These companies could dominate their markets, says a16z

Silicon Valley oracle Andreessen Horowitz on Thursday has published its annual ranking of the fastest growing consumer-facing marketplace startups, which ranked 100 private companies on metrics including revenue from credit card purchases and app and website traffic.

For the second year in a row, grocery delivery service Instacart took first place on the list — by a wide margin, accounting for 64.2% of the gross merchandise value of the entire list. Video game developer Valve, which created the popular gaming platform Steam, took second place and online ticketing company Seat Geek took third place, followed by ride-sharing service Turo and sneaker retailer StockX. (Previous companies on the list that have gone public include Airbnb, DoorDash, and Coursera.)

Instacart, with its massive stake in the startup fortune, presents an interesting case study. Only two other grocery companies made the top 100, both in the bottom half, and both with 0.1% or less of Instacart’s operations. Grocery tends to be a winner-takes-all category, notes a16z. Product suppliers find it difficult to work with multiple vendors given transportation and inventory logistics, which means most serve only a few stores at a time. Meanwhile, a few large grocers typically supply the vast majority of the goods consumers demand. While that hasn’t stopped food delivery startups like Gopuff, Getir, and Gorillas from popping up, it may also explain why so many have failed (see: BuyK, Fridge No More).

What other industries could become winner-takes-all arenas? According to the company, there were seven categories, each with only one company in the top 100. These were:

  • Zola (Wedding)
  • Industrial fair (Wholesale)
  • Raising (discounts)
  • ease (Cannabis)
  • miniature (Celebrity Engagement)
  • Artists (Music)
  • AptDeco (Furniture)

It’s possible that one of these companies could become the next unicorn in its category – especially for emerging areas like cannabis, which is slowly being legalized across the country; and celebrity engagement, with cameo starting a new trend during the pandemic.

However, it’s also worth noting that others may be joining a busy market with established public companies, as a16z notes – and many of these markets lack major barriers to entry that make groceries so challenging. These companies could dominate their markets, says a16z


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