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Salesforce's silly deal dies, Rubrik's IPO, and venture capital in space | TechCrunch

It’s going to be a big week! Tech earnings are coming up, the EV wars are on (and how!), and it feels like venture capital has its head in the clouds. All that adds up to one packed Equity episode!

Today, we dug into the latest markets news, including upcoming earnings, IPOs, and what impact — if any — the bitcoin halving has had on the value of the cryptocurrency.

We also had two new venture capital funds to discuss: A new vehicle from Seraphim focused on space, and TLcom Capital’s new Africa-focused fund. From there, it was time to chat EVs and what impact recent price cuts are having on the value of EV companies.

To close out, we dug into the emerging startup cluster in vector databases and search. In short, normal databases are hot garbage when it comes to the sort of queries we need for AI, but vector search is pretty good at it. Enter startups, venture capital and the biggest tech companies. May the startups win.

Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod.

For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.

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Ibotta’s IPO opens sharply higher, hinting at warming public-market interest in tech shares | TechCrunch

Ibotta began it’s path as a public company on Thursday by opening at $117 per share, a big increase from its IPO price of $88, itself an increase from its proposed range of $76 to $84 per share.

And this pop is despite boosting the size of its offering earlier in the week, with existing shareholders expanding their sale by just under one million shares.

Shares are not continuing to climb in early trading, but are holding steady above its IPO price, at around $100 at the time of writing.

The company left money on the table “for investors who are very bullish on it [expanding] its third-party platform beyond just Walmart,” which has become a key partner for Ibotta and represents much of its current revenue, said Nicholas Smith, a senior research analyst at pre-IPO research company Renaissance Capital. Given that its started trading far above its IPO price today, some critics may argue that it left too much money on the table, and could have raised more for itself.

Its successful debut marks the third major tech IPO in the United States this year, and is the third in a row to price well and immediately trade higher. It is also the first half of a pair of technology offerings that will list this month, with data management and security company Rubrik expected to list its own shares next week. The two companies follow Reddit and Astera Labs out of the private markets, after both the social media company and datacenter connectivity hardware play continue to trade above their IPO prices.

Investor eagerness for Ibotta indicates that “there is an increasing appetite for IPOs again” Smith said, “particularly in the tech space.”

Don’t pop the champagne yet for the tech IPO market coming roaring back, however. Ibotta pivoted to business sales over a direct-to-consumer model, which helped it reach profitability in recent periods. Classic tech IPOs tend to feature tech companies still in growth mode and deeply in the red.

Rubrik could be a better test of IPO appetite. Its products are in the data management and security worlds, and the company is deeply unprofitable and growing more slowly than Ibotta. That said, it does have a strong cloud revenue story to tell. If its debut goes well, we could see more yet-unprofitable unicorns try a shot at the public markets. 

Smith agrees, calling the upcoming Rubrik IPO “an even bigger test” for tech debuts “given its weaker current financial picture.”

We’ll find out next week.

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Rubrik’s IPO filing reveals an AI governance committee. Get used to it. | TechCrunch

Tucked into Rubrik’s IPO filing this week — between the parts about employee count and cost statements — was a nugget that reveals how the data management company is thinking about generative AI and the risks that accompany the new tech: Rubrik has quietly set up a governance committee to oversee how artificial intelligence is implemented in its business.

According to the Form S-1, the new AI governance committee includes managers from Rubrik’s engineering, product, legal and information security teams. Together, the teams will evaluate the potential legal, security and business risks of using generative AI tools and ponder “steps that can be taken to mitigate any such risks,” the filing reads.

To be clear, Rubrik is not an AI business at its core — its sole AI product, a chatbot called Ruby that it launched in November 2023, is built on Microsoft and OpenAI APIs. But like many others, Rubrik (and its current and future investors) is considering a future in which AI will play a growing role in its business. Here’s why we should expect more moves like this going forward.

Growing regulatory scrutiny

Some companies are adopting AI best practices to take the initiative, but others will be pushed to do so by regulations such as the EU AI Act.

