PreIPO INTELLI™ Weekly Insights | Series 41
Friday, July 14th, 2023 | Volume 1 Series 41 | Ripple Ruling, Funding Updates, Google's Web3 startup program, and Liquid Deaths upcoming IPO.
Happy Friday, everyone! Let’s end the week right with some updates brought to you by the team at INTELLI™. In this edition, we cover the Ripple Labs ruling, some recent funding rounds in tech, Google's Web3 startup program, and Liquid Death's IPO preparations.
Breaking Down the Ripple Labs Ruling ⚖️
Legally speaking, the recent decision by Judge Analisa Torres in SEC v. Ripple Labs et al. has created an interesting distinction for cryptocurrency tokens sold to the public. According to the ruling, when these tokens are sold to venture capitalists (VCs) or institutional buyers, they are considered unlawfully sold investment contracts. However, when the tokens are sold anonymously through cryptocurrency exchanges or distributed to employees or insiders, they are considered something other than a security and are deemed perfectly lawful.
This ruling has brought about continued uncertainty in the cryptocurrency markets for issuers. The only entity that can provide clarity and resolve this uncertainty is Congress. Preston Byrne, a corporate partner at Brown Rudnick's Digital Commerce group and occasional CoinDesk columnist, has highlighted the need for congressional intervention in this matter.
The central issue in the case is whether Ripple Labs' decade-long token distributions should be classified as sales of securities. This classification depends on whether the transactions meet the definition of "investment contracts" as established by the "Howey Test" in SEC v W.J. Howey Co., 328 U.S. 293 (1946), and subsequent precedents. The Howey Test states that a contract, transaction, or scheme involving the investment of money in a common enterprise, with a reasonable expectation of profits arising from the efforts of others, qualifies as an investment contract and falls under the regulation of the federal Securities Act of 1933.
To analyze the tokens' classification, the court divided Ripple's sales of tokens into three categories: (1) institutional sales to hedge funds, VCs, and similar entities; (2) programmatic sales directly to retail customers on digital asset exchanges; and (3) sales as a form of payment for services, such as restricted token purchase agreements or option contracts, to employees and service providers.
Ripple lost the case regarding institutional sales, as they were considered investment contracts subject to securities regulations. On the other hand, Ripple won in the case of programmatic sales. The court ruled that programmatic buyers, who engaged in blind bid/ask transactions, did not know if their payments went to Ripple or other sellers. Therefore, their expectation of profit did not arise from Ripple's efforts but rather from general cryptocurrency market trends.
What you need to know about Google’s Web3 startup program
Alphabet, the technology conglomerate, has expanded its Google for Startups Cloud Program to include Web3 firms. This expansion encompasses companies such as Alchemy, Aptos, Base, Celo, Flow, Hedera, Nansen, Near, Polygon, Solana, and Thirdweb. Notably, Nansen, a blockchain analytics firm, announced its collaboration with Google Cloud, aiming to deliver real-time blockchain data for startups. Nansen's extensive database currently holds over 250 million wallet labels.
Under the Google Cloud Program, there are two product suites tailored for Web3 startups, depending on their funding status. Pre-seed companies can avail themselves of up to $2,000 in Google Cloud credits valid for two years, along with access to prominent events like Paris Blockchain Week, Consensus, and TOKEN2049 Singapore, where Google will have a presence.
Seeded startups enjoy a range of benefits, including $200,000 in Google Cloud and Firebase usage credits over two years, $12,000 in Google Cloud Enhanced Support credits, and a 12-month subscription to free Google Workspace Business Plus. Additionally, Web3 projects like Aptos, Celo, Flow, HBAR Foundation, Near, and Solana Foundation offer grants of up to $1 million each in fiat or tokens to these firms.
Seeded firms also have access to up to $3 million in funding from Polygon Ventures. The Base Ecosystem Fund provides priority reviews for entrepreneurs, while Coinbase Ventures assists in introducing them to listing teams and relevant venture capitalists. Other perks include up to $10,000 in Alchemy credits with VIP support and gas-less contract deployment facilitated by Thirdweb.
