VNTR Capital News Nov 19, 2023 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – Nov 19 News, Events, and VC Reads
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Happy Sunday!
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VNTR CAPITAL COMMUNITY NEWS
Spotlight
VNTR GP LP Summit — We are designing our VNTR GP LP Summits to bring General Partners (GPs) and Limited Partners (LPs) together. Summits will be integral to our new premium VNTR GP and VNTR LP subscription services, offered annually, to facilitate seamless interactions between GPs and LPs. The dates will be announced soon:
April 2024 in Lisbon, Portugal.
July 2024 in Hamptons, USA
October 2024 in Singapore
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This week
Lisbon — We hosted our largest VNTR Investors Roundtable event on Nov 14, drawing 120 investors from around the globe who gathered in Lisbon for Portugal Tech Week. We facilitated an engaging panel discussion featuring Igor Ryabenkiy, Founder and Managing Partner at AltaIr Capital, and Ertan Can, Founder and Managing Partner of Multiple Capital. The focus of the discussion centered on investments in Unicorns and the funds that have contributed to their success. (View photos)
Singapore — Singapore Chapter hosted our second VNTR Investors Roundtable this year on Nov 16 as a side event to the Singapore FinTech Festival. VNTR Singapore Chapter team Harn Goh, Janet Lee, Joash Lee, and Jay Koh hosted an engaging event with startup presentations and roundtable introductions. Thank you to aelf Ventures for hosting us at their beautiful offices. (View photos)
Upcoming
London — Join us this week at the VNTR Investors Breakfast in London on Nov 21, where we will host our visiting VNTR PRO member, Victor Baron, to connect to our VNTR PRO members in London.
Barcelona — Barcelona Chapter will gather on Nov 22 for a unique wine-tasting experience with Toni Albiol, awarded Best sommelier of Catalonia 2023. Apply here.
Melbourne — Our first VNTR Investors Breakfast in Melbourne, Australia, will take place on Nov 23 and kick off the VNTR community in Australia.
Bali — Our VNTR Bali Chapter will gather for an engaging VNTR Investors Dinner on Nov 23 with Internet Computer and Gil Petersil to hear Distruptives accelerator graduates' pitches.
Abu Dhabi — Join us at our first event in Abu Dhabi:
VNTR Monthly Speed Networking — Join our members' speed networking event on Nov 29, where VNTR members get matched for 5-7 min introduction calls online. Participants could meet 10-15 other VNTR members from around the globe.
Thank you to our Partners:
Cuatrecasas is an international law firm firmly established in Spain, Portugal and Latin America, where it has offices in Chile, Colombia, Mexico and Peru. With a multidisciplinary and diverse team of over 1,600 professionals from 24 nationalities, we cover all areas of business law with a sectoral approach, focusing on all types of business. Cuatrecasas has 27 offices in 13 countries and collaborates closely with leading law firms in other countries to offer a team to meet every client's needs in every scenario.
TDeFi is a crypto incubator & lifetime advisory firm that has been actively fostering & accelerating innovation in the blockchain & crypto ecosystem. Since the past years, we have worked with over 50 projects, and we continue to work with fellow BUIDLers who aim to disrupt the status quo, not just survive but thrive for years to come, and truly be “game-changers” in their respective fields.
Ballers is a web3 gaming studio & engagement venture. We are thrilled to extend an exclusive invitation to you for the Ballers F1 Yacht Party, a 3-day extravaganza from Nov 24 to Nov 26, right in front of the F1 Grand Prix track (Yas Island), Abu Dhabi. Get ready for:
VIP View of F1 Races: Immerse yourself in the heart of the action with a VIP viewing of all the exhilarating F1 races.
Unlimited Exquisite Delights: Indulge in a culinary journey with unlimited, delectable food curated to tantalize your taste buds.
Sip in Style: Enjoy unlimited premium beverages, including exclusive champagne and bespoke culinary concoctions.