Dubbed “the world’s first comprehensive AI law,” the landmark legislation — expected to become law across the bloc later this year — bans some AI use cases that are deemed to bring “unacceptable risk,” and defines other “high risk” applications. The bill also lays out governance rules aimed at reducing risks that might scale harms like bias and discrimination. This risk-rating approach is likely to be broadly adopted by companies looking for a reasoned way forward for adopting AI.

Privacy and data protection lawyer Eduardo Ustaran, a partner at Hogan Lovells International LLP, expects the EU AI Act and its myriad obligations to amplify the need for AI governance, which will in turn require committees. “Aside from its strategic role to devise and oversee an AI governance program, from an operational perspective, AI governance committees are a key tool in addressing and minimizing risks,” he said. “This is because collectively, a properly established and resourced committee should be able to anticipate all areas of risk and work with the business to deal with them before they materialize. In a sense, an AI governance committee will serve as a basis for all other governance efforts and provide much-needed reassurance to avoid compliance gaps.”

In a recent policy paper on the EU AI Act’s implications for corporate governance, ESG and compliance consultant Katharina Miller concurred, recommending that companies establish AI governance committees as a compliance measure.

Legal scrutiny

Compliance isn’t only meant to please regulators. The EU AI Act has teeth, and “the penalties for non-compliance with the AI Act are significant,” British-American law firm Norton Rose Fulbright noted.

Its scope also goes beyond Europe. “Companies operating outside the EU territory may be subject to the provisions of the AI Act if they carry out AI-related activities involving EU users or data,” the law firm warned. If it is anything like GDPR, the legislation will have an international impact, especially amid increased EU-U.S. cooperation on AI.

AI tools can land a company in trouble beyond AI legislation. Rubrik declined to share comments with TechCrunch, likely because of its IPO quiet period, but the company’s filing mentions that its AI governance committee evaluates a wide range of risks.

The selection criteria and analysis include consideration of how use of generative AI tools could raise issues relating to confidential information, personal data and privacy, customer data and contractual obligations, open source software, copyright and other intellectual property rights, transparency, output accuracy and reliability, and security.

Keep in mind that Rubrik’s desire to cover legal bases could be due to a variety of other reasons. It could, for example, also be there to show it is responsibly anticipating issues, which is critical since Rubrik has previously dealt with not only a data leak and hack, but also intellectual property litigation.

A matter of optics

Companies won’t solely look at AI through the lens of risk prevention. There will be opportunities they and their clients don’t want to miss. That’s one reason generative AI tools are being implemented despite having obvious flaws like “hallucinations” (i.e. a tendency to fabricate information).

It will be a fine balance for companies to strike. On one hand, boasting about their use of AI could boost their valuations, no matter how real said use is or what difference it makes to their bottom line. On the other hand, they will have to put minds at rest about potential risks.

“We’re at this key point of AI evolution where the future of AI highly depends on whether the public will trust AI systems and companies that use them,” the privacy counsel of privacy and security software provider OneTrust, Adomas Siudika, wrote in a blog post on the topic.

Establishing AI governance committees likely will be at least one way to try to help on the trust front.

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Robotic Automations

Startups Weekly: Let's see what those Y Combinator kids have been up to this time | TechCrunch

Welcome to Startups Weekly — your weekly recap of everything you can’t miss from the world of startups. Sign up here to receive the Startups Weekly newsletter in your inboxes.

It’s the most wonderful tiiiiiiime of the yeaaaaaaar … That’s right, we’re back with all the you-can’t-miss companies from the current batch of Y Combinator startups. AI was, not shockingly, the biggest theme, with 86 out of 247 companies calling themselves an AI startup, but we’re reaching bubble territory given that 187 mention AI in their pitches. We have a couple of roundups for you, including the 18 most interesting, and the TechCrunch staff favorites.

Meanwhile, I wrote up an in-depth interview with the founder of Ember, the hot-mug company, about (among other things) how he split his company in half to be able to woo MedTech and life sciences investors.

