This week, Union Square Ventures, which describes itself as a "thesis-driven venture capital firm," announced a new $162 million Climate Fund. The thesis for this fund is pretty simple. They want to invest in companies that either provide mitigation for or adaption to the climate crisis. The thinking behind this approach is as follows. They want to invest in companies that directly attack the causes of climate change (mitigation), but they are also recognizing that the climate crisis is not some distant thing. It's already here, which is why it's important to also focus on companies that are dealing with the consequences of it (adaptation).
One of their first investments is in a company called Leap. What Leap does is provide the connective (software) tissue between local energy devices/applications and the broader energy markets. For example, let's say you have a Leap-enabled smart thermostat. If the grid is in need of power, it might automatically reduce your local energy consumption so as to help with load balancing on the broader network. In exchange for this, you would earn money for your contributions. In effect, Leap acts as a kind of virtual power plant.
Why does this matter? Well, it matters because two important things seem to be happening with energy production: (1) It's moving toward renewables and (2) production and storage are both decentralizing. Assuming this trend continues, there will be an increasing need for software to help manage energy consumption, production, load balancing, the broader energy markets, and so on. That's where companies like Leap come in. It's also why many are arguing that Tesla is so valuable. More than an EV company, it is creating a new decentralized renewable energy network through its car batteries, powerwalls, and solar panels.
That does sound valuable.
Photo by Jason Blackeye on Unsplash
There are a number of home equity startups in the marketplace today.
A few years ago I wrote about an alternative product to HELOCs or home equity loans, called Point. And earlier this year, I wrote about a startup, called Landed, that is helping "essential professionals," such as teachers, with their down payments. They'll contribute up to 10% of the value of a home in exchange for a share in any future gains, or losses.
Today, another startup in the space -- Patch Homes -- announced a $5mm Series A round. From what I can tell, it appears to be similar to Point in that it involves the fractional sale of home equity. Though, to be clear, the model is distinct from the fractional homeownership that is popular in many high demand vacation destinations. Here's a bit more on how the product works (source):
The Patch model enables homeowners to “tap into” their home equity by selling 20–40% to Patch’s affiliate, Patch Capital, which shares in both the upside and downside. The homeowner remains in control of her or his home for the life of the relationship and exits via a sale or refinances in 7–10 years.
While this product is not for all homeowners, it provides a new and important financing option. The Fed estimates that home equity ownership in the US is $15 Trillion. It makes no sense that the only financing options are additional debt or a complete sale of the property. Patch gives homeowners the option to de-lever their personal balance sheet or otherwise raise cash. Clients have used Patch proceeds for numerous reasons, the most popular of which are to pay off debt, increase liquid savings and finance home improvements.
I am not surprised to see this gaining momentum. The biggest benefit is that it gives you partial liquidity (i.e. cash up to $250,000), without having to sell your property or take on additional debt service payments. It's equity, not debt. Fred Wilson, an investor in the company, calls it fractionalizing home equity.
Earlier this week, Union Square Ventures announced that it was leading a Series A investment in an online education marketplace targeted at K-12 students. The platform is called Outschool, and you can think of it as a form of homeschooling.
Today, there about 55 million K-12 students in the US, with around 9% enrolled in private schools. Charter schooling is on the rise (somewhere around 3 million students), but so is homeschooling (similarly around 2.5 million students). Data here.
Homeschooling, at least in the US, largely started within religious groups. But that is starting to change and it is becoming more widely adopted. USV has made a bet that this trend will continue.
If you look at Outschool's model, you'll see that it shares a lot of similarities with other successful internet marketplaces. It is direct-to-consumer (the internet has a way of getting rid of intermediaries). The courses are significantly cheaper than traditional classroom schooling ($10-15 per course). And the supply-side of the marketplace (the teachers) is far more open and accessible to non-traditional participants.
USV gives the example of a human rights lawyer who is teaching on the platform and now earning more than $10,000 per month in additional income. I've never enjoyed online classes, but now that we have reliable video chat, maybe that starts to change.
In any event, where my mind goes with all of this is the impact on our built environment. We are heading toward more flexible spaces and we are doing a lot more from home.
