Launchbay Newsletter 30.10.2024
Newsletter
29 October

Anthropic Opens the Market for Self-Made AI Agents

Anthropic recently announced the launch of its new AI agents, designed to autonomously perform complex, multi-step tasks on a computer just as a human would. These agents, built for productivity, are in public beta for developers, with a wider release to consumers and enterprise clients planned for early next year.
In Anthropic's words, the newly launched Claude 3.5 Sonnet model “can use computers the way people do—by looking at a screen, moving a cursor, clicking buttons, and typing text.” Trained on basic software tasks like using a calculator or text editor, Claude can now transform user prompts into logical actions on a computer, even retrying when it hits roadblocks.

The Big Question: What Happens to AI Agent Startups?

Anthropic’s entry raises the stakes for the many AI agent startups that might now face competition from a homegrown DIY solution. But there’s still a promising future for specialized AI applications, according to Sequoia Capital. In a recent essay, Sequoia introduces the concept of “cognitive architectures,” emphasizing the growing demand for AI companies that operate at the application layer, moving far beyond simple “wrappers” around large language models. Sequoia believes these cognitive architectures can create enduring value by combining multiple foundation models, knowledge databases, compliance guardrails, and application logic that mimics human reasoning through complex workflows.

Service-as-a-Software: Sequoia’s New AI Paradigm

Sequoia argues that the AI era marks a shift from Software-as-a-Service to what they call Service-as-a-Software. Just as SaaS transformed software delivery, Service-as-a-Software transforms labor itself into a digital service—an opportunity not limited to the software market but to the vast services sector, potentially worth trillions of dollars.
For Anthropic, this market expansion highlights the potential for even fiercer competition among AI agent providers. The race to replace labor with AI-driven agents is well underway, and Anthropic’s latest announcement demonstrates that AI as a service is happening right now.

SaaS is Dead, Long Live SaaS

Finally, some good news for the SaaS space: AI isn’t sidelining SaaS but is setting it up for a powerful next chapter. Procurement platform Zip just closed a $190 million Series D round, pushing its valuation up by 47% to $2.2 billion—up from the $1.5 billion valuation in its $100 million Series C back in May 2023.
Zip is in fierce competition with Ramp, which is also advancing its AI-enhanced procurement and expense management tools. Ramp, too, saw an up-round this spring and is now trading at a 20% premium on the secondary market. Maybe, AI isn’t killing SaaS; it’s giving it a fresh surge forward.

Mega-Round Outside GenAI and Semis: Waymo's $5.6 Billion Investment Round

Waymo recently announced an oversubscribed $5.6 billion investment round, led by Alphabet, with participation from Andreessen Horowitz, Fidelity, Perry Creek, Silver Lake, Tiger Global, and T. Rowe Price.
As reported by The Information, Waymo has transitioned from a technology project to a full-fledged commercial enterprise, needing capital not just to refine its self-driving systems but to scale its fleet significantly.
Estimates suggest Waymo currently operates around 700 to 1,000 vehicles, yet it's already managing over 100,000 paid rides weekly. This means each Waymo vehicle could be handling over 14 rides per day, potentially generating several hundred dollars in daily revenue. However, the company still faces high costs, estimated at around $100,000 or more per vehicle, though Waymo’s new sixth-generation model hints at a reduced per-unit expense.
The Information concludes that commercially viable, real-world self-driving taxis are quickly becoming a reality, likely arriving in more cities soon.

Wiz reports 56% growth

Wiz co-founder and VP of R&D, Roy Reznik, recently told CNBC that the company has reached $500 million in annual recurring revenue (ARR) and is targeting a doubling to $1 billion by 2025. This projected 56% growth, while more tempered than last year’s 123% increase, would still make Wiz the fastest-growing liquid private cybersecurity startup.
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GoCardless is following the trend of secondary share sales seen across European fintechs. According to Sky News, the sale will provide a £100 million-plus windfall for GoCardless employees. The company, which was valued at around $2 billion in 2022, is now seeing an implied valuation of approximately $857 million on the secondary market.

Kraken is reportedly preparing to bring on investor Arjun Sethi as Co-CEO, a move that may signal preparations for an IPO. The company is "contemplating an initial public offering," and Sethi's expertise in venture capital and public markets could be instrumental in guiding Kraken through the transition to a public company.

The third article in our series on the Growth of High Liquidity Private Companies—this time focusing on the rapid expansion of AI Infrastructure firms. We delve into the unique challenges this sector presents for investors, the strategies they use to navigate these complexities, and how the evolving secondary market plays a crucial role in managing risk.
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