Drop it like it's hot: EV prices, Reddit's IPO, and Nvidia
Mar 21, 2024
Kaley Ubellacker
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
Capital is still sitting pretty, waiting desperately by the phone for its beloved VCs to call. The Pitchbook data below shows a strong correlation between deal value and capital call rates over the last five years. VC activity experienced a steep drop in capital call rates over the past three years, although deal value remained at or above 2019-2020 levels. Interestingly, there was a relatively low increase in capital call rates from 2020 to the hype year 2021. While there’s plenty of hope in the air for what 2024 will hold, it’s safe to say the trend below challenges that hope.
Good Reads 📖
For the rushed reader …
Goldman Sachs published a recent report forecasting a nearly 40% decline in battery prices between 2023 and 2025 thanks to a merry mix of dropping material costs and continued battery innovation.
Reddit’s IPO revealed a curious sentiment pervading the Valley: down round IPOs aren’t the monster hiding under every founder and shareholder’s bed.
Nvidia unveiled Project GR00T, which entails building an AI platform for humanoid robots designed for prominent makers like Boston Dynamics and Figure AI, among many others.
For the less rushed reader …
A DROP IN THE EV OCEAN: Up next to bat-tery is an EV price drop prediction from Goldman Sachs. Goldman Sachs published a recent report forecasting a nearly 40% decline in battery prices between 2023 and 2025 thanks to a merry mix of dropping material costs and continued battery innovation. CleanTechnica also gives a solid summary of the report. The most prominent highlight is Goldman Sachs sees EVs breaking through to cost parity with internal combustion engines next year, albeit in select markets. As new EV models charge forward (like how Honda just released plans for a hydrogen-powered CR-V), it will be up for debate whether EVs hit the mark or should have saved their energy. Without the cost hurdle, it will be interesting to see how many people choose electric and how EVs compete in an open market. Feeling gassy never feels great, so I can’t imagine electric will lose that competition.
REDDIT OR GREENIT: With Reddit’s IPO here at last, Silicon Valley is shifting like tech-tonic plates. Reddit is the first high profile tech startup to list publicly since Instacart last September. Reddit’s IPO revealed a curious sentiment pervading the Valley: down round IPOs aren’t the monster hiding under every founder and shareholder’s bed. Down rounds are sticking around for the class of 2021, and that fact is being met with less widespread opposition as VCs push their companies to go public if financially possible. While underwritten valuations have indeed sunk to a land down under, like Instacart’s nearly 75% collapse, the IPO boat still has a shot at redemption.
CHIP OFF THE OLD BLOCK: The tech world is buzzing about AI Woodstock, where instead of Jimi Hendrix shredding on a guitar, Nvidia CEO Jensen Huang was shredding on a … dimly lit and very empty stage. Nvidia unveiled Project GR00T, which entails building an AI platform for humanoid robots designed for prominent makers like Boston Dynamics and Figure AI, among many others. If you’re curious to know the real “T,” Tesla didn’t make it on Nvidia’s list. Humanoids are a hot topic in VC circles, for both their bods and their brains, and have attracted vast amounts of capital. Regardless of all the attention they have received, plenty of skeptics remain. Will embodied AI take off running or flee for the hills?
Fire Up the Pre-Seeds🔥
Highlights from this week’s pre-seed raises:
Healthtech
Portal Biotechnologies - Infiltrating the power house
The Problem: In biotech, access to the intracellular space is a critical limitation.
The Tech: A simplified approach to intracellular delivery (a process like the Trojan Horse story) to accelerate advances in RNA, gene editing, and AI-driven discovery.
Recently Raised: $5 million in funding led by Pear VC.
Also Note: Portal already has partnerships with several large pharmaceutical companies as part of its beta program for early adopters.
Artificial Intelligence
Lumino - A prettier protocol for programmers
The Problem: Training AI models is computationally expensive, surging prices for GPUs and causing larger enterprises to hog resources.
The Tech: An integrated hardware and software compute protocol for AI workloads with economic incentives and blockchain support.
Recently Raised: $2.8 million in funding with participation from Longhash Ventures, Inception Ventures, Protocol Labs, TRGC, and others.
Also Note: With its technology, AI compute costs decrease by up to 80% as compared to traditional cloud providers.
Outro🚪
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