This Week in Pre-IPO Stocks - Market Update - Mar 31, 2023 - E40

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Pre-IPO Stock Market Update - Mar 31, 2023 | China AI investments, Q1 startup funding vs prior year, Klaviyo IPO, ByteDance/Tiktok 2022 revenue, Instacart increases valuation 

00:26 | China and AI
- Chinese AI companies are commanding big valuations and are attracting a lot of capital from US investors
- China AI companies must adhere to Chinese govt regulation ... this means they are limited on the data sets available to train their AI models
- Sequoia has invested into a new company by Yang Zhilin (a Google and Meta AI lab alum) who previously founded Recurrent AI, an AI solution for Chinese based sales teams
- Matrix (San Francisco) and Qiming (Boston) funded Frontis, a ChatGPT like solution for Chinese users
- Minimax, another China focused ChatGPT solution, is 16th months old and is currently raising $100m at a $1.0b valuation, up from its last round at $500m valuation less than 1 year ago

01:36 | Start up funding fell 53% 
- Crunchbase Research on startup capital raises...
- Global startups raised $76b in Q1 2023 vs $162b in Q1 2022; down 113% year over year
- The $76b Q1 2023 number includes $10 billion raised by OpenAI and $6.5 billion raised by Stripe
- There was a slowdown in funding across all stages. Capital invested in seed deals fell 44%, while late-stage funding dropped 54%
- AI startups accounted for about 20% of capital invested in the first quarter

02:27 | Klaviyo to IPO
- Klaviyo, a marketing software company, has hired Goldman to explore an IPO
- the IPO could take place as soon as September
- Klaviyo helps companies send marketing emails and text messages
- The company has seen a surge in demand for its products following Apple’s 2020 changes that tightened up third-party access to customer data, which has made it more difficult for online sellers to reach shoppers through digital ads.
- Klaviyo last primary round was in Jul 2022. It raised $100 million from Shopify and Cross Creek Advisors, valuation was not disclosed. The company posted a $9.5 billion valuation in a May 2021 funding round
- Klaviyo delivered $575 million in 2022 recurring revenue

03:19 | ByteDance revenue up 30%
- ByteDance, the Chinese owner of TikTok, generated more than $80 billion in annual revenue in 2022, up 30%+ from $60 billion in 2021
- A substantial majority of ByteDance’s revenue growth came from its core advertising business in mainland China, not the US

03:56 | Instacart increases valuation by 18%
- Instacart, the grocery delivery company, increased its internal valuation by 18% this week to $12b
- This follows four conservative internal valuation decreases in 2022
- Instacart institutes a quarterly 409A valuation process
- The recent valuation gives Instacart 4.8x revenue multiple, Instacart 2022 revenue was $2.5 billion
- The company turned a profit in Q4 2022

04:36 | Large capital raises
- Ledger | $452m Series C, $3.8b valuation
- Cart.com | $38m Series C, $1.6b valuation
- Sonoma Biotherapeutics | $30m Series B1, $715m valuation
- Graphiant | $66m Series B, $425m valuation
- ArriVent Biopharma | $155m Series B, $380m valuation

05:34 | Pre-IPO stock market performance
- Pre-IPO stocks were down 2.04% for the week vs the S&P 500 up by 3.43%. That’s a 5% swing in one week.
- YTD pre-IPO stocks still trail the S&P by most 17%.
- Not much movement in the YTD numbers … OpenSea and Kraken still lead, 36% and 11% respectfully. Flexport, Discord, Airtable, Epic Games, and Chime continue to be down over 20%. Chime is down 38% ytd.
- Stripe was up 11% last week. Chime, Discord, and Databricks were down … 9%, 10%, and 13%.

AG Dillon & Co venture capital funds...
- AG Dillon SpaceX Pre-IPO Stock Fund = www.agdillon.