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A thread compiling my analyses on dead or injured unicorns Convoy

logistics startup
valuation: $3.6B
raised: $1B

https://twitter.com/asanwal/status/1714734406126940476

Airtable is probably worth less than the total equity funding it has raised

I'm not talking about the $11.7B valuation it raised at in December 2021

I'm talking about it being worth less than the ~$1.4B+ in financing it has raised

Here's the math/data

Airtable is on track for $150M of ARR in 2023

Per @CBinsights, it was doing $115M in 2021

That's 14%'ish growth per annum

We'll come back to growth in a second

But for right now, that puts Airtable's forward price/revenue multiple at 78x ($11.7B valuation / $150M ARR)

Now, let's compare that price/revenue multiple with publicly traded peers in the broader project mgmt and collaboration space, specifically:

Monday: 12.63x
Asana: 6.61x
SmartSheet: 7.98x

Note: these are not forward multiples but trailing multiples for these companies. And so on a forward basis, the multiples are likely lower

But for the sake of simplicity and to give Airtable the benefit of the higher multiple, we'll use those comps

This would put Airtable's valuation in the neighborhood of

$991 million to $1.89B

Ouch.

That's a 84-92% valuation discount vs that $11.7B val in 2021

Here is where folks will typically argue that the above doesn't consider Airtable's growth

The logic is that Airtable is growing quicker than peers and hence will grow into that valuation and so should command a premium valuation multiple

And therein lies the problem

Once we layer in growth, the picture for Airtable gets worse

Here's YoY revenue growth for the comps

Monday: 68.5%
Asana: 44.6%
SmartSheet: 39.2%

As a reminder, Airtable's growth is ~14%

And here's their trailing revenues:

Monday: $624.8M
Asana: $606.5M
SmartSheet: $711.9M

Airtable: $150M (forward ARR)

So it's public peers are 4x to 5x larger in terms terms of revenue

And they're growing 2.5x to 4.5x faster

Add in a further discount for illiquidity given Airtable is private, the valuation is prob south of $991 million

Asana has the lowest price/revenue multiple of the bunch at 6.61x which is how we arrive at the $991M

Asana is also growing at almost 3x the rate of Airtable off revenue that is 4x larger

It's not hard to imagine that this brings down the multiple of Airtable to 3 to 5x which would equate to a valation of

$450M to $750M

That'd be a discount of 93-96% vs that Dec 2021 valuation

The company is cutting costs and repositioning for profitability which makes sense in this market but given the current likely valuation, all investors after the March 2018 Series B are likely underwater

They're also talking about a future IPO but getting back to anywhere close to that $11.7B valuation would require reigniting massive growth and making that price:revenue to growth ratio look more appealing

As always, if you believe any of my assumptions in the above are incorrect, please comment and I'll update the analysis if the additional context dramatically changes the results








If you want to go deep on the space, we analyzed @airtable & peers as well as products in the space in Jan 2023

The numbers have evolved a bit but the storyline remains the same.

The massive Airtable equity funding tally was something that caught our eye then as well

Bragging about headcount was 1 of the most corrosive trends in startup land over the last many years

I was guilty of it too

Somehow larger growing headcount became a positive signal of success for companies

When in reality, it may more often than not be a negative signal If you look at articles about unicorns, you'd rarely see revenue figures but you'd see founders/CEOs bragging about taking the team to 800 by year-end

Fundraising and headcount became 2 false proxies for success

But what are the real negatives of more headcount?

1/ Attn: If you're in corp dev or with a financial sponsor/PE

This is an amazing time to look for non-core assets within larger cos that they want/need to divest

Today, we saw Shopify unload 2 recent acquisitions to focus on the core

cbinsights.com/research/shopi… 2/ @Shopify sold @DeliverrInc to @flexport

Exactly 1 year ago, they bought it for $2.1B

They divested to Flexport for 13% of the co's equity

Based on Flexport's last valuation of $8B, that's a $1.04B valuation

That's a 50% haircut vs 1 year ago

app.cbinsights.com/profiles/c/pPe…

The intense drama about SVB has died down

But the implications on the pvt markets will be felt in coming weeks & months

They will be big for VCs, PE and startups

We’ll dig into what the data says here

First stop - Let’s dig into how debt was being used to prop up valuations 2/ In their Q1’23 update, SVB had a telling line

“Clients continue to opt for debt over raising equity at pressured valuations”

This actually explains quite a bit about private market valuations

We bootstrapped @cbinsights by first building a totally different business

It involved hedge funds, too big too fail banks and $100,000 PDFs

For nerds interested in data and information services businesses, you might enjoy this First, some backstory

My 1st day of freedom from big co employment was Jan 1, 2008

In retrospect, this was comically bad timing given the Great Financial Crisis was abt to happen

But I had no idea

1/ Q: How are tech startup valuations doing?

A: pretty darn well

They’ve fallen a bit more than the Nasdaq

BUT, if you believe in ‘reversion to the mean’, there might be more pain ahead

Let’s dig into the data

You can grab all this data here btw → cbinsights.com/research/repor… 2/ In Q2 '22, tech startup valuations fell across most stages vs Q1’22

Series A, B, C and Series E+ were all down

Interestingly, Seed/Angel deal valuations were up

The drops weren’t terrible, however

All is good, right?

Well…maybe

Next, let's go a bit further back in time

With Q2 now 1/2 way done, have notable tech investors changed their investment behavior in any notable way?

