October 3, 2024

They grow up so fast

Hi there,

We just released our Q3’24 State of Venture Report — download 230+ pages on the latest venture trends.

And on October 8, you can join our analysts for a live discussion on the data behind the report — sign up here.

Now, here is this week’s Hot or Not.

Hot: OpenAI's valuation

OpenAI has nearly doubled its valuation (the drama just doesn’t matter). 

The company closed a $6.6B funding round at a $157B valuation yesterday. 

It’s on track for $3.7B in revenue this year. 

OpenAI’s valuation is now 6.5x its next private competitor — Elon Musk’s xAI. 

Anthropic, OpenAI’s closest competitor in the LLM developer market, is rumored to be eyeing a $40B valuation. 

See the most valuable startups in the world here.

And for more on where OpenAI is headed, customers can check out its recent investment strategy map here.

Not: Startup deal activity

The Q3’24 numbers are in and…the venture reset continues.

Global venture funding and deals dropped last quarter, falling back to 2016/17 levels.

The funding decline was felt across fintech, digital health, retail tech, and even AI.

However, amid the decline, AI remained the champ in the venture arena.

It pulled 1 out of every 3 VC dollars in Q3’24 — more than any other sector.

Explore the evolving VC landscape in our State of Venture Q3’24 Report.

Hot: Nvidia acquisitions

Nvidia has picked up another startup (at a steep discount): OctoAI.

OctoAI specialized in optimizing and deploying AI models. Nvidia bought it for somewhere in the $165M-$250M range, a steep discount from its prior valuation of $900M and a poor outcome for most of its investors (it had raised $132M in funding).

We talked about fake unicorn valuations yesterday, and although OctoAI was a clip under the $1B mark, this fate awaits many of them as we discussed.

Nvidia’s acquisitions show a pattern: the company is looking to make using its pricey chips more cost-effective and efficient. 

For example, it acquired Run:ai and Deci AI earlier this year, both of which focus on optimizing AI workloads.

Not: New unicorns

Just 24 new unicorns (companies reaching $1B+ valuations) emerged in Q3’24.

Sure, this marked a lil’ bump QoQ, but it makes you miss the times when we were birthing 130 in a single quarter. Oh, the good ol’ days.

It seems like this moderate level is the new normal for unicorn births.

And right now, the magic is concentrated in one particular area: AI, the venture bright spot.

As AI pulls in more VC dollars than other sectors, it is also minting more unicorns than any other sector (13 in Q3’24).

What does it take to become a unicorn today? Find out what the newest AI unicorns are up to in this report.

The +1

Pie pain. I’d like to bury this chart.

I love you.

Anand

@asanwal 

Co-Founder & Exec Chair

P.S. Don’t forget about our live briefing on the State of Venture Q3’24 — register today to save your spot.

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