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The pandemic effect is slowing

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Our work this week kicked off in China, dug into African startup activity, dealt with China once again, took a very deep dive into the Latin American startup ecosystem and wrapped with a second look at the Robinhood IPO. In other words, not much was really going on at all!
You may have been surprised to see Amazon’s stock fall off a cliff Friday. After all, the company posted huge revenue gains to just over $113 billion during the quarter. And AWS, its public cloud business, seemed to tick along nicely.
But investors had expected more growth and had priced the Seattle-based e-commerce player accordingly. When Amazon missed revenue expectations and projected Q3 2021 growth of “between 10% and 16% compared with third quarter 2020,” investors let go of its stock.
But as some in the financial press are noting, it’s not just Amazon that’s taking stick from investors. Etsy and eBay also fell this week. It appears that investors are anticipating that a period of turbocharged growth in e-commerce thanks to the COVID-19 pandemic is slowing at least, and may in fact be over. That means valuations are going to get reset at a host of companies, startups included.
Not that every company slowing down after the pandemic’s early phases is suffering, Duolingo managed a strong opening week as a public company despite slowing growth. But delta variant or not, the investing classes are changing their market framing. We’d be smart to keep that in mind.

It’s the products, stupid


Something that is stuck in my teeth this week is how much Robinhood has changed the game regarding consumer investing. Sure, this week was mostly about the company’s IPO and its somewhat relaxed early trading performance. But, buried in its final S-1/A filings is new evidence of Robinhood’s cultural impact.
At the top of the U.S. consumer investing unicorn’s filings is a pair of statistics. They look like this:
The pandemic effect is slowing
Image Credits: Robinhood
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