Network with High-Net-Worth Individuals: Elevate your connections and engage in meaningful conversations with a curated guest list of high-net-worth individuals.
Ballers Night Party: As the sun sets, the party comes alive at the Ballers Luxe Yacht! Party Baller-Style with the beats of live DJs and Top models of the town.
Become a member of “Ballers Club” where fun, excitement, luxury, and endless party never stops!
Contact us to join the 3 days of hospitality experience.
VNTR Capital Events:
Dec 1 VNTR Investors Roundtable Helsinki (SLUSH side event)
Dec 5 VNTR Investors Roundtable Berlin (Next Block Expo side event)
Dec 7 VNTR Investors Roundtable Bangalore (India Blockchain Week side event)
Dec 8 VNTR Investors Roundtable Miami (Art Basel Miami side event)
Jan 17 Venture Capital Investors Roundtable Davos (World Economic Forum 2024 side event)
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UPCOMING VC EVENTS
Nov 21 World Tokenization Summit, Dubai, UAE (Complimentary Investor Passes for VNTR Members)
Nov 22 SouthEast Asia Institutional Investor Forum, Singapore
Nov 27-30 Abu Dhabi Finance Week, UAE
Nov 30-Dec 1 SLUSH, Helsinki, Finland
Nov 30-Dec 1 TechEx Global, London, UK
Dec 4-5 Next Block Expo, Berlin, Germany
Dec 4-8 West Tech Fest, Perth, Australia
Dec 6-7 FinTech Connect, London, UK
Dec 8-10 Art Basel, Miami, USA
Dec 11-12 Global Blockchain Congress, Dubai, UAE
Dec 12-13 New England Venture Summit, Boston Dedham, MA, USA
Dec 21-22 Web3 Beyond Borders, Tokyo, Japan
Jan 9-12 CES, Las Vegas, USA
Jan 15-19 World Economic Forum Annual Meeting, Davos, Switzerland
Feb 25-28 AIBC, Dubai, UAE
Feb 26-29 Mobile World Congress, Barcelona, Spain
Feb 26-29 4YFN, Barcelona, Spain
Mar 4-7 LEAP, Riyadh, Saudi Arabia
Mar 8-16 SXSW, Austin, USA
Mar 26-27 Wow Summit, Hong Kong
April 8-12 Paris Blockchain Week, Paris, France
April 18-19 Token2049, Dubai, UAE
April 18-19 EmergeAmericas, Miami, USA
April 23-25 Money 20/20 Asia, Bangkok, Thailand
May 15-17 Gitex Africa, Morocco
May 22-25 Viva Technology, Paris, France
May 29-31 Consensus, Austin, UAE
June 5-7 South Summit, Madrid, Spain
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
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VC Reads
View curated VC news and articles on the VNTR Platform
The Complete List Of Unicorn Companies
A unicorn company, or unicorn startup, is a private company with a valuation over $1 billion. As of October 2023, there are over 1,200 unicorns around the world. Popular former unicorns include Airbnb, Facebook, and Google. Variants include a decacorn, valued at over $10 billion, and a hectocorn, valued at over $100 billion. Download the full list today to see each company's valuation, investors, and more.
Will 2024 be a bounce-back year for startups?
In 2021 and early 2022, startups experienced a time of wild optimism. Capital was still plentiful and cheap, and enterprise buyers were heavily into experimentation, making it a great time to be a startup. But quite suddenly in 2022, the wind shifted, inflation reared its head, the Fed raised interest rates multiple times, and money became much more expensive. Buyers got uncomfortable, buying cycles suddenly were extended, and startups began to feel the pinch. There is a simple law of economic physics: In general, the economy goes up, goes down and eventually bounces back up again. But as we approach the middle of the final quarter of 2023, and some of the economic signals have improved, is it reasonable to expect that we’ll be seeing a recovery in which startups can once again thrive?
