Pre-Money: Mar 25th, 2024

The IPO drought is over, Gulf gains and non-AI unicorns

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The Vibe

The week’s most important happenings

Very bullish week for the ecosystem, as two venture-backed IPOs go swimmingly and all three public market indices hit all-time highs. Here’s what’s top of mind right now:

  • The IPO drought is over

  • Though some after-effects linger

  • The gulf ventures into venture

  • A Wonder of a raise

  • Unicorns across industries

  • An unexpected cameo

  • and more…


The week’s top performance indicators

Based on publicly available data from Thompson Reuters, NASDAQ, CNN Business & other third-party sources.


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Dots & Lines

The week’s top takeaways

  • Let the IPO rivers flow: After a long wait, venture-backed IPOs are back! The industry saw not one, but two, notable private companies go public last week. Reddit ($RDDT), the notorious social network featuring “subreddit” forums on any topic you might want to talk about or troll pseudonymously, debuted Thursday on its second try. It sold shares on NYSE at a $6.4B price, raising $748M, and the stock climbed almost 50% above its opening level before closing the week around 35% above its opening price. The day prior, Astera Labs ($ALAB), a hardware maker whose products improve the efficiency of devices like AI chips in data centers, jumped the queue and went out on Nasdaq on Wednesday. Astera priced at $5.5B, raised $713M, climbed 72% on the first day of trading, and settled into a range 24% higher than the opening price to close the week. Celebratory cheer rippled throughout the venture community, as a broad variety of funds, angels and SPVs look poised to get liquid when lockup periods expire later this year. Tech IPOs, it seems, are on the way back.

  • But the after-effects continue: While the overall market look to be getting back on track, parts of the world not centered in the Bay Area and not focused on AI have not turned the corner. In India last year, for example, venture funding fell to $9.5B, roughly 35% of the prior year’s 6.5B total. African dealmaking fell off as well, dropping more than 30% with funding totaling $4.5B for 2023. And in Israel, venture funding dropped more than 70%. The list goes on. The “rise of the rest” - the trend noted a few years back where the growth of startups and venture funding outside of the Bay Area, New York, Boston and Seattle grew rapidly - is still having an impact. But the turnaround is most likely to start in the heart of the ecosystem and it may lag before it spreads to other regions.

  • Gulf gains: With limited capital available of late, private companies have been going to where capital abounds, the Persian Gulf. Mostly indexed to evergreen petroleum exports, countries in the region asserted themselves in private markets, growing their LP activities and hosting a growing number of conferences and fora. Saudi Arabia just earmarked $40B for AI, which would make it the world’s biggest AI investment fund so far. Not everyone is a fan of the Gulf’s new prominence, since some associate the oil-rich Kingdoms with unsavory activities and national security concerns. Anthropic, for instance, excluded Saudi Arabia from its recent financing. Still, the region is likely to be a growing force in tech as it continues to diversify from oil.

  • A Wonder of a funding round: Wonder, the “fast-fine” food delivery company featuring dishes from famous chefs, raised a huge $700M round, bringing its total funds raised to $1.5B. The valuation was not disclosed but it was rumored that they were targeting a $4.5B-$5B level for this round after last raising at a $3.5B valuation. The company is led by notable entrepreneur Marc Lore, who is investing $100M of his own capital in the round. This shows that a strong business with a well-known founder and a large addressable market can still raise funds in this environment, even if it’s not an AI company.


Smart Humans explores venture capital

Slava Rubin talks with CoinFund's Jake Brukhman about investing into Web3, picking Layer 1s, and finding opportunities in today's markets.

Deal Points

A few items of interest

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The Forecast

Looking ahead to this week

During the week of March 25th, look out for:

  • Earnings from Braze ($BRZE), Buzzfeed ($BZFD), Forge ($FRGE) and Sprinklr ($CXM)

  • New home sales on Monday

  • Consumer confidence on Tuesday

  • Will the market’s enthusiasm for the new IPOs continue?

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