A (0:01)

Welcome back to State of the Private Markets. Your backstage pass to the companies shaping the future before they hit the public markets. Speaking of. Welcome back. One of the hardest things to me personally about this whole Diddy saga is I can no longer sing welcome Back by Mace featuring Diddy when I open podcasts. Nonetheless, each month we break down the biggest valuation shifts, hiring trends and must know moves in the private market so you can stay ahead of the curve. That's the goal. We want to make you sound really, really smart when you're talking to your friends on Microsoft. Teams. Wow. Teams is bad valuations. The most valuable private tech companies. We'll get to that today. Hiring trends, fastest growing teams and notable layoffs. Sector highlights A deep dive into hr, tech, security and legal tech. I picked out some hitters for you. Company Spotlights Updates on Wiz, Harvey and Deal three companies I've been keeping close tabulates on fundraising. The biggest rounds you need to know about Executive moves. Who's stepping into that CFO chair? Folks, who's going to ring a ding dong that bell for an IPO at some point? But first, a quick word from our sponsor, NetSuite. Wow. Can you believe that? The gold standard of ERPs what does the future hold for business? Ask nine experts and you, sir or madame will get 10 answers. Bull market, Bear market rates will rise or fall. Can someone please invent a crystal ball? No need. You have an ERP baby. Until then, over 41,000 businesses have future proof their business with NetSuite by Orac of the number one cloud ERP bringing accounting, financial management, inventory, HR into one fluid platform. It's a lot to say in one breath. With one unified business management suite, there's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data and you're closing the books in days, not weeks. If you're closing the books in weeks, get out of here folks. You're fired. You're spending less time looking backwards and more time on what is next. Let's be honest, they are the gold standard, the Cadillac of ERPs. So whether your company is earning millions or even hundreds of millions, that would be nice. NetSuite helps you respond to immediate challenges and seize your biggest opportunities. Speaking of opportunity, download the CFO's Guide to AIM Machine Learning at netsuite.com metrics. Please do it. I really need this guys. The guide is free to you and from me and from netsuite@netsuite.com metrics, that is netsuite.com metrics as you type it in. And please go there for me. Now, the most valuable private tech companies teamed up with our friends at position. So to pull this data, by the way, it's data. If you say data, that's weird at the top of the leaderboard. Elon Musk may have heard of him. He's not just running companies, he's running a small economy. Between SpaceX, XAI and X, he's now responsible for checking the calculation. Nearly 450 billion and private company value. That is more than the GDP of South Africa or Finland, folks. Yes, I went on Wikipedia before this and looked that up. And if you add in Tesla's enterprise value, the number jumps to 1.5 trillion, which puts them ahead of entire Fortune 500 sectors combined. And I'm not even talking about the US government that he has a hand in. Meanwhile, Core Weave, they're moving fast. Whoa, maybe too fast for the SEC's printers to keep up. Yes, the AI computing company, which was valued at only 2 billion back in 2022. Today they're valued at 26 billion and climbing. Rumor has it they'll file for an IPO next week, aiming for a valuation of over 35 billion. So if true, they'd be raising 4 billion, enough to build data centers the size of 10 Costco warehouses. A lot of chips. A lot of chips. And I ain't talking Tostitos chips inside those Costco warehouses. I gotta stop making up jokes on the fly. Since last month, Anduril has been the biggest mover, doubling its valuation to 28 billion, thanks to rising government defense spending. Yeah, they jumped from 14 to 28. That is a sizable leap. And over in AI, Anthropic's latest fundraising round pushed its valuation to 60 billion, placing it just outside the top five that we track next. Folks, I want to talk to you about hiring and layoff trends. So if you want a leading indicator of future growth or contraction, look no further than headcount. Why? Because over 70% of SaaS expenses go to people. So using our friends database at position. So? So everyone's doing the, you know, no more dot com. You're not cool anymore. AI. That's lame. It's. So we tracked hiring trends across 5,000 private companies. So the fastest hiring companies, I'm talking 500 plus plus employees, 500 million raised. I want them to be actual sizable companies. So it's not the law of small numbers, XAI. They grew at 1300% year over year and then you got Rider, OpenAI and Thoropic core weaving glean all growing over 80% over in cyber security Whiz and Huntress all grew at over 70% year over year. And in the back office Ramp and high Bob are open full business also hiring at 65% or more now sharpest headcount decreases some high profile companies that have been forced to cut costs now we're looking at this Feb to Feb year over year. Sysdig they downsize as cloud security continues to consolidate. They hired a new gentleman to helm the ship. CEO Bill Welch. Exit Zscaler and Symantec who stepped in in November of 2024. Getter yes, another one of those companies delivering 24 packs of pulling springs on small bicycles once a pandemic darling, now exiting Europe in the US and their valuation was cut from a high of 11.8 billion. That is nuts. To just 2.5 billion. So you're going to have to order from Instacart this month. Vice Media. This one, this one hit home but if you remember they filed for Chapter 11 bankruptcy. They're now owned by Fortress Investment Group. I really hope Action Bronson still has a show sector deep dives. We picked HR tech, security and legal tech for you this week. So I'm calling it. I think there's a back office consolidation wave going on. So HR and finance in particular, they seem to be merging and the biggest signal is that hi Bob and hris so you can keep track of all the people you have on board. They went out and acquired Mosaic who's an FPA tool. So for budgeting and forecasting and it's like hiring teams don't just need payroll anymore. They they need forecasting, they need compliance, they need finance, financial integrations built in and you have companies out there that have tightening budgets and they don't want 10 different point solutions in their back office. They want a single source of truth. Right? Just