A $700M SAFE, more IPOs, and how one venture fund is transcending borders | Equity Podcast

Startups and Incubators

• Onyx, a Y Combinator-backed digital bank, is pivoting from B2C to B2B, offering a white-label platform for community banks, regional banks, and credit unions to launch digital apps for young affluent consumers.
• Philip Krim, co-founder of Casper, has launched Monto Climate, an incubator focused on climate-related startups. Unlike traditional accelerators, Monto Climate will work on its own ideas and bring in external people to run successful businesses, raising traditional venture capital later.
• The host expresses skepticism about the effectiveness of startup incubators that are not founder-led and highlights the lack of prominent companies that have emerged from such incubators.
• The host mentions the Reddit IPO as an example of a successful company that came from an accelerator model.
• The host criticizes Wonder, a food delivery company that raised $700 million in a SAFE, calling it an excessive amount of funding for a crowded market.
• The host suggests a hypothetical scenario where Monto Climate raises $700 million and Wonder raises $8.5 million, expressing a preference for more funding for climate-focused initiatives.

Venture Capital

• Late-stage VCs may be holding back their portfolio companies from going public due to concerns about market volatility, regulatory changes, and the potential for better valuations in the future.
• This revelation challenges the common perception that founders are the ones delaying public listings and shifts the focus to the role of investors in this process.
• VCs have a fiduciary responsibility to their LPs, so they may hold back companies from going public to maintain a higher valuation.
• The host introduces Ethos Fund, a new venture capital firm that invests in founders bridging the gap between the US and Vietnamese tech communities.
• The host notes the geopolitical significance of investing in Vietnam and the potential benefits of investing in "third culture founders."
• Saudi Arabia is planning a significant investment of $40 billion into the field of artificial intelligence (AI) through its sovereign wealth fund.
• This move aligns with the Saudi government's broader focus on venture investing, innovation, and following industry trends.

Recent IPOs

• Airbnb reported strong Q4 results and a positive outlook for travel demand.
• Robinhood reported disappointing earnings and a declining user base.
• Affirm reported revenue growth and increasing adoption of its BNPL service.
• Reddit's IPO exceeded expectations, with a 52% increase in stock price on its first day of trading.
• The secondary market valuation of Reddit was around $5 billion, but the public market valuation is now closer to $9-10 billion.
• The success of Reddit and AER lab's IPOs is a positive sign for the tech industry and may encourage more companies to go public.