November 21, 2024

Down the road

Hi there, 

Here is this week's Hot or Not.

Hot: Self-driving cars

Driverless cars feel increasingly imminent. 

I just tried my first Waymo last week, and it was both freaky and amazing. (Waymo raised a $5.6B round last month.) 

We tracked here how genAI is accelerating the timeline for autonomous vehicles (AVs). For example, Waymo is leveraging multimodal models to generate future trajectories for its cars based on sensor data. 

Another boost for the AV sector could come from the Trump administration, which is reportedly planning to relax rules on self-driving cars.

Not: Compressed fintech valuations

Across VC, exit valuations on a per employee basis have deflated — from $1.7M in 2021 to $1.3M in 2024. 

(AKA divide M&A exit valuation by employee headcount at the time of the acquisition.) 

Fintech exit valuations in particular have been compressed (at $1.1M per employee since 2023) compared to other sectors.

The reset is creating opportunities for strategic acquirers. For example, Shift4 Payments scooped up Revel Systems (citing “synergies”) at a $250M valuation and 500+ headcount in May 2024.

We map out 120+ fintech companies with solid teams but limited growth here that are clear opportunities for acquirers. 

Hot: Startup failures

So far this month, two companies that raised hundreds of millions in funding shut down: 

• Bowery Farming — vertical farming startup 
• Forward — high-tech unmanned medical stations

Both had high capital costs and failed to secure fresh funding (or sufficient revenue). They top the list of startup failures so far this year based on total funding. 

Get details on 480+ more startup failures here.

Not: Rapid

API management startup Rapid — once valued at $1B — was recently acquired by Nokia.

Some estimates indicate that the deal could amount to as little as $100M. 

If this is the case, it wouldn’t be all that surprising.

Last year, we covered Rapid’s layoffs — and even then the company was reportedly looking to sell itself for significantly less than its $1B valuation.

While the terms of the acquisition haven’t been disclosed, the early estimates really do make you wonder how many fake unicorns are running around.

Over a third of unicorns are at (or close to) the $1B mark right now, but the fundamentals of many of these businesses never made them worth $1B.

As we predicted last month, more distressed unicorn sales are going to come to market.

The +1

What the puck. Houston, we have a problem.

I love you.

Anand

@asanwal 

Co-Founder & Exec Chair

P.S. Earlier today, we hosted a panel discussion on the 15 tech trends you need to watch in 2025. Download the recording here.

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