Beyond the Arches #29: Surprise election results across U.K. and France stir hope. Invest in startups responding to big economic challenges.

Featured Story

It’s been a tense few weeks for citizens in the U.K. and France, with election uncertainties painting the future in a bleak light due to the incursion of far-right blocs into those nations’ parliaments. 

The rising threat of extremist legislators prompted French President Emmanuel Macron to dissolve parliament and call a snap election to head off the threat of extremism. The results of those contests have surprised many analysts and voters. While there was no clear majority, the collective success of Macron’s Entourage and the progressive New Popular Front edged out Marine Le Pen and the far-right National Rally. The new makeup of the chambers presents many challenges for Macron’s term – but prevents the outright control many French citizens feared inevitable even through the first round of elections in late June. 

In the U.K., the Labour Party unexpectedly won a landslide victory, breaking the 14-year conservative hold on power. The election brings the country center-left in a historic move after years of Tory representation had ushered in austerity measures, depleted the effectiveness of the NHS, and saw Brexit cut the nation off from its previous trade relations with the European Union. Prime Minister Keir Starmer hailed the win as the beginning of change for the U.K. The success of Labour in the election was the worst defeat for the Conservative Party in its nearly 200-year history. 

How to invest in startups solving pressing economic problems

While ideological divides drive the current flux in elections, underpinning every election cycle is the need to solve the world’s most pressing consumer and financial issues. These innovative companies are taking on the challenges weighing most heavily on world economies. 

• Bee: The global housing market is a perennial issue for voters. Bee, nicknamed the “Uber for the mortgage industry,” was created to bring mortgages into the new millennium with AI- and blockchain-powered underwriting that vastly simplifies the mortgage process. Democratized mortgage access through an app allows consumers to get loans on their terms without high-pressure sales or the stress of a manual underwriting process. The app is 100 percent mobile from research to settlement and offers instant pre-approval 24 hours a day. 
• eNavvi: Affordable medication has been a struggle for developed nations for years, and the burden is even heavier in less-developed regions. The eNavvi ePrescribing platform helps physicians prescribe medications through cash-price pharmacies to increase price transparency for patients and improve medication accessibility. The platform streamlines the prescription delivery process between clinicians and pharmacies so they can prescribe quickly and effectively. 
• Moneco: In Europe, the African migrant group known as the Diaspora faces some of the harshest transaction fees of any group – climbing as high as 13 percent. Moneco, an Africa-focused neobank, is working to solve the burden of sky-high remittance fees. With rates of 0 to 2%, Moneco offers better solutions for routing money to Africa, while also solving other challenges like inconsistent digitization, poor financial connections with the EU, and lack of trust in transmission methods.

On Our Radar This Week

• Millions of users learned of a massive AT&T data breach – one of the largest private communications data breaches in recent history – involving the theft of phone numbers, text messages, and phone data. Although the breach occurred over a six-month period in 2022, reporting was delayed due to a DOJ investigation into the incident. The breach also spells more trouble for the data warehousing app Snowflake since hackers gained access to the records through the app. And it’s not the first time Snowflake finds itself at the center of a breach; the company was also involved in the Ticketmaster data theft this past May.
• The Dow Jones Industrial Average experienced a new wave of growth this week, touching a 40,000+ record with a one-day leap of 247 points. Brands like Home Depot and Caterpillar led gains in light of investor migration from tech bull markets. The Dow index is composed of 30 blue-chip stocks across market sectors, including well-known names like Amazon, American Express, Chevron, Goldman Sachs, Honeywell, 3M, Visa, Walmart, Disney, and McDonald’s. 
• The surge in the Dow and investor migration away from tech stocks made for lower results in the Nasdaq and S&P 500. Losses in NVIDIA, Apple, and Tesla led the slide, with investors rotating into smaller companies in light of softened inflation data and the hope for a September rate cut. Amazon took a 2% loss but fared better than Tesla’s 8.4% slump and Apple’s 2.3% downward move.

Macro Bites

• Kroger pursues Albertson’s merger despite earlier concerns about the consumer impacts of such a move. This could affect 600 Albertsons and Safeway stores across the West, primarily in Arizona. 
• Meanwhile, in a move meant to consolidate holdings and encourage growth, Stop & Shop announced the closure of 32 of its underperforming stores by November 2024. All stores slated to close are located in Northeastern states, including Massachusetts, New York, Connecticut, New Jersey, and Rhode Island.
• Big banking kicked off earnings season with mixed results, despite bright spots in other economic sectors and indexes. 

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With its patented waste compaction service, Smash My Trash is disrupting the $1.6 trillion waste management sector. By compacting waste in open-top dumpsters to reduce waste volume, customers save money (up to 20% of waste removal costs) and reduce their CO2 emissions by up to 65%.

Teriyaki Madness stands out with its fresh, made-from-scratch meals and a lively, inviting ambiance, revolutionizing the fast-casual Asian dining scene. Its surging popularity is evident on platforms like Yelp, Facebook, and Google, where an increasing community of enthusiasts sing its praises.

Highlights:

• Target locations: Up to 55
• Smash My Trash per-location economics: $885K in revenue with 28% EBITDA after 16 months of operation
• Teriyaki Madness per-location economics: $1.16M in revenue with 20% operating profit

As the Smash My Trash and Teriyaki Madness locations come to fruition, investors in TNT Franchise Fund Inc. can expect to receive excess cash flows from the business operations of the locations on a quarterly basis.

For more information on the offering, contact our team.