Here's some data on @sequoia, @a16z, @Accel, Tiger Global, and @usv Hypothesis: funds will double-down on their existing portfolio cos and won't do new deals

Data: Not supported

Pro tip: If you're a startup raising right now, don't emphasize your 4 day work week Tip number 2 in this thread is related

https://mobile.twitter.com/asanwal/status/1493911087980363781

Seeing lots of advice to startups to get more prudent with spending to control burn and give themselves more runway given current funding climate and valuations

This is harder than it looks Being undisciplined with money is easy. And it becomes part of culture.

I was at a startup like this

You have no decision quality cuz you make no decisions

You do everything that seems cool

And so you never develop that muscle around “ruthless prioritization”

Q1 2022 VC data is in via @CBinsights

* Valuations down
* Fewer unicorns
* Funding down
* Deals down

But it's not really all bad. Let's dig in.

Full 324 page report here (free) cbinsights.com/research/repor… @CBinsights 2/ Total venture funding of $143.9 billion

-19% qtr over quarter and the first time in 8 quarters VC dollars declined from prior quarter

1/ Some signs to look for that suggest your startup equity won't be worth shit

(note: there are probably exceptions but generally, these will steer you right) 2/ Companies who talk about innovation in HR and other functions more than they talk about innovating on the product

Gimmicky isht like this is never a good sign

When I hear Web3 is going to disrupt VC, I'm mostly reminded of Blades of Glory

It's a great but meaningless soundbite

Here's a quick take on what might actually disrupt VC

But first... Disrupting VC is a topic which comes up basically every 18 months

Crowdfunding, algorithmic venture, ICOs

It's mostly good organized marketing

ICOs - LOL. Remember all those grifters

1/ I’m hopeful my now 12 yo daughter will become an entrepreneur someday

And so we’ve been listening to interviews with badass female entrepreneurs

Their journeys of entrepreneurship & business are great stories and we also learn a ton

Here’s some of our favorites 2/ Rachel Luba (@agentrachelluba) founded Luba Sports and is the youngest female agent in MLB history

She represents Yasiel Puig & Trevor Bauer and recently negotiated Bauer’s 3-year, $102 million deal

Great discussion here b/w her and @joepompliano

podcasts.apple.com/us/podcast/16-…

Hubspot, @stripe and JP Morgan Chase all acquired similar companies recently

Really?!

Yup - Tech and financial services are looking to buy media companies and communities

And this type of M&A is going to accelerate

Why?

In 6 letters, the answer is LTVCAC

🧵 2/ @Chase bought 2 content assets in the last 4 months

In Sept ‘21, JPM acq’d The Infatuation, a publisher with reviews & recs on restaurants in 50 cities.

They also acq’d Frank, an online portal w/ content to help students research and apply for financial aid

What?!

Reference checks are not taken seriously enough

A couple of years ago, I got religion on them

Here are 8 reference call questions that get past BS and really help understand a candidate

🧵 2/ I used to treat ref calls as this perfunctory thing that didn't really influence my decision

Bad move

They're an opportunity to learn more about a teammate and how to make them successful

Or sometimes, they might change you mind and save you both lots of future grief

Your startup has more than 5 people

Here's 18 things you can do in 2022 to screw it up

Want your startup to end 2022 weaker than when you started?

Follow these tips

🧵 (ya, I know) 1/ Keep the high-performing asshole on your team

You've got a small team
1 of them is an epic jerk
But he's really good at his job

Don't worry

He'll get better. And he's just that important. Keep him.

Plus, your other teammates don't have other options in this job market

Language patterns on earnings calls are very interesting

This qtr has already seen a record # of mentions of "transitory"

Why does this happen?

- they all use the same corp comms consultants?
- a CEO cabal determines what word everyone must use?

Why?!!
app.cbinsights.com/top-search/0nd… CEOs always see lots of headwinds

But we did just hit a 5 year high for headwinds

Gotta manage those expectations!!!

Q3 2021 Venture numbers were insane (as expected)

Here's some highlights:

- Tiger Global no longer the most active investor
- Biggest $ quarter in history of venture
- The term unicorn has effectively become meaningless
- China deal activity is back big!

Let's dig in

🧵

https://twitter.com/asanwal/status/1445547792181518340

2/ First, venture funding hit $158.2B in Q3'21

105% increase YoY

And the highest tally ever

When was the prior record? Q2'21

It's raining $$$

BTW, all of this is from this free 263 pg report cbinsights.com/research/repor…

Q: How have the valuations of the largest financial services firms fared over the last 3 years?

A: Not great (data below)

We're seeing a dramatic changing of the guard in financial services

It was happening gradually

Now, it's happening suddenly

Here's why

https://twitter.com/asanwal/status/1413171509565263872

2/ First, a framework to evaluate this through courtesy of Ernest Hemingway in The Sun Also Rises where he asks

"How did you go bankrupt?"

B2B marketplaces are going to be big

$2.3B invested in them since 2019

But there is not a ton written about them

So here's a summary of my favorite articles, podcasts & principles on B2B marketplaces

🧵

https://twitter.com/asanwal/status/1343710387842256907

2/ This by the team @BessemerVP is a great starting point

They discuss

1. What's changed that makes B2B marketplaces possible today
2. The qualities of successful B2B marketplaces
3. B2B marketplace models esp for high-friction goods

bvp.com/atlas/b2b-mark…