This week, Scale AI raised a $325 million Series E. Tech TechCrunch writes that the company operates in the data labeling space. In addition, it has been on the side of a fundraiser tear for the past few years. In 2019, TechCrunch wrote about how the company’s then-22-year-old CEO made $100 million together.
Then in December 2020, it raised $155 million, valued at about $3.5 billion. It is now worth more than $7 billion. Impressive, is not it? Well, as I learned earlier this week, AI startups usually have a hell of a year. According to PitchBook, there were 442 AI-startup deals in the United States between the beginning of 2021 and April 12. In addition, the recent Microsoft-Nuance AI deal could speed things up even more.
Sapphire Ventures ’Joy Das weighed in on the Exchange’s AI venture market. He answered our question about how competitive the space was in the first quarter, saying, and “investment activity in AI / ML startups has gone absolutely insane” in the first quarter. Par Das: “AI / ML startups are regularly receiving 5-6 term sheets from top-tier VC firms and they are able to increase their financing to 150-250X of the current ARR.”
We have seen public software multipliers reach new heights over the past year, but they are also some weaving numbers for aggressive startup rounds. Imagine an AI-centric startup with $1 million in recurring revenue in a quarter of a million dollars. We have heard that in many beginnings the time was compressed and compressed again until its completion. Das helped explain the situation, saying in an email “most companies do their due diligence before financing,” which means, “there is no need to put in any proper diligence when financing.”
We have seen public software multipliers reach new heights over the past year, but they are also some weaving numbers for aggressive startup rounds. Imagine an AI-centric startup with $1 million in recurring revenue in a quarter of a million dollars. We have heard that in many beginnings the time was compressed and compressed again until its completion. Das helped explain the situation, saying in an email “most companies do their due diligence before financing,” which means, “there is no need to put in any proper diligence when financing.”
