TheChek News Flow

NFTs pioneer Yuga Labs seeks $4bn-$5bn valuation from Silicon Valley investor

The start-up behind Bored Ape Yacht Club, the non-fungible token collection that counts celebrities like Gwyneth Paltrow and Snoop Dogg as owners, is discussing a financing with Andreessen Horowitz that would value it at between $4bn and $5bn.

According to people with knowledge of the discussions, NFTs pioneer Yuga Labs is seeking to sell a multimillion-dollar stake in a new funding round.

These people said that among those in talks over an investment is Andreessen Horowitz, one of Silicon Valley’s top venture capital firms, which was previously an early investor in Facebook, Twitter, Airbnb and Stripe.

The terms could still change, and any discussions might not lead to a deal, said people close to ongoing negotiations. Any deal would mark the first institutional investment into Yuga, a secretive outfit led by pseudonymous founders — Gordon Goner, Emperor Tomato Ketchup, No Sass and Gargamel.

It would place the US-based company at the forefront of the frothy but lucrative market for crypto art, less than one year after it debuted the BAYC collection, with some items selling for millions of dollars each.

Yuga did not respond to multiple requests for comment. Andreessen declined to comment. A video series hosted by The Nifty, a website for NFT data and analysis, first reported that Yuga was seeking investment.

The negotiations signal how institutional investors are seeking to dive into the hype-fuelled world of NFTs — collectible tokens that are fixed on the blockchain and so cannot be replicated.

Sales of the digital assets surged last year to become a global market worth $40bn. Facebook-parent Meta is among the Big Tech groups exploring the market by allowing users to make and sell NFTs.

Analysts have warned of scams and dubious trading in the NFT market, but Silicon Valley investors see an opportunity for new consumer brands or tech platforms to be built from the craze for high-priced profile pictures. Andreessen is a big shareholder in cryptocurrency exchange Coinbase as well as NFT exchange Opensea, and plans to raise $4.5bn for a new set of crypto funds.

The price of Bored Apes has soared to upwards of $250,000 since Yuga created — or “minted” — 10,000 of the collectibles for about $300 apiece in April last year. They used to signal stature on social networks such as Twitter. Yuga collects a cut from resales of Bored Apes.

According to some BAYC owners, Bored Ape characters are expected to feature in the Super Bowl halftime show next month, where collectors Snoop Dogg and Eminem are due to perform. It is one of the most-watched television events in the US every year and would be an opportunity to reach a more mainstream audience.

Holders of BAYC tokens retain full commercial usage rights, meaning that while Yuga created the collection, the company no longer controls the intellectual property for the individual works of art. Bored Apes also grant owners access to exclusive events and sought-after merchandise.

The rise of BAYC has attracted controversy. Some NFT artists have accused the collection of spreading racist imagery. Yuga said this month that the collection’s inspiration came from cryptocurrency “apes” — a reference to high-risk traders.

Investors in the surging NFT industry said venture capital groups are interested in cashing in on Yuga’s elite community of celebrities and wealthy enthusiasts, potentially through the creation of new collections and media projects. 

People familiar with the talks said Yuga could even issue crypto tokens to investors and existing Bored Ape holders, which could then prove valuable on the resale market.

Yuga was incorporated last February and had just 11 full-time employees at the start of this year. It recently said on Twitter: “Our ambition is for this to be a community-owned brand, with tentacles in world-class gaming, events, and streetwear.” 

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Tehran, boosted in confidence by China, is using Yemen to pursue its own agenda on Israel

This week’s ballistic missile attack on the United Arab Emirates, the third assault from Iran-backed forces in Yemen in January, seems to be expanding the bellicose message Tehran is sending across the Gulf and the Middle East, as well as taking square aim at a thriving but vulnerable tourism, trade and financial hub with a reputation for stability.

The first attack, aimed near Abu Dhabi international airport and installations of the state oil company Adnoc, was claimed by Iran-backed Houthi rebels but many suspect its very precision bore the hallmark of Tehran.

It was a message to the UAE not to re-enter the seven-year war in Yemen between the Houthis and a Saudi Arabia-led coalition, from which the Emiratis more or less withdrew in 2019. Last month, however, UAE-trained proxy forces halted what had been a winning Houthi offensive in north Yemen.

