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As India’s start-up ecosystem matures, a new trend is emerging: <keyword id="23791918" type="General" weightage="20" keywordseo="micro-acquisitions" source="Orion">micro-acquisitions</keyword>. This approach – focussed on buying smaller businesses – has become increasingly popular among Indian entrepreneurs looking for cost-effective growth avenues. Platforms like <keyword id="23791917" type="General" weightage="20" keywordseo="flippa" source="keywords">Flippa</keyword> are at the forefront of this shift, facilitating these transactions by offering a user-friendly, data-rich environment where buyers and sellers can connect seamlessly. In a country that has seen rapid growth in entrepreneurship, micro-acquisitions represent a shift from the traditional emphasis on large scale deals. And this trend is being fuelled by an influx of domestic funds and micro venture capital (VC) firms dedicated to nurturing early-stage startups. <h2>Changing Mindsets: Why Micro-Acquisitions?</h2>Entrepreneurs are turning to micro-acquisitions for the flexibility, speed and cost-efficiency that they offer. By targeting smaller, less capital intensive deals, they are able to side step the complexities of a traditional M&amp;A, making it a viable pathway for expansion and growth. Besides these can also help entrepreneurs diversify their holdings and adapt to market demands without overcommitting resources. Flippa allows Indian entrepreneurs to access a global marketplace where they can identify businesses aligned with their objectives. <h2>The M&amp;A Landscape in India</h2>While the US mergers and acquisitions market has seen slower growth, private capital inflows in India are on the rise, according to <a href="https://www.pwc.com/gx/en/services/deals/trends/private-capital.html">PwC</a>. The second quarter of 2024 proved to be a landmark period for Indian startups, with a 57% year-on-year surge in megadeals driving fundraising to an eight-quarter high of $5.2 billion, as reported by <a href="https://www.dealstreetasia.com/reports/india-deal-review-q2-2024">Deal Street Asia</a>. Flippa has capitalised on this trend. A marketplace founded in 2009 for buying and selling online businesses, it has amassed over 3 million users worldwide. As of <a href="https://flippa.com/data-insights?buy_sell=PR_DataInsights_EmbedGraphs">October 2024</a>, Flippa had 396,000 active buyers on its platform with a combined wallet of $75 billion, an increase of 15,000 active buyers month-on-month. This broad, engaged user base gives Indian entrepreneurs a diverse pool of acquisition targets, from digital properties to app-based ventures. Notably, data-driven app acquisition companies like KalaGato leverage Flippa to identify the right opportunities. “If you’re trying to get into the market, a platform like Flippa is a great place to start,” said Aman Kumar, Founder of KalaGato. <h2>Cutting Edge Technology At Work</h2>Flippa’s technology sets it apart, using a proprietary <a href="https://flippa.com/product/recommender-engine">matching algorithm</a> powered by an AI-driven graph neural network that assesses over 100 factors to match buyers and sellers. This technology streamlines the acquisition process, helping entrepreneurs find suitable opportunities more efficiently, especially in a crowded market like India, where navigating business brokers or directly approaching potential sellers can be time-consuming and fraught with challenges. “Flippa as a platform is continuously evolving. Once you start looking at exits or the potential to exit a business, then a platform like Flippa is super useful,” Kumar adds, emphasising the platform's adaptability to the needs of modern entrepreneurs. Another standout feature is its <a href="https://flippa.com/product/deal-room">multi-user Deal Room</a>. This comprehensive digital sales hub allows users to manage the entire sales process for online businesses and digital assets in one place. Sellers can communicate with buyers in real time, filter messages, and review offers and Letters of Intent (LOIs) within the Deal Room itself. This organisation is particularly helpful for entrepreneurs who may be overwhelmed by the volume of inquiries when trying to sell their business. The Deal Room provides real-time notifications about buyer engagement, ensuring that users can respond promptly and keep negotiations moving forward. Buyers are invited to the Deal Room on a scheduled basis, creating a structured interaction environment. <h2>Prioritising Security and Trust</h2>A secure transaction environment is crucial, especially for entrepreneurs new to acquisitions. Flippa’s <a href="https://flippa.com/product/insurance">insurance</a> policies offer this layer of security for both buyers and sellers. The Buyer Protect policy safeguards buyers against financial losses resulting from seller misrepresentation or breaches of warranty, covering up to 100% of the enterprise value of the business. Meanwhile, the Seller Protect policy shields sellers from potential financial losses, creating a balanced environment for transactions. This dual protection reinforces trust and allows the involved parties to focus on growth without worrying about potential hidden risks. <h2>Market Insights for Informed Decision-Making</h2>To further assist users in making informed decisions, <a href="https://flippa.com/product/market-insights/">Flippa Market Insights</a> provides valuable data on online businesses and digital assets. This tool enables users to compare prices of similar businesses, benchmark performance metrics like average order value and customer lifetime value, and access real-time sales data, including historical performance information. Users can filter this data by time period, business model, and price point, ensuring they have the insights needed to navigate the acquisition landscape effectively. Flippa’s expert vetting team reviews the stated financial performance of every asset priced above USD $50,000, providing an additional layer of credibility to the listings. <h2>A Bright Future for Micro-Acquisitions in India</h2>With the Indian startup ecosystem thriving and the appetite for micro-acquisitions only expected to grow, Flippa stands at the forefront by connecting ambitious entrepreneurs with the resources they need to succeed. Whether you’re an established business owner looking to expand your portfolio or a newcomer eager to dip your toes into entrepreneurship, Flippa offers a wealth of opportunities in this exciting landscape. So, if you are interested in starting your exit journey, get a free valuation for your business here - <a href="https://flippa.com/free-valuation">get a FREE valuation</a>. Disclaimer: This article is generated and published by the Insider Studios team. You can get in touch with them on <a href="mailto:insiderstudios@businessinsider.in">insiderstudios@businessinsider.in</a>

The rise of micro-acquisitions in India: How Flippa is driving the trend

<keyword id="22948419" type="General" weightage="20" keywordseo="Reflect-Orbital" source="keywords" meta.keywordsubtype="org" meta.entityname="Reflect Orbital" meta.hostid="261" meta.entityid="Reflect Orbital">Reflect Orbital</keyword>, a California-based startup, has set its sights on a futuristic goal: providing "<keyword id="22948420" type="General" weightage="100" keywordseo="sunlight-on-demand" source="keywords">sunlight on demand</keyword>" using orbiting mirrors in space. The company's vision is to address one of the biggest challenges in <keyword id="19915217" type="General" weightage="20" keywordseo="solar-energy" source="keywords">solar energy</keyword> — the inability to generate power after sunset or during cloudy days — by using a fleet of <keyword id="20279522" type="General" weightage="20" keywordseo="small-satellites" source="keywords">small satellites</keyword> equipped with highly reflective <keyword id="22948421" type="General" weightage="20" keywordseo="Mylar-mirrors" source="keywords">Mylar mirrors</keyword>. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">How the technology works</h3>Reflect Orbital plans to deploy 57 small satellites into low-Earth orbit. Each satellite will be outfitted with a 33-square-foot reflective Mylar mirror. These mirrors are designed to reflect sunlight down to Earth, targeting <keyword id="20658734" type="General" weightage="20" keywordseo="solar-farms" source="keywords">solar farms</keyword> and extending their operational hours by providing an extra 30 minutes of sunlight after sunset or before sunrise. The mirrors will focus sunlight into a concentrated beam, directed by solar farm operators using a simple interface, where users can log in, provide GPS coordinates, and request sunlight. <div type="twitter" handle="bennbuilds" handlename="bennbuilds" favoritecount="0" retweetcount="0" id="1826682383514697993"></div>The idea is to make solar energy more available when it’s most needed — not just during daylight hours, but also in the early morning and evening when electricity demand is typically higher. This could potentially increase the efficiency and profitability of <keyword id="20423867" type="General" weightage="20" keywordseo="solar-power-generation" source="keywords">solar power generation</keyword>, as energy produced during these periods can be sold at higher rates. <h3 style="line-height:1.2;margin-top:14pt;margin-bottom:4pt;">Potential challenges</h3>Despite the excitement around this technology, there are several challenges that Reflect Orbital will need to overcome. Weather conditions such as thick clouds or storms could obstruct the reflected sunlight, limiting its effectiveness. Seasonal changes that affect the angle and duration of sunlight might also present difficulties. Additionally, the potential environmental impact, including light pollution and interference with astronomical observations, has raised concerns among scientists and environmentalists. <div type="Article" hostid="261" msid="112805908" title="How will Sunita Williams’ body have changed when she returns from space in February 2025?" mstype="2" mssubtype="0"></div>Reflect Orbital is aware of these challenges and has designed the mirrors to minimise light pollution. The company has also tested its technology using a hot air balloon, which successfully simulated the satellite mirrors' effect by reflecting sunlight down to a solar farm. According to co-founder <keyword id="22948422" type="General" weightage="20" keywordseo="ben-nowack" source="keywords">Ben Nowack</keyword>, the company was able to generate "500 watts of energy per square metre" of solar panel, which is about "half the brightness of the sun." <div type="twitter" handle="bennbuilds" handlename="bennbuilds" favoritecount="0" retweetcount="0" id="1767961251186163857"></div>Reflect Orbital is still in the early stages, with plans to launch its first test satellite in 2025. Interest in the project has been strong, with over 30,000 applications already submitted by individuals and organisations eager to participate in the initial offering of "sunlight on demand." This ambitious project could mark a significant step forward in renewable energy technology if successful, providing a novel solution to the intermittent nature of solar power and helping to accelerate the transition to <keyword id="21313059" type="General" weightage="20" keywordseo="sustainable-energy-sources" source="keywords">sustainable energy sources</keyword>.