Venture capital’s 2023 bloodbath, by the numbers
After a shockingly successful 2021 and a mixed 2022, the party seems to have truly come to an end for startups and venture capitalists in 2023. And while the doomsday economic scenarios many expected at the start of the year failed to materialize, the continued sense of malaise after the collapse of Silicon Valley Bank earlier this year and a less-than-rosy IPO market isn’t painting an optimistic picture for the months to come. Much heralded IPOs from Instacart and Klaviyo, which many thought would signal the resurrection of the public offering market, started strong, but both companies are now trading 15-20% below their first trade price. And that has sent other would-be public companies scrambling back to the sidelines, eliminating a liquidity option for their early investors.
The Week’s 10 Biggest Funding Rounds: Divergent Technologies And Biotech Rule
This was another pretty strong week as far as big-money raises go, especially considering the coming holidays. There was a handful of nine-figure deals — including a huge one for a manufacturing company using generative AI and 3D printing — and lots of money again going to biotech firms.
56% of European VCs haven’t returned capital to their LPs in the last 12 months
Startups aren’t the only ones struggling to fundraise at the moment — so are VCs. In the first nine months of 2023, European VCs raised €13.9bn, putting them on track to raise significantly less than the €27.6bn raised in 2022. Yet that doesn’t seem to be for lack of trying. According to a recent survey of 111 VCs investing in Europe, carried out by Sifted, a majority of VCs (51%) have spoken to over 100 LPs in the past two years about fundraising. It’s perhaps not surprising that LPs are wary: Sifted also learnt that 56% of European VCs haven’t returned any capital to their LPs in the last 12 months.
The Leaders of Movements
The last 24 hours have been a hyper-concentrated dose of an entire philosophical debate within tech, all played against the backdrop of intense speculation and the furthering of personal vendettas.
“This is why you shouldn’t have a board.”
“Careful who your co-founders are.”
“Too bad they didn’t have a better board.”
“This is why venture capital is evil.”
“Where are the venture capitalists who could have stopped this?”
Khosla Ventures Not Letting Declining Venture Market Slow It Down
If it seems like Khosla Ventures has made some headlines recently, that’s because the super-busy firm has. The firm is reportedly closing in on raising $3 billion across a trio of funds, per The Wall Street Journal. That’s even as the venture market continues its slowdown and others like San Francisco-based Founders Fund and New York-based Tiger Global announce cuts to their new funds. However, Khosla hasn’t just been busy raising money — it’s been busy spending it too. The firm, which has backed notable companies such as OpenAI, DoorDash and Block, has spent this calendar year picking up its pace of investment after slowing in the second half of last year.
The time to triage is over
When public market pressure started to affect venture capital in the spring of 2022, companies and VC firms weren’t prepared. Companies couldn’t justify their valuations, and investors had to step in to keep their portfolio businesses afloat. But this focus on triaging wasn’t sustainable. VCs were spending all of their attention and capital on helping their existing portfolio companies ride out the tougher fundraising market. Funds aren’t set up to support that strategy, and venture firms’ fiduciary duties to their investors means they can’t put resources toward companies that they know won’t produce a return.
80% of IPOs Since 2020 Are “Broken”
So the Wall Street Journal did a great job slicing and dicing IPO data recently. To me, the most jarring statistic was this one: 80% of IPOs since 2020 are trading below their IPO price, or “broken”:
So what, you might think? Buyer beware? Hooray for “efficient IPOs” that don’t leave money on the table, some say?
Perhaps. But the problem is this — when folks don’t make money off startups, everything gums up and slows down.
Flying vehicles and a fintech rally: October’s spooky seed wrapup
October did not deliver seasonal horrors to early-stage startups. Tech deal flow picked up last month with 361 pre-seed and seed deals, compared with the 287 pre-seed and seed rounds we saw in September, according to data from Dealroom. The early-stage scene drummed up €599m in total (that’s pre-seed and seed amounts together), compared to €488m in September. October 2023’s early-stage funding was significantly up on the €373m raised in October 2022. The start of a mini tech rally? It’s too early to say. But something to keep an eye on over the next few months.