That, self-evidently, was about the vicious tug of war in Yemen. The attack on Monday, by contrast, was timed to coincide with the historic visit to the UAE by Isaac Herzog, the president of Israel, with which the Emiratis opened diplomatic relations in 2020 under the controversial Abraham Accords sponsored by former US president Donald Trump.

These accords — adding four Arab countries to Egypt and Jordan which made peace with Israel in 1979 and 1994 — are anathema to Iran and its Shia Arab allies in the Levant and the Gulf.

But the point about this attack is that Iran has moved the heterodox Shia Houthis’ agenda on Yemen towards its own agenda on Israel. This is the Houthis’ seventh war against central power in Yemen. This time, however, they control the capital Sana’a and are backed by Iran and Hizbollah, the Lebanese Shia paramilitary power that has become Iran’s spearhead in Iraq and Syria as well as Yemen.

Saudi Arabia, under the de facto leadership of Crown Prince Mohammed bin Salman, expected quick victory when it entered Yemen in 2015. It instead sank into a quagmire of indiscriminate destruction from which the UAE slowly exited after Iran in 2019 hit a Saudi Aramco oil hub with a devastating drone and missile attack (which the Houthis also claimed).

Intermittent UN-sponsored and US-backed talks to end the Yemen war stutter on. Even the Saudis want a respectable exit from this disaster. But what has just been signalled this week is that even if that miracle occurred, the Iranians might use Israel and its relationship with their rivals in the Gulf as an ongoing provocation and Yemen as a base to pursue it.

This is faintly reminiscent of the aftermath of Israel ending its 22-year occupation of south Lebanon in 2000. Then, Hizbollah and its allies in Damascus and Tehran announced the Israelis still held Shebaa Farms, a tiny enclave few Lebanese had heard of and many international maps placed in Syria.

The Houthis have over the years evinced little interest in Israel and Palestine beyond the formulaic flourishes they owe their patrons. Aside from Iran they have a bolt-hole in Hizbollah’s fief in south Beirut and a TV station there.

What the incident shows is an Iran unwilling to compromise. The talks in Vienna to restore the nuclear restraint accord Tehran agreed with six world powers in 2015, which Trump abandoned unilaterally in 2018, are not moving. Among other things, Iran’s now uniformly hardline leadership demands a guarantee that no future US president can repudiate its terms. What is not up for discussion are its ballistic missile programme and the Shia Arab militias that it sees as extending its defence but its neighbours regard as neo-Persian (and Shia) imperialism.

Qatar, the gas-rich emirate the Saudis and Emiratis boycotted in 2017-20, in part for its links with Iran, is trying to mediate between Washington and Tehran. Qatar’s foreign minister was just in Iran and this week its emir, Sheikh Tamim bin Hamad al-Thani, saw President Joe Biden at the White House. They are talking about lots of things, including Qatari provision of gas to Europe if the Ukraine crisis leads to Russia cutting off supplies.

But the Iran conversation is inescapable. Especially in its current mood. Ayatollah Ali Khamenei, the Islamic Republic’s supreme leader and linchpin, this week blasted the pragmatic government of President Hassan Rouhani that negotiated the 2015 nuclear deal. He accused it of pursuing the fools’ gold of sanctions relief while the US used non-nuclear sanctions on its regional activity to shut it out of the dollar-controlled system. The implication was that Iran would not make concessions for another mirage of opening to the west.

Iran may be crippled by sanctions but seems to have gained confidence from China, its biggest oil customer. Beijing is the strategist of the global Belt and Road Initiative that embraces Iran and has upped its stake in the Middle East — especially in countries within its sphere of influence such as Iraq. But it is not interested in the ideological or sectarian disputes of the region. It supplies sensitive technology to the UAE, and helps the Saudis develop ballistic missiles. It does not discriminate quite like Tehran.

Private equity business accounts for 90% of group’s distributable profits while competitors have diversified

US private equity group Carlyle is planning to use its fast-growing earnings and assets under management to expand and diversify through acquisitions.

In results published on Thursday, the group reported a record $903mn of distributable earnings in the quarter to the end of the December — the metric favoured by analysts as a proxy for cash flow. Distributable earnings totalled $2.2bn for the year, or $5.01 a share, beating analyst estimates and 143 per cent up on the previous year. Its annual dividend will increase 30 per cent to $1.30 a share.