Space startup Reflect Orbital plans to sell "sunlight on demand" — how will it work?

<ul class="summary-list"><li>Mark Weinstein is a dad of three kids under 9.</li><li>He was an early investor in a social media company.</li></ul>This as-told-to essay is based on a conversation with<a target="_blank" href="https://www.markweinsteininventor.com/"> Mark Weinstein</a>, author of<a target="_blank" href="https://affiliate.insider.com?h=9208c15dd48705a079452acf43cc89670528cdbcaf041ca1cb7046d5085ecbd2&amp;postID=66fec92ee5b5408300449b37&amp;postSlug=online-privacy-expert-and-dad-shares-how-protect-kids-online-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.amazon.com%2FRestoring-Our-Sanity-Online-Revolutionary%2Fdp%2F1394273967"> Restoring Our Sanity Online</a>. It has been edited for length and clarity.Back in 1998, I launched two social media companies: SuperFamily and SuperFriends. I wanted to help <a target="_blank" class="" href="https://www.businessinsider.com/online-games-apps-play-with-family-kids-multiplayer">connect families online</a>. Social media at that time felt so beautiful and wholesome to me.Now I'm a <a target="_blank" class="" href="https://www.businessinsider.com/what-not-to-ask-chatgpt-gemini-claude-privacy-security-confidential-2024-6">privacy expert</a>, and I talk about the dangers of surveillance capitalism, where Big Tech companies make money from selling your data.I'm also a dad of three kids under 9. That's intentionally vague because I share as little information about them as possible.I have <a target="_blank" class="" href="https://www.businessinsider.com/how-bill-gates-limits-tech-use-for-his-kids-2018-1">strict rules for my kids</a>, friends, and family to keep my children safe online and around technology.<h2 id="3e356a0e-cce3-4e0f-ba8a-eda98eeac7cb">I never allow pictures to be posted</h2>I <a target="_blank" class="" href="https://www.businessinsider.com/why-parents-shouldnt-post-back-to-school-photos-therapist-explains-2022-8">don't ever post pictures of my kids</a>. If your privacy settings are locked down, strangers might not see a lot, but social media platforms still see (and store) everything. I don't want that algorithm to be able to identify my children.When I talk with family and friends about this policy, it's a simple conversation. If I see someone taking a picture, I ask them not to post it. Sometimes, that opens a bigger conversation about why we have that rule. It has never led to friction.<h2 id="c5422b24-d221-42f4-bf10-df0b72a158cf">I rely on group texts instead</h2>For me, group texting is what social media was five years ago.<a target="_blank" class="" href="https://www.businessinsider.com/guides/tech/how-to-name-a-group-chat-on-iphone">In a group text</a>, I can share a cute update about the kids or send a picture to another parent on a playdate.It's private, secure, and an effective way of building connections without the risk of exposing the kids' faces and their data (including who they spend time with) on social media.<h2 id="9ee298a9-c4db-4b12-8bce-5c2c32e7f1a7">My tots have 0 screens — not even FaceTime</h2>My two younger <a target="_blank" class="" href="https://www.businessinsider.com/working-mom-zero-screen-time-toddler-2023-8">children have zero screen time</a>. In fact, we don't even FaceTime with family. I think it's very unsettling for kids to see their loved ones behind a screen. Personally, I don't think toddlers are equipped to understand why their loved one (who they normally see in person) is now on the screen. I worry it can be disorienting, and I don't think the benefits of a FaceTime chat are worth the possible emotional confusion for my kids.My older child has just started using one of my two phones to text me when I'm out. That's the only thing they're allowed to use the phone for.It gives me the same sense of security that I used to have with a landline. I monitor their phone use very carefully and encourage other parents to do the same.<h2 id="e17f3bf0-a619-4c8e-bdd7-8fc28649a204">We have tech-free playdates but don't try to force our rules on others' houses</h2>When my child has friends over, we have a no-tech rule. They have so much more fun outside or doing art projects. But when my kid goes to a friend's house, I know they might be exposed to YouTube or online games.I don't try to enforce my rules at other people's houses — in the same way, my kid might get more sugary treats at a friend's than at home.Luckily, my eldest child has realized they have more fun playing offline, so I don't have to worry about too much exposure with friends.<h2 id="2dd02ff2-cbc7-47af-9734-415368e97420">I teach my kids about online privacy and critical thinking</h2>Just like I teach my children about physical privacy within the home, I talk with them about online privacy, too.I also touch on the dangers of being online. I'll say something like, "This is a new industry, and we need to figure out how to filter it so that it's right for kids." Or, "Social media can lock you inside your head and expose you to ideas you're not ready for."This language helps kids feel like they're being protected, not punished.<h2 id="d019108a-1f90-487e-bc6c-801ad4f9234f">I flip the script on sharing</h2>As kids get older, there's more opportunity for friends to tag them on social media or share pictures online.I'm not at that stage yet, but I hope to talk with my children so they're confident asking friends not to share their pictures if that's their preference. I want to create allure around being an offline kid.<h2 id="0a3e7f8e-2d05-44eb-a7d0-3f6f6c3f0501">I model tech-free time</h2>Kids do what their parents do, not what their parents say. That's why it's important to me not to use my phone or technology in front of the kids. When they're around, I keep my phone up high and well out of reach.With some practical steps, we can navigate this world of screens to keep our kids and ourselves healthy and protected online.After all, everything that's good for our kids when it comes to online privacy is also good for us.

I invested in early social media startups. After having 3 kids, here's why I never share my kids' photos online and prefer group chats instead.

<ul class="summary-list"><li>OpenAI is now worth $157 billion, but it can't rest easy yet.</li><li>High costs, competition, and a lack of profitability remain challenges as it seeks to build more powerful AI models.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/where-openai-cofounders-are-now-sam-altman-2024-10">OpenAI</a> just closed the most lucrative funding round in Silicon Valley history. Now comes the hard part: emerging victorious in a fiercely competitive AI industry.Though Sam Altman's company cemented its status as a frontrunner in the generative AI boom this week, securing a new $157 billion valuation after raising <a target="_blank" class="" href="https://www.businessinsider.com/openai-investors-latest-funding-round-2024-10">$6.6 billion of fresh capital from marquee investors</a>, its leading position is hardly guaranteed. Since OpenAI launched <a target="_blank" class="" href="https://www.businessinsider.com/everything-you-need-to-know-about-chat-gpt-2023-1">ChatGPT</a> in late 2022, it has become clear that its mission to build large language models that rival human intelligence will involve exorbitant costs that require vast resources. Sure, <a target="_blank" class="" href="https://www.businessinsider.com/sam-altman-openai-raising-money-strawberry-after-rough-start-year-2024-9">Altman's company</a> now casts a massive shadow over the industry with its fresh $157 billion valuation. That said, plenty of rivals are chasing him in an effort to compete for capital and resources, complicating the startup's path to profitability.So, while OpenAI has a moment to celebrate, we're about to discover how deep its moat is and whether a brutal wave of consolidation is coming for <a target="_blank" class="" href="https://www.businessinsider.com/companies-using-ai-bain-survey-roi-2024-6">Silicon Valley's hottest industry.</a><h2 id="0306e0b1-bc4b-4999-8da3-b6a62f21a99a">An expensive race begins</h2><div type="image" title="OpenAI CEO Sam Altman." height="2392" width="3600" msid="113915965" hostid="261" sizebytes="163328"></div>While OpenAI's new valuation and its fresh injection of capital represent huge sums that would be the envy of any founder in Silicon Valley, there are signs that Altman remains on edge.According to a Financial Times<a target="_blank" href="https://www.ft.com/content/66e0653e-c446-47b2-8a7f-baa54ccbfb9a?accessToken=zwAAAZJOTf4Kkc9m4GU-xEZHstOKf7qlTMv7mg.MEUCIEJBi-VbRpNb9MIo2y24cDg8XwZ1lH2wIV_Kc-UGHtCBAiEA8JUYYonEqynzl_Wyz-3pPnT4q23D5MCTtg0M0CZ25ak&amp;segmentId=e95a9ae7-622c-6235-5f87-51e412b47e97&amp;shareType=enterprise&amp;shareId=b484077e-9f3e-4aef-a08b-93a56609306a"> report</a> on the fundraising, Altman's almost nine-year-old business asked its new backers — a lineup led by Thrive Capital and includes the likes of Nvidia, SoftBank, and Microsoft — to avoid investing in rival firms, of which there are plenty.Anthropic and Mistral, both worth billions of dollars, are looking to take on OpenAI. So, too, are <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-mad-openai-asking-investors-not-to-fund-xai-2024-10">Elon Musk's xAI</a> and <a target="_blank" class="" href="https://www.businessinsider.com/man-who-revolted-against-sam-altman-just-started-research-lab-2024-6">Safe Superintelligence (SSI)</a>, the startup launched in June by Ilya Sutskever, the former chief scientist at OpenAI who led a failed coup against his former boss."For the biggest model builders, these mega-rounds are the new normal, as the cost of training runs for the biggest models are climbing into the hundreds of millions of dollars," said Nathan Benaich, founder and partner at Air Street Capital, an investment firm. There are a few good reasons why OpenAI can't rest easy.For one, the costs of delivering game-changing generative AI advancements look set to spiral. Dario Amodei, CEO of Anthropic, said earlier this year that he <a target="_blank" class="" href="https://www.businessinsider.com/anthropic-ceo-cost-10-billion-train-ai-years-language-model-2024-4">expected training runs for AI models to top $10 billion by 2026</a> and rocket to $100 billion after that.OpenAI's own training costs could hit north of $3 billion a year, <a target="_blank" href="https://affiliate.insider.com?h=5224dd1203055c905e83c9375c09087db09f238e0d53c9185b4ac4fa5f3c5a5d&amp;postID=66fe95cae5b540830043b738&amp;postSlug=openai-valuation-funding-ai-race-competition-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.theinformation.com%2Farticles%2Fwhy-openai-could-lose-5-billion-this-year%3Fref%3Dwheresyoured.at">The Information previously estimated</a>. GPT-4o costs around <a target="_blank" href="https://www.tomshardware.com/tech-industry/artificial-intelligence/ai-models-that-cost-dollar1-billion-to-train-are-in-development-dollar100-billion-models-coming-soon-largest-current-models-take-only-dollar100-million-to-train-anthropic-ceo?ref=wheresyoured.at">$100 million</a> to train, but the cost will likely rise, depending on the complexity of future AI models.In part, the costs are driven by purchases of powerful chips — known as GPUs — bought primarily from <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-ceo-jensen-huang-product-shortages-making-customers-emotional-tense-2024-9">Jensen Huang's Nvidia</a> to build clusters in data centers. These are essential for providing the computing power needed to run LLMs. The battle to retain talent has also been vicious in the current frenzy, with AI labs vying for an edge over competitors being pushed to offer increasingly eye-watering compensation packages.<div type="image" title="Jensen Huang in a leather jacket in front of a large window." height="2399" width="3599" msid="113915961" hostid="261" sizebytes="586534"></div>"These costs will only grow as companies invest more and more to battle for often marginal performance advantages over their competitors. This race is without obvious historic parallels, thanks to the eye-watering capex demands and the lack of a clear path to profitability," Benaich told BI.Though OpenAI's new arsenal of capital will help it fund some of the more expensive elements of its business, it's not exactly operating from a position of strength just yet. Last week, a report from <a target="_blank" href="https://www.nytimes.com/2024/09/27/technology/openai-chatgpt-investors-funding.html">The New York Times revealed</a> that the hottest AI lab on the planet was on track to end the year with a $5 billion loss.And OpenAI's rumored attempt to insist on exclusivity among investors could have drawbacks. Benaich described the move as "unusual" — but also a "perception of how it perceives its own market power.""It's also a bold move that risks drawing unwelcome attention from competition authorities," he added.For industry experts, it raises questions about how sustainable this is for the industry in the long run.<h2 id="8cde6f78-44e0-4d67-897e-1199d3e507b1">Investors see consolidation on the horizon</h2>As OpenAI moves to cement its position as the industry kingpin, investors anticipate some degree of consolidation among startups in the foundational model layer in the coming year.LLM startups need constant access to a bevy of capital, but not everyone can tap into the same influx of cash as OpenAI. With Microsoft's acquihire of <a target="_blank" href="http://Inflection.ai">Inflection.ai</a>, and Google similarly absorbing <a target="_blank" href="http://Character.ai">Character.ai</a>'s founding team, investors expect more of these types of acquisitions in the near future."This is a capital race as well, and only investors such as sovereign wealth funds will ultimately be able to provide the types of capital needed for these LLM startups," a European growth-stage VC told BI.Once funding dries up, existing juggernauts, including the Big Tech giants, may scoop up smaller upstarts with a vertical focus. These companies have access to a wealth of <a target="_blank" href="https://www.businessinsider.com/copyright-laws-affect-generative-ai-startups-investors-warn-2023-10">proprietary data</a> on which to train their models.VCs also see a more sobering approach to backing LLM giants at lofty valuations. "A lot of other companies are raising capital on vision and hope, and I think that you're going to start to see some rationalization around that," another growth-stage VC told BI, adding that there would be "a level of cooling down of the froth around AI next year.""You don't need 50 foundational model companies — you end up with two or four, maybe," he said.He added that those companies that do survive will be the ones that tangibly serve consumers. "You might have Amazon, Anthropic, OpenAI, Meta, and Google, but I can't imagine there will be many others."

