Category: Lowdown

???????? Hi friends!

Just when you thought it was safe to go out in London…

I turn up with a hot mic and a bunch of crazy questions ???? 

Last night, with the team from Launchpod Studios in tow, I joined a tonne of people at Dream Factory for the London Venture Capital Network social and went a little off the chain.

Watch this space, as I bring some of the amazing conversations to light ????

Let’s get into this week’s happenings.

Today I look at:

????️ OpenAI at $90bn
???? From HS2 to HS who?
???? Akshata Murty (Rishi’s wife) winds down her VC fund

And remember to check out this week’s Nothing Ventured pod where we take a look back at some of our guests looking forward to the future.

Also, if you have any feedback or if there’s something you’re desperate to see me include, just reply to this mail or ping me online – I’m very open to conversations.

Give me a follow on LinkedIn, Twitter (do I really have to start calling it ‘X’ soon?), Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with “Lowdown” and, more importantly, tell me why you’d like to connect ????????)

Don’t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what we’re doing!

Now let’s get into it.

The Lowdown

The Rise and Rise of OpenAI
OK, there are few things to unpack in this bit of news that has been the talk of tech circles and whatsapp groups.

Firstly, it’s been less than 12 months since OpenAI’s last round but, should this go forward, we’re looking at 3x the valuation.

And what a valuation!

Reportedly up to a whopping $90bn.

Which would comfortably propel it from no 10 on this list of the most highly valued private ventures to number 3, behind only SpaceX ($137bn) and ByteDance ($225bn) – based on figures from this August.

And, if the below article is to be believed, they will be taking in the capital as a secondary financing, where employees or even existing shareholders could take some of their money off the table.

Now if that were the case, it would be an incredible outcome for those employees that are able to take advantage, but it also would suggest that the business doesn’t need fresh capital having raised $300m earlier this year and – wait for it – on track for over $1bn of revenue this year alone.

I’ve had more than a few conversations with investors that wish they could have gotten into the last round. No doubt they’re kicking themselves even more right now given both the upside as well as the performance.

HS Who?
In niche UK news, the government seems to be about to roll back on plans to link Birmingham and Manchester via HS2, the flagship infrastructure project that was approved over a decade ago… by the ‘same’ government.

But the politics of the decision aside, this is a pretty big blow for the tech scene outside London.

It signals that the country isn’t willing to invest in itself, which in turn has the potential to slow down inward investment to the the region and the country in general.

Given how critical the government made Levelling Up to its policy platform, this feels like an extremely odd decision to have made.

I found this article by Yiannis Maos MBE, founder of Birmingham Tech Week, incredibly insightful.

Winding Down a VC
I am fairly apolitical from the perspective that I just want a government that works and supports all levels of the country and economy, as fairly as possible.

Even in the short time that I have been writing this newsletter, it will probably come as little surprise to most readers that I am not a fan of the current government.

But articles like the one below give me a headache.

Whatever else you may have to say about the couple, the fact that Akshata Murty was using her wealth to invest in startups is a good thing for the country.

The fact that those startups availed of the Future Fund during the pandemic is not news, it is the reality of the scheme – it was set up to provide loans to high growth startups during a period of massive uncertainty when there was a real risk of many businesses going to zero.

The fact that some of these businesses have failed is not news. And that’s certainly the case for anyone that understands anything about the Power Law distribution of outcomes for VCs, and the ways VCs approach portfolio construction.

At a time when markets in general have pulled back, having capital allocators with the ability and network to support these businesses so that they can survive, thrive, grow and provide jobs and benefits to the economy is (at the risk of repeating myself) a good thing.

So headlines that prey on the tribalistic nature of people and using a political angle to create outrage where, really, outrage is not warranted, just do the ecosystem a massive disservice.

I know of plenty of VCs with strong ties to decision makers in various industries as well as government. It’s a crucial part of ensuring that the startups they back have the best chances at success.

Yes, it is understandable that there is going to be more scrutiny for the wife of the PM, but the fact that some of the portfolio took money from the Future Fund is not the problem here, and shouldn’t be – in my opinion – the story here, or the reason to close down the fund.

And finally, a word from everyone’s favourite meme master…

VCs doing diligence on AI startups

— Dr. Parik Patel, BA, CFA, ACCA Esq. (@ParikPatelCFA)
Sep 23, 2023

????And that’s a wrap for this edition of The Lowdown – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

???? And if you think someone else might love this, please forward it on to them,

???? Finally, if you’re a fan of the Nothing Ventured podcast, please don’t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

That’s it from me so until next time…

Stay liquid 🙂

Aarish

???????? Hi friends!

Bit of a whirlwind of a week for me this week with the first recording of the new season of Nothing Ventured in the bag.

Judging by some of the exploratory calls I’ve been having over the last few weeks, the rest of the season looks like it’s shaping up to be pretty spectacular!

