Hello friend,
If you’re a post-revenue startup, your annual growth rate should be at least 100% otherwise you may not raise your next funding round. Here’s why:
To interest their investors, VC General Partners must offer more appealing returns than more liquid assets, such as the stock exchange. But right now, the stock market is on a roll!
Take Datadog, for example. At its 2019 IPO, it was valued at $7.8 billion and had $363 million in revenue. Today, it’s worth $57 billion and has $2.6 billion in revenue, growing 26% yearly with a 10% EBITDA margin. That’s a 47% CAGR over five years for a company making hundreds of millions. If you had invested in Datadog after its IPO, you’d have made over 7x your money—in a liquid asset.
The bar is much higher for investors considering (illiquid) private startups. If I were a potential LP, I would ask for at least 10 times my money to lure me away from the stock exchange and cover the illiquidity. And to achieve such returns, startups need to promise much better growth than publicly listed companies offer.
If your company is post-revenue, you need to grow 100-300% year-over-year until $100 million. That kind of growth excites VCs and shows your potential to deliver significant returns. This is especially true when more outliers, like Wiz or Together AI, manage to go from $1 million to $100 million in 18 months or less!
Growing 50% annually with multiple millions in ARR is already a tremendous achievement, but not one that can interest VC investors compared to more liquid assets.
Now, let's dive into last week's developer-first transactions.
P.S.: if you're a CTO or tech leader, consider joining the free Unicorn CTO Slack community. We're a small group of international CTOs and tech leaders, and we often meet for virtual (or not) coffees.
💰 Market Summary - Week of December 9th, 2024
18 companies raised $1.37 billion across 8 product categories in 4 countries.
Europe-based companies attracted 12.2% of the total funding vs 1.3% for Asia-based companies (including Israel) and 86.5% for North America-based companies.
Cloud is the category that attracted the highest funding.
1 company provides or contributes to an open-source product.
2 companies were acquired this week.
🧩 Funding by Product Category
🌎 Funding by Region
🏢 Funding By Company
Crusoe, from Denver 🇺🇸, raised $600 million in Series D funding led by Founders Fund. Crusoe is redefining AI cloud infrastructure with its vertically integrated, purpose-built AI cloud platform, known for its reliability and performance in developing, training, and deploying AI models. (more)
Liquid AI, based in Cambridge 🇺🇸, secured $250 million in Series A funding from AMD Ventures. Liquid AI is on a mission to build capable and efficient general-purpose AI systems scalable at every level. (more)
Nscale, located in London 🇬🇧, completed a $155 million Series A financing led by Sandton Capital Partners. Nscale offers high-performance compute optimised for AI, providing unparalleled performance and efficiency from its Europe-based operations. (more)
Gigs, founded in Germany and based in San Francisco 🇺🇸, raised $73 million in Series B funding led by Ribbit Capital. Gigs revolutionizes mobile services by unlocking new revenue opportunities and enabling seamless telecom capabilities integration for businesses. (more)
Evinced, from Los Altos 🇺🇸, secured $55 million in Series C funding led by Insight Partners. Evinced is rapidly growing in the digital accessibility software sector, saving developers time and reducing risks with its AI-enabled products. (more)
WaveForms AI, from San Francisco 🇺🇸, raised $40 million in Seed funding led by Andreessen Horowitz. They aim to solve the Speech Turing Test and create Emotional General Intelligence through advanced audio LLM research and products. (more)
LambdaTest, also based in San Francisco 🇺🇸, secured $38 million in Series D funding led by Avataar Ventures. LambdaTest is enhancing its AI-powered enterprise test execution platform to ensure quality releases and accelerated digital transformation. (more)
Twelve Labs, located in San Francisco 🇺🇸, raised $30 million in Series B funding from Databricks, Snowflake and other backers. They help developers build applications that can understand the world through powerful video-understanding infrastructure. (more)
Cartesia, also in San Francisco 🇺🇸, raised $27 million in Seed funding led by Index Ventures. They aim to build ubiquitous, interactive AI that runs everywhere. (more)
Stainless, based in New York 🇺🇸, raised $25 million in Series A funding led by Andreessen Horowitz. Stainless focuses on providing robust SDKs for REST API development. (more)
🤝 Mergers & Acquisitions
WPAI, based in Austin 🇺🇸, was acquired by Automattic. WPAI offers integrated AI products designed specifically for WordPress creators, enhancing the WordPress ecosystem with advanced AI capabilities. (more)
CodeSandbox, located in Amsterdam 🇳🇱, was acquired by Together AI. CodeSandbox is renowned for its high-performance cloud development environments that cater to both development teams and programmatic code execution at scale. (more)
⭐️ Trending GitHub Repositories
astral-sh / uv (✩ 2,813 stars this week) - An extremely fast Python package and project manager, written in Rust.
soxoj / maigret (✩ 1,932 stars this week) - Collect a dossier on a person by username from thousands of sites.
DioxusLabs / dioxus (✩ 1,433 stars this week) - Fullstack app framework for web, desktop, mobile, and more.
👍 Trending Developer-First Products on ProductHunt
AISmartCube (👍 794) - Build AI tools like you're playing with Lego.
SmythOS (👍 456) - Build, debug, and deploy AI agents in minutes.
Depth AI (👍 276) - AI that deeply understands your codebase.
Insightful! Thanks Daniel.