What are Germany’s CVCs investing in?
Like almost everyone else, Germany’s corporate venture funds have tightened their belts in 2023, with total European investment by the country’s five biggest funds just $161m, down nearly 75% from $603m in 2022.
Even in the US, where German CVCs spend most of their money, deals were worth €833m this year, down 62% from a whopping $3.5bn in 2022.
But CVCs are still spending money: Sifted analysed the portfolios of the five most valuable corporations in Germany with venture arms by market cap: SAP, Deutsche Telekom, Siemens, Airbus and Allianz which, since 2010, have made 498 deals in the US and 129 in Europe.
Out of the five CVCs analysed by Sifted, Next47 by Siemens has been involved in the most European investment, at 35. It’s closely followed by Sapphire Ventures, with 34 European deals.
The State of the Seed
It’s been a rough 18 months for tech. Public tech stocks are down 70-80% as multiples compress. Focus has shifted from growth to profitability. Achieving the latter can have dramatic effects: Udemy, a company with $700M+ in revenue, saw its stock jump +38% in one day after reporting profitable earnings. Netflix was the worst-performing stock in the S&P 500 last year, shedding 75% of its market cap, but it’s up +50% this year after turning in a few highly-profitable quarters. Many SaaS companies have stopped investing heavily in growth and are instead inching their way to cash flow generation.
Fidelity Wants to Create an Ether ETF, Joining BlackRock in Doubling Down on Crypto
Money management giant Fidelity is seeking to create an exchange-traded fund that owns Ethereum's ether (ETH), according to a Friday filing, joining rival BlackRock in strengthening its crypto embrace. The Fidelity Ethereum Fund would be listed by an exchange owned by Cboe Global Markets, which posted the fling that revealed the existence of the proposed product. But first, the U.S. Securities and Exchange Commission must decide whether to approve the ether ETF, as it must for others including one from BlackRock, which was revealed earlier this month.
Smaller GPs offer co-investments to build trust with LPs
Butterfly Equity, a Los Angeles-based PE firm that focuses on the food sector, uses co-investments in the majority of its deals as a way to get them inked, build trust with new limited partners and lock down capital in future fundraising. "For us, it's been a great way to meet investors," said Butterfly co-founder and co-CEO Dustin Beck. "Even if they ultimately don't end up investing into a particular deal, they at least get to see how we run diligence and our what our criteria is for a good deal." GPs, particularly those in the lower middle market, use co-investments as a way to establish and solidify relationships with LPs—an otherwise challenging feat given the lethargic fundraising environment. In fact, 86% of PE deals involving co-investors in 2023 have fallen below the $500 million mark, according to PitchBook data.
‘Primitive’ stablecoin lacks mechanisms that maintain fiat stability: BIS report
Stablecoins lack crucial mechanisms that guarantee money market stability in fiat, and an operational model that gave regulatory control to a central bank would be superior to private stablecoin, a study released by the Bank for International Settlements (BIS) found. The authors used a “money view” of stablecoin and an analogy with onshore and offshore USD settlement to probe the weaknesses of stablecoin settlement mechanisms. When eurodollar holders sought to bring their funds onshore during the financial crisis of the late 2000s, the Federal Reserve provided a $600 billion liquidity swap to other central banks to shore up par using what the authors described as “non-trivial institutional apparatus.”
AI’s energy consumption concerns echo Bitcoin mining criticisms, says Heatbit founder
Artificial intelligence (AI) and machine learning (ML) are demanding huge amounts of computing resources as interest in the space grows, but conventional Bitcoin miners are not jumping on the bandwagon just yet. Speaking to Cointelegraph journalist Joe Hall at Web Summit 2023 in Lisbon, Portugal, Heatbit founder Alex Busarov believes that mining farms, data centers and small-scale computing power providers are far more clued up on Bitcoin mining than the nascent AI and ML infrastructure space.
