A couple of weeks ago, TechCrunch broke the news that Akamai was in discussions to acquire Noname Security, a specialist in API security, for around $500 million. Today, the deal has been confirmed, though at a slightly lower price. Akamai on Tuesday said it has agreed to buy Noname in a $450 million deal. The […]
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OpenAI CEO Sam Altman has transferred formal control of the eponymously firm’s named corporate venture fund to Ian Hathaway, OpenAI confirmed to TechCrunch.
The OpenAI Startup Fund, launched in 2021, was initially set up with Altman as its named controller. The arrangement could have presented a major issue to the company if he had not been reinstated as OpenAI’s CEO following his brief ouster in November. The fund’s initial GP structure was intended as a temporary arrangement, and Altman made no personal investment, nor did he have any financial interest, a spokesperson explained.
The news was earlier reported by Axios.
Hathaway joined OpenAI in 2021 and played a key role managing the Startup Fund, leading investments in Ambience Healthcare, Cursor, Harvey and Speak. He was previously an investor with Haystack, according to his LinkedIn profile.
Last year, the fund had $175 million in commitments, and now holds $325 million in gross net asset value, according to an SEC filing. Investors included Microsoft and other external backers. The unit invests in early-stage AI-driven companies in fields like healthcare, law and education.
The Startup Fund has backed at least 16 other startups, according to PitchBook data. They include Descript, a collaborative editing platform valued at $553 million last year, and Ghost Autonomy, which develops software for autonomous driving.
Noname Security, a cybersecurity startup that protects APIs, is in advanced talks with Akamai Technologies to sell itself for $500 million, according to a person familiar with the deal.
Noname was co-founded in 2020 by Oz Golan and Shay Levi and is headquartered in Palo Alto but has Israeli roots. The startup raised $220 million from venture investors and was last valued at $1 billion in December 2021 when it raised $135 million in a Series C led by Georgian and Lightspeed. While the sale price is a significant discount from that valuation, the deal as it currently stands would be for cash, the person said. The deal is not final and could change or not happen at all.
Other investors who have backed Noname include Insight Partners, ForgePoint, Cyberstarts, Next47 and The Syndicate Group.
While the potential deal price is half the valuation than Noname’s last private valuation, those who invested at the early stage will receive a meaningful return from the sale. Meanwhile, the deal should allow the later-stage investors, particularly those who invested in the last round, to get a full return on the capital they put in, if not the profit that they hoped for during those heady days of 2021 when money was flowing and valuations were optimistic.
The deal values the company at about 15X annual recurring revenue, the person said. Noname’s approximately 200 employees are expected to transition to Akamai if the sale closes.
Akamai declined comment. A Noname Security spokesperson told TechCrunch, “As a policy, we refrain from commenting on rumors or speculation.”
The Information reported in January that Noname was trying to raise another financing round at a substantially lower valuation. In February, Israeli news outlet Calcalist reported that Noname was in negotiations with several potential buyers, including Akamai.
Many VC-backed companies that raised capital at the height of the tech boom saw their valuations crater after the U.S. Fed raised interest rates. Many are now simultaneously looking for buyers and a new round of funding, known in the finance world as a dual-track process. Meanwhile, many later-stage VCs are looking for liquidity after more than a year of a frozen IPO market. So, the general mood in the venture industry is that, if robust IPOs don’t return soon, it will be bargain shopping time for M&A activity.
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