The Sudden Repricing of Startups in Early 2024
We’re entering a new pricing environment for software: AI vs non-AI. It’s only happened in the last few weeks.
Recent earnings have pushed some of the most important companies to all-time highs.
This dynamic doesn’t favor everyone.
Theory created a public market AI index to track software companies who have significant product plans or current AI businesses.
AI companies trade at 2.5x the multiple of non-AI companies in the public market.
This yawning difference should compound over time as the adoption of AI is still relatively early - we’re only 18 months into it. In addition, the productivity gains & the concomitant willingness to pay for them is just getting started.
Microsoft & ServiceNow have reported 70% & 50% improvement in productivity in their organizations.
This dynamic is permeating the early stage private markets just as rapidly with the return of the 100x ARR multiple for AI companies.
The reason is the expected growth rate. AI software companies are projected to grow 63% faster in 2024 than non-AI software companies because of customer demand.
We should expect an elevated valuation environment in Q1 & Q2 as the buyer population expresses strong demand for AI.
WRITER/PRODUCER OF THE BLACK ROSE OF KUSH BOOKS & FILMS -MINISTER OF FOREIGN AFFAIRS EWF,INC - HUMAN RIGHTS DEFENDER
8 个月Im excited to announce that our indigenous coalition under Treaty of the Circle of Life is back by Native American CDFI grant program. So with investors we can give ROI 2X on grant match invested. No risk in investing in our business or organization but in the Grant match that is a US TREASURY program. So we looking for investor to put up grant matches of 5%to 10% of grant budget requests. So for a $1,000,000 grant we have to put up 5% which is $50,000. So the investor would put the $50,000 up and the grant would go to Treasury. The US Treasury wil send the initial funds of $50,000 back and the Grant recipient would upon receiving the Grant funds then pay 2X return. The grants come from allocated funds to Native Americans for community development so this is not a hope we are approved. We have been approved for our project by the Elder council. The grants are processed and paid out every quarter they are applied in. So ROI is in 120 days or less. I feel this is great for investors to help startups without the risk and help impact community development
Strategic Director and Investor
8 个月Get ready for AI-Native unit economics. It's bound to happen!
Corporate Development/M&A Advisory
9 个月Tomasz, what classification do you use for "AI company"?
?? Experienced start-up mentor helping founders get off to a strong start / Investor / Former serial tech entrepreneur, corporate venture builder, CMO, educator, supervisory board member
9 个月Rodger Buyvoets
Team-driven and motivated by unity, love, respect and peace as well as co-existence to create solutions that are everlasting and unify the universe that brings on perpetual state of peace and respect. We care. The MGMT
9 个月Kindly A.I. be nice to humatones and generic beings, we are here to co-exist (shall make sense in 2052) Thank you.