The Banking Vault on LinkedIn: 🚀 Reddit's IPO: A Rational Reset in Silicon Valley Valuations 🔵… (2024)

As Reddit prepares for its listing on the New York Stock Exchange with a valuation of up to $6.4 billion, significantly lower than its $10 billion valuation in 2021, the tech industry is observing a new trend of 'down round' IPOs. The unprecedented $345 billion influx into US ventures in 2021, driven by low interest rates, is now leading to a more pragmatic outlook as startups face dwindling funds. Venky Ganesan of Menlo Ventures aptly summarises the prevailing sentiment by stating, "Down is the new up." While this period of adjustment may pose challenges, it is an essential step towards ensuring the long-term health and sustainability of the industry.#VentureCapital #TechIndustry #IPO #StartupValuation #SiliconValley

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Juicy article by Tabby Kinder on the Valley's VC industry reality check, after the 2021 low-interest rates had investors dumping money on companies left and right.Some quotes:"Despite the combined nearly $35bn write-off of supposed shareholder value, these “down round” IPOs are not being met with derision in Silicon Valley. Instead, they are a signal that rationality is slowly returning to venture capital.Down round IPOs “are not only going to become common, they will become the standard for the class of 2021”, says Venky Ganesan, a partner at Menlo Ventures. He is referring to a group of late-stage companies whose valuations soared that year as investors, punch drunk on low interest rates, poured in astronomical sums."(…)"The looming crunch also highlights the cost of the herd mentality in the venture capital industry, which has become comfortably used to mostly moving en masse and in the same direction. The rush erodes discipline."(…)"If Silicon Valley is moving through the stages of grief from denial and anger to acceptance, that might be a healthy thing in the long-run."Read it all in the link.

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"IPO Winter" comes to an end? The successful IPO of Reddit in March 2024 is undoubtedly a positive sign for both private and public capital markets. It presents more opportunities for companies to raise funds and creates attractive exit pathways for venture capitalists invested in privately held firms.However, it's worth noting that Reddit's IPO timing has likely been opportunistic, riding on the AI hype cycle that gained significant momentum in 2023 and continues into 2024. Reddit has positioned itself to capitalize on this trend by highlighting "data licensing" for AI training as one of its revenue streams.Interestingly, while Reddit has successfully IPOed with stock prices soaring, other major tech giants like Stripe remain hesitant to go public, citing volatile market conditions as per the Financial Times article. This highlights the cautious approach many established companies are taking towards public listings.Private markets data company PitchBook estimated that a backlog of almost 80 IPO candidates has built up over the past year, a period in which public markets have soured on tech start-ups. With so many companies waiting for an opportune window, Reddit's IPO could open the floodgates for more listings once market sentiment improves.The broader market context indicates that 2022-2023 was indeed an "IPO winter," not limited to IPOs, but also taking a significant toll on VC activity overall with a sharp decline in the quantity and size of investment rounds. Nevertheless, history suggests that after every winter comes an "IPO window" of opportunity, and Reddit's IPO could be a significant first step toward capital market reactivation.It's noteworthy that Reddit has never been profitable, even at the time of its IPO. After the VC-wild 2020-2021 period, overall investor sentiment has shifted towards selecting and supporting fewer but higher-quality, efficient companies. Therefore, the upcoming IPO window should bring a strong lineup of fundamentally robust businesses poised to become new market leaders.Reinforcing this notion is the growing trend of venture capital firms calling for more capital to invest in startups, as evidenced by the data from Carta (and Peter Walker). The three-month rolling average of total capital called by VC funds on Carta has crossed the $1B mark in January 2024, indicating a renewed appetite for investing in promising ventures.In summary, while Reddit's IPO is a positive development, it's important to view it within the broader context of market cycles, investor sentiment, and the evolving landscape of emerging technologies like AI. The road ahead may present both opportunities and challenges, but the increasing capital flow from venture firms signals a potential resurgence in investment activity.[Links to relevant posts and articles are in the comments]

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12 Most Active Angel Investors in 2023Angel investors are wealthy individuals who provide capital to startup businesses in exchange for equity. They are a vital source of funding for early-stage companies, and their investments can help to launch and grow successful businesses.1. Marc Andreessen:Instabase, Refraction AI, Ribbit Health, Axie Infinity, OpenSea, and many more.2. Naval Ravikant:Figma, Axie Infinity, Ribbon Finance, and many more.3. Ben Horowitz:Opendoor, Coinbase, Oscar Health, Figma, and many more.4. Peter Thiel:Palantir, Stripe, Affirm, and many more.5. Reid Hoffman:MasterClass, Figma, Oscar Health, and many more.6. Safra Catz:Zoom, DocuSign, Datadog, and many more.7. Mary Meeker:Stripe, Cloudflare, Oscar Health, and many more.9. Amit Singhal:Instacart, Slack, Figma, and many more.10. Krishna Bharat:Twitter, Square, Pinterest, and many more.11. David Lee:Airbnb, Stripe, DoorDash, and many more.12. Jessica Livingston:Brex, Figma, and many more.13. Kathryn Finnegan:Airbnb, Dropbox, Stripe, and many more.This is just a partial list, and these investors have invested in many other companies as well. If you are looking for funding for your early-stage company in 2023, it is a good idea to research these investors and see if your company is a good fit for their investment criteria.It is important to note that the investment criteria of angel investors can change over time, so it is always best to check with the investor directly to see if your company is a good fit.

