Billion-dollar markups are back, y'all

And: How China plans to reinflate its venture capital scene

Welcome back to Cautious Optimism! It’s Friday, June 21st, 2024. CO will feature the occasional interview starting next week. (Hit reply if there’s someone you think I should chat with.) Hugs, let’s have some fun! — Alex

Big Money

A cluster of mega-rounds have touched down recently. A quick scan of PitchBook data indicates that global venture totals for the second quarter will look similar to what we saw in the first but with a smaller deal count undergirding the total. That means bigger rounds are taking more share this quarter. Here are the latest:

• AI chipmaker Cerebras has filed privately to go public; by adding another IPO to our queue, the company is putting a massive fundraising event onto the calendar.

  • Recall that Webtoon is expected to list next week. More here.

• French AI startup Poolside is raising more than $400 million at a $2 billion valuation. The company wants to use AI to make software development faster.

Via Rob

• Zepto secured $665 million at a $3.6 billion valuation. The Indian quick commerce company is seemingly thriving in a market littered with high hopes and low results. Why so much money? TechCrunch reports that the round was oversubscribed, but I also wonder if investors felt like this was their last chance to purchase material equity in the company (in percentage terms).

• Revolut wants to sell stock at a $40 billion price tag. Shares from workers and others would be in the offer, making it a secondary transaction instead of a traditional equity raise. Notably, Revolut is about to surpass its 2021-era valuation of $33 billion if the sale goes forward. Recall that we’ve seen fellow neobank Monzo post impressive results lately.

Trending Up: AI model quality … social media restrictions … Airbnb, thanks to Estonia … the other Kevin Hart … Starlink … Substack … green energy installs … humanoid robots in commercial settings … Medium’s cash balance …

Trending Down: Cable … crypto prices in the last week … Russian software … viability of high-rates … backtracking … commercially viable EVs … saying that your company is American to appease Americans, only to annoy your local regulators … streaming advertising prices …

China’s plan to resurrect its domestic venture market

Yesterday we took a quick historical look at the ups and downs of China’s domestic venture capital market. In 2018 it temporarily overtook the United States’ own venture scene in total dollars raised, only to lose steam before regaining its footing during COVID. Now Chinese venture capital numbers are in decline as the local economy faces a difficult period of deleveraging during a trade spat.

China wants to turn things around. I joked that the effort would be akin to trying to retube toothpaste, but perhaps we were too hasty. What does the Chinese government have in mind? Pulling from the “Several Policy Measures to Promote High-Quality Development of Venture Capital” as published by the Office of the State Council this month, here’s what I am seeing (all translations via Google):

• Why bother? “[V]enture capital is an important measure to promote a virtuous cycle of science and technology, industry and finance.”