Tech Brew Ride Home - Fri. 08/01 – Tech IPO’s Are Back On The Menu, Boys…

Starting point is 00:00:00 On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechBrew Ride Home for Friday, August 1st, 2025. I'm Brian McCullough today. Well, it looks like tech IPOs might be back on the menu because Figma's first day pop was like the good old days. Anthropic seems to be gaining traction, opening eye raises again, earnings from Apple and Amazon, and of course, the weekend long read suggestions. Here's what you miss today in the world of tech. This is getting people's attention. Figma had its IPO yesterday and Figma's stock close. up 250% at $150.15% of share after Figma sold shares at $33 at $33 at its IPO open, hitting a $68 billion valuation. For one thing, you might remember that Adobe's Figma acquisition

Starting point is 00:01:26 fell apart in 2023, and that only valued Figma at $20 billion at the time, so Lina Khan did them a solid there. But also, IPO's tripling on the first day of trading. That's dot-com bubble stuff. If you check my socials. I really ratcheted up my IPO meter, because, I mean, this is a SaaS play, a notional AI play. This really signals that the public markets might be hungry for new issues. Let's see if other companies take the lead from this. Quoting CNBC, The big opening pop is the latest indication that the tech IPO market has reopened following a multi-year lull that began in early 2022 when inflation was soaring and interest rates were on the rise. So far this year, online bank chime.

Starting point is 00:02:08 stable coin issuer Circle and artificial intelligence infrastructure provider core weave have hit the market along with health tech companies hinge health and Omada health. Figma's first trade at $85 valued the company at about $50 billion, the stock trading under the ticker symbol FIG, was halted after it soared past $112 before closing at $115.50 for a 250% gain. The company ended the day with a market cap of almost $68 billion. In 2022, Adobe agreed to acquire Figma for $20 billion, but the deal fell apart in 2003 after UK regulators said the tie-up would likely harm competition. Led by 33-year-old CEO Dylan Field.

Starting point is 00:02:51 Figma makes web-based software that allows people to collaborate on slide decks, digital whiteboards, and designs for apps and websites. Field told CNBC's Squawk Box on Thursday that regardless of what happens with the market debut, the company has to stay focused, stay on mission, listen to our customers, and really keep our priorities in mind. The most important thing to remind myself of, the team of, is share price is a moment in time, said Field, whose stake in the company is worth over $6 billion based on Tuesday's closing price. We're going to see all sorts of behavior probably today over the weeks ahead, end quote.

Starting point is 00:03:27 Figma boasts more than 13 million monthly users, two-thirds of whom are not designers. As of March 31st, more than 1,000 clients were paying Figma upwards of 100,000. annually, according to the prospectus. Google, Microsoft, Netflix, and Uber are all customers. In its filing of preliminary results for the second quarter, Figma said it generated $9 to $12 million in operating income on $247 million to $250 million in revenue, with sales growing about 40% year over year, end quote. As Ashley Vance joked on X, at this rate, Figma will be able to acquire Adobe by the end of next week. The thing is, at this level, Figma is being valued at 54 times sales. Basically, the only more expensive stock on the market right now is Pallenteer. But then look at

Starting point is 00:04:17 what Pallentere's stock has done this year. The point is, if the market is willing to value tech companies this richly, you'd be a fool not to try to take advantage of that. As Zach DeWitt tweeted, quote, every private software company growing at 30% plus with 300 million plus of ARR and good unit economics should be drafting their S1 tonight, end quote. Yeah, I'm looking at you, Canva, or maybe it's time for Stripe to take the leap. What if a pureplay AI company took the leap? A perplexity, an anthropic maybe, more on them later. And hey, the usual arguments are coming back out. Haven't heard these in a while, quoting, John Wang on X. Figma just left $2.3 billion on the table, nearly double what they actually raised.