OpenAI has secured a $157 billion valuation. Now comes the hard part.

<ul class="summary-list"><li>AI startups have raked in over $35 billion in 2024, but many have inflated valuations.</li><li>VCs say that capital-intensive startups struggling to generate revenue are raising flat or down rounds.</li></ul>Down rounds and flat rounds for VC-backed startups have <a target="_blank" class="" href="https://pitchbook.com/news/articles/vc-startup-down-rounds-decade-high">hit an all-time high</a> this year since 2014.And AI startups, which have been the darlings of the tech ecosystem since late 2022, aren't exempt from the trend.Case in point: buzzy startup Inflection AI raised $1.3 billion at a <a target="_blank" class="" href="https://techcrunch.com/2023/06/29/inflection-ai-lands-1-3b-investment-to-build-more-personal-ai/">$4 billion valuation</a> in 2023. When Microsoft paid $650 million to license Inflection AI's software earlier this year — and simultaneously hired key figures from the startup — the price tag fell short of the unicorn valuation the AI upstart had initially commanded.The Big Tech giant stopped short of officially acquiring Inflection AI, but that didn't stop the UK's competition regulator describing the acquihire as a "relevant merger situation." The deal was seen by some investors as an omen for a wider phenomenon in the AI ecosystem — an impending wave of flat rounds and down rounds."In light of the current hype surrounding the sector, we've observed early signs that the AI market may be overheating, with the increase in flat rounds, down rounds, and <a target="_blank" class="" href="https://www.businessinsider.com/wave-ai-acquisitions-deals-who-could-get-bought-2024-5">acquihires</a> being indicative of the challenges ahead," Andreas Riegler, general partner at APEX Ventures, told Business Insider.AI startups raked in nearly $50 billion globally from VCs in 2023, <a target="_blank" class="" href="https://news.crunchbase.com/ai/hot-startups-2023-openai-anthropic-forecast-2024/">per Crunchbase.</a> However, investor optimism appears to be fading in 2024. Startups are struggling to raise at the lofty valuations they did after the advent of ChatGPT-3, so many are looking at alternative funding arrangements.As growth slows, a spate of AI juggernauts have recently cut their valuations or entered acquihire arrangements that significantly slash how much they are worth. Jasper AI <a target="_blank" class="" href="https://affiliate.insider.com?h=d1540641a96b861283a8871d546a563e19e1c7e96e641adbf8c07bcd25acc706&amp;postID=66c889fb7d61a86c1873a0d6&amp;postSlug=ai-down-rounds-rise-valuations-investors-2024-9&amp;site=bi&amp;u=https%3A%2F%2Fwww.theinformation.com%2Farticles%2Fjasper-an-early-generative-ai-winner-cuts-internal-valuation-as-growth-slows">slashed its internal valuation</a> in 2023 as growth stymied, while the founding teams of <a target="_blank" class="" href="https://www.reuters.com/technology/artificial-intelligence/google-hires-characterai-cofounders-licenses-its-models-information-reports-2024-08-02/">Character.ai</a> and <a target="_blank" class="" href="https://techcrunch.com/2024/06/28/amazon-hires-founders-away-from-ai-startup-adept/">Adept</a> were absorbed by Google and Amazon, respectively."Investors went crazy for AI startups with zero revenue, at higher valuations, which will be an issue," said Umesh Padval, managing director at Thomvest Ventures. "Acquihires like Inflection.ai, Adept, and Character.AI will accelerate in the next 12 months, and these startups will have to face the music," he said."If they could be acquired for an equal amount of the last round, it's great, but it's not happening," he added. "The fact that they're selling means they're not growing otherwise."<h2 id="4f4e55ed-41da-4a23-a651-52483bc00bdb">Down rounds are on the rise</h2>In 2022, 90.2% of AI startups in the US raised up rounds, while 6.5% raised down rounds, according to PitchBook data. In 2024, the number of startups raising up rounds dipped to 81.1% — and down rounds rose to 11.4%.In 2021, the multiples in the market were at an all-time high. By 2023, startups that raised at inflated valuations could no longer justify the price tag — so had to resort to flat rounds, Padval said. Now, the AI ecosystem is in for a similar reckoning.Many startups entering these arrangements are strapped for cash because they focus on building foundational models, a capital-intensive process."A lot of them hired really expensive engineers to try to solve this problem," a London-based investor who was not authorized to speak on the record told Business Insider. "They also spend a lot of money trying to train these datasets, and what they realized is that now they're running out cash without any sort of traction to prove — so they've burnt a lot of money."The key problem is that these AI startups operate like typical software companies, "with the caveat that the infrastructure serving the customer was more expensive than before, so margins were lower," said Francesco Ricciuti, a deep tech VC at Runa Capital."Those that torch VC's money to chase growth will crash mid-flight. They will die just like the quick commerce startups," he added.<h2 id="e39c7c04-5af1-4e16-9514-c8a1902af4f7">Secondaries are becoming an attractive option</h2>Some VCs are reticent to back AI startups at the same lofty valuations they commanded in 2023 — so companies are thinking of inventive ways to raise capital."Startups aren't going out publicly and raising a flat round — but many are opting for <a target="_blank" class="" href="https://www.businessinsider.com/secondary-sales-startup-employees-are-pushing-companies-for-liquidity-2023-2">secondaries</a> as a means to do this," the London-based investor told BI.Secondary share sales have had a renewed importance in the last few years. Because of the scramble for AI talent, startups are starting to hire people with the promise of giving secondary sales to employees as a perk, Padval said."They're doing this to retain them — it's not a typical phenomenon, it's an AI phenomenon," he added.

AI startups should brace for a wave of down rounds, investors say. Here's how it might play out. 