Most interesting startup stories from the week

Image Credits: PM Images (opens in a new window) / Getty Images

Startups losing money is nothing new, but this week, Devin summarizes why Trump’s Truth Social is different in a few key ways. In a nutshell, the whole thing is playing out like a bad reality TV show, where the plot revolves around hemorrhaging money and the suspense is whether it’ll run out of cash before viewers change the channel. With a debut on Nasdaq as $DJT, thanks to a merger with the desperation darling of the finance world, a SPAC, Trump Media & Technology Group’s (TMTG) financial lifting of the veil reveals a $58 million loss on a meager $4 million in revenue. This isn’t your typical Silicon Valley “burn cash now, profit later” saga; it’s more of a “burn cash now, and that’s it” kind of story. Unlike startups that thrive on VC life support while disrupting industries, TMTG’s lifelines are fraying, with no explosive user growth, no VC sugar daddies, and the unenviable position of being publicly accountable while trying to juggle a business model that seems to repel advertisers like it’s made of antimatter. As the stock flops around lacklusterly, the reality sets in that TMTG’s story might be less about pioneering digital media and more about how to lose friends and alienate advertisers, all while the credits roll on what could be the most expensive episode of “The Apprentice” ever produced.

  • IPOs are gathering steam … maybe?: Cybersecurity darling Rubrik, which has been guzzling venture capital like it’s going out of style, has decided it’s time to brave the public markets and files for an IPO. With a history of bleeding money, Rubrik’s tale is one of modest revenue growth, eye-watering losses, and a pivot to subscription models that’s as groundbreaking as deciding to sell software as a service in the tech world.
  • Accel rethinks India: Accel, the venture capital firm that’s been collecting Indian unicorns like they’re going out of style, is having a bit of an existential crisis with its Atoms accelerator program, realizing that in the eyes of founders, all VC money eventually starts to look the same — just a pile of cash with strings attached.
  • Crypto is back?: If the 2023 crypto venture landscape was an ice-cold pot of water, the first quarter of 2024 is the part where the bubbles start to form right before water boils, Tom Schmidt, a partner at Dragonfly Capital, said to TechCrunch in Jacquelyn’s overview of the VC investment space for crypto.

Chaos in automotive startup land

Tesla’s cybertruck exists now. That’s about the best thing your friendly correspondent can say about this design monstrosity. Image Credits: Darrell Etherington / Getty

Stormy weather continues to be the theme for the movers and shakers of the startup world: Transportation.

Canoo’s 2023 earnings report reads like a tragicomedy. The star of the show? CEO Tony Aquila’s private jet, which cost the company double its entire revenue for the year. In a year where Canoo managed to rake in a meager $890,000 by delivering just 22 vehicles, it simultaneously shelled out $1.7 million to ensure Aquila could jet-set in style. I guess in the fast-paced world of electric vehicles, nothing says “fiscal responsibility” quite like a private jet tab that overshadows your sales, even as the company picks clean the bones of its failed competitors.

Meanwhile, in the land of Fisker, the company momentarily misplaced millions in customer payments amid a frantic scramble to restructure its business model. This financial game of hide-and-seek, which diverted crucial resources from sales to sleuthing, highlights the company’s rather casual approach to tracking transactions, including, in some instances, handing over vehicles on the honor system. Fisker’s attempt to play catch-up with paperwork not only strained its relationship with PwC during annual report preparations but also left the company clueless about its actual revenue, all while teetering on the edge of bankruptcy. So, if you’ve ever felt bad about losing your car keys, at least take solace knowing you didn’t misplace the equivalent of a whole SUV stuffed full of dollar bills, or get yourself into an investigation about why the doors on the cars you manufacture won’t open.