Starting point is 00:05:06 That's not market excitement. It's deliberate underpricing and legalized theft by investment banks who sold it cheap to their institutional buddies. Retail shoves in at Open and gets used as exit liquidity, end quote. I said I'd get back to Anthropic. The information has a source suggesting that Anthropic is nearing $5 billion in annualized revenue. That's up from the $4 billion reported just on July 1st. So it looks like their growth is accelerating. Should help for this, quote, investors are keen to invest in Anthropic as the company seeks to close its round in a matter of weeks. The company initially sought to raise $3 billion, but due to investor interest, it may raise as much as $5 billion at a $170 billion valuation in a round led by iconic capital, according to a person who has spoken.

Starting point is 00:06:04 spoken to company executives. It needs the capital to pay for running and training its clod models. Earlier this year, it told investors it will burn $3 billion in 2025 after burning $5.6 billion last year. Selling access to its models to coding assistant startups is one of the big factors driving its revenue growth. Anthropic has roughly 42% of the $1.9 billion market for cogeneration, while OpenAI had 21% according to a report by Menlo Ventures, an early Anthropic investor. That market share includes coding tools such as cursor that use Anthropics models. In fact, when Anthropic hit $4 billion in annualized revenue earlier this month, about $1.2 billion of that revenue was coming from the Claude developer's top two customers, according to another person.

Starting point is 00:06:48 It's not clear who those customers are, but some investors think they are Cursor and Microsoft's GitHub co-pilot. Even excluding Anthropics' largest two customers, the company's annualized revenue in early July would have increased 11 times from the same month a year ago. according to one of the people. Some of the $1 billion increase in Anthropics revenue over the last month to nearly $5 billion is also coming from Anthropic success with Claude Code. The coding assistant is generating nearly $400 million in annualized revenue, roughly doubling from just a few weeks ago, according to one of the people. Claude code can be accessed as part of a Cloud Chatbot subscription or through Anthropics' application programming interface. Anthropics' gross margins

Starting point is 00:07:28 have recently been about 60% according to a person with knowledge of the financials. This includes direct sales of clod to customers as well as through its partners, Amazon Web Services, and Google Cloud. That's higher than OpenAI's roughly 40% gross margins last year and its projections of nearly 50% for this year, although the chat GPT maker has told investors that it expects the figure to rise to nearly 70% in 2029, end quote. And actually speaking of OpenAI, Andrew Ross Sorkin, was reporting this morning that OpenAI has raised $8.3 billion led by Dragonnear at a $300 billion valuation months ahead of schedule

Starting point is 00:08:04 and part of its $40 billion fundraising goal for 2025. Quote, the round was five times oversubscribed and left some early investors in Open AI frustrated by the smaller allocations they got as the company prioritized bringing in new strategic backers. The biggest investor was Draganeer Investment Group, which committed $2.8 billion, an astonishing check from a single venture capital firm that may be one of the largest ever written. The investment casts a spotlight on Dragonnear, which made successful early bets on companies like Airbnb, Spotify, and Uber, but has largely stayed behind the scenes in Silicon Valley. Mark Stad, Dragonnear's founder, is now taking a very public claim on what many in Silicon Valley see as the defining tech platform of the next decade. The investment represents about 10% of the firm's funds.

Starting point is 00:08:50 Open AI's business continues to surge. Dealbook hears that the company's annual recurring revenue has soared to $13 billion up from $10 billion in June. June and is projected to surpass $20 billion by the end of the year. The number of business users who pay for chat GPT has reached 5 million up from just 3 million a few months ago, end quote. Meanwhile, Google has rolled out Gemini 2.5 Deep Think, its most advanced reasoning model, which can consider multiple ideas simultaneously. This is available to $250 per month ultra subscribers, quoting TechCrunch. First unveiled in May at Google I.O. 2025, Gemini 2.5 DeepThink is Google's first publicly available multi-agent model. These systems spawn AI multiple agents to tackle a question in parallel, a process that uses significantly more computational resources than a single agent, but tends to result in better answers. Google used a variation of Gemini 2.5 Deep Think to score a gold medal

Starting point is 00:09:56 at this year's International Math Olympiad. Alongside Gemini 2.5 Deep Think, the company's says it is releasing the model it used at the IMO to a select group of mathematicians and academics. Google says this AI model takes hours to reason instead of seconds or minutes, like most consumer-facing AI models. The company hopes the IMO model will enhance research efforts and aims to get feedback on how to improve the multi-agent system for academic use cases. Google notes that the Gemini 2.5 DeepThink model is a significant improvement over what it announced at I.O. The company also claims to have developed novel reinforcement learning techniques to encourage Gemini 2.5 DeepThink to make better use of its reasoning paths.

