One of the predictions I made for 2023 was that startups were going to have a very tough year. That was a prediction with strong consensus. The prediction turned out to be as terrible as people expected. Many seed stage pre-PMF startups closed down. Former unicorns like Zume, Convoy and WeWork filed for bankruptcy. Stripe had a down round. Figma acquisition was canceled. Series A/B funding dried up. A VC firm with $1B+ AUM imploded. The list went on and on. But I do think we are approaching the bottom. 2024 is still going to be tough but startup investors and founders are probably going to finally see the light at the end of the tunnel. Valuations will be further reset to levels that make sense for investors and companies that execute well with phenomenal growth will get funded or get to profitability. I do think many overfunded AI startups won’t make it. Do we really need so many companies that provide general LLM capabilities? I don’t think so. But outside the frothy AI segment, most startups are getting back to basics, focusing on product and profitable growth. I am positive that amazing companies will emerge from this period.
I predicted Instacart would IPO in 2023 and they did. The company IPO’ed with a ~$11B valuation but is currently trading at ~$6.5B. Instacart’s stock lockup expiration date is around the end of March. It will be interesting to see if its valuation holds up after that. I do believe the company has a solid business and will be around for the long run. I am personally a customer using Instacart a couple of times a week.