Tech Valuations Find Level Ground

TOP NEWS

1. Design Giant Canva Plans $1 Billion Share Sale in Private Market Boom: Canva eyes $1 billion stock sale by employees and investors, valuing it at $26 billion. Echoes trend among tech giants like OpenAI & SpaceX providing liquidity to employees without raising additional capital. (Link)
2. 2024's Shifting Venture Capital Landscape: 2023 saw VCs adapt to a changing market. Top partners are shaking up their ranks at major funds Sequoia, Tiger Global, Y Combinator and Greycroft. While some startups faced challenges, others thrived, and the year ended with a renewed focus on due diligence and responsible investment. This sets the stage for a more sustainable and value-driven approach to VC in 2024. (Link)
3. Countdown Capital Calls it Quits: Jalik Malik, founder of Countdown Capital a micro fund focused on industrial investments called it quits and returned $15M to LPs. The emerging GP wrote a 4-page letter to his LPs referencing the competition he faces with larger funds in the capital intensive industry (Link)

CHARTS FROM THE WEEK

1. OpenAI crosses $1.6BN in ARR, up from $1.3BN in October despite turmoil

• OpenAI is rumored to have passed $1.6BN in ARR, on pace for $5BN in 2025E (Source: The Information)
• The Company appears to have moved past the management situation in November which saw the removal and immediate re-hiring of CEO Sam Altman
• Reportedly raising $10BN at a $100BN+ Valuation (Source: The Information)

2. X reportedly down -71% following purchase by Elon Musk

• Fidelity has again marked down the value of its shares in Elon Musk's X, carrying them at a 71.5% discount to their original purchase volume
• The cut includes a 10.7% cut Fidelity applied to the asset following Elon's outburst in November which Musk was seen telling advertisers to "go-F-yourself" during on on-stage interview with the New York Times
• Its unclear how much Fidelity has in terms of financial information inside the Company so their discount may vary when compared with other investors - but the message has been received by the market

3. Venture Capitalists Shifted from Crypto to Generative AI in 2023

• Cryptocurrency was a major focus of VCs and generalist VCs in 2022.
• In November of 2022, the FTX CEO Sam Bankman-Fried's fall from grace changed a lot of VC's view of Crypto. Crypto raised only $3.8BN this year less than a quarter of $17.5BN last year.
• VCs shifted to generative AI in 2024, investing over $23.4BN in investments a 10x increase

4. Tech Minted Fewest Amount Of Unicorns in 7 Years

• It was a bad year for unicorns in Silicon Valley, with the fewest number of unicorns minted dating back to 2016
• A number of unicorns failed or are starting to show signs of cracking. A notable shutdown. examples includes Convoy - the "Uber for Trucking" - that raised $1BN from Jeff Bezos, Bono and Fidelity
• In a challenging market, we expect the "winning" unicorns to survive and extend runway.
• "Losers" will fail to receive the same support in market and will be forced to raise down rounds or go out of business depending on how the math works out.

5. Which Social Media Application Distracts Us The Most?

• Social media platforms remain one of the most downloaded application on Apple and Google
• Above, Instagram managed to win the title of most downloaded application at 765 million with TikTok close behind at 749 million (The Information)
• TikTok remains the highest in terms of average time spent by US Users at 87 minutes vs Instagram at 45 minutes

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