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TP EP6: Peter Walker of Carta 📊 | OpenAI Tender 🧾| Revolut $75B Valuation 💳 | Is 3X 3X 2X 2X 💀?

October 7, 2025

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  • The traditional SaaS growth benchmark of "triple, triple, double, double" is being challenged by VCs demanding much higher initial growth rates (e.g., 15x then 6x) due to the AI hype cycle. 
  • AI native companies, despite showing superior revenue growth and potentially better net burn multiples (if CapEx is excluded), face scrutiny over the sustainability of their ARR and the massive capital intensity of their operations. 
  • The private market is highly bifurcated, with elite AI companies commanding massive valuations and easy access to capital, while the median seed valuation on Carta is at an all-time high, indicating significant frothiness at early stages. 
  • Revolut's $75 billion valuation is questionable because its revenue composition, which includes significant interest income, suggests it should be valued more like a traditional bank (using P/E or P/B multiples) rather than a high-growth payment processor like Stripe. 
  • The valuation framework for fintech companies relies on a 'magic metric' (EBITDA margin * growth rate) plotted against the sales multiple, where companies above the line are considered good buys. 
  • Investors must carefully determine whether Revolut is fundamentally a payment processor or a bank, as grouping it incorrectly into the wrong comparable set can lead to a massive valuation discrepancy (as demonstrated by the speaker's past experience with a small business lender). 

Segments

Bubble Confirmation and Founder Hype
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(00:00:00)
  • Key Takeaway: The current market is confirmed to be a bubble, which is currently beneficial for founders due to high valuations and abundant capital.
  • Summary: The market is acknowledged as a bubble, but this environment is highly favorable for founders seeking funding. Prices and valuations are described as being ‘out of the world.’ This period is characterized by easy fundraising and beautiful conditions for company builders.
VC Math: Triple Triple Dead
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(00:00:38)
  • Key Takeaway: General Catalyst’s Managing Partner declared the traditional SaaS metric ’triple, triple, double, double’ dead, setting a new, much higher bar for growth expectations.
  • Summary: The traditional benchmark of 3x, 3x, 2x, 2x revenue growth is considered obsolete by some top VCs. The new implied bar suggests companies need to achieve growth rates like 15x in the first year and 6x in the second. Dismissing companies that only triple revenue year-over-year seems like an unnecessarily high standard that could disqualify many viable businesses.
Iconic Report: AI Capital Efficiency
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(00:03:36)
  • Key Takeaway: AI native companies under $100M ARR show worse free cash flow margins than non-AI peers, but their rapid growth results in lower burn multiples if CapEx is excluded from the calculation.
  • Summary: The State of the Software Industry 2025 report highlights that AI natives have significantly worse free cash flow margins than traditional SaaS. However, their extreme growth rates make them appear more capital efficient based on the net burn multiple calculation (which often omits CapEx). The validity of this metric is questioned because AI companies’ high CapEx burn might be improperly excluded.
OpenAI Tender Offer Results
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(00:07:42)
  • Key Takeaway: OpenAI’s tender offer at a $500B valuation was undersubscribed, selling only $6.6B of the $10B offered, signaling strong employee confidence in future valuation growth.
  • Summary: OpenAI completed its tender offer, but the sale volume fell short of the $10.3 billion allocation. This undersubscription is interpreted as a positive sign of employee confidence, as eligible employees chose not to sell their shares at that price point. This valuation leap makes OpenAI the world’s most valuable private company, surpassing SpaceX’s recent $400B valuation.
IPO Window Update and Performance
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(00:09:43)
  • Key Takeaway: The IPO window is opening steadily, with Q3 showing sequential growth over prior quarters, allowing companies like Wealthfront to target significantly higher valuations.
  • Summary: The IPO market has seen four steady quarters of growth, suggesting a return to a more normal window, especially for profitable, growing companies. Wealthfront, last priced at $1.4B in 2022, is now targeting $4B to $5B based on its $339M TTM revenue and strong profitability (45% EBITDA margins). Most recent IPOs have performed well post-listing, though day-one pops can be ephemeral.
Cerebras Stays Private Despite Filing
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(00:12:32)
  • Key Takeaway: Cerebras pulled its IPO filing after raising a large private round at an $8.1B valuation, likely due to high customer concentration (87% from one customer) being a public market risk.
