PreIPO INTELLI™ Weekly Insights | Series 53
Friday, October 13th 2023 | Volume 1 Series 53 | IPOs to watch for in 2024, Former Unicorn acquired for $975 Million, and more funding updates.
Happy Friday to you all - Another week flies by and with this, of course, another round of news and updates brought to you by the INTELLI™ Newsletter. In the ever-evolving world of finance and tech, 2024 promises to be a year of notable Initial Public Offerings (IPOs), with exciting prospects on the horizon. Furthermore, a former unicorn has recently been acquired for a staggering $975 million, signifying the ever-dynamic landscape of mergers and acquisitions. Additionally, the funding front has been buzzing with updates from various startups securing the resources they need to fuel their innovations and growth.
Noteworthy IPOs to watch for in 2024
Here are six noteworthy IPO prospects for 2023 and beyond, each with its own unique characteristics and challenges:
Stripe IPO
Estimated Valuation: $50 billion
Stripe, a San Francisco-based payment processing company, raised $6.5 billion in March 2023, but its valuation dropped to $50 billion from its peak of $95 billion in 2021.
The funds raised will be used for stock buybacks and tax-related expenses.
Despite its IPO potential, Stripe doesn't seem rushed to go public. Earlier this year, it raised $6.5 billion in private funding, which addressed liquidity concerns for current and former employees. This funding has lessened the pressure to go public for reasons related to employee stock options. As a result, founders Patrick and John Collison may delay the IPO until 2024, given Stripe's access to deep-pocketed private investors who are already backing the company.
Klarna IPO
Estimated Valuation: $6.7 billion
Klarna, a Swedish buy-now-pay-later pioneer, saw its valuation decline to $6.7 billion from almost $50 billion due to a lack of profitability.
Klarna's CEO, Sebastian Siemiatkowski, has expressed readiness for a stock market listing once market conditions improve.
Chime IPO
Estimated Valuation: $25 billion
Chime is a no-fee mobile banking platform that reached a valuation of $25 billion in 2021 but delayed its IPO due to market uncertainty.
Chime Financial Inc. had plans to go public last year with an anticipated valuation nearing $25 billion, but it postponed its IPO due to market conditions. With a resurgence in fintech stocks this year, Chime could potentially make its debut by the end of the year, particularly since it has established itself as a leading player in digital banking. Chime's app is increasingly adopted by regional banks to provide cost-effective banking solutions, attracting budget-conscious consumers.
Databricks IPO
Estimated Valuation: $43 billion
Databricks provides cloud-based AI-powered data analytics tools and was valued at $43 billion in 2023.
It's preparing to be a significant player in the AI data/cloud computing space.
Reddit IPO
Estimated Valuation: $5.5 billion
Reddit's IPO plans have been delayed, and its valuation was reevaluated at $5.5 billion by Fidelity.
While Reddit filed its IPO paperwork with the SEC in December 2021, it has yet to announce a public offering date. The company initially aimed for a debut in the second half of 2023, but as of October, there have been no updates regarding the Reddit IPO.
Impossible Foods IPO
Estimated Valuation: $7 billion
Impossible Foods, known for its plant-based burgers, aims to reduce meat production and help the climate. An IPO is on the horizon, although the timing remains uncertain.
These valuations are subject to change when these companies go public. The IPO prospects vary in terms of industry, valuation, and market conditions.
Former Unicorn Loom acquired for $975 Million 💰
Atlassian is acquiring video messaging service Loom for $975 million. Notably, Loom's valuation was $1.53 billion in May 2021 during a $130 million Series C funding round when optimism about cloud-based work was high.
Atlassian sees Loom's 25 million customers and 5 million monthly video conversations as valuable. They plan to integrate Loom into their platforms, particularly Jira and Confluence, recognizing asynchronous video as a crucial element of team collaboration.
AI is expected to enhance Loom's capabilities, including video transcripts and document workflows for improved collaboration. Loom's CEO, Joe Thomas, is positive about joining Atlassian, aiming to accelerate effective workplace communication.
Loom, founded in 2015, raised over $200 million, with support from prominent industry figures and corporate customers like Ford, Tesla, Disney, Walmart, Goldman Sachs, and Amazon. Despite its success, a free tier may have led to challenges in converting users to paying subscribers, which resulted in layoffs in June.
Atlassian plans to fund the acquisition with cash reserves, and the deal is expected to close in the third quarter of the following year, subject to regulatory approval.
Recent Funding Recap 🤝
Anysphere - $8 Million Seed Round
Anysphere, a startup specializing in AI-centric software development, has recently secured $8 million in seed funding. The funding round was led by OpenAI's Startup Fund, raising Anysphere's total capital to $11 million. Anysphere's flagship product, Cursor, is designed to revolutionize common programming tasks using AI-powered tools that assist with code, identify bugs, and even generate code based on prompts.
While Anysphere acknowledges Microsoft's Visual Studio Code as a major competitor, they believe there is significant room for growth in the AI-focused coding space. They argue that the wide and diverse user base of Visual Studio Code may limit rapid and radical changes, presenting an opportunity for innovation.
Anysphere has big plans for Cursor, aiming to enhance its capabilities by allowing more complex code editing across files and folders, improving code search, and facilitating learning from documentation. The platform is already gaining popularity, with thousands of users and growing revenue, exceeding $1 million in annual recurring revenue.
InsuranceDekho - $60 Million Series B
InsuranceDekho, an Indian insurtech incubated within CarDekho, has raised $60 million in a Series B funding round, valuing the startup at over $600 million. Investors include Mitsubishi UFJ Financial Group, insurer BNP Paribas Cardif, Beams Fintech Fund, and the Yogesh Mahansaria Family Office. InsuranceDekho, which integrates with nearly four dozen insurance providers, offers over 400 insurance products, with automobile coverage being the most popular. The startup plans to expand into health, life insurance, and services for small- and medium-sized enterprises. It covers 98% of all zip codes in India, with a focus on smaller cities where it sells more than 80% of its coverage.
Conveyor - $12.5 Million Series A
Conveyor, a startup founded by Chas Ballew, has raised $12.5 million in a Series A funding round to further develop its platform for automating security questionnaires. These questionnaires are commonly used to vet third-party vendors for security and compliance. Conveyor employs large language models (LLMs) similar to OpenAI's ChatGPT to generate responses in the original questionnaire format. The platform offers two products: a self-service portal for sharing security documents and compliance FAQs, and an AI-powered question-answering tool that can automatically complete questionnaires by understanding their structure. Conveyor aims to streamline security reviews and enhance response accuracy, reducing the need for manual work. Despite the benefits, questions remain about the reliability of LLMs for such critical tasks.
As always, stay tuned for more updates and insights from the team at INTELLI™.