B2B Brand Building For Series B And Beyond
The much-anticipated IPOs of Arm Holdings, Instacart and Klaviyo in September quickly turned into a wet blanket for investors, who have since decided to hold back in an already frugal year. VC funding is now at its lowest since 2018 and the time between funding rounds is increasing. With exits hitting a wall, B2B brands looking to raise Series B and beyond need to be more convincing than ever that they have long-term potential. Earlier stages were all about being scrappy and finding product-market fit, but now is the time to invest in building a brand that stands for something and sets the foundation for growth.
Sam Altman Out As OpenAI’s CEO
OpenAI co-founder and AI wunderkind Sam Altman is out as the company’s CEO. In what can only be described as a Friday afternoon news dump, the generative AI firm named Mira Murati, the company’s chief technology officer, as its interim CEO effective immediately. In a posting, the company said Altman’s departure comes after “a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.” The company also announced Greg Brockman will be stepping down as chairman of the board, but will remain with the company.
Yet another former Silicon Valley darling is convicted of investor fraud
This year will be remembered for a lot of things. Among them could be the growing number of stars in the startup world who were later convicted for defrauding investors. Roughly six months after Theranos founder Elizabeth Holmes headed to jail for four counts of wire fraud, and just two weeks after Sam Bankman-Fried was found guilty on seven counts of fraud and conspiracy for his role in the collapse of his crypto exchange, another former high-flier in the startup world, Mike Rothenberg, was today convicted on 21 counts, including bank fraud, false statements, four counts of money laundering and 15 counts of wire fraud.
PE drives consolidation in maturing fertility market
Private equity is continuing to drive consolidation in the fertility sector, with $2.9 billion invested across 30 buyouts globally this year, according to PitchBook data. As more people look to have children later in life, demand for services that can aid reproduction has increased. In a recent report, investment bank Harris Williams estimates the global fertility services industry to be worth $8 billion and projects in vitro fertilization services will grow roughly 10% annually through 2025. Last year, PE investment in the sector peaked with 41 buyouts worth a total $8.4 billion. This included the sector's largest PE buyout yet: KKR's roughly $3.2 billion acquisition of Spain-headquartered IVI-RMA Global.
Hashing It Out: How Web3 is causing an evolution of traditional finance
As decentralized finance grows in popularity, many wonder what the future holds for traditional finance (TradFi). In episode 37 of Cointelegraph’s Hashing It Out podcast, Elisha Owusu Akyaw talks to Sarah Clark, the CEO of E-Gates, about how TradFi plans to compete and collaborate with the Web3 space and what that means for global payments moving forward. The episode also highlights issues around Web3 payments, such as regulatory compliance, fraud prevention and customer trust. Clark has worked at multiple TradFi firms like PayPal and Barclays before pivoting to Web3. She explains that conventional finance could benefit from integrating blockchain technology and Web3 practices to solve major gaps like cross-border payments. Clark argues that these changes should be seen as an evolution instead of a revolution.
There Is a World of Web3 Outside the U.S. and Europe
Far from a monolithic entity, APAC has emerged as a kaleidoscope of unique cultures, each with its distinct contribution to the evolving Web3 narrative, often challenging and complementing Western perspectives. As the digital landscape continues to unfold, a deepened appreciation of these diverse cultures is essential to foster genuine global collaborations. The crypto industry is an events industry these days. While on the events circuit I started to see the same people at each conference almost everywhere I go. No offense to any of those people, but it just wasn’t making sense. I started to ask myself what was the value in going to places where there was no new business to be won?