For Saumya Bhatnagar, being the only woman in a room is far from a novel experience. An engineer by training and currently the co-founder and chief product officer at AI sales rep startup Jeeva, she remembers being the sole girl in her high school's 170-person <a target="_blank" class="" href="https://www.businessinsider.com/5-tips-women-career-coding-twilio-2020-8">coding class</a> — and that none of her male peers would sit next to her."I had to make space for myself, and there were plenty of micro and macro aggressions in the grand scheme of things that I had to talk my way through," she told Business Insider. "At the end of the day, <a target="_blank" class="" href="https://www.businessinsider.com/women-left-out-of-the-ai-investment-boom-risks-bias-2023-10">it's a man's world</a> in the VC, startups, and AI space."Bhatnagar isn't alone in her journey. Although the number of women-founded startups has increased, less than 3% of venture capital funding went to <a target="_blank" class="" href="https://www.businessinsider.com/venture-capital-decline-hurts-female-founders-gender-gap-startup-funding-2023-12">female-only founding teams</a> in 2022, according to PitchBook.A handful of women who are well-known as leaders in the AI space — including "Godmother of AI" <a target="_blank" class="" href="https://www.businessinsider.com/vcs-like-khosla-and-a16z-backing-robotics-that-use-ai-2024-7">Fei Fei Li</a>, Anthropic president and co-founder Daniela Amodei, and OpenAI's former chief technology officer Mira Murati. But others building startups report facing various gender-related obstacles to success, including bias in the fundraising process, limited mentorship opportunities, and difficulty building meaningful business relationships with men.In the AI sector specifically, which has surged in popularity since the release of ChatGPT two years ago, the challenges for female founders are even more pronounced. <a target="_blank" class="" href="https://www.businessinsider.com/meet-18-women-who-made-partner-vc-firms-in-2023-2023-11">AI continues to attract significant VC interest</a>, but women in the space face additional barriers compared to their male counterparts, starting at the education level.While a degree in engineering or computer science isn't a requirement for launching an AI company, it's often a prerequisite for techies building foundational models to tackle complex machine-learning problems. Women accounted for just 22% of AI and computer science PhD programs in the US in 2019, according to a Deloitte study.Women in 2020 made up an estimated 26% of data and AI positions in the workforce, per a World Economic Forum report. And <a target="_blank" href="https://www.uktech.news/diversity/ai-funding-women-founders-20240319">recent data from the UK </a>shows that only about 4% of AI startups in the country have women founders.Although Bhatnagar is among the small group of women in the space with advanced technical chops, she says she still notices the gender imbalance in the AI world — and that it, at times, has led to her feeling impostor syndrome and burnout.Developing relationships with other women working in the AI space has become a vital lifeline, she said. An active member of online and in-person groups, including <a target="_blank" href="https://www.womenandai.com/">Women and AI</a> and <a target="_blank" href="https://thewomenweadmire.com/">Women We Admire</a>, Bhatnagar said that she's made connections that support her in navigating difficult business dynamics, connecting with female investors, and finding solace in shared experiences."Women are not comfortable asking for help, and there's this idea that perfectionism needs to be showcased at all times," she said. "Finding a community of women has helped me take risks and realize that I'm actually doing okay," she said.Vivien Ho, a partner at early-stage fund Pear VC, has watched the meteoric rise of buzzy AI startups during the last two years and noticed that many are run by men, she said. But as a longtime community builder in the Bay Area tech scene, this didn't jive with what she was seeing on the ground. There were plenty of women interested in building AI companies, she said. Many just didn't know how to start.This observation was the catalyst for the Female Founder Circles, a community for women engineers interested in building AI startups. Each FFC cycle welcomes a cohort of around 50 women for two months of programming that includes fireside chats with existing female AI founders, company-building workshops with Pear investment partners, and other in-person events designed to help women build meaningful relationships with one another, such as pitch competitions, spa days, and public speaking practice.Demand for FFC has exploded, Ho said, with more than 500 women applying for the most recent cohort that kicked off last month. And the program has already been a success: more than 70% of participants end up incorporating their startups, and at least five women have matched with another female co-founder in their cohort, she said."Three of our FFC founders have already raised Series Bs, which is pretty incredible," Ho told BI. "We first meet them, and they're really shy, and then three years later, they're running a 100-person company and making eight figures. It's incredible to see how we can build a community that makes a difference."As women in AI create opportunities that could help them succeed, their work parallels women in another once-white-hot subsector of the startup world: at the height of the crypto craze, female-led blockchain startups earned about 6.4% of venture dollars in the third quarter of 2022, <a target="_blank" class="" href="https://www.bitget.com/blog/articles/bitget-report-the-gender-gap-in-blockchain-startup-funding-press-release">according to data from Bitget</a>.Funding in the space has dropped off dramatically during the last two years, and women continue to struggle when it comes to connecting with investors and closing rounds, <a target="_blank" class="" href="https://www.forbes.com/sites/digital-assets/2024/08/29/what-web3-data-reveals-about-gender-inequality-in-the-crypto-industry/">Forbes recently reported</a>.For Shreya Rajpal, Pear VC's FFC was one of the first times she felt genuine, positive support from the people around her. As a software engineer who cut her teeth in startups and on Apple's machine learning initiatives, she was accustomed to being the only woman whose work was judged with more scrutiny than that of her male coworkers."There are a lot of men who aren't very supportive, and being the only woman on a team means that they're often an undue level of attention on your work, so you stand out, for better or for worse," Rejpal told BI. "Pretty early on, it was obvious that I kind of needed to justify my space in the room a lot more compared to other folks."Fast forward to today, and Rajpal is the CEO and co-founder of Guardrails AI, which builds risk and reliability systems for generative AI programs. As she's progressed in her career, she's made an effort to build community with other women in tech. It's work that takes significant time, but it's been "life changing" in terms of succeeding as a founder and well worth the effort, she said.Guardrails earlier this year raised a $7.5 million seed funding round led by Zetta Venture Partners with participation from Pear, Bloomberg Beta, and GitHub Fund.In addition to participating in bigger groups like FFC, Rajpal has sought out mentorship opportunities with other women in engineering, machine learning, and project management."I became friends with a woman who is five to six years older than me and in the industry for that much longer, doing the things that I wanted to do," she said. "Hearing from her and what worked for her, in terms of changing jobs and talking to her about how she made those decisions, was the stuff that ended up being really impactful for me."Stephanie Guo, a partner at Sapphire Ventures based in San Francisco, is constantly iterating on community events for women interested in AI that strike the right balance between informational – think fireside chats and panel discussions – and informal ways for women to form connections that turn into mentor relationships.These events aren't just for would-be founders: Guo says that while the number of female-funded AI startups can sometimes seem "abysmally small," she's encouraged by the number of women who hold leadership positions at AI startups, funds, and bigger companies."We're creating both the space to have dialogue, but also a networking opportunity," Guo told BI. "These relationships stick, and there are business opportunities that actually form from them."

