Artificial intelligence is fueling booms in startups and creating opportunities for investors looking to participate in seed and early round funding for companies that could reshape industries like media and entertainment.
Analyst Rich Greenfield, known for aiming sharp questions at CEOs and
proclaiming the end of traditional media, also wears an investor’s hat with a venture capital fund. Think former Disney exec-turned-investor Bob Iger, but on a smaller scale.
Greenfield talked to The Ledger about how AI powers some of the companies he’s invested in, plus names one public company he thinks is truly taking advantage of what the emerging technology has to offer.
With football season starting, we also look at NFL valuations and watch as Lionel Messi adds to his portfolio of fútbol teams.
Thanks for reading.
Jon Lafayette
(Send your tips and pitches to jon.lafayette@thewrap.com)
P.S. Money moves, companies change hands and the power map gets redrawn. At TheGrill on Sept. 30, the executives, investors and dealmakers behind those shifts get into what’s moving the business next. AI Creator Day is included on Sept. 29. Subscribers get 50% off through Sept. 8 with PROPERKS50.
THE DEEP DIVE
How Analyst Rich Greenfield Sees Investing as a Venture Capitalist
Rich Greenfield is best known as the LightShed Partners analyst often quoted about the difficulties traditional media companies face adapting to the streaming era. But Greenfield and his partners in 2021 set up a $75 million fund, LightShed Ventures, designed to make seed and Series A investments in tech, media and telecom startups. A second $25 million fund was launched two years ago.
“There’s never been a more exciting time to be in venture capital, given what’s happening in AI,” Greenfield told The Ledger. “The ability to create a company and scale a company with far less resources than ever before because of what AI can do is pretty incredible.”
- LightShed Ventures’ first fund launched in 2021 with $75 million. A second $25 million fund launched in 2024.
- The value LightShed brings to AI-powered startups is its ability to introduce them to larger public companies for investments and partnerships.
- The time horizon for LightShed’s investments is 10 years, so it’s too soon to evaluate the startups in its portfolio, Greenfield said.
- One public company taking advantage of AI is Spotify. Greenfield said Spotify’s stock is undervalued.
A lot has changed over the last five years.
“When we started Fund One in ‘21, nobody was talking about AI,” Greenfield said. “By the time we got to Fund Two, obviously everything has become AI.”
Greenfield said the biggest difference between doing his analyst job and his venture job is the timeframe involved.
The public market investors who follow his recommendations, “are looking at what can you do for me tomorrow,” he said. “Whereas when you’re investing in early-stage ventures, you have to think about these as 10-year investments, right? Very often it takes four or five years to even know whether something has product market fit. I mean, it takes time.”
Greenfield said there is a symbiotic relationship between his analyst and venture roles. He readily admits LightShed is far from the biggest player in the market. “What really differentiates us is the connectivity between private market and public market,” he said. “The reason you want LightShed on your cap table is our ability to open doors to larger companies.”
Most of the public companies Greenfield covers have not yet come to grips with how AI will change industries, including the media business.
“The most important thing to think about is how does that explosion of content impact the value of these companies? I don’t think investors fully appreciate what’s about to happen,” he said.
One exception Greenfield points to is Spotify, which he said uses AI more aggressively than any other company he covers. Spotify has launched an AI DJ, AI playlists and an AI tier that lets users create covers and remixes of participating songs.
“Spotify is truly unique today in terms of how fast they’re pushing AI functionality. They’re not getting credit for it, which I think is crazy when I look at the stock,” he said.
While traditional media companies have been slow, startups have been pushing ways AI can transform aspects of the business including content creation and advertising.
“We love crazy pitches,” Greenfield said.
One of LightShed’s most important investments is Telly, which gives away advanced two-screen TV sets in order to get ad revenue and consumer data. Telly this week announced a new home screen ad product that is sold programmatically.
“Every media company wants more people with TVs. You’ve got a lot of young people who don’t want to buy TVs because they’re watching on their laptops or on their phones,” Greenfield said. “If you can figure out how you can cost effectively get a large screen device into someone’s home, and if the price is free, it’s a pretty incredible opportunity.”
LightShed also has investments in 30 or so other young companies, including Peak, which uses AI to help prevent child pornography from showing up on their sites, and Vurvey, which uses AI to glean more insight out of focus groups.
