Senior Reporter, deputy bureau chief
@theinformation
covering the money powering Silicon Valley. Author of Dealmaker. Kate
@theinformation
. Signal: 415-409-9095.
Scoop: Sam Bankman-Fried invested hundreds of millions in Sequoia Capital, Paradigm, Multicoin and Altimeter, the same VC firms that backed FTX. These ties show just how deeply entangled Silicon Valley VC firms are in SBF's collapsing crypto empire.
Adam and Rebekah Neumann’s crypto startup Flowcarbon raises $70 million in equity & token funding from Andreessen Horowitz. Yup, you read that correctly.
An investor told me yesterday that they were recently asked what the "web3 strategy" of one of their portfolio companies was. It was a smart oven startup.
Andreessen Horowitz has $16.6 billion in AUM, according to its website. Its
@coinbase
stake, at the expected $100 billion valuation, is worth an estimated $15 billion.
🤯
Scoop: A recent Sequoia secondary investment in Zapier valued the company at over $4 billion. It's quite the achievement for the enterprise software startup, which has raised just one round of venture capital, a $1.3 million seed in 2012.
"A former VC firm associate has built a crypto marketplace designed for fantasy startup investing, where users spend real money buying fakes shares — in NFT form, of course — of real startups."
Everything is fine.
A startup selling NFT jetpacks and hoverboards "that let your avatars fly in the Metaverse" just raised $7 million in venture capital funding. Was that on your 2021 bingo card?
Scoop: Nat Friedman, the former CEO of GitHub, was asked to be Interim CEO of OpenAI yesterday. He declined. Later Sunday, OpenAI announced that Twitch co-founder Emmett Shear would take over as Interim CEO.
Sequoia’s stake in Stripe could be worth ~$60B if Stripe goes public at a $300B valuation (some major guesstimating here). The new structure allows them to hold till, perhaps, Stripe’s worth $1T. The revamp is worth it for the Stripe returns alone.
Am I getting this right?
Panic in China, where SVB has played a hugely important role in the country. Chinese startups can’t raise money from overseas investors in foreign currencies without offshore bank account. Opening an SVB account has been the easiest option.
Every time I log on to Twitter this week:
~$10 million *pre-seed~
~6 month old fintech valued at $2 billion~
~largest Series A in history~
~166 new unicorns in 2021~
What am I missing?
New: Sam Altman has already spoken to investors about a new venture. No details yet on what it will look like but its expected that OpenAI employees will jump ship and join Altman in whatever he builds next.
Scoop: A few weeks after announcing a $300 million funding round,
@dapperlabs
, the startup behind the NFT marketplace NBA Top Shot, is raising *more* money. This time at a valuation over $7.5 billion. w/
@alexeheath
If you’re keeping track, the OpenAI board asked Anthropic CEO Dario Amodei, former GitHub CEO Nat Friedman and Scale AI CEO Alex Wang to come aboard as Interim CEO. All declined. Former Twitch CEO Emmett Shear was named Interim CEO on Sunday night.
BREAKING: Over the weekend, OpenAI's board approached Dario Amodei, the CEO of its top startup rival, about a potential merger.
The approach was part of an effort by OpenAI to persuade Amodei to replace Altman as CEO.
I’m hearing that many VCs are advising founders to keep no more than $250,000 of funds in SVB. Here’s what USV told founders in an email:
Keep “only keep minimal funds in cash accounts at SVB,” that is, funds of up to $250,000. “SVB is in a severe cash crisis”
The latest: Microsoft may take a board observer seat on OpenAI's revamped board if Altman returns. That would mean no voting power. Other new board recruits could be Bret Taylor, Marisa Mayer, Brian Chesky, Roelof Botha & Reid Hoffman w/
@aaronpholmes
Altos Ventures, a very under-the-radar venture capital firm, invested in
@Roblox
in 2008 as part of a $2.8 million round. Its stake is worth $7.5 billion today.
$10 billion in new venture funds announced in the first week of January between Andreessen Horowitz, Katie Haun's new fund and Khosla Ventures, surely missing a few others too. 2022 VC fundraising off to a good start.
So Jake Paul, Josh Richards, Griffin Johnson and Noah Beck all launched VC funds this week (Anti Fund & Animal Capital). The influencer-turned-VC era is upon us!
The story that keeps on giving. OpenAI board is in discussions with Sam Altman to return as CEO, per
@alexeheath
. Altman is “ambivalent” about returning.
News: Keith
@Rabois
is returning to Khosla Ventures as a managing director, leaving his post at a rival VC firm, Founders Fund. The hire represents a coup for Khosla Ventures, which recently raised $3.1 billion in new funds.
Exclusive:
@DavidDobrik
has stepped down from
@DispoHQ
following sexual assault allegations against a member of his “Vlog Squad." Spark Capital, which led Dispo's Series A last month, announced earlier today it would sever all ties with the startup.
It seems like pension funds are going direct, leading rounds in private companies more often (ex: Coda, Flipkart). What happens if more LPs start going direct … and realize they don’t have to invest in VC funds to achieve strong returns? Crazy talk? Idk.
I wrote about Tiger Global’s incredibly aggressive year.
Big checks and fast closes: How one New York hedge fund is beating Silicon Valley VC firms at their own game.
The whiplash tech recruiters must have right now after spending 2+ years tirelessly trying to expand headcount, then suddenly pivoting to deep layoffs. Never seen anything like it.
Silicon Valley Bank's investment arm put $234 million in Sequoia Capital, $173 million in Andreessen Horowitz and $145 million in Ribbit Capital over the last few years. And it had just raised nearly $2 billion to invest in more VC funds.
