Catch the latest 20VC x SaaStr episode with Harry Stebbings, Jason Lemkin, and Rory O’Driscoll! The team dives into Databricks’ $100B valuation, the impending IPO surge, CoreWeave’s major debt raise, AI infrastructure spending potentially reaching trillions, the return of SPACs signaling a bubble, and the faster-than-expected consolidation of AI tools.
Key Insights
Harry Stebbings: “We are witnessing the largest wealth transfer in tech history. With Databricks at $100B and Andreessen potentially earning $30B from a single investment, we’re not just seeing a bubble—we’re at a generational moment where the upcoming IPOs could make 2021 seem like just the beginning.”
Jason Lemkin: “We will live in AI constantly, using 10 times more tokens and compute within two years. The numbers are mind-blowing—if we require 200x more infrastructure, how do we fund it? Yet, we’ve already automated five roles with ten AI agents in our small team. This isn’t hypothetical anymore.”
Rory O’Driscoll: “This hinges on 3-5 more years of AI capex growth. If that continues, everything works. If not, all bets are off. We’re at the high-risk end, with AI adoption being the lifeline keeping Armageddon at bay.”
Databricks’ $100B: A New Benchmark for Private Valuations
When Databricks reached a $100 billion valuation this week, the prevailing sentiment was one of nonchalance. As Jason remarked, “Five years ago, a private company hitting $100 billion was unthinkable. Now, with companies like Anthropic at $170B, SpaceX at $360B, and OpenAI at $500B, it’s just expected.”
This attitude masks a major shift in valuing AI infrastructure firms. Databricks is now approximately 50% more valuable than Snowflake and is growing twice as fast—hitting $4 billion ARR at 50% growth compared to Snowflake’s $4 billion at 26% growth. At 25x revenue, it’s arguably undervalued given its growth and AI positioning.
The real focus isn’t just on another unicorn—it’s about generational wealth generation concentrations in private markets. If Andreessen Horowitz led Databricks’ seed round in 2013 and continued to invest in later rounds, they might own 15% of a company nearing a $200B IPO, potentially translating to $30 billion from one deal.
“If A16Z invested from a $650 million fund and turned $1.5 billion into $30 billion, you’d be thrilled,” Rory said. “The broader perspective we often miss is how many profit when these go public. Numerous LPs in SPVs and other networks will see huge returns, even dentists might achieve a 5x return.”
The Imminent IPO Wave: Just the Beginning
This moment is crucial because we’re yet to see the major IPOs. CoreWeave, Circle, Hinge Health, and even Figma are still considered niche compared to what’s to come. As Harry noted, “The biggest IPOs are ahead. We might soon witness an IPO wave that’s even more significant and could create a bubble within a bubble.”
Consider the prospects: If Canva goes public next year at $4 billion ARR growing 40% (compared to Figma’s $1 billion growing 48%), and if Databricks debuts at a $200B valuation, this could be a wealth creation event previously unseen.
“There’s a large amount trapped in private markets that will eventually seek public fruition,