Liquid Death Hires Goldman Sachs for IPO
Supplying Demand Inc., the parent company of Liquid Death Inc., a millennial-targeted beverage brand, is reportedly working with Goldman Sachs Group Inc. to prepare for an initial public offering (IPO) in 2024. According to the Information, the IPO could potentially launch in the spring of the following year. Liquid Death is known as a unique and humor-driven beverage brand that emphasizes health and sustainability. It has experienced rapid growth, positioning itself as one of the fastest-growing non-alcoholic beverage companies.
Founded in 2019 by CEO Michael Cessario, Liquid Death has successfully raised close to $202 million in venture funding. As of October 3, 2022, the company was valued at $700 million based on FactSet data. Notable investors in Liquid Death include Powerplant Ventures, Live Nation, comedian Tom Segura, and Science Media.
The IPO preparations and potential public listing indicate the company's confidence in its brand and its growth potential. By going public, Liquid Death aims to further expand its presence in the market and capitalize on the increasing demand for its unique beverage offerings.
Recent Funding recap 🤝
Resemble.AI - $8 Million Series A
Resemble AI, a platform utilizing generative AI to replicate authentic-sounding voices, has recently secured $8 million in a Series A funding round. The funding was led by Javelin Venture Partners, with participation from Craft Ventures and Ubiquity Ventures, bringing the total raised by the startup to $12 million. This investment will be utilized to further enhance Resemble's enterprise products and expand its team to over 40 members by the end of the year, according to Zohaib Ahmed, co-founder and CEO.
Ahmed emphasized that Resemble's technology is transforming content creation for major media companies worldwide, enabling the production of previously unattainable content. Resemble was established in 2019 by Ahmed and Saqib Muhammad, who identified the need for improved voices in video games that could adapt to frequent updates. Ahmed, who had prior experience at Magic Leap, BlackBerry, and Hipmunk, played a key role in developing Resemble.
Silo - $32 million Series C
Silo's AI-centric approach has yielded positive results, with hundreds of customers and revenue growth exceeding 100% since December 2022, reaching tens of millions of dollars. The company's strategy has also attracted investors, evident from its recent $32 million Series C funding round led by Koch Disruptive Technologies, with participation from Andreessen Horowitz, Haystack Capital, Tribe Capital, Collate Capital, and Moore Capital.
With the infusion of funds, totaling $272 million, Silo plans to allocate resources to product development and research and development (R&D), particularly focusing on logistics and workflow automation. The company believes that these areas are crucial for constructing an intelligent supply chain and a more efficient marketplace. Additionally, Silo will prioritize financing solutions. In addition to their Instant Pay product, which enables automated payment reconciliation with accounting systems, Silo is launching Cash Advance, a loan program for food supply chain businesses. Partnering with First Citizens Bank, Silo aims to provide $100 million in debt to fund Cash Advance.
Silo's financing programs and comprehensive solutions empower small- and medium-sized businesses within the perishable supply chains to scale their operations, find stability in a consolidating market, and compete with larger industry players. By leveraging data insights and accessing additional working capital through financing, companies gain the confidence to seize market opportunities and secure a stronger position at the rapidly consolidating table.
Secure Code Warrior - $50 Million Series C
Pieter Danhieux and Matias Madou, cybersecurity analysts, recognized the need to empower developers with skills and tools to enhance software security and speed of delivery. They created Secure Code Warrior, a learning platform that offers modular and customizable training experiences. Developers can learn at their own pace, focusing on secure coding concepts in their chosen programming language. Secure Code Warrior provides assessments and hosts competitions to promote learning. The company has over 400,000 developers and 600 enterprise clients and recently closed a $50 million Series C funding round. The funds will be used to improve the platform and expand the workforce. The market for security awareness training is projected to surpass $10 billion annually by 2027. Secure Code Warrior aims to provide an enterprise-grade learning platform dedicated to developers.
As always, stay tuned for more updates and insights from the team at INTELLI™.
Great content this Friday! The liquid death news literally just dropped, way to stay on top of the industry, keep it coming