For women building AI startups, finding community has been the key to success

<ul class="summary-list"><li>Before he was the vice president-elect or a senator, <a target="_blank" class="" href="https://www.businessinsider.com/trump-vice-president-jd-vance-career-facts-2024-7">JD Vance</a> was a venture capitalist.</li><li>He maintains ownership stakes in several funds, according to his disclosure forms.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/election-results-congress-historic-firsts-2024-11">JD Vance</a> is a man of many careers: attorney, author, senator, vice president-elect, and, perhaps less well-known, venture capitalist.For about six years between graduating from law school and becoming a United States senator from Ohio, Vance held various positions in the space before eventually starting his own fund, Narya Capital.Over his career, Vance has been involved in investments across a broad range of business areas. Through Narya, he continues to hold a portfolio of investments in several startups, though he gave up his role as a partner there in 2022 and doesn't actively run or advise any of the companies.<h2 id="4b0a6db6-89d6-4a96-93e8-e561475e4b10">Vance's early VC career</h2>After a brief stint at a now-defunct biotech startup, Vance got a job at his benefactor <a target="_blank" href="https://www.businessinsider.com/peter-thiel">Peter Thiel's</a> venture fund Mithril Capital.He went on to work as a managing partner at <a target="_blank" class="" href="https://www.businessinsider.com/rise-of-the-rest-steve-case-jd-vance-2018-1">Rise of the Rest</a>, part of Steve Case's Revolution venture firm. The fund's mission is to invest in companies outside major tech hubs — New York, Silicon Valley, Boston — and Vance, whose outsider persona was cemented by his memoir <a target="_blank" class="" href="https://www.businessinsider.com/jd-vance-hillbilly-elegy-transformation-trump-vice-president-2024-7">"Hillbilly Elegy"</a>, was <a target="_blank" class="" href="https://www.businessinsider.com/jd-vance-venture-capital-opioid-nonprofit-tech-record-ohio-senate-2021-8">seen as a perfect fit for the fund</a>.Vance was active in a number of deals for the firm, including leading investments in storage-sharing startup Neighbor, agtech company AppHarvest, and AI outfit Pryon, Rise of the Rest confirmed.<h2 id="114f37cf-0035-49cd-8b40-1bd02d5bdb6c">Vance co-founded Narya Capital in 2019</h2>After two years, Vance broke out on his own, cofounding <a target="_blank" href="https://www.businessinsider.com/hillbilly-elegy-jd-vance-launches-vc-fund-backed-by-thiel-2020-1">Narya Capital</a> in 2019 with investments from Thiel, former Google CEO Eric Schmidt, and VC veteran Marc Andreessen.Vance still owns pieces of the funds that he helped advise. According to his vice president and senate disclosure forms, he has a stake in Narya Capital Fund I, Narya Capital Fund II, and Rise of the Rest Seed Fund.His stake in Narya Capital Fund I is worth between $500,001 and $1 million. His holdings through Narya's Capital Fund II and the Rise of the Rest's Seed Fund are smaller, worth as much as $15,000 and $250,000, respectively, according to his disclosure forms.Through all three funds, he holds a portfolio of investments in dozens of startups. He doesn't actively run or advise any of the companies, and gave up his role as a partner in Narya in December 2022 after winning his senate seat, according to disclosure forms.It's not entirely clear which Rise of the Rest companies Vance has a stake in. The fund has two $150 million investment vehicles and did not disclose which portfolio companies are in which fund.Narya, meanwhile, has only completed one fundraise so far — its $120 million Fund I. The fund has a dozen active investments, according to its website, and because Vance has a stake in the fund, he technically owns a stake in each.The companies vary in their mission: One is a gene therapy company founded by Vivek Ramaswamy's brother, while another is a Catholic meditation and prayer app. Thiel, one of Vance's mentors, is listed as a separate investor in many of the companies, per PitchBook.Some are the type of companies that could work with the government.True Anomaly, an aerospace company for which Narya participated in two rounds of funding, <a target="_blank" class="" href="https://www.trueanomaly.space/newsroom/true-anomaly-selected-for-30m-space-systems-command-contract-in-support-of-victus-haze-tactically-responsive-space-mission">won a $30 million government contract</a> from the US Space Force in April. ValueBase, a property valuation software, lists local governments among its customer base on its website.Nayra has had two exits: <a target="_blank" class="" href="https://www.businessinsider.com/what-is-rumble-conservative-video-youtube-competitor-joe-rogan-2022-2">Rumble</a>, the conservative-leaning social video platform that went public in 2022, and AppHarvest, which went public in 2021.Criminal conflict of interest laws do not apply to the president and vice president.Luke Schroeder, a spokesperson for the vice president-elect, said that Vance has complied with all required disclosures and is not directly involved in the funds.<h2 id="883278a9-d442-4e81-aeb4-b282861515b7">Here are Narya's current portfolio companies</h2>Deal details, unless noted with a comment from the company, come from PitchBook.<table style="width: 652px"></colgroup></colgroup><tbody><tr><td>Company</td><td>Industry</td><td>Deal Description</td></tr><tr><td colspan="1" rowspan="1">AcreTrader</td><td colspan="1" rowspan="1">Farmland investment</td><td colspan="1" rowspan="1">Narya contributed to AcreTrader's $12 million Series B round in 2021. "Senator Vance has no involvement in AcreTrader's operations or strategic direction," the company said.</td></tr><tr><td colspan="1" rowspan="1">AmplifyBio</td><td colspan="1" rowspan="1">Biotech</td><td colspan="1" rowspan="1">Narya took part in the company's $200 million, early-stage investment round in 2021.</td></tr><tr><td colspan="1" rowspan="1">Atomic Industries</td><td colspan="1" rowspan="1">Manufacturing</td><td colspan="1" rowspan="1">In 2023, Narya contributed to a $16.5 million early-stage round.</td></tr><tr><td colspan="1" rowspan="1">Branch</td><td colspan="1" rowspan="1">Insurance</td><td colspan="1" rowspan="1">Narya took part in Branch's 2022 $147 million Series C. During his time at Rise of the Rest, Vance led an investment in Branch.</td></tr><tr><td colspan="1" rowspan="1">Chapter</td><td colspan="1" rowspan="1">Medicare advisory</td><td colspan="1" rowspan="1">Narya contributed to three of Chapter's fundraising rounds: A 2021 $17 million Series A round, 2022 $42 million Series B round, and 2024 $50 million Series C round. Peter Thiel is also an investor in Chapter.</td></tr><tr><td colspan="1" rowspan="1">Hallow</td><td colspan="1" rowspan="1">Religion</td><td colspan="1" rowspan="1">Narya invested in Hallow's 2021 $40 million Series B round."We worked with another partner at the fund on the investment - not with JD at all," Alex Jones, Hallow's CEO, told BI. Thiel is also an investor in Hallow.</td></tr><tr><td colspan="1" rowspan="1">Kriya Therapeutics</td><td colspan="1" rowspan="1">Gene therapy</td><td colspan="1" rowspan="1">Narya contributed to three of Kriya's funding rounds, including a $87.6 million Series A in 2020, $100 million Series B in 2021, and $430 million Series C in 2023. Kriya Therapeutics is founded by Shankar Ramaswamy, the brother of Vivek Ramaswamy.</td></tr><tr><td colspan="1" rowspan="1">Realm Alliance</td><td colspan="1" rowspan="1">Security services</td><td colspan="1" rowspan="1">Earlier this year, Narya took part in Realm Alliance's seed round.</td></tr><tr><td colspan="1" rowspan="1">Strive</td><td colspan="1" rowspan="1">Asset Management</td><td colspan="1" rowspan="1">Narya invested in Strive's $20 million seed round in 2022 and $30 million Series B earlier this year. Thiel is also an investor in Strive.</td></tr><tr><td colspan="1" rowspan="1">True Anomaly</td><td colspan="1" rowspan="1">Space</td><td colspan="1" rowspan="1">Narya contributed to True Anomaly's $100 million Series B in 2023 and $17 million Series A in 2022. The company won a contract from the US government earlier this year.</td></tr><tr><td colspan="1" rowspan="1">ValueBase</td><td colspan="1" rowspan="1">Property valuation</td><td colspan="1" rowspan="1">Narya took part in ValueBase's $6.3 million seed round earlier this year.</td></tr></tbody></table>

Before politics, JD Vance had a career in venture capital. Here are the startups he's invested in.

<ul class="summary-list"><li><keyword id="23582686" type="General" weightage="20" keywordseo="tim-tully" source="keywords">Tim Tully</keyword> taught himself to code when he was six and went to school for computer science.</li><li>He started his career in software engineering at startups and later worked at Yahoo and Splunk.</li></ul>Venture capitalist Tim <keyword id="23582684" type="General" weightage="20" keywordseo="tully" source="keywords">Tully</keyword>'s programming experience began at age six, when he taught himself to write code and make video games on an Apple II computer. Fast-forward to the present: Tully has a data center in a basement and is known to deploy software and try out startups' APIs when he's sussing out potential investments. He's also written code for some of his portfolio companies. Using his technical expertise as a former programmer and CTO, Tully is helping amass an impressive portfolio of AI startups at <keyword id="23582685" type="General" weightage="20" keywordseo="menlo" source="keywords">Menlo</keyword> Ventures. The firm, which has backed Chime, Warby <keyword id="20325026" type="General" weightage="20" keywordseo="parker" source="keywords">Parker</keyword>, Roku, and Uber, has historically focused broadly on early and growth-stage startups across the consumer, enterprise, and healthcare sectors. More recently, Menlo has <a target="_blank" class="" href="https://www.businessinsider.com/menlo-ventures-naomi-ionita-investor-3-lessons-growth-saas-2020-12">planted its flag in the generative AI space</a> as frenzy in the sector is creating new <keyword id="19926959" type="General" weightage="20" keywordseo="opportunities" source="keywords">opportunities</keyword> for early-stage startups. The firm closed a <a target="_blank" href="https://techcrunch.com/2023/11/16/menlo-ventures-closes-on-1-35b-in-new-capital-targets-investments-in-ai-startups/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAJVkFGzX14zh8oeHL-Sgmmj-ke1177qyd4BoL1N3eHbqg52MVVO8w7Q3RR0puoRkQ4EVSoyHdffSI5guxcbH9Yl6z1fudXp_WheLfxYB72QiEo_1inwN7UZNPAOLctyEfQ-jGLcCesRz0ajnDsJPg8AVE2iYArspH-l5HM_X7Pbp">$1.35 billion fund</a> last year specifically for investing in fledgling AI startups, and it's already been an early backer of AI powerhouses including vector database <a target="_blank" class="" href="https://www.businessinsider.com/chroma-weaviate-pinecone-raise-funding-a16z-index-vector-database-ai-2023-3">Pinecone</a>, LLM developer <a target="_blank" class="" href="https://www.businessinsider.com/researchers-at-anthropic-taught-these-ai-chatbots-how-to-lie-2024-1">Anthropic</a>, enterprise data cleaner Unstructured, conversational AI system Neon, automated data cleanup program Cleanlab, and many others. For Tully, one of Menlo's key check-writers in this space, having a background in computer science and operating experience has been necessary when it comes to evaluating potential AI investments. "I'm still coding every day," he said. "That really helps me for my job, and I think it's really hard to be a VC and invest in a deeply technical product if you don't have a technical background. I'm actually using this stuff." <h2>Before becoming a VC, Tully worked at startups and led engineering teams</h2>For Tully, who grew up in the Bay Area, computers and games have always been a core part of his life. He had an Apple II computer and cassette tape player that plugged into a TV on a rolling cart, which is where he taught himself to code by playing video games and reading through manuals. He said an early game of his, coded using Applesoft BASIC, was a text-based adventure game in which players would get lost in a forest and navigate through a maze, answering a series of fork-in-the-road puzzles to chase down the treasure. As a teenager, Tully had a bank of modems at his mom's house to organize a <a target="_blank" href="https://www.theatlantic.com/technology/archive/2016/11/the-lost-civilization-of-dial-up-bulletin-board-systems/506465/">bulletin board system</a> – a pre-internet computer server that other users could dial into – to host pirated video games. After college, Tully gravitated toward startups, becoming a software engineer at the dot-com-era companies iScale and Pillar Data Systems, the latter of which he left in 2003 and was eventually acquired by Oracle. He spent 14 years at Yahoo, working his way up to lead engineering for Yahoo, AOL, and its media properties, which included the Huffington Post, Tumblr, Polyvore, and Flurry, and managing a team of more than 850 people. In 2017, Tully joined data analytics company Splunk as its chief technology officer and senior vice president of product and engineering and managed the company's migration to the cloud. While he loved his team at Splunk, Tully said that he was always interested in the investing side of the tech world, and his interest was further piqued by his wife, <a target="_blank" href="https://www.businessinsider.com/sequoia-partner-jess-lee-advice-for-startup-founders-2022-9">Jess Lee</a>, who has been a partner at Sequoia since 2016. "Growing up in the Valley, I had this in the back of my mind, and I thought that as a technical person, I could do the job differently, so I began to take some calls," he said. One of those calls eventually turned into a job offer at Menlo Ventures, and Tully joined the firm as a partner in 2021. "This was an opportunity to be part of the next wave of folks that joined the firm, which was exciting to me because I'm a builder," he said. <h2>At Menlo Ventures, Tully writes checks for AI startups at the app and infrastructure layers</h2>Since joining Menlo, Tully has invested in nine startups, including Pinecone, which raised a $28 million Series A in 2022; Neon, which raised a $46 million Series B in 2023; Unstructured, which raised a $40 million Series B in 2024; and JuliaHub, an AI programming startup that raised $24 million in 2021. Another of his portfolio companies, AI quality management software startup True Era, was acquired by Snowflake earlier this year. For Tully, finding camaraderie with technical founders has been a winning strategy so far in his VC career. "My background helps me connect with technical founders because they want investors who they can talk shop with," he said. "I've managed teams and have been CTO of a public company." He's also written code as a way to help win over startups in the broader Menlo Ventures portfolio. In 2022, another Menlo partner, Naomi Pilosof Ionita, was working to land a deal for fintech startup Orb. The company didn't have a software development kit, so Tully wrote them one, printed out a link to the devkit, rolled it into a scroll, and delivered it to the startup. That helped seal the deal, and Ionita led Orb's $14 million Series A funding round. While Menlo has been bolstering its portfolio with AI-infrastructure startups, Tully said he's excited about opportunities at the application layer. This means looking at various vertical AI categories, including legaltech — he wrote a $14 million seed check for the AI legal assistant Eve, which was announced in 2023 — as well as marketing and automation. And, perhaps unsurprisingly, Tully is also trying out various AI coding copilots, and he says that the tech is making him "50-60% more productive if I'm being honest." "I'm really high on AI coding assistants," he said. "Opportunities in this space are pretty compelling." Correction: October 8, 2024 -- An earlier version of the story misstated the year Pillar Data Systems was acquired by Oracle, which was in 2011, not in 2003, which was when Tully left the company. It also said that Menlo Ventures invested in Eve in 2022, and the correct year is 2023. .

