Brain implant needed to justify a $5 bln Neuralink 5 Jun 2023 Elon Musk’s startup promises brain-computer interfaces that do everything from curing disease to storing memories. The $5 bln valuation presupposes $3 bln of revenue in 10 years. That’s an optimistic timetable, even assuming Musk’s technology is successful.
Capital Calls: OpenAI’s backers 1 May 2023 Concise views on global finance: The ChatGPT developer has secured $300 mln from venture giants including Andreessen Horowitz, according to TechCrunch. As it rounds up scarce funding from tech’s biggest names, competitors will find it harder to break through.
Capital Calls: Allianz’s fintech sale 19 Apr 2023 Concise views on global finance: The $100 bln insurer may offload its 5% stake in German digital banking startup N26, a decision that would make all kinds of sense.
Israel hits tech sector cash cow while it’s down 3 Apr 2023 Prime Minister Benjamin Netanyahu has delayed a controversial plan giving the state power to override court decisions. Foreign investors in Israel’s key tech sector, which accounts for half its exports, were already getting stingier. They’ll get even more so if the idea returns.
Capital Calls: Gas station M&A 16 Mar 2023 Concise views on global finance: Canada’s $44 bln Alimentation Couche-Tard pays 3.1 bln euros for TotalEnergies’ European gas station cast-offs.
Venture capitalists swap Paris Hilton for Al Gore 3 Mar 2023 Rising rates and falling valuations have forced startup investors to move beyond reality stars and cryptocurrencies. Chatter at a Los Angeles confab suggests more useful ideas like green energy and healthcare are getting more attention. Tight funding demands sober analysis.
Capital Calls: SoftBank, BP 7 Feb 2023 Concise views on global finance: Masayoshi Son’s $69 bln technology investor is out of ammunition when it needs it most; the $108 bln British oil group’s pledge to pump more of the fossil fuel may not boost its lowly valuation.
Scooterverse collides with financial reality 16 Nov 2022 Bird’s scooter-share business attracted investors on the understanding that it would disrupt transportation and eventually turn a profit. It got part way there, but the capital markets seized up before Bird really got going. Even good ideas can run out of road.
Lisbon tech schmooze takes baby steps to reality 4 Nov 2022 Amid 2022’s cratering valuations, venture capitalists attending the Portugal-based Web Summit are appropriately more cautious about new startups. Yet crypto crowds are still out in force. That’s despite the need for tech cash to focus more on solving problems like climate change.
Mutual funds’ private bets could use more daylight 14 Sep 2022 The tech stock rout has done little to dent money managers like Fidelity or T. Rowe Price’s zeal for unlisted companies. In some cases, such holdings have performed better than public shares. Yet illiquid stocks bring fresh risks, and disclosure on how they are valued is patchy.
Fintech’s next big down round may have an upside 24 Aug 2022 After pay-later group Klarna raised cash at an 85% discount to its previous valuation, candidates for the next giant markdown include $25 bln Chime and $32 bln FTX. But it isn’t all bad news. By raising money when others can’t, they could grab market share or scoop up rivals.
Instacart’s fast growth isn’t fast enough 23 Aug 2022 The grocery delivery service is expanding into advertising and offering services to rivals, as boss Fidji Simo preps to potentially go public. Yet even with double digital revenue growth it only looks to be worth around $11 bln, far less than a private valuation a few months ago.
Gross margins are market’s next valuation fetish 11 Jul 2022 Growth-obsessed investors have cooled on companies with soaring sales. As first-half results approach, they’re looking lower down the income statement to see what’s left after deducting the direct costs of revenue. If that number is high, even loss-making groups can find favour.
Misra’s next step is worth watching, with caution 7 Jul 2022 The SoftBank Vision Fund boss is stepping back from startup investing. Rajeev Misra’s prior forays into structured credit and tech show a knack for identifying the next big thing. Both sectors’ subsequent implosions show the risks for investors of copying him too late.
Unicorns’ hard times point to M&A stampede 25 May 2022 Of the 2,300 private firms with valuations above $1 bln in the past decade, one-third managed to go public. Volatile markets now make that door inaccessible. As investors seek proof in their paths to profit, combining forces with rivals is the least-bad option.
Review: PayPal alumni’s age of innocence 18 Feb 2022 Elon Musk, Peter Thiel and several other entrepreneurs cut their teeth at the payments firm. “The Founders” follows its birth and the network it spawned, embodying the best of scrappy tech culture. Its human insight contrasts with the larger-than-life moguls they have become.
Southeast Asia still loves New York 10 Jan 2022 While U.S.-listed Chinese companies move home, Indonesian and Vietnamese startups are eyeing a berth in the Big Apple. Unlike their northern peers, these hopefuls are starting with home floats. Ensuring IPOs fill local coffers first is good politics and makes financial sense too.
Red-hot startups face a year of down rounds 29 Dec 2021 Venture capitalists invested more than $600 bln in 2021, an all-time high. The flood of money has boosted private-company valuations. Even a small correction would lower prices, alienating employees. Cash-burning upstarts in areas like rapid grocery delivery are most at risk.
India’s tech stock bubble is poised to deflate 28 Dec 2021 Investors will continue to afford banks and consumer firms dizzying valuations but will increasingly give their money-losing digital brethren a shorter leash. Some mix of rampant competition, slowing user growth and rising data charges will crash the party for the startup crew.
Peer-to-peer lending’s demise is cautionary tale 13 Dec 2021 The business of directly linking savers and borrowers is all but dead after pioneers Zopa and $3 bln LendingClub pulled out. Creating an asset class requires regulatory buy-in, while bank funding costs are hard to beat. Both lessons are relevant for newer fintech upstarts.