HorsePlayAndrew Update Oct 2021

HorsePlayAndrew · November 3, 2021, 1:11am

Summary

October, although a quiet month for company news, it was exciting with the market getting back to its usual bullish ways. The portfolio hit 83% mid month before taking a breather. I must say there have been some brilliant posts this month on the board, keep it up guys!

My background

Entrepreneur, ex-founder of SaaS & marketplace business, exited, now founder of horseplay.ventures, angel investing & building other startups. Normally live & work in London but currently residing in Bali, Indonesia.

See further details here. https://discussion.fool.com/horseplayandrew-update-nov-2020-from…

Performance

YTD >75%
2020 > 209%

January > 29%
February > 23%
March > 1.7%
April > -6%
May > 11%
June >21%
July >15%
August >51%
September >61%
October >75%

Oct 2021 Portfolio

Upstart - 37.9%
Fubo - 11.0%
Datadog - 10.4%
Affirm - 10.3%
Monday - 9.9%
Sea - 7.9%
DigitalOcean - 6.8%
Zoominfo - 5.8%

SOLD

Crowdstrike I let go of the rest of my position. I couldn’t resist after hitting ATH’s again. I am open minded to get back in if Q3 surprises us with a fightback.

BUYS

I topped up Upstart, Fubo and Monday.com

My companies

Upstart Lots of great bank customer sign ups again this month. When the price dipped to $315 I put my cash to work despite a chunky portfolio size already because I think they’ll do close to 1b in revenue in 2021. They are also busy working on the auto market, a reminder, 8x the size of the personal loans market they are currently expertly executing in.

https://twitter.com/akhentravel/status/1454103466754908177?t…

Highest conviction, great momentum, great founders, eagerly awaiting November 9th.

Fubo I decided with the price hovering around the $25 mark that I’d build up this position. They have so much momentum going into Q3/Q4. Subscriber numbers look very strong on apptopia, the sportsbook is about to launch and advertising revenue should continue to grow QOQ. As I’ve said many times, this isn’t for the faint of heart, high risk high return play.

Datadog Awaiting Q3 earnings. I must admit I’m a little cautious with what we are seeing with a lot of our companies when they hit the 60-100b range. Will stable 60% growth be enough or will they need to keep accelerating? The advantage they have ahead of CRWD is the space, cloud services and their alignment to the continued growth of AWS et al, vs security and the potential for hacks.

Affirm When Saul doesn’t like a stock then you really find yourself questioning your conviction… but I believe enough to keep holding for now. They have the biggest merchants in the world as partners, BNPL is clearly a significant new consumer trend, and I can’t see many better positioned. This is a company that I am prepared to cut fast if required, but I’m holding to see what earnings and estimates bring us with the holiday season just around the corner.

Monday.com I used some of my cash to increase this position. Lots has been said on the board, I’m a believer in the new category of work OS, don’t just look at this as a project management software. This is a great post by Chang88 that smartly highlights what MNDY is going after and their TAM. https://discussion.fool.com/jck101-i-own-monday-stock-but-i-hone…

Sea Continued expansion into Europe, and some amazing stats coming out. Shoppee is downloaded globally more than mega apps like Twitter and Pinterest. Free fire the number 3 most downloaded game globally. Free fire continues to be their AWS, the cash cow feeding the e-commerce empire, spreading out from SE Asia. I continue to hold and be humbly impressed with their founder Forest Li.

Zoominfo As I am posting late I will include their Q3 earnings. I really liked the report. In particularly the enterprise growth which the CEO keeps mentioning is very early days. Enterprise customers with ACV over $100k is growing at 74% now, up from 69%, so its ahead of the revenue as revenue lags sign ups, so a great sign for future revenue growth accelerating. ZI are a candidate to top up because they are still a little under the radar yet the metrics are moving beautifully in the right direction, with a TAM that is still very under penetrated. By the way, I can’t remember who posted it but totally agree with the board member who listed having “zoom” in the name as one of the reasons it’s a little unloved. It put me off for almost a year even looking at it, but I am glad I finally dived in.

DigitalOcean I’m really looking forward to earnings. Hopefully they can add more colour to the recent acquisition, Nimbella, but more importantly, will revenue continue to accelerate? Expect fireworks if they can hit 40% for the first time. A reminder that the tailwinds here couldn’t be stronger. We have seen what has just happened to Cloudflare, the cloud services space is red hot, and if a company can show they are also aboard the big kahuna wave that Azure, AWS and GCP, then they are going to be rewarded with a very high multiple as there are years and years of growth ahead. But DOCN is still a tiddler and needs hypergrowth for the share price to really go some from here so I will be watching closely. What I would like to see in earnings:

Continued QOQ growth of all key metrics, revenue, NRR, customers
Evidence that they can get their NRR into the SaaS big league, currently 113%…
ARPU - still tiny, $58, the theory is that their start up customers will scale up, taking DOCN with them… this metric needs to move north pretty fast.

Watch List

Cloudflare - Saul keeps tempting me here
Asana - I might get back on this horse, depends how they stack up vs MNDY this earnings
Global-e - sitting on the sideline for now
dlocal - monitoring, high risk and a few red flags here
Amplitude - looking to deep dive asap

Previous updates

Thank you for getting this far, as always, very grateful to the amazing work and research that is shared on Sauls board.

Andrew