Starting point is 00:10:37 Deep Think can help people tackle problems that require creativity, strategic planning, and making improvements step by step, said Google and a blog post shared with TechCrunch. The company says Gemini 2.5 Deep Think achieves state-of-the-art performance on humanity's last exam, or HLE, a challenging test measuring AI's ability to answer thousands of crowdsource questions across math, humanities, and science. Google claims its model, score. 34.8% on HLE without tools compared to XAI's GROC4, which scored 25.4%, and OpenAI's O3, which scored 20.3%. Google says that Gemini 2.5 Deepthink outperforms AI models from OpenAI, XAI, and Anthropic on LiveCodebench 6, a challenging test of competitive coding tests. Google's model scored 87.6, whereas

Starting point is 00:11:25 GROC 4 scored 79% and OpenAI's O3 scored 72%. end quote. Let's bang this out real quick. Apple reported Q3 revenue was up 10% year on year to $94.04 billion versus $89.53 billion estimated. So its largest quarterly growth since December of 2021. Apple incurred around $800 million in Trump's tariff costs in Q3, $100 million less than expected, but expects that number to jump to $1.1 billion in Q4 if current rates and policies remain in place. Tim Cook said Apple is significantly growing its AI investment, reallocating staff to work on AI features, and is, quote, very open to M&A that accelerates our roadmap. Eyes emoji. Also worth noting that Apple has now sold over 3 billion iPhones since the device's 2007 launch.

Starting point is 00:12:28 It announced $1 billion had been sold in July of 2016, so we can estimate that they probably reached $2 billion sold around September of 2021. Amazon reported Q2 revenue up 13% year-on-year to $167.7 billion. Ad revenue was up 23% year-on-year to $15.7 billion. But the all-important AWS revenue was only up 17.5%. So not exactly matching what Microsoft reported this week for their cloud business. Might be why Amazon stock is down over 6% this morning. Meanwhile, Reddit reported Q2 revenue up 78% year-on-year to 5%. to $500 million and Daily Active Uniques up 21% to $110.10.4 million.

Starting point is 00:13:14 Q3 guidance for Reddit came in above estimates, so that explains why Reddit stock is up almost 16% this morning. Reddit CEO Steve Huffman said Reddit wants to become a go-to search engine for users. Its core search apparently now has more than 70 million weekly active unique users and its AI-powered Reddit Answers has 6 million weekly users, quoting The Verge. In his latest note to investors, CEO Steve Huffman says that the company is, quote, concentrating our resources on the areas that will drive results for our most pressing needs, including making Reddit a go-to search engine.

Starting point is 00:13:52 Huffman says that every week, hundreds of millions of people come to Reddit looking for advice and we're turning more of that intent into active users of Reddit's native search. Reddit's core search has more than 70 million weekly active users. Reddit overall averages 400. and 16.4 million weekly active unique users and Reddit answers, the platform's AI search tool that it launched in December, has 6 million weekly users up from 1 million weekly users in the first quarter of this year. To continue to build out search, Reddit is, quote, expanding Reddit answers globally, integrating it more deeply into the core search experience

Starting point is 00:14:27 and making search a central feature across Reddit, Huffman says. Of course, the move to build out its own search capabilities could be a hedge against losing traffic from Google, which is increasingly finding new ways to give you answers with AI instead of providing a list of links. Appending the word Reddit to Google searches is a classic way to try and get information written by humans, and Reddit has seen an influx of traffic as a result. But if Google becomes a less reliable source of traffic for Reddit, the platform may need to have better search for itself, end quote. Time for the weekend long read suggestions. First up, did you know the first,

Starting point is 00:15:10 private commercial space station is about to launch from BBC Science Focus. In 2026, a SpaceX Falcon 9 will launch Haven 1, the world's first commercial space station developed by private company VAST. Designed as a minimum viable orbital lab, it's compact about the size of a tour bus, and will host short, focused missions with four astronauts at a time. Cruise will conduct research on human biology, plant growth and protein crystallization during 10-day stays. Haven 1 emphasizes safety, speed, and comfort featuring inflatable sleep pods and a sleek design. It will also test artificial gravity systems and be the first station connected to Starlink. For Vast, Haven 1 is a strategic leap towards, hopefully someday, winning NASA's ISS successor contract.

