Venture capital investment dipped slightly in New York during the second quarter compared with the same period in 2017 while increasing for rival tech centers. The numbers are almost certain to turn around in the third-quarter as some of the city’s most well-known tech starts are landing significant investments and boosting their already sky-high valuations. In the last few weeks: The home cycling company Peleton raised $500 million in its sixth venture round, bringing its total to just about $1 billion. The company is now valued at $4 billion. It gained unicorn status – meaning it was worth $1 billion, only 15 months ago.
The innovative health company Oscar received another $375 million from Alphabet, the parent of Google and a long term investor in Oscar. The money will be used to hire more staff as Oscar continues to expand and readies entry into the Medicare Adantage program in 2020. Oscar’s valuation remains about $3 billion.
The Japanese conglomerate SoftBank invested another $1 billion in WeWork in the form of a convertible note. The real estate company needs the money. WeWork revealed that it had lost $933 million on revenue of $886 million last year. For the first six months, it did slightly better, losing $723 million on revenue of $764 million.
How much WeWork is worth is anyone’s guess. The company had been valued at $20 billion before the $1 billion bond offering. But a recent analysis by the Financial Times put its real worth at $3 billion. Only when WeWork goes public will the market put a real value on the company.
There are many important tech stories to track in New York but the most important for 2019 will be whether the biggest names and most valued companies will be able to go public. Despite their recent troubles, both Uber and Airbnb are preparing for IPOs in that time frame. To prove their worth, New York companies will need to follow suit.
Read Complete Article