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RTC #41: This is the largest VC round of all time

RTC #41: This is the largest VC round of all time

The numbers behind it are insane

Stephan Freudl
September 24, 2024

👋 Welcome to ‘Road-To-Capital’ your weekly companion on venture capital and startup financing. This newsletter is about understanding how venture capital investors think and act. Follow me for deep dives, exclusive expert talks, and the latest headlines and insights to stay ahead of the curve.

Hi everyone, here is today’s issue at a glance:

Weekly top links → Pitchdeck promises vs. actual product. Spot the difference!

Report of the week → The state of SaaS in 2024

Understanding VCs → The largest VC round of all time

Most active European VCs → Investing in femtech startups

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📢 My favorite links of the week

👉 Pitchdeck promises vs. actual product. Spot the difference! (Link) -
My favorite this week

👉 Y Combinator in 2010 vs. Y Combinator in 2024 (Link)

👉 How to raise $1 billion without traction (Link)

👉 Avoid losing control of your company and getting fired by investors (Link)

👉 How to manage burnout (as a founder) (Link)

👉 Controversial opinion: “Founder Mode” won’t get you a unicorn (Link)

👉 Most AI firms in a nutshell (Link)

📖 Report of the week

Learn how to scale your SaaS company in 2024:

What are the key fundamentals to look at?
How are companies performing in the current environment?
What does best-in-class performance look like?
And much more…

BREAKING NEWS

“OpenAI is close to raising around $6.5 billion at a $150 billion pre-money valuation, while also turning down billions of oversubscribed dollars”

Bloomberg

The news came out by Bloomberg at the end of last week, the largest venture capital round of all time, topping the $6 billion raised earlier this year by Elon Musk's xAI.

Yes, the LARGEST venture capital round of all time!

And of course - an AI company.

Generative AI companies are playing in a different league these days.

Let us have a look at the deal stats

➡️ Estimated valuation: USD 150bn

➡️ Total capital raised: USD 6.5bn

➡️ Lead investor: Thrive Capital

➡️ Other (likely) investors: Apple, Nvidia, and Microsoft (usual suspects here)

➡️ Who is NOT investing: Sequoia Capital (remember, they recently backed Safe Superintelligence, which was started by OpenAI co-founder Ilya Sutskever)

Putting the deal in context

🫧 The $150 billion valuation of OpenAI is what the entire U.S. venture capital market had under management in 1999 - which fueled the internet bubble.

😲 $6.5 billion is the amount raised just 10 years ago (2014) by all startups in New York, Texas, and Florida combined.

Wait, didn’t OpenAI receive $10 billion from Microsoft last year already?

Yes, OpenAI received a $10 billion investment at the end of last year from Microsoft.
BUT: This was a multi-year, corporate deal that included more cloud credits than cash (ergo not a venture capital deal).

Sounds like a great deal - how can I participate?

Go ahead, the round is not officially closed yet.
Minimum ticket: $250 million (peanuts) 🤑

Thank you Axios and Bloomberg for the insights 🙏

Largest deal for a while, or is a bigger one around the corner?

💸 Most active European VCs

Thank you for reading today’s issue. If you enjoyed it, leave a like or comment, and share it with your friends. Follow me on LinkedIn to never miss updates again.

Have a great week,
Stephan 👋

Issue #41 | 24 September

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