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The fastest-growing software startups, Apple’s AI deal, and new TWiST500 companies

Author

Alex Wilhelm
June 13, 2024 • Estimated Reading Time: 5 minutes

Top News

  • Apple + OpenAI: Who is paying whom? In the wake of Apple’s mega AI event earlier this week, how much — if anything — Apple will pay OpenAI was an open question. New reporting indicates that Apple might be paying nothing at all. Does that mean Microsoft is subsidizing Apple’s consumer AI push?

  • Breaking up is hard to do: Former high-flying ed-tech startup Bjyu’s troubled fundraising process took a fresh blow this week when a judge forced the $200M to a halt. Byju’s was working to raise new funds at an effectively zeroed-out valuation to stay in business.

  • Software growth: OpenAI’s revenue is pipped to have more than doubled in less than a year, putting the yet-private AI giant on a $3.4B run rate. Databricks is also scaling quickly, underscoring that while many tech companies are struggling to grow, there are standouts in the market today.

TWiST500

Yesterday, on TWiST E1965, Jason and Alex added a few new names to the TWiST500. While discussing the startups most likely to IPO next, Circle, Intercom, Databricks, Shein and Turo made the cut.

  • Circle: The stablecoin giant has filed privately to go public after nearly getting out during the SPAC boom. Rising interest rates make sitting on cash more lucrative than before, meaning that the tens of billions of dollars that Circle has in reserve to back its token are valuable indeed.

  • Databricks: Fresh reporting noted above indicates that Databricks is now on a $2.4B run rate. It’s huge, has a big AI story, and a well-liked CEO to boot. The only thing holding Databricks is a concern about public-market valuation norms. That should not be enough to keep the data lakehouse company out of the pool forever.

  • Shein: Widely expected to list in London, the fast-fashion giant does tens of billions of dollars per year in revenue and is profitable. Sure, we can argue that fast fashion is terrible for the planet thanks to waste and carbon emissions. A number of consumers, however, do not seem to care.

  • Turo: After filing to public years ago, car rental service Turo has updated its S-1 filing every quarter on the regular. This means we’ve had a great perch to watch its growth, but also that it very clearly wants to go public. You don’t GAAP up your accounting shop, file, and keep the filing warm if you don’t have hardcore IPO ambitions.

  • Intercom: In mid-late 2020, Intercom hired a CFO. It reached an annual run rate of around $150M earlier that year. Throw in the return of its old CEO, focus on deploying new AI tools, and what we expect to have been continued growth, and Intercom is big enough to list and could earn some AI credit with public-market investors at the same time.

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This Week in Startups

E1965: Jason and Alex dug into Waymo’s self-driving update for its hundreds of robotaxis, how much more Apple is worth thanks to its AI news, the good news on inflation and rates for startups, and finally, the startups expected to list next.

E1964: Following Apple’s massive AI download at 2024’s WWDC, Jason and Alex discuss Apple Intelligence, Siri’s upgrades, why the company’s deal with OpenAI is so interesting, and more. Consumer AI is heating up!

E1963: Jason and Alex discuss the state of seed investing, how to leave your employer and start a competitive company, and how anonymous apps impact society, particularly kids. Many founders raise less money when their companies are young to conserve equity, but how does that dynamic play with venture investors?

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