Tag Archives: Equity

23andMe goes public (IPO) through a SPAC

DNA testing 23andMe, Anne Wojcicki‘s startup, just went public through a SPAC, Virgin Group Acquisition Company (VGAC) of Richard Branson.

So what is a SPAC? It took me some time to understand and I am still not sure about the details… If you are interested about general information, you may want to read the Wikipedia link below or the following articles:
OK, What’s a SPAC? from the New York Times, Feb. 2021 or
The Pied Piper of SPACs from the New Yorker, June 2021.

A standard IPO is a process where a private company becomes public by offering its existing shares for sale to the public with the possibility of creating new shares bought by the public at the IPO.

A SPAC (Special Purpose Acquisition Company as explained on Wikipedia) is a process where an empty shell or “blank check” company is created by raising money on a public stock exchange, it becomes a public company with no activity and just new shareholders. Then it may acquire an existing private company by a negociation where the existing shareholders of the SPAC and of the private company agree on a balanced value between the two companies. By this reverse merger company, the private company becomes the public company and the SPAC name disappears.

So 23andMe followed such a process and I understood the following to build the cap. table of the new public company. VGAC, the SAPC, had raised $509M at IPO in October 2020. Then Richard Branson proposed to Anne Wojcicki to acquire 23andMe. It worked and they agreed on a price per share of $10, so that the $509M would give 50.9M shares to the VGAC shareholders.

23andMe had its own shareholders, including Anne Wojcicki (about 100M shares), Sequoia (24M shares), Glaxo (39M shares). There were shares detained by managers and board memebers and about 28M stock options too. (The two other cofounders are not mentioned in the IPO document.)

What makes it a little more complex is the additional fact that there was an “private placement” at the IPO of $250M at $10 per share, i. e. 25 new shares in the cap. table.

I am not full sure about all this. It could be that I am mixing the Private Placement, the SPAC shareholders and the 23andMe shareholders, but in a way this is a detail. Where I am confused is that the press annouces a value of $3.9B and I obtain $4.9B which the stock options are not sufficient to explain… Please react if you see a good explanation!

Coursera files to go public (#750)

After Deliveroo yesterday, here is Coursera’s cap. table. It’s #750 in my long list of startups (see here my most recent analysis – data about 700+ startups).

Coursera and Udacity are probably the most famous MOOCS companies and I could not be surprised if they contributed to create the edtech category. Coursera just filed to go public on Nasdaq so its numbers are available.

Revenues of $293M, with a loss of $66 million in 2020. A lot of venture capital since its foundation in 2011, $464M in total from Kleiner Perkins (and legendary partner John Doerr, and NEA.

Founded by two Stanford professors, specialists of artificial intelligence, Daphne Koller and Andrew Ng, age 43 and 34 at the time of foundation. They are not managing the company anymore. No information about Koller’s shareholding probably because she owns less than 5% of the company and has no executive role.

Coursera founders Andrew Ng and Daphne Koller are computer science professors at Stanford University

Source : NPR

Deliveroo plans to go public

There was a lot of buzz today about Deliveroo announcing its IPO soon. By the way Coursera, the edtech company just announced it too and I will post about it next. So I had to build its cap. table and thanks to the openness of the British register of companies, I could do it (at least partially) even before the company filed its IPO document.

Interesting data I think about the company growth, its funding and the founders stakeholding. £1.3B invested to cover £1.1B loss, 2’500 employees in 2019 and £1.2B revenues in 2020. Among the best European VCs (Index, Accel) plus Amazon, Fidelity, DST, T.Rowe Price as late stage investors. What else?

PS (March 19): a former colleague mentioned an article saying that early investors would have made “60’000 per cent return” on their investement. At the same time, I discovered about Coupang in South Korea which looked similar to Deliveroo. So I also checked the multiple return for seed investors in Coupang. Here is first its cap. table.

So for Coupang, the initial price per share was $0.02, and I assumed a $35 at IPO, which makes a 1750x multiple.

For Deliveroo, I assume a price per share of £900 with a series A price at £8.36. It is true there were also seed shares at £1,5. This would be a 600x (or 60’000 per cent, not an annuela return though)

So Coupang is even better than Deliveroo…

Airbnb files to go public – the last giant?

Airbnb just filed to go public. Finally! It maybe the last IPO of the recent giants (and not the latest only), these giants which emerged in the 21st century, such as

and of course is the cap.table, not that far from what I had tried to guess in 2017 in www.startup-book.com/2017/03/13/what-is-the-equity-structure-of-uber-and-airbnb/

Palantir files to go public

I am not sure this was worth a post as there is nothing really surprising with Palantir IPO filing that can be found here on the NASDAQ website. Still, this is Palantir, the secretive software company cofounded by Peter Thiel, Alexander Karp & Stephen Cohen (as well as Joe Lonsdale and Nathan Gettings)

Thiel, Karp, Lonsdale & Cohen (Gettings cannot be found online)

So I did my favorite exercise, building a tentative cap. table. Here it is:

What are the striking facts: the high level of sales, losses and fund raising. The startup, neither its founders are not young anymore… That’s it. Or feel free to comment!

The dark and mysterious side of British unicorns : Darktrace Ltd

My naive and obsessive quest for startup cap. tables has led me today to a thriller-like research! First I will let you have a look at Darktrace cap. table which I decided to study as it belongs to the short list of UK unicorns together with Revolut and Graphcore.