  • Self-driving … into the abyss: Ghost Autonomy, a startup that once dreamed of making highways safer with its autonomous driving software, has ghosted the automotive world, shutting down operations despite a nearly $220 million séance with investors.
  • Riveting reading from Rivian: Rivian’s latest report card reads more like a cry for help than a victory lap. The EV underdog kicked off 2024 by building a smaller number of cars and delivering even fewer. With each EV sold last quarter costing them the equivalent of a luxury sedan in losses, Rivian’s journey to profitability looks … interesting.
  • Tesla takes a dip: Tesla’s latest delivery figures are so-so, as the company blames everything from arsonists with a vendetta against German factories to maritime mayhem courtesy of the Houthi rebels for its first year-over-year sales dip in three years. As if transitioning to the new Model 3 wasn’t enough of a speed bump, Tesla’s also juggling production of the Cybertruck and a mysterious lower-cost EV, all while trying to invent a revolutionary manufacturing process on the fly.

Most interesting fundraises this week

Kidsy’s catalog drew investor interest. Image Credits: Kidsy

Kidsy is the latest brainchild to emerge from the startup nursery. The company is essentially the T.J. Maxx of baby gear, swooping in to save parents from the financial black hole that is raising children by offering discounted, overstocked, and gently used items that were once destined for the landfill. Founded by a former business journalist and a software engineer, Kidsy has quickly become the superhero of the circular economy for baby products, managing to charm investors into an “oversubscribed” pre-seed funding round faster than a toddler can throw a tantrum.

  • A sticky startup indeed: Stripe, the payments behemoth, has swooned over a four-person startup named Supaglue, formerly known as Supergrain, in a classic tale of acqui-hire romance. Supaglue somehow caught Stripe’s eye — perhaps through the tech equivalent of a love potion mixed with mutual acquaintances and serendipitous meetings.
  • Google blesses nonprofits with $20 million: is throwing $20 million at nonprofits to play fairy godmother to their AI dreams. Twenty-one lucky nonprofits get to be the guinea pigs in a six-month tech boot camp, complete with AI coaches and Google employee minions, all in the name of making the world a better place — one automated task at a time.
  • Bla bla bla something something cars: From its humble beginnings as an online hitchhiking platform to becoming a unicorn with a penchant for hoarding millions and dabbling in buses, BlaBlaCar has had quite the ride. Now armed with a $108 million credit line and a newfound taste for profitability, it’s on a shopping spree for smaller companies.

Other unmissable TechCrunch stories …

Every week, there’s always a few stories I want to share with you that somehow don’t fit into the categories above. It’d be a shame if you missed ’em, so here’s a random grab bag of goodies for ya:

  • No account required: OpenAI, in a move that screams “data is the new gold,” is now letting anyone chat with ChatGPT without an account, ensuring that even your grandma’s queries about knitting patterns can help train their AI, all while vaguely hinting at “more restrictive content policies” that are as clear as mud.
  • Just bumblin’ along: Bumble, once the belle of the IPO ball, now finds itself grappling with the modern dating dilemma of being ghosted by users for TikTok love stories. New CEO Lidiane Jones is on a mission to rekindle the flame by rethinking the women’s first-move mantra and flirting with AI, all while trying to make dating fun again without really changing the swipe-right culture.
  • Hey, that’s a good impression of me: OpenAI is basically saying “hold my beer” as it dives headfirst into the ethical quagmire of voice cloning with its new Voice Engine. The company insists it’s all about responsible innovation while simultaneously opening Pandora’s box to see how it can be used and abused. We can’t think of a single downside.… </sarcasm>
  • B nixes AI: Beyoncé’s “Cowboy Carter” has been out for only a few days. But in the middle of the press release for “Cowboy Carter,” the singer made an unexpected statement against the growing presence of AI in music.

Software Development in Sri Lanka

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From YC to IPO: Winter 2024 Demo Day, Rubrik and Ibotta | TechCrunch

What a week, everyone. Two full days of Y Combinator demo day activity kept us busy, but the latest accelerator cohort’s launch was far from the only big story in startup land. Today on TechCrunch’s Equity podcast, Mary Ann, Becca and Alex gathered to dig into favorites from the hundreds of new YC companies that pitched, and a venture capital fund that wants to become “the investment and innovation arm of the autism community.”

Becca wanted to talk about Seso and its fascinating fintech play in the agricultural space, while Alex brought Home From College and its recent seed round to the mix.

