Friday, 21 January, 2022

Netflix, Spotify, Costco: launch of the first global fund that focuses on the subscription economy


“In France, we don’t have oil, but we have ideas.” This slogan dates from the 1970s but the founders of Thematics Asset Management apply it to perfection in the world of management. Created less than two years ago, this company, a subsidiary of Natixis AM, specializes in “thematic” management: water, security, artificial intelligence, robotics, etc. The new fund they have just created is even more targeted, it is even a world first: the subscription economy, which is developing in recent years.

A real underlying trend, according to Mohammed Amor, Managing Director of Thematics AM: “after telecoms and the media (Spotify, Netflix), the phenomenon is spreading to new sectors such as software, video games, but also more traditional sectors such as mass distribution (Costco) or food deliveries (Hello Fresh) “. The manufacturer of sneakers Nike has also set up a subscription system to build customer loyalty.. It must be said that the subscription is

s ideas. “This slogan dates from the 1970s but the founders of Thematics Asset Management apply it to perfection in the world of management. Created less than two years ago, this company, a subsidiary of Natixis IM, specializes in “thematic” management: water, security, artificial intelligence, robotics … The new fund they have just created is even more targeted, it is even a world first: the subscription economy , which has been developing in recent years.

A real underlying trend, according to Mohammed Amor, Managing Director of Thematics AM: “after telecoms and the media (Spotify, Netflix), the phenomenon is spreading to new sectors such as software, video games, but also more traditional sectors such as mass distribution (Costco) or food deliveries (Hello Fresh) “. The manufacturer of sneakers Nike has also set up a subscription system to build customer loyalty.. It must be said that the subscription has become very easy thanks to the digitization of the economy and that it offers customers the possibility of subscribing to products or services previously unaffordable because of a unit price considered too high.

A growing market

This new mode of consumption also offers advantages to companies that offer it: “the subscription economy allows for recurring, less cyclical turnover, better knowledge of customer habits, and with better visibility “, explains Nolan Hoffmeyer, the fund manager. So, taking the example of a business with $ 100 million in sales and where 75% of people renew their subscription, this business begins the following year with $ 75 million in its bank account. Comfortable, right? And in the business world, where the subscription system is developing at high speed because it allows the balance sheet of client companies to be lightened, the renewal rate is rather 90%.

The Thematics teams have worked for more than a year to define their investment universe, which includes more than 200 companies listed around the world, on a total market of more than 400 billion dollars and above all with an annual growth of 13 %. These are mainly American companies, the most advanced market in this area, but there are also some European companies: the Dutch Wolters Kluwer which sells its medical and legal databases by subscription, the German specialist in Hello Fresh meal boxes and the French Ubisoft, which has launched a subscription system for its video games. Among these companies, the fund has selected about fifty and the beginnings are promising: since its official launch on December 23, the fund has already grown by 11%.

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Netflix subscription Ubisoft

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