Stableton Navigator | OpenAI Unveils GPT-4o Mini & Secondaries Market Surges to $71B

IT’S WEDNESDAY AGAIN

This week in the Navigator, we bring a mix of groundbreaking advancements and significant shifts in tech and finance. As the landscape evolves, new developments are reshaping the future. Dive in to discover the latest in AI innovation, market movements, and industry strategies that are making headlines.

THIS WEEK’S BREAKING NEWS
GPT-4o mini: Redefining affordable intelligence

OpenAI's GPT-4o mini significantly enhances AI efficiency and affordability. It boasts an 87.0% score on mathematical reasoning and 87.2% on coding performance, surpassing competitors like Gemini Flash and Claude Haiku. With a cost of 15 cents per million input tokens and 60 cents per million output tokens, it offers a 99% reduction in token costs compared to previous models.¹

MARKET UPDATE
Anthropic, Menlo Ventures launch $100M AI fund

Anthropic and Menlo Ventures have created the $100 million Anthology Fund to support AI-focused startups. This fund targets infrastructure, novel applications, consumer experiences, trust and safety, and societal benefits, with investments beginning at $100,000. Menlo Ventures has previously invested in Anthropic, including leading a $750 million round in early 2024.²

Secondaries surge: $71B in first half of 2024

The secondaries market achieved a record-breaking $71 billion in transaction volume in the first half of 2024, up from $42 billion in the same period last year. GP-led deals comprised 57% of this volume, with notable increases in pricing for buyout, credit, and venture and growth assets. This significant growth highlights the robust demand and evolving dynamics within the secondaries market.³

PORTFOLIO & CO-INVESTMENT UPDATE
Gain early access to the next generation of industry-leading private companies

Stableton's portfolio products and co-investment program offer unique opportunities to invest in the most promising businesses before they go public.

Contact us today to express your interest and start receiving information about our latest offerings.

PORTFOLIO NEWS
OpenAI's chip dreams: Bigger, better, Broadcom!

OpenAI is in early talks with Broadcom and other semiconductor designers to develop a new AI chip, aiming to reduce dependence on Nvidia and enhance its supply chain. This initiative, led by CEO Sam Altman, seeks to boost the capacity for running advanced AI models, supported by partnerships and significant financial backing, including $13 billion from Microsoft.⁴

Kraken boosts crypto custody with launch to UK & Australia

Kraken has expanded its custody services to institutional clients in the UK and Australia, following a successful US launch earlier this year. This move aims to meet the rising demand for secure digital asset custody, driven by the success of Bitcoin ETFs. Kraken Financial, a US state-chartered bank, ensures the segregation of clients' assets from the main exchange. The platform offers robust security and operational checks, leveraging Kraken's 12+ years of experience.⁵

Tiger Global fuels Revolut with $500M boost

Tiger Global Management is in talks to lead a $500 million secondary share sale for Revolut, valuing the fintech at approximately $40 billion. The sale, involving shares from existing employees, follows a record profit of $545 million in 2023 and a 95% increase in revenue to $2.2 billion. The deal aims to solidify Revolut's financial position and support its application for a UK banking license.⁶

Elon Musk vs. California law

Musk announced that SpaceX and X headquarters will move from California to Texas due to a new California law on gender identity disclosures in schools, centered on student privacy rights versus parental rights. Musk, who previously moved Tesla’s HQ to as in 2021, cited this law as "the last straw".⁷ Texas offers financial benefits with no state income tax, which likely influenced Musk’s decision.

STABLETON NEWS
Portfolio companies featured on 2024 CNBC Disruptor

We’re beyond excited to announce that 6 of the top 10 companies in the CNBC Disruptor 50 list are part of the Stableton portfolio:

• OpenAI (The first-ever back-to-back top disruptor, with its valuation skyrocketing from $29 billion to over $80 billion)

• Stripe

• Brex

• Databricks

• Canva

• Anthropic

Additionally, we're proud to highlight that Chime, Discord, and Deel also made the list, showcasing their impressive growth and innovation. This milestone reflects our unwavering confidence and commitment to supporting the best in the industry.

CHART OF THE WEEK
Innovation waves: Ride the IPO surge

This chart highlights the cyclical nature of the IPO market, much like swimming in a tide where timing is crucial. The IPO Pulse serves as an early indicator of market strength and opportunities. Peaks in valuations indicate prime times for companies to go public. The sharp decline in 2022 was significant, but the forecasted recovery by 2024 suggests the market is poised for a comeback. Investors can use these signals to strategize their moves, while companies should aim to IPO during high-valuation periods for maximum gains, indicating a robust IPO market in 2024.

THE UNTOLD UNICORN STORY
Epic Games: Unleashing the power of play

In 1991, Tim Sweeney established Epic Games. Known for creating popular games like "Fortnite" and the revolutionary Unreal Engine, Epic Games has become a cornerstone in the video game industry. The Unreal Engine is renowned for its high-fidelity graphics and versatility, influencing not just gaming but also film, VR, architecture, and automotive design. The company continues to push the boundaries of technology and interactive experiences, shaping the future of digital entertainment.

Fun fact: Tim Sweeney, the founder of Epic Games, is not just a visionary in the gaming industry but also a dedicated conservationist. He has spent millions of his own money on land conservation efforts. By 2023, Sweeney had acquired close to 40,000 acres of land in North Carolina to protect its natural state and biodiversity. Notably, he purchased a 1,500-acre parcel known as Stonehill Pines to prevent its development into a golf resort. He also owns the 7,000-acre Box Creek Wilderness, where he has added a conservation easement.⁹

WEEKLY Q&A
Are the largest 20 tech unicorns overvalued?

After the rapid decline of technology stocks in 2022, private technology companies as a group seem to be attractively priced. The largest private market unicorns are often benchmarked against their public peers and mostly trade at discounts or par to public market peer valuations, but they frequently offer better growth characteristics. This is advantageous if you can build your positions in the secondary market. Although news outlets often report declining valuations compared to past financing rounds, secondary market prices for these companies have begun to rebound in the second half of 2023. We expect valuations to rise further as the largest tech unicorns continue to grow their revenues rapidly and increase profitability, and as the IPO window opens over the coming 3 to 18 months.

EVENTS
Will you be around? Let us know so we can say hello!

• IPEM - Paris (September 9-10)

• Prestel & Partner Family Office Forum - Wiesbaden (September 11-12)

• AIM Summit - Dubai (October 21-22)

• Europe Family Office Summit - Rome (October 24-25)

• AltsUK - London (October 26)

And, of course, we’re always happy to have you over at our main office in Zurich, Switzerland.

WHAT’S NEXT
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