Then to close out, we chatted through the impending Ibotta and Rubrik IPOs. The latter deal could provide a fascinating heat-check for unprofitable unicorns that need to find some sort of exit, and quickly. All told we chatted through startups from their very earliest form all the way through their most mature. A very fitting capstone to the week!

Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday. You can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod.

For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.

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Ibotta's expansion into enterprise should set it up for a successful IPO | TechCrunch

Ibotta confidently submitted an S-1 filing with the SEC on March 22 with the intent to list its shares on the New York Stock Exchange. The 13-year-old cash-back startup looks to make its public debut after turning profitable and recording impressive revenue growth in 2023.

The company reported $320 million in revenue in 2023, up 52% from 2022 when it produced $210 million in revenue. Ibotta’s gross profits grew 68% from 2022, $164.5 million, to 2023, $276 million.

The Denver-based company started as an app for consumers to get cash back on purchases through Ibotta’s brand partnerships. The company has since expanded into building back-end software for reward programs for enterprise customers including Exxon, Shell and Walmart.

Ibotta’s move into B2B2C — selling to companies that then use those products to sell to consumers — is likely a key reason why investors may be interested in this IPO, says Nicholas Smith, a senior equity research analyst at Renaissance Capital, a research firm focused on pre-IPO and IPO-focused ETFs. Selling to companies also likely played a big role in Ibotta’s recent financial gains.

“The fact that [Ibotta] has become, with Walmart, more of an enterprise software play, basically being the back-end for its Walmart cash rewards program, that lends more credence to it,” Smith said. “[Compared to] ‘Hey we have this app and we need to grow users and continue down that avenue.’”

The company started building its enterprise program, known as Ibotta performance network (IPN), back in 2020. Its partnership with Walmart also started in 2020 but expanded its IPN partnership with the retail giant in 2022. According to the S-1, this partnership plays a big role in Ibotta’s revenue boost.

“Our revenue growth significantly accelerated with the addition of new publishers to the IPN,” according to the S-1. “Most recently, the rollout of our offers on the digital property of Walmart has attracted larger audiences, and in turn, resulted in greater spend by CPG brands and a greater number of redeemed offers. These developments have increased our scale, growth, and profitability.”

Putting the Ibotta comment into perspective, from 2022 to 2023 its direct-to-consumer business grew by 19%, a respectable amount. The company’s enterprise business (“third-party publishers revenue” in its filing), by contrast, grew 711% over the same time frame, scaling from just under $10 million to just over $80 million in a single year. That growth, and a resulting improvement in its gross margins — from 78% in 2022 to around 86% in 2023 — helped the company flip from persistent net losses to consistent profitability.

Quarterly data from Ibotta underscores how recently — and rapidly — it became a profitable company. From Q1 2022 through Q1 2023, the company posted regular, decreasing net losses. In the first quarter of 2022 it had negative net income of $22.9 million, which declined to $4.3 million one year later. Then, starting in the second quarter of 2023, it began to generate regular profits, which grew to $18.6 million by the last quarter of last year.

Rapid revenue growth, an expanding secondary revenue line, improving revenue quality and GAAP profits all came together for Ibotta to list its shares. If it stumbles even with those backing characteristics, late-stage venture-backed startups could view its debut as a cautionary tale.

But there is reason to expect that its growth will continue. The company has signed IPN partnerships with Family Dollar, Kroger, Exxon and Shell, implying broad corporate demand, even if the extent of those relationships is less clear compared to Ibotta’s partnership with Walmart. The S-1 did not clarify how long Ibotta’s partnership with Walmart is contracted for, but it did mention that if the retailer does end the relationship, it would have a material impact on Ibotta’s business.

The biggest question that remains is how Ibotta will price its shares. While the company likely chose to file its intent now — it originally hired bankers back in November — to ride the recent wave of successful IPOs from Astera Labs and Reddit, Ibotta is very different from both of those companies.

Ibotta has seen very little, if any, secondary activity according to secondary data platforms, which makes it hard to gauge how investors are currently valuing the startup. Smith said the pricing could go a few ways considering the company has multiple revenue streams that traditionally get valued quite differently.