  • Summary: Chip manufacturer Cerebras opted to raise private capital instead of proceeding with its IPO filing, securing a Series G at an $8.1 billion valuation. High customer concentration, with 87% of revenue coming from G42 in Abu Dhabi, is a significant red flag for public markets but perhaps more acceptable in the private AI sector. This suggests companies may choose private markets if public requirements are too stringent.
DevTools Funding Rounds
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(00:14:20)
  • Key Takeaway: DevTools companies are attracting significant capital, evidenced by Vercel’s $9.3B valuation and Temporal’s secondary valuation jumping 50% in six months.
  • Summary: Vercel raised a primary round at a $9.3 billion valuation, led by GIC, benefiting from being labeled an AI DevTools company. Temporal saw its valuation increase from $1.7B to $2.5B in about six months following reported 4x revenue growth the previous year. This rapid valuation markup suggests strong investor appetite for high-growth infrastructure software.
Peter Walker’s Journey to Carta
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(00:18:23)
  • Key Takeaway: Peter Walker transitioned into his role at Carta after gaining experience visualizing complex data sets, notably during The Atlantic’s COVID-19 tracking project.
  • Summary: Walker’s background is in political history and economics, initially gaining traction through data visualization as a hobby. His work translating complex data for The Atlantic’s COVID tracking project solidified his interest in opaque data sets. He pitched his research role at Carta, joining in 2021 when hiring was easier amidst the market upswing.
AI Bubble Valuation Concerns
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(00:20:39)
  • Key Takeaway: The AI bubble is problematic because it immediately followed the ZIRP era bubble, preventing the market from learning lessons, leading to inflated valuations (50x-100x revenue) for some AI plays.
  • Summary: The proximity of the current AI bubble to the 2021 ZIRP bubble means lessons were not learned, resulting in high entry prices for many AI startups. While AI revenues are amazing, the sustainability of growth translating into actual margins remains the biggest question. Median seed valuations on Carta are currently the highest in the platform’s history.
Secondary Sales at Early Stages
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(00:24:43)
  • Key Takeaway: Secondary activity is unusually high at the Series A stage, allowing founders and early employees to take liquidity, though this phenomenon is concentrated among high-demand companies.
  • Summary: There is increased secondary activity occurring at the Series A round, which is considered very early for liquidity events. This ability to take money off the table is reserved for companies in the ‘golden circle’ of AI demand. Founders are advised to allow employees to share in this early wealth creation.
Companies Staying Private Longer
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(00:29:05)
  • Key Takeaway: The median time for Carta companies to go public is now 12.5 years, necessitating manufactured liquidity via tender offers to prevent employee revolts.
  • Summary: Companies are staying private significantly longer, with the median time to IPO for Carta companies approaching 13 years. This extended private tenure forces companies to manufacture liquidity through secondary markets or tender offers to satisfy employee and investor expectations. The availability of massive late-stage private capital pools makes this ‘staying private forever’ strategy viable for large firms like Stripe and SpaceX.
Secondary Buyer Sophistication
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(00:40:32)
  • Key Takeaway: Sophisticated secondary buyers exist, but the market also features excessive complexity (SPVs) and a dangerous trend where buyers prioritize known names over understanding underlying deal terms and preferences.
  • Summary: Many secondary buyers are highly optimistic about consensus names (like top AI or SpaceX derivatives) and may be buying into multi-layered SPVs without fully understanding the underlying preferences or fees. This behavior drives consensus, leaving hundreds of less-known, yet potentially valuable, companies without viable secondary exit paths.
Unexercised Employee Options
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(00:38:37)
  • Key Takeaway: A significant 70% of employee stock options are going back to the pool in 2025 when employees leave, suggesting pessimism about valuations or current cash constraints.
  • Summary: A high percentage of employees leaving companies are not exercising their options, even in companies that have recently raised up-rounds. This indicates that employees either lack the immediate cash to exercise or are pessimistic about the long-term value realization of those options. Even after filtering for recent up-rounds, 55% of options still revert to the pool.
VC Fund Performance Metrics
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(00:50:09)
  • Key Takeaway: The traditional VC goal of 3x net TVPI is becoming less meaningful as fund lifecycles extend past 10 years, leading to funds showing high paper returns (TVPI) but minimal realized cash returns (DPI).
