Operating loss has not improved. In Q1 2022, operating loss on median was -$19.8mm and it hasn’t changed. Operating loss in Q1 2023 was -$20.1mm.
Our view. If the goal is truly profitability, it will be quite a long haul. The first dollar of cost is much easier to cut than the last dollar, and we do expect gains in operating margin to slow. We do not expect the sector to attain profitability on median, but the efficiency at which these companies grow will improve to the point where investors once again get excited about the space. Those that cant improve to an acceptable level will likely be acquired at attractive valuations.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at sammy@blossomstreetventures.comhttps://blossomstreetventures.com/metrics/
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