Well the first surprising information is the founding structure, ICP London. Why a British Virgin Islands structure? To hide who the founders are? Then I discovered surprising board members, Michael Lynch, the founder of Autonomy and Sushovan Hussain, the former Autonomy CFO… Autonomy was always a puzzle to me before becoming a scandalous HP acquisition and then the cause of a huge trial, not decided yet… And in law, you are innocent unless proven guilty.

Another strange side of the company is its links to secret services, MI5, CIA, NSA. Probably not so surprising when your industry is cybersecurity… Being based in Cambridge, it is not surprising that many Darktrace employees were at Autonomy before. The board members I did not know, but the investors are famous: Summit, KKR, Insight. Less maybe is Invoke Capital board members Vanessa Colomar and Andrew Camper. Lynch and Hussain are not on the board anymore and this is probably linked to the HP Autonomy litigation.

Then I got it: Invoke Capital Partners… ICP! So Darktrace was indeed founded by the former Autonomy people and its new investment structure, Invoke. I had to do a little more search and found two quite fascinating articles:

Skeletons In The Closet: $2 Billion Cybersecurity Firm Darktrace Haunted By Characters From HP’s Failed Autonomy Deal, a remarkable enquiry published in Feb. 2020 by Forbes staff member, Thomas Brewster.

And 2019 Darktrace and Autonomy: tracking down all the money and CEOs published in Dec. 2018 by Luca Kosev is nearl as good!

Worth reading. Enjoy!

Two new British startup cap. tables: Autonomy and Bicycle

I recently published an updated version of a database of capitalization tables of 600 (former) startups. I obtain the data most of the time from the IPO prospectus of the company (that is the document the company publishes when it is listed on a public stock exchange, and in general Nasdaq.

These documents are an amazing source of information of all the business components of the companies even if I focus only on the shareholding and funding history. They are sometimes a little frustrating though as they do not cover the full history of the company, but only 3 to 5 years in the past so it is not simple to get the founders’ data for example.
Some countries do however provide access to the full company data, often for a fee like in France. A few cantons in Switzerland (Basel, Zurich) and the United Kingdom provide it for free and this is just great.

I have done some research for Revolut and Graphcore recently. Today, I revisited the data I had built for two British companies: Autonomy founded in 1996 and had gone public on Easdaq in 1998 and Bicycle Therapeutics, a biotech company with links to EPFL (Lausanne, Switzerland) founded in 2009 and public since July 2019.

The IPO documents did not provide enough for me about the founders and early rounds. So here are my new tables:


Bicycle from the IPO data

Bicycle from the UK register data, the updated cap. table, the funding rounds and its growth over time:

The funding rounds

The growth of revenues and jobs

Data about equity of 600 startups – comments (7)

A final post (for now) about the data about 600 (former) startups. So what have they become today in April 2020?

First a quick point of caution: I counted some companies twice, because I had looked at their equity strutcure at different points in time: Alibaba had two IPOs in 2007 in HK and 2014 in the USA, Esperion had 2 filings in 2000 and 2013. This is not a big deal, except if you count Alibaba’s value twice!

So out of the about 600 former startups, I found that
– 20 were still private (they may have recently filed for IPOs though)
– 12 were private again after an IPO
– 13 had stopped their activity (often through bankruptcy)
– 225 had been acquired or merged with another company (Merger and acquisitions – M&As)
– 331 were still public.

So let us have a closer look at M&As and public companies:

On the M&A side, the main acquisition value comes from biotech, with a $5B average value whereas software or internet is a little les below $3B.

On the public side, I will let you discover depending on your interest about, given the field, the number of companies, employees, cumulative market capitalizations, sales, profits, then age of companies and current average price to sales (PS), price to earnings (PE) and an interesting personal metrics, price ot employees in $M (Pemp).

Graphcore shareholding is really strange!

Graphcore gave me concerns. How is it possible that the two founders, Simon Knowles (58) and Nigel Toon (56), two serial entrepreneurs, who founded Icera Semiconductor in the past (sold to Nvidia in 2011 for $435 million or $367 million depending the sources – after having raised $258 million) and Element14 (a 1999 spin-off of Acorn – or its new name – sold to Broadcom in 2000 for $640 million), each owns only 4 shares of the startup? Are they so rich that they don’t need more? !!

All this follows my recent discovery that the UK gave open access to all company and in particular startup data. I began with Revolut a few days ago and now Graphcore. There had to be something wrong. The startup could not have only investors as shareholders. And then of course, I had forgotten the ESOP, the employee stock-options. So my only explanation is that the founders are part of this too and have a minimal number of shares. Still intriguing!

Data about equity of 600 startups – comments (6)

Sixth post of comments on the 600 startup data. Today, it’s about the valuation of startups.

I had touched the topic on page 615 of the pdf. Here is the data again.

Be aware that these numbers are not typical of traditionnal companies. They show that startups going public are of a speculative nature, with a promise of very high-growth in the future. The multiples are very high and in the case of earnings, in fact most startups do not make a profit at IPO – about one out five!

Interestingly Silicon Valley does not have the highest multiples, but Europe is behing the USA.

The tables give the PS ratio (price to sales – ratio between valuation and sales) and PE ratio (price to earnings – ratio between valuation and profits) and the number of startups taken into account each time. The following curves show the PS values by 5-year periods and by year.

If you are lost, here are slides I have used in the past and if you want to get the excel file, send me an email.