.

  • Shopify announced 100+ product enhancements, including updates to the Shop app, a new one-page Checkout, and Fulfillment Network upgrades.

  • Outside of Silicon Valley, companies across corporate America are continuing digital spending and keeping up the engineering hiring pace.

  • Pico, owned by TikTok owner ByteDance, has increased shipments of VR headsets as it attempts to compete with Meta’s Quest 2 and is increasing its market share.

  • The venture firm CRV published a framework for how to think through the product philosophy and business care for vertical SaaS startups

  • An essay on the common pitfalls that early-stage digital health startups fall into and advice on how to avoid them.

  • As more platforms roll out generative AI products, The Platformer has published an overview of the big burning questions facing the AI movement across IP, abuse, trustworthiness, etc.

  • GitHub’s enterprise AI code completion tool Copilot for Business hits general availability after the beta launch in December 2022, available for $19 per month.

  • Brazilian neobank Nubank reports Q4 revenue up 128% YoY to $1.45B and a $58M net income, up from a $66.1M net loss YoY, saying it ended 2022 with 74.6M users.

  • Verge’s Nilay Patel did an interview with Mozilla CEO Mitchell Baker on the company’s history, battling Microsoft, working with rivals, generative AI, iOS, Chrome, Mastodon, and more.

  • Increased competition, government incentives, and falling prices for lithium and other battery materials are making electric vehicles more affordable. For more on battery components, you can read our memo on KoBold Metals, and a broader deep dive on battery tech.

  • In recent months, the US Department of Justice ramped up work on a potential antitrust complaint into whether Apple has iOS monopoly power and favors its own products.

  • An interview with TikTok CEO Shou Zi Chew as he works to persuade US lawmakers that the app is not a national security threat, calling suspicions “misinformed.”

  • An overview of frameworks to think through valuations of various sub-categories like insurance, payments, infrastructure, banking, and wealth management within fintech.

  • Deel released their first full-year report covering what countries hired globally, who got hired for what roles, and how the economic climate impacted terminations and salaries in 2022.

  • YouTube CEO Susan Wojcicki, Google’s 16th employee, plans to step down after nine years and will be replaced by Neal Mohan as SVP and head of YouTube.

  • OpenAI plans to improve ChatGPT’s behavior to reduce biases, allow more user customization, and get more public input into decision-making about system defaults.

  • TikTok announces TikTok Trivia, a live-streamed trivia quiz with a $500K prize pool open to US users aged 18 and older.

  • Meta launches Instagram Channels, a broadcast chat feature that lets creators share one-to-many text, images, and more with their followers.

*Disclosure: Anduril is a portfolio company of Contrary

Thank you for your support. Have a great weekend!

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