M FoundationThematics | EuropeVenture Vision: Speed to $100bn?Morgan Stanley & Co. International plc+Edward StanleyEquity Strategist Edward.Stanley@morganstanley.com +44 20 7425-0840 Matias OvrumEquity Strategist Matias.Ovrum@morganstanley.com +44 20 7425-9902 Our Venture Vision weeklies look at (1) early-stage cross-theme funding patterns; (2) relative valuations between themes; (3) public versus private valuations; (4) the resulting anomalies within certain themes. Please let us know if you would like our excel database of >45,000 VC deals categorised by theme, country, value and date. We also send this file as a weekly distribution if you would like to receive it regularly. See here for our global market synopsis. See here for our longer analysis on the state of the VC market, particularly as it relates to non-US Venture and innovation acceleration. Only two private VC-backed companies are officially valued at >$100bn: SpaceX & Bytedance. However, OpenAI - currently $29bn - is reportedly on its way to join the club. A valuation of $100bn by end '24 would rank it as the 8th fastest company in history to bridge from $10-$100bn, albeit behind 4 of the Magnificent 7.• See here for our analysis Mapping AI's Diffusion in public markets in 2024• See here for our Internet team's analysis of private companies involved in the GenAI spaceDespite much discussion in the media (here and here) and relatively liquid secondary market transactions, OpenAI's last known primary funding round equity valuation was $29bn. Clearly though, much has changed since this funding round. Nonetheless, in spite of annualised revenue reportedly heading towards $2bn there is rising pressure to stay ahead of a field of well capitalised foundational model builders (discussed here)...whilst also providing liquidity to insiders. We have written about private AI companies and their interplay with (and funding from) incumbents in the "Land of the Giants" (here and here). Tech stocks have averaged c60 months from $10-$100bn of market cap: If OpenAI were to raise before the end of 2024 and its valuation were to expand to $100bn, we want to put into context how exceptional this would be relative to history. Technology stocks - many of which were helped by the timing of the dot com bubble - bridged from $10bn to $100bn of market cap in a c60 months window on average. By comparison, consumer companies took >200 months to achieve the same feat. Clearly, therefore, it would not be entirely unexpected for OpenAI and other AI enablers to be at the quicker end of the spectrum. We note though that we are comparing public liquid market valuation change versus private illiquid valuation change.Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest t...