LightShed’s most recent investment is in Eventual, a company that will create analysis and news based on what’s happening in prediction markets.
“Prediction markets are certainly not going away, and when you think about news and politics and essentially everything but sports betting, there will be a huge explosion,” Greenfield said. “There’s been no media companies built around that theme, and we think Eventual is a great way to participate in the growth of non-sports prediction markets.”
Greenfield said the market for startups is strong compared to a few years ago. But he added it’s early to gauge the returns on LightShed’s investments so far.
“It is a long game,” he said. “We’re in year five of our fund. It’s still very early. We’ve got a lot of potential breakout success when I look out over the next few years, but it’s still very early to call balls and strikes.”
DEAL SHEET
- World Cup legend Lionel Messi agreed to buy a majority stake in Eldense, a soccer team in Spain’s second division. Terms were not disclosed. Messi, whose net worth is estimated at $1.1 billion by Forbes, already owns stakes in another Spanish team, a club in Uruguay and Inter Miami of Major League Soccer in the U.S.
- Amid a consolidating media industry, Sony Pictures CEO Ravi Ahuja said his studio has no plans to prioritize “large-scale M&A.” “It’s extremely disruptive when you end up with a large company that has lots of different businesses,” said Ahuja, speaking at a Bank of America investor conference Wednesday. The process of getting a deal approved and the associated integration work “sets you back for years,” he added. Tell that to Paramount.
- BC Partners offered to buy LIV Golf for $300 million in a deal that’s contingent on LIV surviving bankruptcy. The Saudi-funded golf tour filed for Chapter 11 protection and is asking the court’s permission to terminate millions of dollars’ worth of contracts with its golfers, including Bryson DeChambeau, Jon Rahm and Phil Mickelson. The bankruptcy is the result of Saudi Arabia’s Public Investment Fund pulling its investment.
- The founders of Hyrox, which operates a running and fitness competition popular on social media, bought back a majority stake in the company from Infront Sports & Media. Equity firm L. Catterton helped fund the deal, which valued the company at $698.3 million, according to Reuters.
WRAP 20 INDEX
Here’s how the companies in our Wrap 20 Index performed this week.
FINANCIAL ROUNDUP
More Questions for Fox-Roku Deal
The Justice Department made a second request for information from Fox and Roku about Fox’s proposed $22 billion acquisition of Roku. In an SEC filing, Fox said the requests were expected and that it plans to consummate the merger by the first half of 2027.
- In a report Wednesday, Parks Associates said the deal “highlights the strategic value of owning the platform that connects consumers to content, advertising and streaming services.”
- Fox has promised to run Roku independently as a way to address concerns that the streaming platform would unfairly favor Fox’s businesses after the acquisition.
How ‘Bout Them Cowboys
The Dallas Cowboys are the most valuable NFL team at $15.36 billion, according to an analysis by S&P Global Market Intelligence. The No. 2 team is the New York Giants at $12.2 billion, followed by the Los Angeles Rams at $11.5 billion.
According to S&P, valuations have jumped dramatically over the past five years. The increases are driven by the growing number of billionaires, the influx of private equity and the rapid growth in TV rights values. “This valuation growth has been sustained by rising revenues from TV rights and other avenues, such as ticket sales and an expansion in revenue multiples,” S&P said.
Recent deals involving the Seattle Seahawks and the Atlanta Falcons indicate that multiples are still expanding to above 15 times revenue.
The least valuable NFL team is the Detroit Lions at $7.36 billion. Also at the bottom of the pile are the Cincinnati Bengals and the Jacksonville Jaguars. Their performance on the field also leaves much to be desired, with none ever winning a Super Bowl, S&P added.
Barclays Analyst Likes Spotify’s Tune
Greenfield isn’t alone in his appreciation of Spotify. Barclays analyst Kannan Venkateshwar rated the streaming music giant as “overweight” with a price target of $565 a share in a report that focused on the costs involved in providing several new AI-based products and services.
Those costs are a concern for some investors, but Venkateshwar said his analysis found that “inference costs are unlikely to derail the margin trajectory at Spotify.”
Spotify management has given guidance that AI costs will be “neutral to accretive,” and Venkateshwar called that guidance credible. “Once there is a more broad-based understanding of this framework, we would expect the debate on AI to move from cost to adoption, as rest of the major labels sign AI music deals with Spotify.”
Spotify closed Thursday at $521.73.
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