Episode 49: The Stitch Fix IPO

**Ben Gilbert** (0:11)
Welcome back to episode 49 of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:18)
I'm David Rosenthal.

**Ben Gilbert** (0:20)
And we are your hosts. Today, we are covering the Stitch Fix IPO, one that David and I have been excited to cover since the S1 came out because it's a fun read, it's fun to compare and contrast against other S1s coming out recently. It's a e-commerce leader that is going up against Amazon in Amazon's absolute heyday and rise to prominence. And we're going to dive in to figure out how can they compete, how can they differentiate, how is there still a good business left in e-commerce in an era where Amazon looms high?

**David Rosenthal** (0:51)
Yeah. And this is one that is really tailor made for our narrative section, because for the longest time, the narrative when Stitch Fix was a private company was this company is crushing it, you know, it's all up and to the right, which as we'll find out, it was, but then it was actually a disappointing IPO in and of itself. So we'll dig into the story here. What happened?

**Ben Gilbert** (1:14)
Yeah. And for listeners who are new to the show, so we started as just Acquisitions, hence the name Acquired. When we added IPOs, we realized we needed to change up our format a little bit. And there's a big part of IPOs, which are narratives, and that's both narrative from the company side and narrative from sort of the investor side, from the street. So it's what does the company want you to believe and what does the analyst team or the analyst and media community want you to believe? You never hear much about that in Acquisitions because they kind of happen, and then you just hear about the news afterwards. But with the road show and the lead up and trying to price optimally, depending on your definition of optimally, there's lots and lots of narratives flying around about IPOs. So we will dive into that. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (2:00)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:25)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (2:31)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (2:49)
Yep. Obviously, it's a huge benefit for the environment and for customers on costs, since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (3:05)
It's super cool that they can put their data centers out there in these remote locations where quote unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the Internet happens because they are doing everything in their clouds.

**Ben Gilbert** (3:22)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's crusoecloud.com/acquired, or click the link in the show notes. Now, that reminds me, we have a Slack now with over a thousand people. If you go to acquired.fm, you can join the Slack. You can learn about any news that we haven't really gotten to yet on the show because we release sort of a week or a week and a half after anything happens, and mostly kind of just do historical episodes. So if your jam is talking about news as it's happening with other nerds like us, jump into the Slack and enjoy.

**David Rosenthal** (4:03)
Yeah, it's kind of awesome that there are over a thousand people in the Slack now. I mean, this was like an experiment that Ben and I started right in the beginning of Acquired, and now it's taken on a life of its own. So thank you guys for being such great members of the community.