More Global Refurbished Gadget Startups Are Getting Funded
Across the globe, consumers of cellphones and electronic gadgetry share a common orientation: We yearn for the latest and greatest. But we settle for what we can afford. With the price of new premium cellphones soaring past the $1,500 mark, settling increasingly involves buying used. While it might not have the allure of an iPhone 15 Pro, that $400 smartphone from 2021 will probably do just fine. The value proposition of refurbished gadgetry hasn’t been lost on startup investors. They’ve put billions into the space over the years — pitching offerings as both a way to reduce electronic waste and serve a high-demand consumer market.
Biden, Xi meet against backdrop of dwindling US investment in China
President Joe Biden met with Chinese President Xi Jinping near San Francisco Wednesday for the Asia-Pacific Economic Cooperation summit, in a highly anticipated attempt to curb mounting tensions between the two nations. Amid China's economic downturn, Xi has reportedly pushed for an increase in outside investment into China, which has steeply declined over the past few years. In 2020, the country's government began a regulatory crackdown on its tech sector, which led to a slowdown in startups entering the global public markets, and a nearly $1 trillion loss for these tech companies.
Many Crypto-Corns Navigate Trying Times After FTX Fall
It has been a tough go as of late for startups in the crypto space.
Everyone knows funding has plummeted in the sector, and Sam Bankman-Fried’s recent conviction brought FTX’s troubles back to the forefront.
Then, just this week, it was reported Coatue has marked down its stake in OpenSea by 90%, now valuing it at about $1.4 billion. That is a significant drop considering in January 2022, the NFT marketplace raised a $300 million Series C co-led by Coatue and Paradigm at a $13 billion valuation.
However, OpenSea is not alone in being a once high-flying crypto unicorn — or crypto-corn — that seems to have suffered during the recent FTX backlash and general market downturn for VC-backed startups.
On Valuations and Hyped Seed
The recent flow of AI seed funding announcements, almost all at high valuations, sparked my curiosity: can investing in these deals deliver high fund returns for seed investors or are they tailored to a different strategy altogether?
Many hyped companies look attractive on the surface. They tend to have a compelling product vision, a qualified team, and a vast market opportunity. Yet, despite these qualities, are their high entry valuations too restrictive for the return profile necessary to generate outlier fund returns? Using historical data as a guide, I decided to investigate.
Plotted below are the 50x+ return hit rates of seed (& pre-seed) investments where the post-money valuation was below $20M vs. those where the post-money valuation was above $20M.
China races past US in autonomous vehicle investment
China has zoomed past the US when it comes to investing in autonomous vehicles, a dramatic shift from just a few years ago when the US dominated the category. China, home to the world's largest automotive market, has accounted for around 60% of global VC investment in autonomous vehicle companies since the beginning of 2022, according to PitchBook data. US companies, which secured more than half of global investment in the sector in 2021, have taken in less than 15% of the capital this year.
Will regulation cast light on shadowy private markets?
Another week, another suggestion that the next financial crisis is hidden in the private markets, waiting to blow up. Although the veracity of such concerns continues to be debated, more regulatory scrutiny seems almost inevitable at this point. The most recent comes from Colm Kelleher, chairman of UBS, who commented at a conference in Hong Kong last week that it is a "real cause for concern" that a large share of global financial assets now sit within the "shadow sector"—meaning, outside of banks. "I think the next crisis, when it happens, will be in that sector," he said.
Australia’s Place On The Global Innovation Map
There is a global race for innovation and startups today. Regions and cities around the world are working hard to push their own startup ecosystems and put them on the global map. Unfortunately, the main “innovation hunters” (VC funds and large corporates) tend to focus their scouting efforts toward high-density ecosystems such as Silicon Valley and Israel. What that means is until a certain threshold is reached in terms of volumes of startups, ecosystems tend to remain local, limiting their growth potential. In other words, no global connections, no party.
Global venture capital investment activity plunges to 4-year low
The value of venture capital funding rounds worldwide dropped 27% year over year to $18.49 billion in October while the volume declined 23.8% to 1,243.
The investment value and volume were the lowest October totals since at least 2020, according to S&P Global Market Intelligence data.