Tim Tully taught himself to code at age 6 and still codes daily. Here's how computer science took him from startups to AI investing at Menlo Ventures.

<ul class="summary-list"><li>Elon Musk's xAI is raising fresh funding at a $40 billion valuation, the WSJ reported.</li><li>Social media network X, meanwhile, is currently valued at $9.4 billion, according to Fidelity filings.</li></ul>A new funding round in the works for xAI could value Elon Musk's startup at more than four times what his social media network, X, is currently worth, <a target="_blank" class="" href="https://www.businessinsider.com/fidelity-openai-stock-valuation-filing-2024-10">according to recent Fidelity filings</a>.The AI startup is reportedly in talks to raise funding at a $40 billion valuation, according to <a target="_blank" class="" href="https://www.reuters.com/technology/artificial-intelligence/elon-musks-xai-talks-raise-funding-valuing-it-40-bln-wsj-reports-2024-10-29/">the Wall Street Journal</a>. xAI, which Musk founded in 2023 and has billed as an alternative to OpenAI's ChatGPT, previously raised a <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-xai-raised-6-billion-funding-vc-saudi-arabia-2024-5">$6 billion Series B</a> from a16z and Sequoia Capital at a $24 billion post-money valuation.Talks with investors are still in the early stages, sources told the Wall Street Journal. But if the funding round goes through at a $40 billion valuation, that would make xAI worth more than four times the value of X, according to Fidelity's estimates, which held steady from August to September.Fidelity, which invests in startups through multiple mutual funds, including its Blue Chip Growth Fund, valued shares of X at $4,185,614 at the end of September, according to its monthly filing released at the end of October. The fund had 196,600 Class A shares at the end of July, according to an annual filing from August.At $21.29 a pop, this price is unchanged from the Blue Chip Growth Fund's August estimation of X's value. It is, however, a 78.7% drop compared to two years ago: Musk in October 2022 purchased X for $44 billion. The Fidelity fund at the time invested $19.66 million, according to filings.Assuming the investment was made at X's $44 billion valuation, the fund now estimates X's value to be around $9.4 billion.Fidelity's Blue Chip Growth Fund also has a stake in xAI, valuing its investment at $44,152,362, according to the October filing. The fund had 3,688,585 shares at the end of July, according to an annual filing from August. That's $11.96 per share.

Elon Musk's xAI startup could soon be worth many times more than X

<ul class="summary-list"><li>Louis Lehot, a Silicon Valley law-firm partner, specializes in taking companies from startup to IPO.</li><li>Lehot gave his suggestions for how to prepare, like hires to make and risks to consider pre-IPO.</li></ul>The IPO market is expected to pick up later this year, so Business Insider emailed Silicon Valley lawyer Louis Lehot, a partner at Foley &amp; Lardner, for advice on how startups should prepare for life as public companies.Lehot has more than 25 years of experience advising businesses, financial sponsors, venture capitalists, investors, and investment banks on topics including equity offerings, mergers, acquisitions, and spinoffs. His work often involves helping startups prepare for initial public offerings.The following has been edited for brevity.What's the environment like for IPOs?2023 was the toughest year for IPO activity in more than two decades. The IPO outlook for the second half of 2024, or at least the first half of 2025, can only get better.Riskier assets, such as Bitcoin, have rebounded strongly, suggesting risk appetite is a lot higher. The Fed is expected to make at least one rate cut later this year. The after-market performance of some recent IPOs has been stronger. Earnings reports from public companies are improving.There's a substantial backlog of companies preparing to go public as soon as the window opens, and the outcome of important federal and state election races should bring greater clarity.Which sectors are most likely to be successful in an IPO?<ul><li>Healthcare and Biotech: These companies go public as part of their venture financing path, often before they have a product in the market. As a result, they are heavily risk-driven, and the opportunity to make alpha with smaller amounts of capital invested is real. If risk appetite is truly back, we can expect investors to pile into biotech, life sciences, and medical device IPOs. New tech, enabled by CRISPR and AI, should increase the speed and accuracy of clinical trials.</li><li>Green Energy: As the effects of climate change spread, we expect industrial policy to favor renewable energy companies and the ecosystem that they enable, maybe even nuclear energy. Renewables and related technologies are gaining traction with a growing focus on sustainability.</li><li>Enterprise software and fintech: There's a solid backlog of late-stage private companies whose venture capital and private equity investors require a public market exit to return capital to limited partners and raise new funds. As a result, we expect a bumper crop of enterprise software (B2B solutions, cloud services, and cybersecurity) and fintech companies (digital banking, payments, and financial services) to come to market when the window opens later this year or next.</li></ul>Are public market investors generally keen to invest in IPOs, or are they focused elsewhere?Public market investors are selective, focusing on established profitability and sustainable growth over speculative, high-growth stories. Many investors are diverting their attention to safer, more predictable assets due to market volatility and economic concerns.What are IPO investors expecting in the current climate?<ul><li>Profitability, or a clear path to profitability: Unlike previous periods focused solely on growth, profitability is now critically correlated to a successful IPO.</li><li>Sustainable revenue growth: Consistent and predictable growth trajectories</li><li>Robust metrics: Strong KPIs and unit economics</li><li>Valuation discipline: More conservative valuations compared to the frothy markets of past IPO booms</li></ul>Should tech startups want to go public right now?If you have a choice, you stay private.For example, if you're the CEO of a successful startup with more than $100 million in revenue that's growing in excess of 30% at over 40% gross profit margins, every door is open to you.There's ample private capital to finance your company's scaling needs. There is likely a robust secondary market for your personal shares if you need to take some chips off the table. You have no obligation to report your compensation and equity holdings publicly or your company's quarterly results, much less live under the public microscope and the constant glare of Wall Street analysts who are focused on reporting on any short-term event that might drive trading.Fringe benefits include more control over business decisions, fewer regulatory requirements, and the ability to focus on long-term growth.The choice is not even close. Any CEO-founder would want to stay private. Look no further than the example of the <a target="_blank" class="" href="https://www.businessinsider.com/how-collison-brothers-built-stripe-most-valuable-us-startup-2021-3">Collison brothers at Stripe</a>.However, the characteristics that drive a transformational CEO-founder to achieve this level of commercial success are not necessarily driven by the same logic.The vision of a transformational CEO extends far beyond the perceived short-term benefits of a quick exit. I'm surrounded by mission-driven CEO's with the burning ambition to achieve global market ubiquity, which usually means an IPO is a necessary step on their long road.What are the most important hires to make before an IPO?<ul><li>Chief Financial Officer: A CFO with public company experience is crucial for navigating financial reporting and investor relations.The CFO of a public company is the first or second line of communication with Wall Street, key long-term investors, auditors of your financial statements, and financial regulators. In addition, the finance department will quickly need someone who can manage internal controls over financial reporting and write public financial reports. This person is usually a "controller."The CFO will also need someone who can forecast, model, and plan ahead and ensure that the company, when going public and forever thereafter, accurately telegraphs its future performance on a forward-looking, one-quarter, and one-year-ahead basis. This is usually a vice president for forecasting, planning, and analysis, or FP&amp;A. For larger public companies, a chief accounting officer is also on the road map.</li><li>General Counsel: Whereas 20 years ago, a general counsel was not hired until just before an IPO, nowadays, a company with $10 million of revenue or more may consider hiring a head of legal in-house to control costs, particularly for rote, repeatable tasks. But an IPO puts the company under a microscope of regulatory, investor, employee, and public scrutiny where the stakes get large enough that an experienced general counsel is usually hired, and if large enough to support the cost, even a deputy general counsel for securities law compliance to manage the more hours intensive processes of making the company ready for IPO and maintaining compliance thereafter.</li><li>Investor Relations Officer: About a year ahead of the big day, a forward-thinking CFO will try to hire a vice president of investor relations who has been through the process of managing a syndicate of analysts before, during, and after an IPO. Particularly for larger companies who garner analyst coverage from six or more sell-side and buy-side analysts, making sure the analysts are getting adequate information to build quality models will ensure higher quality coverage and greater liquidity for the company once public, which is a critical indicator of success.</li><li>Audit Committee Chair: While a pre-IPO company will seek to hire a majority-independent board of directors, the audit committee chair is one key role to fill on the board.The audit committee chair is usually a former CFO who has deep knowledge of the IPO process and the interplay of a board of directors and its independent registered public accounting firm, which is a critical relationship at every stage of an IPO and beyond.The audit committee's role is to oversee the production and auditing of the financial statements and the financial integrity of the company's public disclosures and compliance with regulatory standards. The audit committee chair will want to make sure there are at least two other directors who can serve independently on the audit committee who are financially literate and expert enough to assist them.</li></ul>What are the biggest changes startups must go through to be IPO-ready?To consider a successful IPO, a tech company will need to have line of sight to $100 million in revenue with eight quarters of historical growth and line of sight to eight quarters in the future of predictable growth. For a tech business, annual growth in GAAP revenue will need to be in excess of 20% (and ideally double this amount) at gross margins of 40% or more. These are herculean feats that few businesses will ever achieve.There also has to be some other ingredient, which some call the "sizzle," to inspire long-term fundamental investors to believe that growth can be significantly greater than what the models show over the next eight quarters.Historically, that sizzle could be explained by exposure to international markets that would be enabled by the scaling capital provided by the IPO.Today, revenue from a US tech business may well be evenly split between US and international markets from the outset, so the "sizzle" will need to come from planned advances in technology, new product releases, and new product enhancements that will unlock new and significant branches of growth.What are the key process changes companies need to make ahead of an IPO?<ul><li>Leveling up the company's financial reporting function: Enhanced accuracy and transparency in financial statements is an absolute necessity, both historically and forward-looking for eight quarters in both directions.</li><li>Corporate governance: Companies need to recruit an experienced, independent, and supportive board that can provide wisdom to management during the IPO process and beyond.</li><li>Operational scalability: Ensuring systems and processes can support growth and compliance requirements. Have you installed a world-class ERP software system? Do you have a contract management system and CRM software? Do they all work together?</li><li>Compliance and risk management: Implementing robust controls to meet regulatory standards is a playbook that a new CFO and new General Counsel can implement with the help of outside advisors.</li></ul>

