Always tricky to understand valuations… we’re in a high interest rate period and yet AI startups are (selectively) breaking through and still getting crazy valuations.
Recently Perplexity got a half billion valuation, even though current ARR is just $3M (note: revenue, not profit). That’s 150x
It’s easy to ridicule, but then I’m reminded of DHH’s ‘famous’ dismissal of Facebook’s 33B valuation back in 2010. And look at how that turned out (current market cap is 763B). A rare exception of course, but that’s what investors are banking on (and why they make so many bets).