We dive deep into our sectors. Our research drives our insights and thesis-driven approach.

We launched the insurance index last quarter to help investors keep tabs on trends and valuations in the insurance ecosystem. With Q2 now (somehow already) behind us, we’re back to report on performance over the past quarter and the first half of the year.

Today, we’re publishing the last of Equal’s Product Owner perspectives on retail, a sector that makes up almost 20% of U.S. GDP (see previous posts on supply chain, insurance, and climate). Despite a massive TAM, the sector’s structurally low margins suggest that not only is getting to economies of scale critical, but also investment into technology is limited. These dynamics set the stage for the current state of investing within retail:

Our Prepared Mind philosophy at Equal has always been interdisciplinary — we believe strongly in seeking out perspectives across asset classes and stakeholders. And in an industry like climate, that’s been especially critical. We’ve written at length over the past few months about the need to learn from the past, from those who were in climate before it was cool, to do our best to avoid the missteps of CleanTech 1.0. We believe doing so requires collaboration and learning across industry, innovators and investors to bring these stakeholders together for a universal framework for digital transformation. While this means talking to other early stage investors, it also means talking to infrastructure funds, to field management teams at utilities, to finance teams at developers, and to equity research teams at some of the world’s biggest financial institutions. These conversations are the foundation of the Prepared Mind that we bring to the climate arena and the networks we bring to our companies.

As long as I’ve been an investor, VCs have leaned on revenue multiples to justify valuations. These multiples have gone up and down over the years, but have been the cornerstone of setting valuations in the tech world. Unfortunately, these multiples have proven themselves to be useless in properly determining the true long-term value of businesses, and I think it’s high time to do away with them.

As part of Equal’s AGM this year, the Equal Product Owners did mini deep dives into the current investment landscape of our various sectors (see Adam’s great post on insurance and Simran’s on climate). Today, it’s my turn to share our thoughts on a sector that came en vogue in a major way in the last few years — supply chain & logistics: