Fifteen years ago, I was starting my first real job as an analyst at Morgan Stanley in London. With the audacity of youth, I dashed off an email to John Mack, the company’s CEO, and requested a meeting. John Mack was already a legend in the world of finance. I was a low-level newbie.
To my shock and delight, he responded. John said he’d be in London in a couple of weeks and that we should have lunch. From then on he became an important mentor to me.
Even at the age of 21 I understood the power of professional networking. Today, I realize how incredibly lucky I was to make that connection. And that’s why I am so excited to announce our Series A round investment in Lunchclub, the next-generation networking platform.
The right platform at the right time.
The beauty of Lunchclub is its simplicity. You sign up and tell the service a little bit about who you are and the kinds of people you’re hoping to meet. Lunchclub does the rest, using AI to identify appropriate matches and set up meetings.
But Lunchclub is about more than finding your next job. It helps entrepreneurs seek out investors, startup founders find cofounders, and growing companies locate talent. It’s also about mentoring others, brainstorming with peers, and just meeting interesting people. In other words, networking.
The company was already growing steadily before the global pandemic as a way to arrange in-person meetings. When COVID-19 made IRL meetings impossible, Lunchclub added video meetings to its toolkit. That’s when it really accelerated.
It was exactly the platform people needed at a very critical time. At Lightspeed we believe that virtual meetings, conferences, and other remote events will be an essential part of how we conduct business moving forward. And the habits we’re building now will continue to be sticky long after this pandemic has passed.
Creating communities.
What makes Lunchclub different than LinkedIn, MeetUp, or Bumble Bizz, is the extremely sophisticated AI that lives at the heart of the service.
Just the other week, Lunchclub scheduled me to meet with a female founder who was a total stranger. Once we got to talking, we discovered that not only were we both born in England, we grew up in the same village and went to the same very small high school, one year apart — a fact not contained in either of our Lunchclub profiles. It’s as if the algorithms know us better than we know ourselves.
And that’s the whole idea. The brilliance of the AI is no accident. Lunchclub’s co-founders, Vladimir Novakovski and Scott Wu, are two of the brightest humans I’ve ever met. They’re both math geniuses (and humble about it) with extensive backgrounds in machine learning. It’s a well-worn cliche that in Silicon Valley we invest in people, not companies, but this is one case where it truly fits.
There are other reasons why Lunchclub aligns so well with Lightspeed’s investment philosophy.
* It’s growing organically by leaps and bounds. Despite spending zero dollars on marketing, monthly active users grew 4X in the six months to March 2020, and another 8X since shifting to video in March. They are now setting up tens of thousands of virtual meetings per week among hundreds of thousands of users.
* The total addressable market is big. US companies spend more than $40 billion a year on recruiting and professional development. They spend more than $200 billion on in-person conferences and events. We believe that at least 10% of those markets will move online over the next few years.
* It’s been global from day one. Lunchclub is already operating in 50 cities, with the top six — New York, San Francisco, London, Los Angeles, Singapore, and Tel Aviv — accounting for 80 percent of its members. This aligns with our focus at Lightspeed, with our 9 offices globally, to help our companies succeed in the US and internationally.
* The more people use it, the better they like it. Unlike a lot of services that start out hot but quickly lose users’ interest, Lunchclub use grows over time. At first, the average member takes around one meeting a month. By year two, it’s multiples of that each month. After shifting to video and growing over 10X this year, average user feedback has gone up by 20%.
* It’s a very social business. People who are familiar with my investments in Goop, Cameo, and Calm know that I strongly value companies that help to foster a community of like-minded people. That describes Lunchclub perfectly. In a time when everyone is feeling isolated, it’s helping its members make new business and personal connections.
The future of networking, now.
I’m a big believer in networking. Who you know is as important as what you know.
That’s why platforms like Lunchclub are so exciting to me. It does things that existing networking platforms can’t even begin to do. If you’re a screenwriter, it can match you with an actor. If you’re a three-time founder, it can pair you up with a CMO at a unicorn startup. And so on.
Lunchclub is a smarter, more dynamic version of in person networking. And I deeply believe it represents the future of how connections will be made.
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