Is fintech having a moment? | Equity Podcast

Funding Platforms

• Cherub, a subscription-based platform, connects accredited angel investors with entrepreneurs seeking funding.
• Cherub charges startups a membership fee while offering free access to investors.
• Some founders have reported success in securing investments and making valuable connections through Cherub.

Maven Ventures

• Maven Ventures, despite Andreessen Horowitz's shift away from consumer tech, has launched a $60 million fund focused on consumer tech trends, particularly those involving AI.
• Maven Ventures boasts an impressive track record, with 16% of its portfolio companies reaching a minimum $500 million exit or valuation, which is 10 times the industry average.
• Maven, a venture capital firm, recently announced a $1.25 billion investment in AI infrastructure and another $1 billion in AI apps, indicating a shift in focus from consumer-oriented AI.
• Despite the recent popularity of consumer AI tools like ChatGPT and Pixar's AI-generated images, Maven's portfolio companies initially had a lukewarm response to the firm's consumer AI focus.

AI Industry Trends

• There is a trend of "price anchoring" in the AI industry, with companies like OpenAI, Microsoft, and GitHub charging subscription fees for their AI services, suggesting that there is potential for significant revenue in consumer AI products.

HR Tech Funding

• Rippling, an HR tech company, is raising $870 million in a new funding round, with $200 million in primary capital and $670 million in secondary capital.
• Rippling's large secondary offering indicates that the company is not in urgent need of cash and is not planning to go public in the near future.
• The HR tech space is highly competitive, with companies like Gusto and Deel also raising significant funding.
• Rippling's valuation of $13.4 billion reflects optimism about the growth potential of HR tech companies, but it raises questions about their long-term viability and the need for them to go public.

IPO Market

• Rubric, a data management and cybersecurity company, is set to go public next week despite being unprofitable, which could signal a broader willingness among investors to support unprofitable tech companies.
• The successful IPO of iBata, which priced above its expected range and opened trading at a significant premium, is seen as a positive sign for the IPO market, which has been slow in recent months.

Robotics

• Serve Robotics, a sidewalk delivery robot company backed by Uber and Nvidia, debuted on the stock market through a reverse merger but is currently trading below its debut price.

Tesla Restructuring

• Tesla recently laid off 10% of its workforce, including some high-profile executives.
• The layoffs are part of a broader restructuring of the company, with Elon Musk pivoting towards a focus on Robo taxis and cutting the price of the Full Self-Driving software package.
• Tesla's push for Robo taxis raises questions about the company's ability to achieve Level 5 autonomous driving, which is still decades away.
• The company's financial situation is also a concern, as price wars in the EV industry have squeezed its profit margins.
• Despite these challenges, some investors remain bullish on Tesla, believing that Elon Musk's history of delivering on ambitious promises makes the company a good long-term bet.

Fintech Funding

• Ramp, a corporate card and expense management platform, raised $150 million in a Series D extension at a post-money valuation of $7.65 billion.
• The round was co-led by Kosla Ventures and Founders Fund, with participation from new backers Sequoia Capital, Greylock, 8VC, and other existing investors.
• Fintech companies are experiencing a positive trend, as evidenced by Ramp's consistent revenue growth, steady capital raising, and a valuation close to its peak two years ago.
• Rippling's expansion into global payroll and Mercury's move into consumer banking further support the notion that fintech is having a moment.
• Despite the positive developments, there is uncertainty surrounding Chime due to their lack of recent news and financial reporting.