“It’s hard because there is no perfect comp,” Smith said. “It’s a little bit of an adtech company, maybe getting more [into] enterprise software. [If it’s] looked at truly from a tech perspective, it will probably go for a high multiple, if it’s more sort of adtech or even consumer it might be lower.”

Smith added that if investors peg it more as an advertising or marketing company that it might price similarly to how Klaviyo, the digital marketing company, was priced last fall. Klaviyo priced at $31 a share, $1 above its target of $30, which gave it a valuation of $9.2 billion, a hair below its previous primary round valuation of $9.5 billion. The company currently has a market cap of $6.8 billion.

Ibotta has raised a little over $90 million in venture capital from funds including GGV Capital, Great Oak Ventures and Teamworth Ventures, among others, in addition to a slew of angel investors including Thomas Jermoluk and Jim Clark, the co-founders of Beyond Identity. The company was last valued at $1.08 billion.

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Robotic Automations

Rubrik’s IPO filing hints at thawing public markets for tech companies | TechCrunch

Rubrik, a data cybersecurity company that raised more than a half-billion dollars while private, filed to go public after the bell on Monday. Following quickly on the heels of debuts from Reddit and Astera Labs, the choice by Rubrik to pursue a public offering now could indicate that the IPO market is warming for tech companies.

As a private-market company, Rubrik last raised a lettered round in 2019 when it closed $261 million at a $3.3 billion post-money valuation, according to Crunchbase data. The company could have luck pricing its IPO shares significantly higher than its last primary round. Buyers on the secondary market have bid for shares valuing the company at $6.6 billion in recent months. Secondary data platform Caplight estimates the company’s valuation hovers around $6.3 billion.

Rubrik sells its cloud-based data protection platform to enterprises. As of January, the company had over 1,700 customers with an annual contract value of $100,000 and nearly 100 customers who paid Rubrik over $1 million a year, according to its IPO filing.

Inside Rubrik’s growth

Rubrik initially presents as a moderately growing software business with net losses that stretched to $354 million in its most recent fiscal year.

From its fiscal 2023 to its fiscal 2024, which concluded at the end of January this year, the company’s revenue grew from $599.8 million to $627.9 million, or just under 5%. However, subscription revenue grew 40% over the same period, rising from $385.3 million to $537.9 million.

The growth in its subscription revenue, and not its legacy revenues, is the engine that could propel Rubrik to a successful IPO. The company began life as a software company that sold its product on a perpetual license basis. However, after several years, it began to shift toward a subscription model in its fiscal 2019. It expanded its subscription (SaaS) offerings over time and told investors in its IPO filing that it anticipates that its non-recurring revenues will “continue to decrease,” as it doesn’t generally offer perpetual licenses today.

Rubrik’s transformation to recurring revenues is nearing its completion, with the company reporting that in its most recent quarter — the period ending January 31, 2024 — subscription-related top line comprised 91% of its total revenue. That was up from 73% in the year-ago quarter.

The business model transition from licenses to SaaS can be costly and has weighed on stock prices of other large security companies like Splunk, said Brendan Burke, emerging technology analyst at PitchBook. “Yet Rubrik shares have traded at a 50% premium to the last VC round in secondary markets, suggesting the company will be able to justify a sufficiently high valuation to fund this shift,” he said.

The shift to subscription revenue has helped Rubrik boost its gross margins, which rose from 70% in its fiscal 2023 to 77% in its recently completed fiscal 2024.

However, a growing recurring-revenue software business and improving gross margins have not solved Rubrik’s stiff losses. The company’s net losses grew from 46% of revenue in its fiscal 2023 to 56% in its fiscal 2024, totaling some $354.2 million in the 12 months ending January 31, 2024.

However, despite Rubrik’s steep unprofitability, its cash burn has been comparatively modest. The difference between its net losses and operating cash deficits is not resolved through the excision of expansive share-based compensation; those are single-digit million yearly expenses at the company. Instead, upfront collection of ratable revenue helped Rubrik expand its deferred revenue by hundreds of millions in recent years and limited its net operating cash outflows over the same period.