How startups can get in top shape for an IPO, according to Silicon Valley lawyer Louis Lehot

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Hello! I have a tough time keeping up with the latest fashion, to put it mildly. So <a target="_blank" href="https://www.businessinsider.com/pant-trends-whats-popular-and-going-out-next-year-2023">this rundown of what's in and out regarding pant trends</a> was helpful, albeit a bit overwhelming. (Where does one get metallic pants?)In today's big story, we're looking at the <a target="_blank" href="https://www.businessinsider.com/30-of-the-most-successful-early-stage-investors">best investors when it comes to early-stage companies</a>.What's on deck:<ul><li>Markets: Elon Musk's push for more control at Tesla <a target="_blank" href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-stock-price-ownership-ai-artificial-intelligence-wedbush-2024-1">has some people up in arms</a>.</li><li>Tech: More job cuts at Google, this time in its <a target="_blank" href="https://www.businessinsider.com/google-is-laying-off-hundreds-of-employees-in-its-advertising-team-2024-1">advertising-sales team</a>.</li><li>Business: The "Silver Tsunami" of boomers' houses <a target="_blank" href="https://www.businessinsider.com/what-will-happen-baby-boomer-homes-die-millennials-gen-z-2024-1">hitting the market will benefit Gen Z</a>.</li></ul>But first, we've got some unicorn hunters.If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h2>The big story</h2><h3>Picking winners</h3><div type="image" title="Caterina Fake, Cindi Bi, and Suleman Ali" height="975" width="1300" msid="106934418" hostid="261" sizebytes="71442"></div>Investing can be a crapshoot, especially when it comes to early-stage companies.It's one thing to back a company with years of financial statements and proven products. It's another to give money to a couple of founders with an idea and not much else.Such a high degree of difficulty means angel investing can often be a numbers game. Seed as many smart ideas as you can stomach. With any luck, one will return enough to cover the losses from the rest (and then some).But for a select group, successfully investing in young companies is the norm. TRAC, a San Francisco-based early-stage venture firm, set out to find these investors, dubbing them "SuperForecasters."The group of 287 investors helps inform TRAC's investing model, which predicts startups likely to grow to become unicorns (a valuation above $1 billion).After <a target="_blank" href="https://www.businessinsider.com/the-startups-most-likely-to-be-the-next-unicorns-2023-8">highlighting 30 startups TRAC's model predicts will take off</a>, the venture firm took things a step further, sharing with Business Insider <a target="_blank" href="https://www.businessinsider.com/30-of-the-most-successful-early-stage-investors">the names of 30 SuperForecasters</a>.The investors, profiled by BI's Ben Bergman, Samantha Stokes, Rebecca Torrence, and Leena Rao, have an incredible track record for early-stage investing. SuperForecasters make a profit on two-thirds of their bets, and 20% of their investments return over 10X, Joseph Aaron, one of TRAC's cofounders, told BI.<div type="image" title="Piggy banks" height="1500" width="2000" msid="106934530" hostid="261" sizebytes="65960"></div>Plenty of the traits SuperForecasters share are fascinating.Many didn't go to business school — sorry, bankers — and they tend to steer clear of solo founders.But the characteristic that stood out to me the most was that multiple SuperForecasters rarely, if ever, co-invest in the same startups.(The irony of this revelation coming from a model that partially relies on tracking SuperForecasters bets isn't lost on me.)Silicon Valley can be known to have a herd mentality, especially when it comes to venture investors.Getting backing from a high-profile investor can often do more for your valuation than a breakthrough product. It represents validation in a world full of uncertainty.And yet, some of the best early-stage investors have proven to have far better success going out on their own.Maybe there's a lesson for the rest of the industry: Come to your own conclusions and theories instead of trying to catch the next wave with everyone else.<h2>3 things in markets</h2><div type="image" title="jim chanos elon musk" height="600" width="1200" msid="106934532" hostid="261" sizebytes="55708"></div><ol><li>Jim Chanos still has a bone to pick with Elon Musk. The famous short-seller, who has consistently bet against Tesla, said <a target="_blank" href="https://markets.businessinsider.com/news/stocks/chanos-elon-musk-tesla-stock-voting-rights-equity-stake-fidelity-2024-1">Musk was being "outrageous" for requesting more control</a> at the EV maker. But Chanos isn't the only one raising concerns, as Wedbush's Dan Ives wrote <a target="_blank" href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-stock-price-ownership-ai-artificial-intelligence-wedbush-2024-1">Musk's comments created a "firestorm" for Tesla</a>.</li><li>Goldman Sachs isn't sweating the economy. The bank is taking a more optimistic view of economic growth in 2024 compared to the rest of the Street. Goldman sees US GDP growth of 2%, and only a 20% chance of a recession, figures that are well below consensus estimates. <a target="_blank" href="https://www.businessinsider.com/recession-prediction-goldman-sachs-economic-growth-gdp-wall-street-economy-2024-1">Here's why it's so bullish</a>.</li><li>And Goldman's not the only one feeling good these days. More than 81% of individual investors believe the Dow will <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-indicator-dow-2008-recession-comparison-investor-sentiment-crash-2024-1">end this year higher than last year</a>, according to Yale's One-Year Confidence Index. Main Street hasn't felt this good about stocks since March 2007... right before the financial crisis.</li></ol><h2>3 things in tech</h2><div type="image" title="Tim Cook in an Apple store" height="1333" width="2000" msid="106934534" hostid="261" sizebytes="152688"></div><ol><li>Apple just ended Samsung's 12-year run as the top smartphone seller in the world. Shipment data shows that <a target="_blank" href="https://www.businessinsider.com/apple-iphone-overtakes-samsung-global-smarphone-shipments-market-id-data-2024-1">Apple reached the top position</a> last year. The iPhone maker's win comes amid tough business in the US and China.</li><li>Microsoft CEO says the company wants stability at OpenAI — not a board seat. While at Davos, Satya Nadella said he's <a target="_blank" href="https://www.businessinsider.com/satya-nadella-microsoft-wants-stability-openai-not-board-seat-2024-1">"not interested" in a board seat</a> at ChatGPT's parent company. Meanwhile, OpenAI CEO Sam Altman is at the conference trying to show leaders his plan to <a target="_blank" href="https://www.businessinsider.com/sam-altman-ai-chatgpt-safer-than-facebook-for-elections-2024-1">prevent tools like ChatGPT from interfering with elections</a>.</li><li>Leaked memo: Google is laying off hundreds more employees. The search giant is laying off swaths of employees in its ad-sales team. Philipp Schindler, Google's chief business officer, announced the job cuts in a <a target="_blank" href="https://www.businessinsider.com/google-is-laying-off-hundreds-of-employees-in-its-advertising-team-2024-1">memo obtained by BI</a>.</li></ol><h2>3 things in business</h2><div type="image" title="Graphic of woman taking a picture of a for sale sign in front of a house, with a couple looking at the house and embracing" height="500" width="1000" msid="106934537" hostid="261" sizebytes="30002"></div><ol><li>You can't talk about the housing shortage — or runaway home prices — without boomers on the brain. As the generation ages, its vast real-estate portfolio poses a question: <a target="_blank" href="https://www.businessinsider.com/what-will-happen-baby-boomer-homes-die-millennials-gen-z-2024-1">What happens when boomers die</a>?</li><li>Airlines are experiencing some turbulence. Boeing's <a target="_blank" href="https://www.businessinsider.com/boeing-737-max-quality-control-company-culture-merger-finances-2024-1">quality-control process and company culture are under scrutiny</a> after multiple airlines have found issues with its 737 Max 9 jets. Meanwhile, Spirit Airlines stock nosedived after a judge <a target="_blank" href="https://markets.businessinsider.com/news/stocks/spirit-airlines-stock-price-jet-blue-merger-judge-doj-antitrust-2024-1">blocked JetBlue's proposed takeover</a>.