The value of funding rounds appears to be on track for a steep annual decrease. For the year to Oct. 31, the total value was $216.13 billion, less than half of the $435.19 billion raised during full year 2022, the data shows.
Coinbase Cuts Crypto Investment Amid Wider VC Pullback
Coinbase, among the chief investors in the cryptocurrency sector, has reportedly reduced its startup funding. This pullback is part of a larger decline in investments at crypto firms, many of whom have their own venture capital (VC) operations, Bloomberg News reported Wednesday (Nov. 15). And although crypto venture funding dropped to $2 billion during the third quarter — a 63% drop year over year, many corporate venture capital units have cut back even further.While overall crypto venture funding tumbled 63% to $2 billion in the third quarter compared to the same period last year, many corporate VC offices reduced their investments even more dramatically, PitchBook crypto analyst Robert Le told Bloomberg.
Over the years, venture capitalists have poured billions into pet-focused startups. But what about cats, specifically? Cat people want to know. As it turns out, feline-focused startups receive far less funding than those targeting the canine crowd, Crunchbase data reveals. A large portion of funding also goes to more generic pet startups, which market to households with dogs, cats and other critters. So, who’s betting big on cats? Using Crunchbase data, we put together a list of 11 companies funded in roughly the past couple years with a full or major focus on felines. Altogether, they’ve pulled in nearly $140 million for offerings ranging from human-grade cat food to microbiome-based supplements to an AI-enabled movement-tracking collar.
In The Age Of AI, Google Experiments With Bold Changes To Search
Google is testing and releasing a bunch of new features that amount to real change at a critical time.
For years, Google dominated search with little opposition. The format faced little disruption, always a bunch of blue links. And the company’s multi-billion dollar deals with Apple cemented its lead. But its comfortable perch is starting to fade. A U.S. Justice Department lawsuit exposed its distribution practices, opening it to competition. And generative AI tools threaten to upend the search format and reshuffle the playfield.
In this moment, Google’s experimenting with bold new changes that may meaningfully alter the search experience. It’s started allowing people to leave publicly visible notes on search results in a test announced this week. It’s added an option to follow specific search queries, pushing new information vs. requiring repeated searches. And it continues to test generative AI results that answer questions in natural language.
Software’s AI-Driven Watershed Moment
For years, enterprise-software and infrastructure companies relied on the same, tried-and-true metrics to measure success as they scaled: ARR (annual recurring revenue) growth, “magic number,” “Rule of 40,” etc.
But what if the new, more-challenging macroeconomic environment, coupled with powerful new technologies like AI, means we should rethink the metrics we’ve all gotten used to – and encourage companies to reevaluate the right set of benchmarks to survive and thrive?
That’s one of the core takeaways from our 2023 OpenCloud report, which we’re releasing today as the enterprise-tech industry continues its journey out of the woods and, hopefully, spawns stronger, fitter, leaner companies.
Indeed, in the technology markets, the dust is finally beginning to settle. Growth rates for the big cloud providers are not what they were two years ago, and the IPO market has not yet rebounded. But we see the technology landscape quietly pivoting toward a horizon brimming with promise as more enterprise-tech companies revert to fundamentals, seeking to balance growth and profitability and capture new efficiencies with AI.
A "zombie" invasion will hit fintech and venture capital in 2025
Many of the major fintech unicorns are secretive about their financials. Few have had successful funding rounds in recent years, and far fewer have gone public. The question is, which are safe to join? The answer comes from VC and fintech veteran Jack Selby, and it's not a good one.
Selby, an MD at Peter Thiel's Thiel Capital was one of the first ten employees at PayPal, so has been on both sides of the fintech coin. He says that, there are "two categories of zombies" coming: unprofitable fintechs and the VCs that funded them. Funds born after the 2008 crisis would hand founders a "blank paper," tell them to "write in the valuation and however much money you want, then I’ll pat you on the back and see you in a year."