Pre-Money: Apr 8th, 2024

KPIs

The week’s top performance indicators

Dots & Lines

The week’s top takeaways

• IPO Two-step: Last month’s Reddit and Astera Labs IPOs broke the seal, and the next pair of companies to make it through are up. Palo Alto-based enterprise data and security company Rubrik and Denver-based consumer cash back and shopping platform Ibotta both filed S-1s to go public soon. Ten year-old Rubrik did $627M of revenue last year while losing $354M and growing its annual recurring revenue 47%. It was valued at $4B in a 2021 Series E where Microsoft and top VCs invested, and will target $100M-$500M on a price in the range of $6-7B when it lists on NYSE as $RBRK. Twelve year-old Ibotta boasts $320M revenue, a 50% growth rate, and was profitable to the tune of $32M last year. Backed by Walmart, it will target $400M+ in secondary and primary sales at a price of $2.55B when it debuts on NYSE as $IBTA. These entrants demonstrate that the bar is quite high, but that the IPO window for venture-backed technology is being pried open, slowly but surely.

• The waiting game: AI enthusiasm and the first few IPOs notwithstanding, the venture capital ecosystem remained slow through the first quarter. In the US, there were 2,882 financings - the fewest since the third quarter of 2017 - adding up to $36.6B raised, which was less than 40% of what the market took in at its 2021 peak. Global numbers were even worse. Upstream of startups struggling to raise, those who fund them - i.e. venture funds - have also been challenged. The quarter saw only $9.3B committed to funds, putting the year on the slowest pace of fundraising since 2013. To top it off, despite massive cash reserves on public company balance sheets, merger and acquisition activity remains slow and limited by regulatory hurdles to getting deals done. Good things come to those who wait, so wait a bit more more for things to turn up.

• Climate picks up steam: With last year as the hottest year on record, climate tech remains top of mind for many investors, and is likely to become a leading global sector for the coming decades. World Fund closed its $325M Climate Fund to invest in businesses with scalable emissions savings across multiple industries. As a whole, Climate tech saw almost $10B raised over the past two years. Effective solutions will require significant capital, and are likely to blend public and private sources, like the $20B in federal funds earmarked for local climate and clean energy projects that eight organizations were recently directed to allocate. Look for opportunities and capital in Climate tech to expand rapidly.
  

• Geopolitical ventures: Between hybrid work, off-shoring of labor and “the rise of the rest,” the world seems to be flattening as tech goes global. But the geopolitical rivalry between the US and China threatens to keep some borders tight, even in a virtual world. The US is on guard after hackers accessed senior officials’ emails. Washington is ramping up its concerns with the alleged links between social network TikTok and the CCP. And venture funds investing in China, like GGV, are finding it more practical to split their partnership in two rather than try to straddle the two geographies. In an otherwise interdependent world, friction is likely to continue to grow along these lines as enmity increases, trapping exposed investors in the middle.

Deal Points

A few items of interest

• Mega-funder Tiger Global closed its latest fund at $2.2B, one-third of its target and one-sixth of its prior fund, suggesting mega-rounds will be limited in coming years

• Leading AI companies got pretty scrappy in acquiring data for their AI data troves, violating terms of service and taking user data to train their models, and are now turning to synthetic data to keep scaling

• Gold racket to gold jacket, Serena Williams’ venture fund has backed 14 unicorns and counting

• Palo Alto-based Flip, the social shopping app taking on TikTok is the newest unicorn, raising a $144M Series C led by Streamlined Ventures

• New York-based Grow Therapy raised an $88M Series C led by Sequoia to keep building out their mental health platform

• Crypto is another sector on the rise, with $2.5B raised in Q1 as BTC and ETH both rallied

  1/ Crypto venture funding is seeing a major boost!

  According to new data, investments in crypto startups jumped 50% in March compared to February. Over $1.16 billion was invested last month. #crypto#venturecapital

  — Giuseppe Rimola (@giuseppe_rimola)
  Apr 8, 2024

• Newly public Truth Social ($DJT) is suing its co-founders Wesley Moss and Andrew Litinsky for alleged poor governance as the stock declines from its market debut

• The Humane Pin device he invested in hasn’t yet shipped, but Sam Altman is reportedly planning another AI device with iPhone creator Jony Ive

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