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IBM Mainframes Grew Faster Then AWS in Q4
Plus a TikToker's Spotify playlist becomes a music label, JOKR raises a Series C, and data on how long it took startups to raise in 2022
Hello, and welcome back to this Friday edition of The Split!
I'm not making this up - IBM's mainframe business grew faster than Amazon's AWS in Q4. I don't follow IBM closely enough to know exactly why this is happening. I have my theories below, but if anyone has the inside scoop, please tell us why!
A TikToker is converting his Spotify playlist into a music label, Banana portfolio company JOKR raises a Series C, and data from Carta shows us just how much the time between a startups subsequent rounds of venture funding increased in 2022.
Also as a reminder, I decreased the number of referrals needed to get a banana cap from 10 to 5 until Friday, Feb 3rd at 11:59pm ET. This means I'll send a cap to everyone with 5 or more referrals by tonight (even if you already passed it awhile back). If you've been enjoying The Split, grab your unique referral link at the bottom of this email and send it to a couple friends! (I unfortunately can only ship within the US for now. I'll work on figuring out international shipping soon.)
🚀 Product Launches
TikToker Ari Elkins Starts a Music Label: Its not surprising to me that this is happening, but I am surprised that it took this long. TikTok has been driving culture for years, specifically in music, and in a meaningful way as early as 2019 when Lil Nas X rode TikTok to the top of the charts. Ari grew to 2 million followers on TikTok by curating and sharing his weekly Spotify playlist, Fresh Fridays. TikTok has reportedly been working on figuring out its own label for years, and I'm interested to see how this one (Blue Suede Records) pans out.
🔗 Links and Charts
JOKR Closes $50m Series C at $1.3 Billion Valuation: One of our Seed investments at Banana Capital, JOKR announced its doubling down on Brazil with the latest round. It disclosed positive gross profit earlier in 2022 (which means it doesn't lose money on each order), and expects to reach full profitability by Q1 of 2024.
Time Between Venture Rounds is Increasing: New data from Carta shows the average time between venture rounds is higher than at any point since 2017.
Median times to raise in Q4 across the following milestones:
Seed to Series A: 798 days, or 2.2 years
Series A to B: Over 2 years
Series B to C: Just under 2 years
The time to raise the next round is increasing across the board, and this data only include rounds that actually get done. There are plenty of founders raising that don't get to the finish line, which masks just how difficult startup fundraising was in 2022. By the end of 2023, I'd expect these time periods to be even longer. (and I do think all of this is healthy!)
Thanks to Peter Walker at Carta for sharing!
78% of babies in Finland sleep in cardboard boxes: The Finnish government reportedly gives all new parents the option of either a cardboard box of baby supplies or a cash grant. 95% of parents choose the box, which is worth more than the cash grant. Selecting the box also requires early and consistent physician visits throughout the pregnancy, which has led to very low infant mortality rates in Finland.
LAFC Becomes First US Soccer Team Worth $1 Billion: The MLS Club reported $8 million in operating profits on $116 million in revenue last season. The team just signed a 10-year, $100 million stadium naming rights deal with BMO, which would essentially 2x its profitability from last season. The MLS also just signed a 10-year, $2.5 billion deal with Apple TV+, which is roughly $8.9 million per year spread evenly among all 29 teams. Average MLS valuations are up 85% from 2019, and they're probably headed higher if the MLS signs more streaming deals.
Secondhand Clothes are 70x More Sustainable: 62% of used clothing ends up in landfills or is incinerated. Buying secondhand saves an average of 3kg of CO2 for each high/medium quality article of clothing.
IBM's Mainframe Business is Growing Faster than AWS: Finally, I can't believe I'm typing this, but in Q4 IBM's Infrastructure business grew 32% over Q3, compared to Amazon's AWS at 4%. Specifically inside this segment, its "Z System" mainframe business grew 16%. Its admittedly working on a much smaller base, but IBM added $1.1 billion in infrastructure revenue in Q4 compared to $900 million for Amazon's AWS.
My hunch is this is because AWS usage skews towards startups and tech companies more broadly, all of which are disproportionately focused on cost cutting compared to the rest of the economy. Still, its an unbelievable soundbite to share at your next networking happy hour.
📚 Long Reads
Duolingo's Social Media Strategy: Zaria Parvez, who spearheads arguably the most successful corporate account on TikTok, shares what's made Duolingo's account so successful: authenticity.
California Passes Statewide Zoning Reform: The Builder's Remedy is part of California's Housing Accountability Act passed in 1990. According to the Builder's Remedy, a developer can propose a housing project of any height, density, and parking capacity in any city, regardless of existing zoning and land use codes. It's automatically approved as long as a certain percentage of the new units are deemed "affordable" and it doesn't present clear danger to public health or safety.
Historically, this hasn't really been enforced, especially because no one was incentivized to do so. But a new law (Senate Bill 828) passed a few years ago has forced more adoption of various housing regulations. If this starts happening en masse, it could be a big deal for rent and housing prices in SF and LA. And it will be interesting to see if other states follow California's lead.
How to Raise a Venture Capital Fund (Part 1): If you're getting up to speed on venture capital and want an inside look, this was a good listen from Harry on how he approaches fundraising and his lessons learned.
💼 Career Services
This is also your daily reminder to check out the Banana Talent Collective. We just added 10 new candidates on Sunday, with another 11 lined up for the next drop on Feb 12th.
If you're starting to explore a new startup role and want to passively get in front of hiring managers in the Banana Cap portfolio and my broader network, apply here.
If you're hiring and want a curated feed of pre-vetted candidates every two weeks, get started here. (And a reminder that if you're at a Banana portfolio company, reach out for access).
🍌 Monkey Business
This "re-designing products with an unhinged feature" meme has been sending me all week.
❤️ Reader Love
Thanks to Josh and Dan for the Twitter shout out's on Wednesday! They both hit 5 referrals shortly after, and I'll be sending them + everyone else with enough referrals an email on Saturday to grab their banana cap.
🤝 Interested in a sponsor partnership with The Split? Inquire here.