Carlyle will aim to expand by buying asset managers focused on growing markets such as credit investments, chief executive Kewsong Lee told the Financial Times.

“In the big picture, we are looking for strategic adjacencies, new markets that we can scale in, and businesses that are additive to our fee-related earnings,” he said. “The areas with the most opportunities for us are in credit and in investment solutions.”

The group’s private equity business accounts for 90 per cent of its overall distributable profits and two-thirds of management fee-based earnings, unlike some rivals that have diversified more.

Competitors including Blackstone Group, KKR, Apollo Global, and Ares Management have all made large acquisitions in recent years to expand in markets such as insurance and debt-focused investments.

Lee’s strategy is to keep pace with soaring share prices among alternative investment managers. Carlyle’s stock generated a total return of 64 per cent over the past 12 months, trailing Blackstone, KKR, and Ares, but outperforming Apollo.

There has been a surge of M&A activity in the private equity industry recently, with a number of companies looking to list on public markets or to sell to larger rivals. At the same time, money continues to pour into private investment strategies, driving record earnings across the industry.

Carlyle’s earnings were boosted by rising markets that increased the value of its investments and fast-growing assets under management, which increased 22 per cent over the year to top $300bn.

It also ended the year with $3.9bn of “carried interest” — fees that are generally set at 20 per cent of investment profits — on its balance sheet, a 67 per cent increase year on year.

Lee is just over a full year into the job as sole CEO after co-head Glenn Youngkin left the company in Sept 2020 to eventually become governor of Virginia.

Lee’s tenure has also coincided with rising fund performance and early success in reaching a milestone of raising $130bn in new assets by 2024. Seventy-five per cent of Carlyle’s assets eligible to earn performance fees were doing so at year end, a 30 percentage point increase from the year before.

“We have established a new level of earnings power,” he said. “It is a stronger and healthier Carlyle that is better positioned than ever before.”

Payfit, Qonto, Exotec... En quatre mois, pas moins de 8 start-up ont rejoint le club sélect des licornes françaises. Voici la vraie liste des start-up françaises valant au moins un milliard d'euros. En première place? Back Market.

Quelques incertitudes sur la stratégie de Netflix auront suffi à mettre le feu au Nasdaq: depuis le début de l’année, la plateforme de streaming vidéo a perdu plus du tiers de sa valeur, entraînant à sa suite tout le marché des actions technologiques, qui s’est affaissé de 13%. Krach boursier ou simple réajustement des valorisations astronomiques atteintes par les fleurons de la high-tech américaine au cours des deux dernières années? Quelle que soit la raison de ce mouvement de panique, l’effondrement du Nasdaq interroge aussi sur la solidité du modèle de financement des start-up, qui a battu tous les records l’an dernier: avec plus de 500 milliards de dollars, les financements en capital-risque ont été multipliés par deux dans le monde.

En Europe, ils ont été multipliés par 2,5, à plus de 100 milliards. Et la France, troisième pays européen derrière le Royaume-Uni et l’Allemagne, n’échappe pas à la règle: doublement des fonds levés, à 11,1 milliards, mais aussi des exits – les opérations de sortie d’actionnaires du capital –, à 10,2 milliards. Résultat, fin janvier, l’Hexagone comptait 26 licornes, ces start-up valorisées plus d’un milliard de dollars. Firmin Zocchetto, co-fondateur de l'une des toutes dernières à avoir rejoint ce cercle privé, Payfit, raconte: “Nous nous étions mis en recherche de fonds, mais nous ne pensions pas que cela irait aussi vite. Nous avons des sollicitations d’investisseurs tous les jours, car il y a plus d’investisseurs que de très belles entreprises qui grandissent très vite de manière saine.” Et selon les spécialistes d’Avolta Partners, la hausse des taux et les risques de retournement économique ne freineront pas le mouvement des méga-levées. Arthur Porré, associé à la banque d’affaires, prévoit même une levée supérieure à un milliard d’euros pour la première fois, cette année, en France: "Le private equity et la Bourse sont en partie décorrélés car leurs cycles sont différents, estime-t-il. La Bourse réagit à court terme, le private equity obéit à des cycles longs, de cinq, sept ans."