</li><li>We still don't know if the NFL's first streaming playoff game was a success. The Chiefs-Dolphins game was <a target="_blank" href="https://www.businessinsider.com/nfl-first-streaming-playoff-game-nbc-universal-peacock-success-2024-1">primarily streamed on NBC's Peacock</a>. NBC says it was a success, citing viewership and internet usage numbers. But we don't know <a target="_blank" href="https://www.businessinsider.com/how-watch-nfl-playoffs-streaming-service-peacock-amazon-chiefs-dolphins-2024-1">how many people paid</a> for Peacock so they could watch the game.</li></ol><h2>In other news</h2><ul><li><a target="_blank" href="https://www.businessinsider.com/nikki-haley-next-steps-after-finishing-third-in-iowa-2024-1">What's next for Nikki Haley after finishing third in Iowa</a>?</li><li><a target="_blank" href="https://www.businessinsider.com/desantis-next-steps-after-iowa-disaster-2024-1">Where does DeSantis go from here</a>?</li><li><a target="_blank" href="https://www.businessinsider.com/goldman-sachs-fourth-quarter-earnings-wall-street-stock-market-news-2024-1">Goldman Sachs posts an earnings beat as growth for its stock-trading business triples estimates</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/ai-chatgpt-jobs-layoffs-kristalina-georgieva-world-economic-forum-davos-2024-1">AI will be bad news for plenty of workers, warns IMF chief</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/booths-grocery-chain-removed-self-service-checkouts-staff-prefer-it-2024-1">My supermarket removed all the self-service checkouts. It's annoyed some customers — but the staff prefer it</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/mark-zuckerberg-metaverse-bet-take-decade-fully-realized-meta-executive-2024-1">Mark Zuckerberg's $47 billion metaverse bet will take at least a decade to be "fully realized," says Meta exec</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/mustang-mark-cuban-texas-ghost-town-empty-mysterious-2024-1">I visited Mark Cuban's Texas ghost town, and "Mustang" was more barren and mysterious than I ever imagined</a>.</li></ul><h2>What's happening today</h2><ul><li>GLAAD Awards nominees will be announced today. The awards celebrate "fair, accurate and inclusive representations of the LGBTQ community and the issues that affect their lives in the media."</li><li>Samsung's annual Galaxy Unpacked product launch event is today. The company is expected to announce products that include AI capabilities.</li><li>Happy birthday, Michelle Obama! Betty White, Steve Harvey, Muhammad Ali, Benjamin Franklin, Al Capone, and Calvin Harris were also born on this day.</li><li>Earnings today: Charles Schwab <a target="_blank" href="https://markets.businessinsider.com/earnings-calendar">and other companies</a>.</li></ul><h2>For your bookmarks</h2><h3>Decreasing ultra-processed foods</h3><div type="image" title="Woman in a grocery store" height="867" width="1300" msid="106934540" hostid="261" sizebytes="119572"></div>A nutritionist shared how he's cut down on eating convenient, ultra-processed food. They've been linked with many health issues, so he figured out some <a target="_blank" href="https://www.businessinsider.com/ways-cut-down-ultra-processed-foods-even-when-busy-2024-1">tips to cut down on them</a>.The Insider Today team: <a target="_blank" href="https://www.businessinsider.com/author/dan-defrancesco">Dan DeFrancesco</a>, deputy editor and anchor, in New York City. <a target="_blank" href="https://www.businessinsider.com/author/diamond-naga-siu">Diamond Naga Siu</a>, senior reporter, in San Diego. <a target="_blank" href="https://www.businessinsider.com/author/hallam-bullock">Hallam Bullock</a>, editor, in London. <a target="_blank" href="https://www.businessinsider.com/author/jordan-parker-erb">Jordan Parker Erb</a>, editor, in New York. <a target="_blank" href="https://newsletter.businessinsider.com/click/33739711.1210015/aHR0cHM6Ly93d3cuYnVzaW5lc3NpbnNpZGVyLmNvbS9hdXRob3IvaGF5bGV5LWh1ZHNvbj91dG1fbWVkaXVtPW5ld3NsZXR0ZXImdXRtX3NvdXJjZT1TYWlsdGhydSZ1dG1fY2FtcGFpZ249SW5zaWRlcl9Ub2RheQ/6388bd81e7b7ccd0ba0929daB5b9051cd">Hayley Hudson</a>, director, in Edinburgh. <a target="_blank" href="https://www.businessinsider.com/author/lisa-ryan">Lisa Ryan</a>, executive editor, in New York.

Some of the best early-stage startup investors share a common trait that should be a lesson for Silicon Valley

In 2024, grocery shopping is a thing of the past in India. Delivery platforms like <keyword id="19939135" type="General" weightage="20" keywordseo="Swiggy-Instamart" source="keywords">Swiggy Instamart</keyword>, <keyword id="20069203" type="General" weightage="20" keywordseo="Blinkit" source="keywords" meta.keywordsubtype="org" meta.entityname="Blinkit" meta.hostid="261" meta.entityid="Blinkit">Blinkit</keyword> and <keyword id="19939134" type="General" weightage="20" keywordseo="Zepto" source="keywords" meta.keywordsubtype="org" meta.entityname="Zepto" meta.hostid="261" meta.entityid="Zepto">Zepto</keyword> have made life easier for millions of people by delivering regular household items at their doorsteps. Ran out of salt? Order it online. Ran out of flour? Order it online. Need some stationery items for your kid’s school project? It can be delivered too. The list is endless. <h2><keyword id="21384253" type="General" weightage="100" keywordseo="Zepto-CEO" source="keywords">Zepto CEO</keyword> compares it with Zomato</h2> Zepto, which is newer when compared to Swiggy and Blinkit, is a popular choice in many areas. And its CEO and co-founder <keyword id="22736526" type="General" weightage="20" keywordseo="Aadit-Palica" source="keywords">Aadit Palica</keyword> feels that the company is in the stage where <keyword id="19904608" type="General" weightage="20" keywordseo="Amazon" source="keywords" meta.keywordsubtype="org" meta.entityname="Amazon" meta.hostid="261" meta.entityid="Amazon">Amazon</keyword> was in 1990s or early 2000s. While speaking at the Moneycontrol Startup Conclave 2024 on Friday, Palicha drew a bold comparison between his company’s current trajectory and that of Amazon during the late 1990s and early 2000s. He added that with the right execution, Zepto could potentially achieve a valuation between $50 billion and $80 billion, positioning itself as a leader in the global quick commerce sector. With that being said, Palicha is keenly aware that success isn’t guaranteed. “It is largely just execution,” he noted, talking about the importance of flawless operational strategy in turning potential into reality. He also acknowledged the history of companies that had the right ingredients for success but failed to execute, highlighting Zepto’s commitment to staying focused on its core business for the foreseeable future. Over the past year, Zepto has been on an aggressive fundraising streak, securing significant investments that have fuelled its growth. In August 2023, Zepto raised $231 million at a valuation of $1.4 billion, marking its entry into the unicorn club. But that was just the beginning. The startup recently closed another funding round, pulling in $665 million and boosting its valuation to $3.6 billion. The momentum doesn’t stop there. Zepto has attracted further interest from investors, with discussions underway for an additional $250 million in funding. This new round, which could grow to as much as $400 million, is expected to push the company’s valuation to around $4.6 billion. <h2>When Palicha said Zepto will be bigger than D-Mart </h2> This isn’t the first time that Palicha has made a bold prediction about Zepto. Last month, Palicha had said that Zepto would be bigger than D-Mart in the near future. Speaking at the JIIF Foundation Day event in Delhi, Palicha had pointed out that despite D-Mart’s impressive $30 billion valuation, the retail behemoth is currently only 4.5 times larger than Zepto in terms of sales. "D-Mart is a $30 billion company, and they are only 4.5 times our size in sales. If we maintain our current pace, growing 2-3 times each year, we could potentially surpass them in the next 18-24 months," Palicha had said.

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