Chime IPO: Are IPOs Hotter Than Ever?

Rory O’Driscoll and Jason Lemkin argue Meta’s $14.8B Scale AI deal bought only talent and messaging—not a viable revenue business—while Chime’s 50% IPO pop signals the window is finally open again.

• Meta paid $14.8B for 49% of Scale AI but all cash immediately dividended out to investors, leaving Meta with a declining-revenue stub it does not control.
• Scale AI described as a dead man walking: customers are reallocating hundreds of millions in spend because a key supplier is now 49%-owned by an LLM competitor.
• Handshake (Garrett) says demand tripled the week of the Scale deal announcement; primary constraint is now hiring, not pipeline.
• Chime IPO popped 50%, Circle also strong—Rory says it was definitionally mispriced but intentionally conservative to rebuild pavlovian IPO-buyer confidence after 2021-22 losses.
• Ramp raised $200M at $16B (1% dilution); Jason argues Mercury’s banking relationships are worth zero and private markets incorrectly value 20%-margin fintech revenue the same as 80%-margin SaaS.
• Gusto reached $900M ARR; Paychex trades at 10x revenue at $55B market cap, making $9.3B Gusto tender easy to justify against public comps.
• Jason’s B2B IPO data: 90% of recent B2B IPOs still had the founder-CEO, nearly all step-downs were voluntary—violent founder replacements rarely produce better outcomes.
• Salesforce throttling Slack’s API access to Glean called pathetically lame; Rory says Dropbox vs. Glean is the wrong frame—Dropbox lacks the enterprise install base to matter outside its existing SMB base.

2025-06-19 · Watch on YouTube