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DeepSeek's CEO Seen as a Hero in China

DeepSeek's CEO Seen as a Hero in China

Christopher Webster
February 03, 2025

Startups:

Copying famous investors:

Ever wonder how much money you would make if you just copied famous investors stock trades? Well you don’t have to wonder anymore thanks to Dub. Dub is a marketplace where users can follow the trades of top investors. They are attempting to combine Wall Street with TikTok. Founder Steven Wang is a 23 year-old Harvard drop-out that has been trading since he was in second grade. The app allows users to follow the strategies of traders, hedge funds, and even those mimicking high-profile politicians. Instead of making individual trade decisions, Dub users can copy entire portfolios. The app has a lot of the younger generations talking. The company has also already raised $17 million in seed funding and looking to snag some more money. Will Dub turn into the go-to social media app for trading?

Startup IPO’s!:

Tech companies are looking to be a hot topic in the IPO market this year with the new administration. This is probably because of the new administration’s promises to ease regulations and embrace industries like crypto and AI. Some of the companies expected to IPO this year are eToro, Voyager Technologies, Karman Holdings, Chime, Klarna, Genesys, Clario, Cerebras, Circle, Harry’s, Omada Health. How many and which of these companies will actually IPO this year?

Venture:

Conviction Partners’ $230M fund:

Sarah Guo left Greylock to launch her own AI-focused fund in 2022 called Conviction Partners. Although she was the only partner she named the firm “Partners” because she would eventually bring on other GPs. Now, more than two years later, Guo is being joined by Mike Vernal, who was a partner at Sequoia before leaving the storied firm in 2023. Vernal joins as Conviction announces closeing a second fund with $230 million in capital commitments. This is more than double their $101 million debut fund. It isn’t a surprise that Conviction has attracted more investment. Over the last two years, Guo has built up Conviction’s brand, becoming among the better-known AI investors in Silicon Valley with stakes in companies like Mistral, Harvey, and Sierra. Meanwhile, Vernal, who spent nearly seven years at Sequoia, and the previous eight years at Facebook as a VP of product and engineering, has himself led deals in numerous high-fliers, including Notion, Rippling, and Verkada. What startups will this power duo invest in this year?

More dying startups to come in 2025:

We have already talked about some of the failed startups that have either completely closed down or sold in fire sales. Like Bench and Divvy Homes. Will these be the only failures we see this year? My guess probably not because a lot of weak startups were funded in 2020 and 2021 with famously lax diligence. Also, a lot were funded with venture debt. There was a whole lot of venture debt going aroud the past couple of years. There was $41 billion in venture debt across 2,339 deals, a record for the time in 2021, according to Silicon Valley bank. A lot of companies have gotten to the end of their rope. A lot of startups are being pushed to be sold so investors can salvage some of their investments. While debt can help fast-growing startups meet their cash needs without selling off chunks of the company to VCs, it also increases the risk of negative outcomes. Too much debt compared to a startup’s income or cash reserves can result in a forced fire sale, where a company is sold for a fraction of its previous value. Or lenders may resort to foreclosure, so they can claim any underlying assets used to secure the loan, to recover at least some of their investment. But the risks associated with venture debt haven’t slowed its appeal. In 2024, new venture debt issuance reached a 10-year high of $53.3 billion. A significant portion of that capital was directed toward AI companies, with notable examples, including CoreWeave, which secured $7.5 billion in debt financing, and OpenAI, which obtained a $4 billion line of credit. What companies will we see fall because of debt this year?

Big Tech:

The Chinese superstar:

DeepSeek founder Lian Wenfeng is being hailed as a hero in the southern Chinese province of Guangdong. He even had to return to his hometown with bodyguards. He is already a billionaire from his hedge fund, High-Flyer, but this new found fame is from his breakthrough research with DeepSeek. His breakthrough sows that strong AI models can be built with fewer and less-powerful Nvidia chips. This is huge news for China where there access to high-end chips has been restricted by the U.S. Although Lian has become famous over night he has avoided public attention. This is a smart move as we have seen high-flying Chinese CEOs like Jack Ma and Pony Ma face government scrutiny after becoming too popular with the common folk. Will DeepSeek remain a top player in the AI wars?