These private valuations are getting absolutely nuts. SpaceX at $1.5T, OpenAl at $852B, and Anthropic up over 900% since September 2024. Crazy growth.
You have to wonder if these private valuations are set up for a massive reality check once these companies actually have to open their books to public markets, where retail and institutional investors won't just take a VC's word for it on growth projections.
We've seen it before where private unicorns get blown out of proportion only to face a brutal down-round or a disappointing public debut when the liquidity finally hits. Uber and WeWork, for example, where the IPO process either forced a brutal haircut or exposed cracks that private funding rounds papered over. If these trends continue, the gap between private sentiment and public reality might lead to some very turbulent listings for the Al sector and who knows how that could impact the overall market/ indices.
The gap between funding raised and implied valuation is massive in some cases, especially SpaceX and the Al names, which makes the numbers feel a little detached from traditional fundamentals. That said, private investors are clearly paying for category leadership, optionality, and the chance that one or two of these companies become
infrastructure-level winners. So valuations may be stretched, but the bigger question is whether they are irrational or just pricing in outcomes public markets cannot access yet.
Like most IPOs, I could see a big pop at first followed by a reality check, especially for the Al plays. What do you think….will they justify these prices or are we looking at another post-IPO
bloodbath?
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Posted by Zipski577