Premier objectif: encaisser du cash

Les investisseurs tiennent néanmoins compte de l’état du marché pour réaliser leur sortie. Certaines pépites comme ContentSquare ou Mirakl, qui envisageaient une cotation à court terme devront, selon Arthur Porré, peut-être attendre quelques mois. L’industrie française du capital-risque semble alignée sur le même constat: il faut savoir raison garder. Car les sommes injectées par le capital-risque dans l’Hexagone ont été levées par une nouvelle génération d’entrepreneurs mieux formés, plus matures, plus responsables. Et pour savoir si cette manne ne servira pas à alimenter des caprices de nouveaux riches, il suffit de suivre l’argent…

Bien sûr, une bonne partie des capitaux levés part en cash out, explique Benoist Grossmann, président de France Digitale, c’est-à-dire qu’il ne sera pas réinvesti dans l’entreprise mais permettra aux fondateurs et aux premiers actionnaires de vendre tout ou partie de leur participation. Ce montant peut atteindre 40% des capitaux. Par exemple, les quatre fondateurs de Jellysmack ont reçu chacun 100 millions de dollars lors d’un tour de table de 500 millions mené par SoftBank. Mais l’argent levé sert également à constituer des réserves de liquidités. "Les start-up conservent au moins 20%, en cas de retournement de marché", décrypte un investisseur. "Il faut prévoir au moins deux ans de pertes pour ne pas se retrouver dans la situation très mauvaise de lever des fonds en étant acculé."

Deuxième but: l'international

Deuxième poste clé de ces levées de fonds: la croissance externe. Lors de son introduction en Bourse l’an dernier, Believe a annoncé qu’il dépenserait environ 100 millions d’euros par an dans les acquisitions. Au second semestre 2021, il a pris des participations dans les labels Play Two et Jo & Co en France, dans le label leader philippin Viva Music & Artists Group et a racheté Think Music en Inde. De son côté, la fusée Doctolib vient d’acquérir la start-up française Tanker, une brique cyber pour sécuriser ses données. Longtemps ignorée, la croissance rapide à l’international est à présent dans toutes les têtes. Back Market, le champion du reconditionnement de produit électronique est déjà présent dans seize pays. "A chaque fois, il faut faire connaître le service, faire grandir la base de clients et de professionnels qui proposent des produits sur notre plateforme", commente Thibaud Hug de Larauze, le cofondateur. "Dans les places de marché, le vainqueur emporte tout, il faut créer au plus vite des barrières à l’entrée."

Même logique d’accélération pour la place de marché ManoMano, qui mise sur l'Europe "La France est rentable, nous avons un leadership sur ce pays-là: à présent, l’objectif est d'être un leader européen", explique Christian Raisson, son co-fondateur. Le spécialiste de la robotique Exotec, lui, veut étendre son emprise hors du Vieux Continent. "Dans les trois ans à venir, nous voulons nous développer en Asie, notamment du Sud-Est, dans toute l’Europe, et au nord de l’Amérique", annonce son cofondateur Renaud Heitz. La levée de fonds sera utile à deux titres: "Elle nous donne accès à de l’argent mais surtout à des partenaires. Goldman Sachs est une marque de référence, qui va nous permettre d’entrer chez certaines entreprises."

Troisième pilier: le recrutement de talents

International, R&D, amélioration et diversification des produits… A la source de ces carburants qui alimentent la croissance de l’entreprise, il y a les talents. Payfit prévoit 400 recrutements en un an, pour arriver à un total de 1.150, quand Exotec veut embaucher 500 ingénieurs d'ici trois ans. "C’est le “jus de cerveau” de nos collaborateurs qui fait la force des produits que nous concevons", assure Philippe Corrot, cofondateur de Mirakl. "Les levées de fonds nous donnent de la lumière. Cela nous permet de recruter des collaborateurs qui viennent de McKinsey, Amazon ou Alibaba." Loïc Soubeyrand, le fondateur de Swile, résume la répartition idéale: "Sur les 175 millions d’euros levés en octobre, un tiers est consacré à l’internationalisation, notamment en Amérique du Sud, où nous recrutons 200 à 300 personnes. Un deuxième tiers est destiné à la diversification et à l’élargissement de l’équipe business développement. Le dernier tiers va aux fusions-acquisitions à venir. En vingt-quatre mois, l’équipe va passer de 400 à 1200 personnes." L’hypercroissance est un sport de haut niveau. L’approximation ne pardonne pas.