give me the damn data. The correct data in one place preferably. And this is exactly how ERP software evolved from the beginning, if you remembered back in the day with the likes of, you know, the oracles, the ADPs, the SAPs, et cetera. And we're about to see HR tech follow the same path. What's going on in security? Well, there's a really good show on Netflix. It's called Zero Day with Robert De Niro and that one scared me a bit. What was once a four horse race between Wiz, Orca, Lacework and Sneak is now a whiz guys there was just running away with the show. So they're at closing in on. Well we know they're over 500 million on track for 1 billion in revenue. Sneak said about 300 but half the size and growth of Wiz. Orca looks to be sub 200 million and their growth is estimated to be flattening then Lacework. Wow. They were picked up for a song by fortnet after a failed deal with Wiz. Yeah, that's right. So Wiz was, was, was hanging around the hoop and then that didn't go through so then they were picked up by fortnet for a bargain. Keep an eye on Island. Right, they're funded by douglion or over at Sequoia along with Insight and they're building momentum in enterprise browser security. Always cool when you can own a category. Yeah. And Huntress, they're quietly owning the SMB cyber security space, an untapped market. A couple of SMBs out there saw Zero Day and said I need to get me some security. Between Harvey, Cleo and Ironclad folks, legal tech is having its day. Legal automation is truly having a moment. If you look at Harvey, which is one of the fastest growing companies ever to 50 million in ARR, they 4x year over year Clio, they're dominating legal workflows. We interviewed their CFO Kurt on the podcast who is very passionate about stock based comp. If you're interested in stock based comp, that guy put on an absolute masterclass. And what I love about Clio is they meet customers where they want to work within their existing workflows. Right. A lesson that all vertical software companies can take. And then you have Ironclad bringing AI to contract management. So if AI is coming for white collar jobs, legal is certainly a perfect first target. Just take notes. Company spotlights. Like I said folks, I picked out some hitas heavy hitters only private giants redefining their industry. So we said Wiz is crushing it. If you remember, Google slid this $23 billion buyout offer across the table. Wiz doesn't blink. They slide it back and they say we're going to get to a billion in I IPO. So they're growing at 100 year over year from 500 million in ARR on track to hit 1 billion in revenue in 2025. And keep an eye out for them to ring a ding dong that bell. And I mean if you look at the likes of cyber security companies like, like a crowdstrike, they're trading around 20x forward revenue now a lot bigger not, not growing as fast though. But like they're, they're dominating the endpoint market. You could argue that the cloud security space that Wiz is playing in is larger and has larger ticket sizes. So if they can keep stacking multi product, it's going to be a really awesome story there. So they could trade for a rich, rich multiple. Harvey, the AI co pilot for lawyers. Wouldn't it be nice if you had Harvey Specter helping you? I refuse to believe that this company was not named after the character from Suits. If you've ever watched a lawyer sift through a thousand page contract with three highlighters and a headache, you understand why Harvey exists. They raised 300 million in Series D funding at a $3 billion valuation. Like I said, forex ARR growth. In 2024, they're serving over 200 customers across 42 countries. Talk about going international from the beginning. Whoa, that's a brave move. Which includes most of the top US law firms. There are a lot of lawyers out there, folks. There are a lot of lawyers out there. Deal the profitable global hiring machine. So hiring internationally used to be a logistical nightmare. Endless paperwork, compliance, you know, headaches, payroll systems held together with duct tape. I tried to set up a bank account in Singapore once. That was that almost killed me. Deals doing over 800 million in revenue. They are profitable, which is crazy. And they're growing at 70% year over year. That's wild. They could hit 1 billion in revenue this quarter. And they want to make hiring across 10 plus countries as easy as booking an Airbnb. How I describe deal to friends is like as if Workday and ADP got together and had an international baby. So I'm excited for whenever deal could potentially go public. The multiple they would be trading at I guess is like a very, very high and rich marketplace multiple. More so than a pure play SaaS multiple because you know, it's basically a subscription play on the people that they're helping hire. So I don't think it would trade at necessarily like a crowdstrike multiple who we just mentioned, but I do think that it would trade well above like an Airbnb multiple. So notable rounds and CFO hires. Andrew, they raised 2.5 bajillion, doubling their valuation at 28 billion. Saronic. Guess who went down a rabbit hole last night and was in bed at 1am watching videos of these autonomous floaty float machines in the water going around me. They raised 600 million for AI powered Marine Defense tech. I don't know why I call them floaty float machines. I think I've been playing with rubber ducks in the bathtub too often. Mercury they reportedly raised at a 3 billion dollar valuation on 500 million in revenue. Congrats to the team over there redefining how entrepreneurs bank some executive moves. 5tran hired a new CFO, Suresh Sashadri, who joined 5tran. They kind of stitched together your your BI pipelines in the back. They're crushing it. They're growing quickly. Flock Safety hired Brandon Simmons to join his cfo. Congrats to him and Grammarly friend of the pod, Matt Hudson, who was the CFO coda at the time they were acquired by Grammarly and he now steps to the CFO seat there. Great for him. That's a wrap on this month's State of the Private Markets. I get so amped up and pumped to do this report because I think it can make you smarter on the companies who are going to eventually dip their toes into the public markets here. Please subscribe because we're going to cover Core Weave in their upcoming IPO and we'll also do an IPO s1 breakdown on mostly metrics.com so thanks to our sponsor Netsuite for this podcast here. Thanks to the folks over at Position. So thanks to my dog Walter over on the couch staring into my soul as I do this by myself. I appreciate your camaraderie, Walter. Until next time. Peace.