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The stock market is ripping again. The NASDAQ opened this morning at a 15 month high.You might be wondering: "What does that mean for startup valuations?"The answer is not much, for a few reasons:1. Startup/private company valuations usually lag public company valuations by at least 6 months.2. Most of the rebound has been driven by a handful of "large cap" tech companies. Think Nvidia, Facebook, Snowflake... Those just aren't reasonable comps for most startups. Note: some smaller public tech companies that have prioritized profitability have also shown signs of recovery.3. Startup valuations don't adjust in real time. The public markets will reset valuations in seconds/minutes, but VCs can't do that. So they'll want to see if public market valuations persist at current levels.4. The IPO window has not reopened. That may change, but until it does, no tech IPOs has a stifling effect on startup valuations, particularly at the growth stage.5. Most importantly, I think there's a painful, enduring hangover from the last few years of crazy valuations on all fronts (investors, founders, employees). And this is one of those hangovers that won't really go away. You take the 4th Advil, eat the greasy cheeseburger, drink the bloody mary... and it's still there. Maybe that's a good thing.

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#Reddit IPO - Down is the new Up :When Reddit lists on the New York Stock Exchange next week, the #socialmedia platform is expected to carry a valuation of up to $6.4bn — well down on the $10bn it was worth in 2021.Down-round #IPOs are not only going to become common, but they will also become the standard for the class of 2021. Group of late-stage companies whose #valuations soared that year as investors, punch drunk on low #interestrates, poured in astronomical sums. US venture investment in 2021 was a record $345bn, more than double the previous year.Now #startups are running out of cash and venture capital funds need to return some money to their #investors.When listings start happening in force, there will be some seriously painful consequences for later-stage investors who fuelled the 2021 start-up bubble. There are hundreds of companies that were funded in a low interest rate environment that should have been shut down or sold, but have managed to only delay the inevitable reckoning. A valuation cut might not be the worst outcome for many.#privateequity #venturecapital #technology #investments #techbubble #capitalmarket #NYSE #nasdaq #siliconvalley

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Let's take a quick jog back to 2023 and explore the VC scene – it was more than just ups and downs; it was a year of decrease in VC activity globally, minus the GCC. 📉 Shifting Gears in VCLast year, the VC world was like a tricky workout routine – challenging but rewarding. Mega-deals were taking a breather, allowing early-stage startups to sprint into the spotlight. These smaller companies offered quality opportunities at more approachable valuatice.🌱 Early-Stage Start-ups Take the Leadinvestors are trying to benefit from economic turmoil and interest rates to negotiate better deal terms as valuations are rock bottom. investors who have a long term vision can get a decent upside on the next market correction and business cycle. 🚀 What's on the Horizon for 2024?due to Market conditions, wars and interruptions of supply chains we witnesses a low IPO activity which sets 2024 to be the IPO year with companies like :Reddit, Inc. , Databricks, Klarna and Stripe.

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From Techcrunch: Fidelity cuts Reddit valuation by 41%-------------------------------Fidelity, the lead investor in Reddit’s most-recent funding round, has slashed the estimated worth of its equity stake in the popular social media platform by 41%, the latest high-profile write-down amid a weakening worldwide economy on public markets. Fidelity Blue Chip Growth Fund’s stake in Reddit was valued at $16.6 million as of April 28, […]Fidelity cuts Reddit valuation by 41% by Manish Singh originally published on TechCrunch #techcrunch #startups #breakingtechnews

Reddit’s IPO: Rewarding Power Users for Success : Motiveflikr Media#Business #Startup #Tech #Technology #AI #Artificialintelligence #Economy #Growth #Strategies #Digital #Globalupdates #news #innovation #success #change #money #wealth https://lnkd.in/dGpTTMxc #Startups

🌵 Why I'm so bullish on pre-seed angel investment and why 2024 should be a good year for the startups and tech ecosystem📈 We have seen recent IPOs like the one of Instacart in Sept 2023 and more recently Reddit, Inc. (last week), which are giving some fresh air to the IPO market And they are doing well👉 Instacart IPO 6 months later ➕ 60%👉 Reddit IPO 1 week later ➕ 30%There are 5 more 🌶 hot ones expected this year (see graph)This impact directly the VC marketIPOs --> liquidity events --> more growth and late stage deals --> more Serie A and B deals --> attracting more capital againSo, as an angel investing in pre-seed, you don't invest in the current market.You always invest in a market in 3y-5y💹 And as every crisis repeats the same pattern, the fact that we see again few IPOs, it means we certainly reached the bottom of the market🐂 Hence, I'm expecting the coming years to be a bull market, which means that if have picked the best founders and startups, we should be in a good position as investors in that future market.Also, that should implies more operators getting their partial / full cash out, which part of it would be reinvested in the ecosystem. 💰 💰 And hopefully that implies new Upscalers' members ⚡ Which expected tech IPOs are you more excited about ?------✍ I write about startups, community, and angel investments, focusing on the greatest tech operators.👨💻 I run Upscalers, the Home of the best operators in Europe (and soon beyond) to network, grow and learn together, and angel invest.Apply to join us --> https://lnkd.in/e_zr4Xzd

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