Dan Primack, the partner in charge of the Mercato Partners Traverse Fund, has a lot to say about the future of venture capital. He says that it is important to adopt a data-driven approach to analytics. And he says that Mercato Partners will be expanding its operations to 30 cities by the end of this year.
Dan Primack on the future of venture capital
As a business editor at Axios, Dan Primack covers the intersection of tech and business. His reporting includes mergers and acquisitions, as well as private equity deals. He is a former senior editor at Fortune and Reuters.
While IPOs are at a 32-year low, total venture capital dollars have reached a decade high. Competition for deals is intense. Venture investors use human judgment, and oftentimes their own biases affect the final decision.
In order to succeed, tech startups need to generate revenue. They will have to be more conservative with their expenses. This means they will have to raise more capital in the private market before going public.
Larger VCs are seeking out nonprofit organizations and endowments as backers. But they are also competing with new entrants.
Expanding to 30 cities by the end of this year
Axios, a leading US news publication, is about to expand its business beyond local news to thirty cities by the end of this year. It will also launch a tech policy newsletter. But, the growth is coming from a different direction than many expected.
Axios is in a different business landscape than other news startups. Axios has built a strong relationship with its subscribers. In fact, it has more than a million subscribers in 24 major metropolitan markets. The company has a large amount of cash on hand. As it continues to grow, subscription revenue will be a key measurement.
Axios is looking to build a higher-end subscription business in 2019. By the end of 2021, the company anticipates having more than 600,000 subscribers.
Targeting elite audiences with brand awareness messaging
Axios, the media company, recently swooped into town announcing their plans to put a dent in the local media space and a well funded round of venture capital to boot. The company has a healthy suite of advertisers to speak of and they aren’t about to be shortchanged. With more than one million subscribers in 24 of the nation’s largest metropolitan areas, they are looking to hit the ground running. They are well on their way to achieving that lofty goal and are already on track to meet or exceed their quota for the year. In addition to their paid subscriptions, Axios offers display banners for brands of all sizes on their ad network. As a bonus, you can opt to pay to play and get your brand o-san in the good graces of the likes of Axios in the process.
Mercato Partners’ Traverse Fund
Mercato Partners’ Traverse Fund is one of the leading growth managers in the US. With 14 years of performance exceeding both public and private return benchmarks, it is ranked the fifth best growth equity manager in the world by Preqin. The firm invests in high-growth consumer branded companies in undersourced or undercapitalized geographies. Its investment strategy supports growth strategies with genuine post-investment value-add.
The firm’s portfolio companies include Cradlepoint, Venafi, Klover, and Galileo Financial Technologies. Mercato was an early investor in Cradlepoint, which was acquired by Ericsson for $1.1 billion. Central Logic, which Mercato invested in, was acquired by Rubicon Technology Partners.
Another Mercato Partner’s Traverse Fund portfolio company, Klover, raised $60 million in Series A funding. The company, based in Chicago, offers a free app for digital cash advances. As its user base grows, it plans to expand its services and engineering team.
Adopting a data-driven approach to analytics
Creating a data-driven culture requires a lot of effort and commitment. But as you begin to measure the success of your initiatives, you’ll find that it pays off. A data-driven organization is more able to implement new strategies, scale, and respond quickly to changes in the marketplace.
One of the most important reasons to adopt a data-driven approach is the fact that you have the tools you need to know if your strategy is delivering the results you expect. You’ll also be able to verify that you’ve made the right choices.
If your company isn’t yet a data-driven organization, it may be tempted to rely on intuition or the hunches of its staff. These types of decisions, while they might be useful for making small choices, can be risky in high-stakes decisions at large companies.