☕️Revved-Up Multiples

Good morning.

Comparisons may be odious, but when it comes to getting to the bottom of high-octane AI startup valuations, a little side-by-side ranking paints a fairly interesting picture.

According to analysis by The Information, the biggest developers of foundation models, such as OpenAI and Anthropic, are now cheaper than they were a year ago, based on their valuations as a multiple of their annualised revenue (unsurprising as a concept). More unusual, however, is that some AI startups are hanging on to high multiples as revenue rises. Perplexity, for instance, passed US$80 million ($126.3 million) in ARR in January, 60% higher than its US$50 million pace in November when it raised funding at a valuation of $8.5 billion before the investment, resulting in a whopping revenue multiple of 170. In March 2024, its revenue multiple was around 63.

Among AI apps, investors are awarding the highest multiples to young startups targeting customers in one industry, where models specialised on proprietary data give the startups a competitive advantage.

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Market movers

Spare a thought for Johns Lyng management, who on Wednesday copped the sharpest of feedback an investor can give—a brutal 33% share price wipeout after profits sank and forecasts were cut.

At the other end of the spectrum, Helia investors had plenty to cheer about—shares surged 17% as the mortgage insurer boosted dividends and doubled its buyback.

The quick sync

• US Treasury Secretary Scott Bessent defends Trump’s tariff plans but offers no guarantees on Australia’s request for an exemption from steel and aluminium duties. (Reuters)

• Airwallex is pushing deeper into SME finance with a new Australian credit card and a New Zealand expansion, taking on banks and global fintechs.  (Capital Brief)

• ASIC’s alarmed by a shrinking ASX but admits it has no fix, as big super reshapes markets and companies snub local listings. (Capital Brief)

• Donald Trump’s fight against “unfair” tech regulation has rattled Australia’s media and tech sectors, but News Corp seems unfazed. (Capital Brief)

• Ukraine has agreed to a minerals and energy deal with the US, hoping it will strengthen ties with Trump despite lacking security guarantees. (Bloomberg)(FT)

Trading floor

M&A

• Westgold sells Lakewood mill to Black Cat for $85m to streamline assets post-merger. (Capital Brief)

• Ideagen makes a conditional $0.10 per share bid for Envirosuite; investors advised to wait. (ASX)

• KKR eyes Australian media deals, with outdoor advertising firm oOh!media under consideration. (The Australian)

• Nippon Steel insists on full US Steel takeover despite political opposition. (Capital Brief)

• Starbucks explores selling a China stake to revive sales, with KKR, Fountainvest, and Meituan among potential buyers. (Reuters)

• GLNG leads the race to acquire Queensland’s $600m+ Meridian gas plant as Westside and Mitsui exit. (The Australian)

• Nvidia and Cisco expand AI networking partnership. (Bloomberg)

• HMC Capital hires Macquarie for Healthscope takeover bid, seeking to protect HealthCo rents and ensure long-term stability. (The Australian)

• Mark Creasy sells CZR Resources to Fenix in third Pilbara deal. (AFR)

• Dalrymple Bay Infrastructure eyes acquisitions, with BHP’s Hay Point Coal Terminal and Port of Newcastle as possible targets. (The Australian)

• Baidu buys YY Live for $2.1b to diversify and expand AI initiatives. (Capital Brief)

• Tesla is acquiring parts of the insolvent German parts maker Manz. (FT)(Reuters)

   

Capital Markets

• JOLT gets a $214m loan to deploy 1,500 EV chargers in Canada. (Capital Brief)

• ANA Holdings orders 77 aircraft from Boeing, Airbus, and Embraer to support long-term growth and meet rising demand. (Capital Brief)

• NGEx courts Aussie investors after missing BHP’s $4.4b copper deal. (AFR)

• Apple shareholders uphold DEI efforts; CEO Tim Cook hints at future adjustments. (Capital Brief)

• ISGroup taps Deloitte to raise capital for Land Surveys' growth. (AFR)

• Australia bans Kaspersky from government devices over security risks. (Startup Daily)

• AEC presses big tech on AI disinformation risks before election. (Capital Brief)

• ASX exits hit 1990s levels, but study suggests a cyclical trend. (AFR)

• Bingo debt hits Sydney credit funds after S&P downgrade. (AFR)

• Big Tech's US$1.6 trillion selloff deepens as investors brace for Nvidia's earnings, rattled by tariffs, inflation fears and slowing growth. (Bloomberg)

• Treasury Secretary Scott Bessent defends the Trump administration’s push to shrink the federal workforce and deregulate finance, while using an event at the Australian embassy to pitch US Treasuries to global investors. (Bloomberg)

• Jim Chalmers pushes for a tariff exemption as US treasury secretary Scott Bessent signals support for reciprocal investment at a superannuation summit in Washington. (AFR)

• MA Financial welcomes tougher oversight of private credit, while Metrics Credit Partners warns against media-driven panic over risks in the booming asset class. (Capital Brief)

• CBA’s Bankwest is ramping up its digital push and broker recruitment to counter Macquarie’s mortgage surge, targeting under-serviced borrowers with a new app and website. (SMH)

• US lawmakers are ramping up scrutiny of the Federal Reserve, questioning whether its pandemic-era shift toward job growth has weakened its core mission of fighting inflation. (Reuters)

VC

• Fleet Space and Koloma partner to map natural hydrogen reserves using satellite tech. (Capital Brief)

People moves

• Albanese and Dutton battle to control the election narrative through Medicare spending promises. (Capital Brief)

• News Corp claims Angelo Pandeli’s reputation wasn’t harmed in defamation case. (Capital Brief)

• Affinity Equity Partners promotes Mark Chudek to partner. (AFR)

• Henry Ruiz named CEO of Lifestyle Communities as shares drop post-HY results. (Capital Brief)

• Musk’s ultimatum to U.S. government workers sparks confusion; 21 staffers resign. (Reuters)

• Platinum’s co-CIOs step down; Ted Alexander appointed portfolio manager. (Capital Brief)

• TEG searches for new CEO as Geoff Jones considers chairman role. (AFR)

• Unilever has unexpectedly replaced CEO Hein Schumacher with finance chief Fernando Fernandez, who will take over on March 1. (Reuters)

• Taiwan detains Chinese-crewed ship over severed undersea cable, citing security concerns. (Capital Brief)

• Trump advisor Navarro allegedly sought Canada’s removal from Five Eyes; denies claim amid rising U.S.-Canada tensions. (Capital Brief)

• Court orders ex-Cannon-Brookes staffer to hand over devices in escalating legal battle. (Capital Brief)

• Peter Dutton built a $30m property empire but repeatedly failed to declare key deals—now, as he campaigns on housing affordability, scrutiny is mounting. (SMH)

• Sanjeev Gupta’s GFG Alliance faces fresh turmoil as top energy executive Stefan Hakansson quits amid Whyalla’s collapse and wider financing woes. (The Australian)

• After Citigroup ditched diversity goals, Wall Street is bracing for the next corporate U-turn under Trump. (Bloomberg)

• Nine acting CEO Matt Stanton backs Labor’s tech levy despite Trump’s tariff threats, as he pushes a $100m cost-cutting plan and eyes the top job permanently. (Capital Brief)

The watercooler