"Sales grew, but valuation evaporated by 80%"… The fall of the SaaS myth in the AI era

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Airtable, a U.S. software startup once valued at $11.7 billion (approximately 16.6 trillion won), has found a new owner at a corporate valuation more than 80% below its peak. The shock is particularly significant given that this valuation was achieved amid steadily improving performance. Industry analysts point to this as clear evidence that the market's evaluation criteria for traditional SaaS (Software-as-a-Service) companies have fundamentally shifted following the spread of generative AI (artificial intelligence).

According to major foreign media outlets including The Wall Street Journal (WSJ) and TechCrunch on the 7th, Italian tech company Vending Spoon has agreed to acquire Airtable for an enterprise value of $1.285 billion (approximately 1.84 trillion won). The total equity value, including net cash held by the company, was assessed at approximately $2.25 billion (about 3.22 trillion won). The transaction is expected to be finalized by year-end following regulatory approvals and other procedures.

Founded in 2013, Airtable is a U.S. SaaS company that provides a work collaboration platform combining spreadsheets and databases. Based on an interface familiar like Excel, it enables users to build databases and create various business applications for project management, sales management (CRM), marketing, and more—all without writing code.

This deal has drawn attention because Airtable's corporate valuation dropped sharply despite improving sales performance. Airtable's annual recurring revenue (ARR) stood at approximately $480 million (about 686 billion won) as of June, an increase of more than 20% compared to a year ago. According to the company, over 500,000 organizations use its service, and 80% of Fortune's list of America's 100 largest companies are also customers. The company has not lagged in AI adoption either; earlier this year, it unveiled "Super Agent," a platform that coordinates multiple AI agents to perform tasks.

However, the market refused to grant the same premium as before. During the zero-interest-rate era and SaaS investment boom of 2021, Airtable received a corporate valuation of $11.7 billion during its Series F funding round. Yet in this year's over-the-counter market, it was valued at around $4 billion (approximately 567 billion won), and the price recognized in this sale was even significantly lower.

The industry interprets this transaction as a structural shift in the SaaS sector. Tomasz Tunguz, general partner of Theory Ventures, a U.S. VC that primarily invests in AI companies, stated, "This is a clear example showing how drastically market valuation criteria for traditional SaaS companies have been recalibrated." He added, "Strategic M&A at discounted prices has become the realistic exit scenario for SaaS unicorns that received funding at their 2021 peak."

Dave Samuel, co-founder of Freestyle Capital, Airtable's early investor, said, "This transaction is a very painful event for B2B SaaS startups and investors," noting, "We are now advising our portfolio (SaaS) companies to consider strategic sale possibilities as well."

Meanwhile, Vending Spoon, which acquired Airtable, is one of the most aggressive acquirers of software companies in Silicon Valley recently. Founded in 2013 as a mobile app development firm, Vending Spoon has recently gained attention for its strategy of acquiring digitally struggling companies with poor profitability, restructuring their operations, and improving their financial performance.

This year alone, it acquired internet brand AOL and event platform Eventbrite, and also holds file-sharing service WeTransfer and video platform Vimeo. It has completed more than 50 M&A deals to date. After listing on NASDAQ last July, it chose Airtable as its first acquisition target.

A path has opened for ordinary retail investors to indirectly 'bet' on startups backed by Y Combinator (YC), Silicon Valley's leading accelerator (AC·entrepreneurship planner).

According to reports from Reuters and TechCrunch, U.S. fintech firm Robinhood plans to list its "Robinhood Venture Fund II (RVII)" on the New York Stock Exchange on the 13th at a price of $25 per share (approximately 35,500 won). Through this offering, it aims to raise up to $200 million (about 280 billion won). The primary investment targets are equity stakes in startups that have currently or previously gone through YC.

Investors will not directly hold startup equity. Instead, they can buy and sell shares of a fund containing stakes in multiple private companies. This allows indirect investment in early-stage Silicon Valley firms through the stock market, which was previously only possible by participating in VC funds or special purpose vehicles (SPVs).

This fund applies the industry-standard "2% management fee and 20% performance fee" (2·20 structure) common among VCs. Additionally, if YC-backed startups achieve successful exits through IPOs or M&A and the fund generates profits, Robinhood Ventures, a management affiliate of Robinhood, will receive 20% of the gains as carried interest (performance fee).

However, some point out that the profit realization structure for individual investors remains somewhat opaque. Unlike typical VC funds, RVII has not specified a maturity or liquidation date, nor has it disclosed plans to regularly distribute investment returns in cash. TechCrunch noted that individual investors will likely have to rely mostly on capital gains from rising fund share prices.

The previously launched Robinhood Venture Fund I (RVI) invested in private companies such as Databricks, OpenAI, and Mercuri, and listed at its offering price of $21 per share. On the 6th (local time), it completed trading at approximately $28 per share, exceeding the offering price. However, considering that shares briefly surpassed $56 in May, the high volatility implies significant risk of losses.

Robinhood has previously faced controversy over its private company investment products. Last year, it introduced "Tokenized Shares" linked to stocks of OpenAI and SpaceX for European investors, but OpenAI publicly refuted any connection, stating that the tokens had no relation to company equity.

Research indicates that startup fraud in Silicon Valley may not be merely the result of individual founder misconduct, but rather a product created jointly by investors and the venture investment ecosystem.

Researchers from Imperial College London in the UK and EM Lyon Business School in France recently released a report analyzing how founders of startups backed by Silicon Valley VCs commit fraud and what roles investors play in that process.

Published last June in the European international academic journal Organization Science, the report analyzed a database of technology company founders and startup cases prosecuted by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) for civil and criminal securities fraud charges from 2000 to 2023.

Tim Weiss, co-author of the report, told TechCrunch in a recent interview, "Fraud in the startup industry is far more common than we realize and has become somewhat accepted as normal."

He added, "The problem isn't just the founders," noting that "investors who demand unrealistic high growth from founders also contribute to creating the problem." He further diagnosed that the current investment frenzy around AI startups creates an environment that easily tempts founders toward fraud.

The researchers defined the process by which founders gradually escalate lies to bridge the gap between investor expectations and actual business performance as "façading." They explained that it begins with exaggerating results, then progresses to creating fake contracts and fabricated revenue data, and eventually extends to false demonstrations claiming superior technology than actually exists.

The researchers particularly pointed out that investors are not merely victims. Not only do they demand unrealistic growth targets, but there are also numerous cases where they reinvest in founders who have already faced fraud suspicions.

Weiss described this as investors "co-creating fraud."

He proposed that the SEC should conduct regular investigations and audits for startups receiving investments above a certain threshold. Currently, the SEC typically only initiates investigations after whistleblowers come forward or investor lawsuits are filed. He also suggested that investors should bear greater responsibility for imposing unrealistic growth targets on founders.

[MoneyToday startup media platform Unicorn Factory]