This week, Union Square Ventures, which describes itself as a "thesis-driven venture capital firm," announced a new $162 million Climate Fund. The thesis for this fund is pretty simple. They want to invest in companies that either provide mitigation for or adaption to the climate crisis. The thinking behind this approach is as follows. They want to invest in companies that directly attack the causes of climate change (mitigation), but they are also recognizing that the climate crisis is not some distant thing. It's already here, which is why it's important to also focus on companies that are dealing with the consequences of it (adaptation).
One of their first investments is in a company called Leap. What Leap does is provide the connective (software) tissue between local energy devices/applications and the broader energy markets. For example, let's say you have a Leap-enabled smart thermostat. If the grid is in need of power, it might automatically reduce your local energy consumption so as to help with load balancing on the broader network. In exchange for this, you would earn money for your contributions. In effect, Leap acts as a kind of virtual power plant.
Why does this matter? Well, it matters because two important things seem to be happening with energy production: (1) It's moving toward renewables and (2) production and storage are both decentralizing. Assuming this trend continues, there will be an increasing need for software to help manage energy consumption, production, load balancing, the broader energy markets, and so on. That's where companies like Leap come in. It's also why many are arguing that Tesla is so valuable. More than an EV company, it is creating a new decentralized renewable energy network through its car batteries, powerwalls, and solar panels.
That does sound valuable.
Photo by Jason Blackeye on Unsplash
There are a number of home equity startups in the marketplace today.
A few years ago I wrote about an alternative product to HELOCs or home equity loans, called Point. And earlier this year, I wrote about a startup, called Landed, that is helping "essential professionals," such as teachers, with their down payments. They'll contribute up to 10% of the value of a home in exchange for a share in any future gains, or losses.
Today, another startup in the space -- Patch Homes -- announced a $5mm Series A round. From what I can tell, it appears to be similar to Point in that it involves the fractional sale of home equity. Though, to be clear, the model is distinct from the fractional homeownership that is popular in many high demand vacation destinations. Here's a bit more on how the product works (source):
The Patch model enables homeowners to “tap into” their home equity by selling 20–40% to Patch’s affiliate, Patch Capital, which shares in both the upside and downside. The homeowner remains in control of her or his home for the life of the relationship and exits via a sale or refinances in 7–10 years.
While this product is not for all homeowners, it provides a new and important financing option. The Fed estimates that home equity ownership in the US is $15 Trillion. It makes no sense that the only financing options are additional debt or a complete sale of the property. Patch gives homeowners the option to de-lever their personal balance sheet or otherwise raise cash. Clients have used Patch proceeds for numerous reasons, the most popular of which are to pay off debt, increase liquid savings and finance home improvements.
I am not surprised to see this gaining momentum. The biggest benefit is that it gives you partial liquidity (i.e. cash up to $250,000), without having to sell your property or take on additional debt service payments. It's equity, not debt. Fred Wilson, an investor in the company, calls it fractionalizing home equity.
Earlier this week, Union Square Ventures announced that it was leading a Series A investment in an online education marketplace targeted at K-12 students. The platform is called Outschool, and you can think of it as a form of homeschooling.
Today, there about 55 million K-12 students in the US, with around 9% enrolled in private schools. Charter schooling is on the rise (somewhere around 3 million students), but so is homeschooling (similarly around 2.5 million students). Data here.
Homeschooling, at least in the US, largely started within religious groups. But that is starting to change and it is becoming more widely adopted. USV has made a bet that this trend will continue.
If you look at Outschool's model, you'll see that it shares a lot of similarities with other successful internet marketplaces. It is direct-to-consumer (the internet has a way of getting rid of intermediaries). The courses are significantly cheaper than traditional classroom schooling ($10-15 per course). And the supply-side of the marketplace (the teachers) is far more open and accessible to non-traditional participants.
USV gives the example of a human rights lawyer who is teaching on the platform and now earning more than $10,000 per month in additional income. I've never enjoyed online classes, but now that we have reliable video chat, maybe that starts to change.
In any event, where my mind goes with all of this is the impact on our built environment. We are heading toward more flexible spaces and we are doing a lot more from home.
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