In startup news, I wrote about
@Chime
. The company raised more than $1B in 2020 & watched its valuation swell from $1.3B to $14.5B. But for *many* years before that, top VC funds wouldn't touch it.
Figma’s $20 billion sale—the largest deal for a private tech company at the time of the announcement—is delivering MASSIVE returns to several VC firms.
Index: $2.6 billion
Greylock: $2.6 billion
Kleiner: $2.1 billion
Sequoia: $1.2 billion
and more
And the hot deal of the week is...
@DispoHQ
.
@DavidDobrik
's camera app & social startup soon to be worth over $100M. Sequoia, a16z & Benchmark are all interested. Clubhouse, Dispo sparked "renaissance" in social media investing, says
@MariaSalamancaM
WeWork's CEO tells WSJ there is an easy way for companies to spot their most engaged employees: They’re the ones who want to come back to the office. “Those who are least engaged are very comfortable working from home,” he said.
VCs, is it standard to offer limited partners a discounted management fee for participating in the first close? Had not heard of this.
From Tiger LP letter: "Investors in the first close will receive a discounted management fee of 1.75%."
Scoop: Corporate card startup
@tryramp
is raising $50 million from
@stripe
at a $1.6 billion valuation. It's also raised additional capital from hedge fund D1 Capital.
w/
@berber_jin1
We wrote about the history of Andreessen Horowitz, the early Coinbase investor that gained $11B this week (one of the biggest paper returns from a single-company investment in VC history.) + a look at its ferocious investment pace of late. w/
@amir
New: Redpoint Ventures is launching a new publication, featuring podcasts and content for TikTok, YouTube & Instagram.
It’s not the first VC firm to get into the media biz. Andreessen Horowitz launched the media property Future in June.
In other news, Y Combinator's latest batch, which kicked off last week, has more than 300 companies. The last batch had 220. It just keeps getting bigger and bigger!
Ryan Breslow of Bolt + Twitter rant fame is working w/ psychedelics co MindMed founder & a founder of the ill-fated vending machine startup fka Bodega on a new startup, , where crypto meets pharma.
SVB’s venture arm SVB Capital is a limited partner in a bunch of prominent VC funds. What happens to those commitments? SVB Capital also has more than 100 direct investments in startups.
News:
@GreylockVC
has raised $500M dedicated exclusively to supersize seed deals (up to $20M each) at “lean in valuations.” The announcement comes just weeks after Andreessen Horowitz introduced a $400M seed fund as the battle for seed heats up.
The latest: VC investors, fearing a mass exodus at OpenAI or Microsoft pulling out of its $10B commitment, are negotiating w/ OpenAI's board & w/ Microsoft. A decision about Altman's return is expected to be reached in hours. Stay tuned! w/
@nmasc_
Crypto scoop: NFT game Axie Infinity valued at $3 billion in a new round led by Andreessen Horowitz. The valuation reflects the *tremendous* growth in sales on the multiplayer NFT game.
w/
@hgmiller29
Breaking news: Sam Altman has been removed as CEO of OpenAI after a internal review "concluded that he was not consistently candid in his communications with the board."
I talked to
@paradigm
's
@FEhrsam
and
@matthuang
, the founders of what's considered the top VC firm exclusively focused on crypto, about their new $2.5 billion fund and crypto's "dramatic sea change."
Re: a16z building a larger media platform. Curious if founders are interested in bypassing tech news sites and publishing funding & other news on VC blogs instead?
I know it’s much harder for certain types of companies, like B2B SaaS, to get traditional media coverage.
Chris Dixon addresses a16z's investment in Adam Neumann's new company at
#tcdisrupt
.
"We do our own research. We don’t rely on books and movies for our diligence. We do our own research and we just came to our own conclusion about a lot of what happened."
Scoop: iPhone designer Jony Ive is in talks with VC firms including Emerson Collective & Thrive Capital to raise money for his new AI hardware company. Ive is working with Sam Altman on the new venture. w/
@Jessicalessin
&
@coryweinberg
Scoop: VC Firm Greycroft is cutting five investors after missing its fundraising target by 40%.
Startups & big tech companies have been dealing with major layoffs for 2 years now but the realities of the downturn are just beginning to hit many VC firms.
Two little deal scoops on fintech startups focused on the creator economy. Stir & Karat have closed competitive Series As led by top funds. VC investors (a16z in particular) are getting more serious about investing in tools for creators & influencers.
A stat that boggles the mind: U.S. startups have raised a record $140 billion so far this year, or 91% of the $153 billion raised in *all of last year.*
Scoop: A shareholders’ agreement prepared by Musk’s lawyers for equity investors shows that Musk will retain absolute authority over key decisions. More details here:
Scoop: Former Twitter CEO Parag Agrawal has raised money for—you guessed it—a new AI startup from Khosla Ventures, Index Ventures & First Round Capital. Agrawal was fired by Elon Musk immediately after his takeover of this website in late 2022.
25% of Sequoia's new deals this year were in crypto, several,
@shaunmmaguire
says, just haven't been announced yet. That includes
@ParallelFi
, which Sequoia & Founders Fund recently valued at $250M.
More here on how Sand Hill Road is embracing crypto:
Since taking over Y Combinator,
@garrytan
has laid off staff, shrunk its batches of startups and eliminated its late-stage fund.
He's also raised eyebrows with his attacks on the firm’s critics. Some founders find his blunt public persona invigorating.
VC funding for creator economy startups dropped 30% in the first quarter.
After last year's frenzy, "investors are getting back to [the] fundamentals of actually understanding businesses."
by
@mahiradayal
So last year there was no VC “summer slowdown” because lockdowns prevented vacations. Instead it was one of the most active and competitive investment periods of 2020. This summer’s a totally different story. The biggest summer slowdown ever is coming, right??