EquipmentShare's IPO was "effortless" because it checked all the boxes for the current market: billions in revenue, high growth at that scale (47%), and profitability. This success contrasts sharply with the struggles of smaller tech companies, defining the new standard for a smooth IPO.
New AI companies reframe their P&L by viewing inference costs not as a COGS liability but as a sales and marketing investment. By building the best possible agent, the product itself becomes the primary driver of growth, allowing them to operate with lean go-to-market teams.
Companies like Ethos going public at a valuation significantly lower than their last private round represent a strategic capitulation. It shows investors have given up hope of regaining peak valuations and prefer to "clear the logjam" by providing liquidity, even if it's at a loss.
For mature companies struggling with AI inference costs, the solution isn't feature parity. They must develop an AI agent so valuable—one that replaces multiple employees and shows ROI in weeks—that customers will pay a significant premium, thereby financing the high operational costs of AI.
While AI model providers may overstate demand, the most telling signal comes from TSMC. Their decision to significantly increase capital expenditure on new fabs, a multi-year and irreversible commitment, indicates a strong, cynical belief in the long-term reality of AI compute demand.
To justify its massive valuation, OpenEvidence must expand its Total Addressable Market (TAM). This means moving beyond the current online ad spend for doctors and capturing a significant portion of the budget that pharmaceutical companies allocate to their army of sales reps who conduct in-person visits.
Unlike firms whose value is tied to a few key partners, Andreessen Horowitz is building an institution akin to Goldman Sachs. Their bet is that venture capital will evolve from small partnerships to large, institutional firms, making them better equipped to handle generational transitions and founder departures.
The challenge for SaaS isn't simply adding an AI agent. Growth is attacked by shrinking workforces (seat contraction), CIO budgets shifting to AI, and aggressive price hikes that eliminate upsell opportunities. This combination makes returning to the high-growth, high-NRR days of the past unlikely.
Mature B2B SaaS companies, after achieving profitability, now face a new crisis: funding expensive AI agents to stay competitive. They must spend millions on inference to match venture-backed startups, creating a dilemma that could lead to their demise despite having a solid underlying business.
Brex's acquisition, despite being a lower valuation than its previous round, is a heroic success. The negative feelings associated with a "hubristic financing" round are fleeting compared to the massive value created, proving the ultimate outcome outweighs temporary valuation optics.
Brex's acquisition creates a complex challenge for its rival, Ramp. While validating Ramp's market leadership, it simultaneously establishes a low public M&A valuation multiple (7x revenue vs. Ramp's 30x), and introduces a powerful competitor with a structural cost advantage via the Discover network.