  • Summary: The correlation between TVPI and DPI is weak in early vintages, and the 10-year fund life cycle is no longer adequate for judging performance. Some funds at 10 years have high TVPI but have not yet achieved 1x DPI, meaning paper gains have not translated to cash. Liquidity remains concentrated, with only the top 20-30 private companies having reliable secondary pricing.
Unrepriced Unicorn Valuations
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(00:55:09)
  • Key Takeaway: A large cohort of 2021 unicorns (valued over $1B) has not raised primary capital since, and among those that did, half were down rounds, suggesting significant repricing is still needed for the majority.
  • Summary: Only 20-25% of the $1B+ valued startups on Carta as of early 2025 have raised primary capital since 2021. Half of those subsequent rounds were down rounds, implying the remaining 75% are likely still holding inflated 2021 valuations. Fund managers are slow to write down these older portfolio companies, creating dispersion in reported valuations.
Peter Walker’s Six-Month Prediction
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(00:57:50)
  • Key Takeaway: Walker predicts a ’tiny little rush’ of unexpected IPOs before the end of the year, driven by the current open window potentially closing in 2026.
  • Summary: The current IPO window is open, and some bankers predict 2026 will be a banner year, creating urgency for companies to list sooner. This anticipation might prompt a small, unexpected wave of IPOs before the year’s end. Successful IPOs could help paper over valuation bumps when the AI bubble inevitably corrects.
Revolut Valuation Analysis Setup
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(00:59:18)
  • Key Takeaway: Revolut is seeking a $75 billion valuation, positioning itself near Stripe, backed by strong fundamentals including $4B in revenue and 25% profit margins.
  • Summary: Revolut, a digital banking app, is aiming for a $75 billion valuation, placing it among the top fintechs globally. The company reports approximately $4 billion in annual revenue, growing 75% year-over-year in 2024. Crucially, Revolut is highly profitable, achieving 25% profit margins.
Revolut Valuation Introduction
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(00:59:18)
  • Key Takeaway: Revolut is raising money at a $75 billion valuation, positioning itself near Stripe’s $107 billion valuation in the premier fintech leagues.
  • Summary: The segment introduces Revolut as a European digital banking service allowing users to manage money, transfers, and multi-currency accounts. The company reports approximately $4 billion in annual revenue, growing 75% year-over-year, and maintains strong 25% profit margins, potentially clearing $1 billion in profit.
Fintech Valuation Framework
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(01:00:45)
  • Key Takeaway: Fintech valuation uses a framework plotting the ‘magic metric’ (EBITDA margin * growth rate) against the sales multiple, where being above the line suggests a good deal.
  • Summary: The ‘magic metric’ on the Y-axis is a fast, loose guideline derived from discounted cash flow principles, correlating profitability and growth. The X-axis represents the price-to-sales (or EV/sales) multiple. Companies above the line of best fit, which includes peers like Adien and Stripe, are considered undervalued relative to their cash flow potential.
Banking vs. Payment Comps
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(01:02:50)
  • Key Takeaway: Valuation for Revolut hinges critically on whether it is classified as a payment processor (valued on sales multiples) or a bank (valued on P/E or book value multiples).
  • Summary: Comparing Revolut to payment processors like Stripe is only appropriate if its revenues resemble those of a payment network. Banks typically trade at much lower multiples, often 10x to 15x P/E or based on book value. A shift in comparable analysis can drastically reduce a company’s perceived valuation, as experienced by the speaker when their former company was comped as a lender instead of a tech firm.
Revolut’s Revenue Composition
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(01:04:43)
  • Key Takeaway: Revolut’s increasing interest income revenue stream strongly indicates banking operations, undermining the justification for a pure payment processor valuation multiple.
  • Summary: Revolut possesses a banking license and operates as a regulated bank in key markets like the UK and US. While subscriptions, FX, and interchange revenues align with fintech peers, the significant and growing portion derived from interest income is characteristic of traditional banking. This banking-like profit stream suggests the $75 billion valuation is too rich.
Valuation Conclusion
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(01:06:12)
  • Key Takeaway: The speaker issues a ‘seller recommendation’ on the $75 billion Revolut valuation, advising investors to analyze the future contribution of banking versus payment revenues.
  • Summary: Investors must investigate the future trajectory of Revolut’s revenue streams to determine if they will predominantly generate bank-like returns or payment processing returns. Based on current regulatory filings and revenue composition, the company appears to be valued too highly at $75 billion if it is fundamentally operating as a bank.