Poor returns dog Tiger

Top News

• GM pulls the plug on Cruise: The dream of building an industry-leading robotaxi company at GM is over. Instead, Cruise’s assets will get folded into GM’s other driver-assist programs. Workers report that they were “blindsided” by the news, which leaves the market a bit more open for Waymo to eat market share sans an in-market competitor today. In the United States, at least — there are several competing players in China, for example.

• Google unleashes wave of AI updates: As part of a package of news items, Google dropped Gemini 2.0, which it claims will help push agentic AI apps ahead, a ‘Flash’ version of Gemini 2.0 that is better than Gemini 1.5 flagship and cheaper, an AI assistant for coding called ‘Jules,’ and a new AI chip that is faster and consumes less power. Phew. Got all that? We’re still reading through all the releases, but Google’s AI just planted a new flag in the AI race to close out the year. So much for OpenAI enjoying clear air for its current drops.

• Poor returns dog Tiger: If you raised nearly $13 billion back in 2021 to invest in startups and put the entire fund to work in rapid fashion, how well are your returns looking? Poor, if you are Tiger, according to reporting from The Information and TechCrunch, you’re staring down an IRR that is both negative and over 10%. Not good. Alex points out that private funds often have poor early returns, but allows that as Tiger’s XV fund is in the bottom decile of funds of its vintage, it’s hard to argue that the numbers don’t say something.

TWiST500

Here at TWiST, we’re watching the IPO market closely as many big names are pipped to be part of the upcoming 2025 public-market cohort. One name getting out early is ServiceTitan, the vertical SaaS company for tradespeople. Frankly, given that it is a venture-backed software company, its IPO could help set the tone for next year’s early debuts.

And I have good news! ServiceTitan upped its IPO price range this week from $52 to $57 per share to $62 to $65 per share. That’s a lot more and is, therefore, bullish for IPOs. Renaissance Capital reports that the company could raise 21% more money in its IPO with the tweaks to its expected pricing.

That in hand, all systems go for early 2025 IPOs, including, say, TWiST500 member company Klarna? Maybe, but every IPO has to fly under its own power in the end, and Klarna just got dinged by the Swedish government to the tune of around $50 million. Why? The FT writes that the fine stems from lacking money-laundering controls at the company in prior years.

The news item won’t derail Klarna’s IPO. But it does serve as a useful reminder that even the companies that appear on a glide path to public liquidity might have a lump or two left to swallow before listing. — Alex

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This Week in Startups

E2058: Jason and Alex break down Tiger Global's investment strategy and the challenges of quick capital deployment amid shifting market trends. They explore how public market downturns and political influences are shaping private investments, startups, and the tech landscape. The episode wraps with insights on self-driving technology, GM's Cruise scale-back, and a spotlight on Flite’s innovative AI-driven business model with guest Suvir Wadhwa.

E2057:Jason and Lon Harris discuss the latest in drone technology, including privacy concerns and the future of drone delivery services. They dive into OpenAI's new video generation tool, Sora, and the rise of AI-driven creative mediums. The episode features Quby Technologies, which is pioneering mobile micro-factories to revolutionize home construction. Founder Alex Gumbel explains how Quby’s approach to deskilling labor, streamlining production, and addressing housing demand positions them as a transformative force in the construction industry.

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