A Silicon Valley story

Rubrik’s potential IPO could prove a coup for Lightspeed Venture Partners, a well-known Silicon Valley venture capital shop. Bipul Sinha, Rubrik’s co-founder and CEO for the last decade, is a former partner at Lightspeed. The venture capital firm led Rubrik’s Series A, and, per Crunchbase, took part in all its successive funding rounds. Investing in a former partner is not unheard of in venture circles, with some firms even building out founder or entrepreneur-in-residence roles internally. But to see Sinha’s company come to market with 23.9% ownership in the hands of his former employer underscores how personal networks can affect who raises capital in startup land.

Greylock is the other venture firm with the most on the line when it comes to Rubrik’s planned IPO, with its investor Asheem Chandna on the board and ownership of around half of Lightspeed’s stake, or 12.2% of Rubrik’s voting stock, before new shares are sold in the public offering. Greylock led Rubrik’s Series B.

Other investors that led lettered rounds in Rubrik did not meet the 5% threshold required for mandatory inclusion in the company’s S-1 filing, but Enrique Salem from Bain Capital Ventures, which led the company’s Series E, is also present on its board. Other board members include Yvonne Wassenaar, the former CEO of Puppet; Mark McLaughlin, who sits on Snowflake’s board; and John Thompson, another Lightspeed denizen and former Microsoft board member. NBA player and investor Kevin Durant was previously announced as a board adviser at the company, though he is not mentioned in its IPO filing.

The founders are the kind of Silicon Valley A-list that the VC community loves, demonstrating the often incestuous relationships that these tech companies can have with each other through their personal networks. The related third-party disclosures point out that Sinha co-founded another startup called Confluera, where he still sits on the board. In its fiscal 2022, Rubrik spent $124,640 with Confluera. Co-founder Arvind Jain, who remains a major shareholder but has gone to found a new darling AI startup, Glean, is also really well known from his days as an early Google employee. Rubrik reports in its S-1 filing that it spent $356,000 with Glean since April 2021.

While Rubrik notes that its purchases of technology products and services from Confluera and Glean were “negotiated in the ordinary course of business,” they underscore the connections that exist between many Silicon Valley operators. Those same connections can help founders repeat prior successes by buying from and selling to friends and former colleagues. The Rubrik S-1, while not indicating anything untoward, is a reminder that network effects in startup and venture circles are often predicated on relationships and their geographic density in places like Northern California.

What’s on the line

There are more than 1,000 startups in the world today with a valuation of $1 billion or more. Those that are still in fighting shape need to find a way to exit and return capital to their backers. With the IPO market long behind the needed pace to clear those decks, many private-market companies are waiting for a clear starting gun to pursue their own public offerings. If Rubrik can price and trade well in its own debut, it could help other, enterprise-focused software companies that are still unprofitable to also take a shot at going public. That would be welcome news for both founders and venture capitalists alike.

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Robotic Automations

Deal Dive: A Stripe secondary deal worth paying attention to

Venture capitalists and founders are hoping — praying? — for exits to pick back up in 2024. A recent TechCrunch+ survey found that there is consensus among VCs that exits will start to rebound this year, but the when and the how are still a bit fuzzy.

The consensus, though, is that fintech Stripe will go public this year. The investors surveyed clearly aren’t the only ones who are excited about a potential Stripe exit in 2024, either. According to secondary data tracker Caplight, there has been an absolute flurry of buyers looking to get shares in the company in recent months.

While bids tell us one thing, deals tell us another, and a closed transaction this week tells us a lot about what could happen to Stripe in 2024. On Tuesday, literally the day after New Year’s Day, a secondary sale closed that valued Stripe shares at $21.06 apiece; that values the startup at $53.65 billion, according to Caplight data.

Stripe declined to comment.

There are a few reasons why this deal is worth paying attention to. For one, Stripe’s $53 billion value marks an increase from the company’s most recent primary round last March, when Stripe was valued at $50 billion.

Software Development in Sri Lanka