In some personal news, I am writing today’s issue from my first ever Apple device, the Macbook Air – as someone who has been a Windows / PC user for the last 30 years, this has been a tough, but rational decision for me – check out my thoughts here.

Down to business!

Today I look at:

????️ Getir’s down round
???? When are we going to see some CBDC?
???? What happens when Excel gets bitten by Python?
???? What’s going on with tech’s talent pool?

And remember to check out this week’s Nothing Ventured pod where we take a look back at some of our guests most passionate about levelling the playing field in venture ????????

Also, if you have any feedback or if there’s something you’re desperate to see me include, just reply to this mail or ping me online – I’m very open to conversations.

Give me a follow on LinkedIn, Twitter (do I really have to start calling it ‘X’ soon?), Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with “Lowdown” and, more importantly, tell me why you’d like to connect ????????)

Don’t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what we’re doing!

Now let’s get into it.

The Lowdown

Before I get started, those of you who are fans of the pod may remember our episode with Sameer Singh.

Sameer is the go-to guy for anything network effects (NFX) related to the extent that he parlayed his passion for NFX into a course, working with Atomico’s Angel Programme and joining Speedinvest as a Venture Partner.

He knows his stuff.

And if you want to learn from him, the next cohort of Applied Network Effects begins on 26th September 2023. Check it out and apply here. ???? 

Now, let’s check in with what’s been happening in the wider tech and venture ecosystem this week…

Getir Gets Down (Round)
Now I’m not gloating. Really, I’m not.

It’s never great to see the impact that business failures have on employees and the people and businesses that have come to rely on a significant part of their income from a behemoth that once was.

But, if you have spent any time following, reading or listening to me, you will know that since pretty much day one, my attitude to the whole 15 minute grocery delivery space can be best summarised as “whaaaa ?????????”

These business models were highly reliant on a mass of cheap venture dollars coming in to essentially subsidise customers’ – let’s face it – laziness.

In the latest example of “told you so” in the sector, Getir is purportedly raising fresh capital at a price that would slash their valuation by a whopping 78%.

As this FT article suggests – this overall dampening of fortunes in the grocery delivery space doesn’t bode at all well for Instacart’s upcoming public listing.

Maybe this isn’t the end for fast delivery, but it certainly feels like if they don’t figure out a way to make the economics work, the end can’t be too far away.

Will We Ever See a UK CBDC?
Probably.

But right now, it’s on hold due to concerns about privacy.

It’s worth checking out this episode I recorded with Alex Mann where we talk about Bitcoin for the most part, but we also delve into the implications of a Central Bank Digital Coin (CBDC) which – from where I’m sitting – could be pretty dystopian.

Imagine having a coin that is programmed so that you have to use it within a certain time frame, or only on certain ‘approved’ products or services…

The reality is that we could very easily see some of our freedoms encroached upon without us even realising it.

Or not.

The point is that we don’t know, and I’m not sure I’m willing to risk taking a punt on the government – any government – getting it right.

Excel Gets Bitten – by Python
Having just moved over to the Macbook and, prior to that, having moved most of my spreadsheet work over to Google Sheets, I have to say I wasn’t expecting to be writing about Excel here.

But Microsoft once again shows that they want their spreadsheet tool to be first choice for progressive finance users by announcing this new integration.

I’ve dabbled with programming (never deep enough to actually be any good, but good enough to know I could do a lot of damage if I applied myself), and I have locked horns with VBA, SQL and Python over the years.

If Excel can make this integration intuitive with smart UX and UI, it’s going to make a lot of finance types like me pretty happy.

Being able to do advanced data analysis and work with charts seamlessly all from within Excel is a big deal and I’ll be watching closely!

Where Have All the Employees Gone?
Or rather, where are they going?

Net headcount has fallen for 5 out of the first 6 months this year and overall hiring has more than halved in H1 2023 as compared to the same period last year.

The question that Carta poses in their Data Minute newsletter is whether founders will remain capital efficient when – I’d say if – funding bounces back.

My thoughts are that it is not a given that funding does come back to anywhere near the levels we have seen in the last few years at the same sort of valuations as we previously saw.

This is important as companies will, in my opinion, have smaller balance sheets to work from (i.e. investors may invest the same net dollars, but across a larger cohort of businesses at more sensible valuations).

And I also think that the last year has really sunk into people’s psyche.

I don’t believe that founders are suddenly going to become profligate with their spending just because investor purse strings have loosened slightly again.

But the further forward we move, the more likely we are to get to some point of equilibrium, and then we can take stock of where things are, and where they’re likely to go.

And finally…

Did you play any bingo this summer ?????

Instagram post by @prayingforexits

????And that’s a wrap for this edition of The Lowdown – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

???? And if you think someone else might love this, please forward it on to them,

???? Finally, if you’re a fan of the Nothing Ventured podcast, please don’t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

That’s it from me so until next time…

Stay liquid 🙂

Aarish