Starting point is 00:16:06 Then, from popular mechanics, recently a... toxic fungus, killed 10 scientists working on a tomb in Poland, and it's believed to be the same spore that killed the people who excavated King Tut's Tomb 50 years earlier, thereby leading to the legend of the curse of Tuts' tomb. But get this, scientists now think the spore, Aspergillus Flavis, has the potential to successfully target and destroy leukemia cells, so a new compound derived from the Spore could potentially kill cancer by disrupting cellular reproduction. And finally, from the Financial Times, this year, the alert system for defending the planet Earth against incoming space rocks, like the one that killed the dinosaurs, was activated

Starting point is 00:16:54 for the first time ever. This led the FT to do a deep dive into what will happen when it's not a drill, when we detect an actual potential planet killer heading our way. Listen to this, quote. Cautionie, the SPM-A-G astronomer reported on the mission options to divert the asteroid five spacecraft would have to be crashed into its surface, or we could launch several craft to shoot streams of charged particles at the object to push it away, and then there was the nuclear option, a single bomb would suffice. But of the orbital dynamics of the asteroid and the solar system's geometry, Coshney said it was possible to move the asteroid only in one of to directions north or south relative to the Earth. There was also a risk that deflection would

Starting point is 00:17:41 only be partially successful, shifting the asteroid's impact zone further north or south. Most participants felt that sending the asteroid south would be the better option. Deflecting at north would open up a much more populated risk corridor stretching through the center of Africa, over Istanbul and Western Ukraine, and up to northern Scandinavia. And although Cape Town lay in the southerly path. Talk about a conflict of interest here, said Johan Mini, a manager at Cape Town's Disaster Risk Management Center. The Southern Corridor was much less populated overall. Then a member of the audience asked about possible risks to Antarctica. Laurent Sazeran, an officer from the UN Office for Outer Space Affairs took the microphone to respond. The equivalent of more than 10,000 Hiroshima bombs

Starting point is 00:18:27 exploding over the ice sheet and raising global sea levels was, quote, a bigger problem than anything else I can see, said Cesaran, there was a flicker of shock at the intervention. It was a risk that had been little considered. Neither way is a sure thing, Johnson said. It's a diabolic situation. The purpose of the exercise was to discuss this dilemma. The difficult choices said Cautionie would have to be made by politicians, but which ones? In a situation where many countries would face varying levels of risk depending on the chosen course of action, it wasn't clear who would pick among the alternatives. Who would make the decision, said Cesaran, toward the end of the exercise. it's actually quite a fundamental question. Perhaps he said it would fall to the UN Security Council,

Starting point is 00:19:08 but defending the Earth from space lies outside its mandate. Another UN official told me later that the most realistic scenario was individual spacefaring states deciding for themselves whether to launch missions. Other problems went unaddressed. If a deflection mission placed a different nation suddenly in harm's way, that might constitute an armed attack. Plus, international law bans the use of nuclear weapons in space. Many planetary defenders believe they should have an exception. Sometimes only a nuke will do. Other policymakers worry about handing states a convenient pretext for nuclear proliferation. Perhaps with many years of warning, these issues could be ironed out, but we may not have that much time, end quote. No weekend bonus episode for you this week, still getting things in order with the

Starting point is 00:20:02 pod transition. By the way, you might have noticed there are no ads at the moment, but no worries. They'll be back in about a week or two. I know our friends at One Password re-upped for one. Not that you were worried about not having ads, but people did ask me, yes, they're coming back eventually, all in good time. Talk to you on Monday.

Tech Brew Ride Home - Fri. 08/01 – Tech IPO’s Are Back On The Menu, Boys…

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.