- A newly minted decacorn…
- The talk of Silicon Valley “feels like seeing the future”
- The race for a COVID-19 vaccine
Yesterday afternoon, I watched the live return of the SpaceX Crew Dragon Demo-2 mission with astronauts Bob Behnken and Doug Hurley on board. The mission launched on May 30, making it about a two-month stay on the International Space Station (ISS).
What a beautiful sight.
Crew Dragon Endeavour Splashdown
Why is this such a big deal? Well, it has been 45 years since the last splashdown from an Apollo mission in 1975. It is hard to imagine that we were going to the Moon all the way back in the ’70s. And it’s also the last milestone for SpaceX’s human spaceflight system to be officially certified by NASA.
This is such an incredible accomplishment for SpaceX. It has completely disrupted the aerospace industry in just 18 years and run circles around its primary competitor for a spaceflight system… Boeing.
The current schedule is to launch another crew aboard Dragon come September with four astronauts. And the spacecraft seen in the picture above will be refurbished and prepared for its next launch in the first half of next year.
This was the first time a private company launched astronauts into orbit – and, of course, returned them home safely. What an exciting day for space exploration.
What’s next for SpaceX?
Build out and spin out its Starlink business – a space-based internet backbone in Earth’s orbit
The first private lunar mission – a flyby of the Moon (2023)
NASA lunar mission, including landing SpaceX’s Starship on the Moon (2024?)
And then… mission to Mars?
How’s that for ambitious…?
This decacorn is paving the way for robotic process automation…
Whenever a private company attains a valuation of $1 billion, we call it a unicorn. That’s because it used to be very rare for this to happen. In the past, it was normal for companies to go public once it had something like $100 million in revenue and a sub-$1 billion valuation. Not anymore.
While we have seen a ton of unicorns in recent years, decacorns are still very rare. Decacorns are private companies that are worth more than $10 billion. And a new one was just “minted” that very few have ever heard of.
UiPath just completed a $225 million Series E round, propelling it to a valuation of $10.2 billion. And consider this – UiPath was only worth $3 billion after its Series C round in November 2018. The company’s valuation shot up over $7 billion in less than two years. That’s impressive.
And the onslaught of capital pouring into UiPath speaks to the work it is doing on robotic process automation (RPA).
RPA uses software and AI to help companies automate their business and manufacturing processes. This technology uses artificial intelligence to automate the kinds of tasks that have been slow and arduous for humans. This improves gross margins and makes businesses dramatically more efficient.
RPA might not sound exciting, but it is the fastest-growing segment of the enterprise software industry. And the fact that a private company has attained a valuation of more than $10 billion in this sector tells us that the market for adopting this kind of technology is accelerating.
And here’s the thing – RPA hasn’t been around that long.
UiPath was founded way back in 2005, well before RPA was the talk of the town. The company struggled to get off the ground for a full decade before it finally pivoted to RPA in July 2015.
At that time, UiPath was only worth $7 million. RPA has taken the company’s value from $7 million to $10.2 billion in just five years. That’s the power of investing in early stage companies. And UiPath’s exponential growth in just five years gives us insight into how fast this trend is moving.
Another thing to note is that looking at UiPath’s Series E round, we see a lot of late-stage capital coming in. T. Rowe Price, Wellington Management, Sequoia Capital – these firms typically only invest in private companies just before an initial public offering (IPO).
I can envision that UiPath will go public within the next 12–18 months.
Let’s add this company to our early stage watchlist – it could make a great investment target as a public company when the time is right.
Silicon Valley is humming over OpenAI’s new product…
We talked about OpenAI’s new commercial product GPT-3 back in June. And now that it has hit the market, GPT-3 is all the rage in Silicon Valley. I haven’t seen the Valley this excited about something in a long time.
To bring new readers up to speed, OpenAI started as a nonprofit artificial intelligence (AI) research institute in 2015. Its goal was to work through the ethical issues around how AI and machine learning are used.
OpenAI then spun out a commercial arm last year and started working on a text generator called GPT. Basically, GPT is an AI, a natural language processor capable of understanding and generating output.
The second-generation product GPT-2 was trained on 1.5 billion language parameters to help the AI learn how to understand human language. That made GPT-2 somewhat functional but not overly impressive.
For GPT-3, the AI was trained on 175 billion language parameters. This training enabled the AI to use language just like a human. And that opens the door to all kinds of interesting possibilities.
At its simplest level, GPT-3 can complete our sentences as we type. Anyone using Microsoft Outlook has likely seen GPT-3 in action. We start typing an email, and the AI offers to finish our sentence for us. And the AI’s suggestion is often completely logical. In many cases, the AI predicts exactly what I was planning to type.
And that’s just scratching the surface.
GPT-3 has already been used to write entire technical manuals. Just give it the raw technical information and an example manual to learn what the structure should look like, and the AI can write the new technical manual all by itself. And I bet that GPT-3’s manuals are easier to follow than the manuals written by humans. Ha.
The AI is also creative. Users can give it a command such as “write a story about a little boy and his dog in the park,” and GPT-3 will do just that. The AI will create the details and write a coherent story that will read like a human writer wrote it.
And get this – the AI even learned how to code. Users can tell it something like “please produce a button on my website that performs this action and looks like this.” And GPT-3 will write and implement the proper code, just as instructed.
How incredible is that? Imagine being able to program or code simply by issuing commands and describing what we would like to happen.
One software developer in Silicon Valley said, “Playing with GPT-3 feels like seeing the future.” Indeed.
And here’s the big picture – GPT-3 demonstrates that we are very close to crossing the bridge between functional AI and truly intelligent AI.
GPT-3 is highly functional. The next step up is an AI that can review its own work, analyze its shortcomings, and improve itself. Just like we humans do every day.
At that point, we will have AIs that are creative without input. And then the big question comes up – at what point are these AIs self-aware?
For some in Silicon Valley, this is a very scary thought. GPT-3 is evoking fear. We are past the point of no return.
For others, GPT-3 is the most exciting development of our time.
Once we get to AIs that can perform designated tasks perfectly all day, every day, we will have opened the door to immense productivity gains that we cannot fathom today.
And if applied wisely, that will allow us to eliminate scarcity, cure all human disease, and create a world of abundance that we will hardly recognize… a golden age for humanity.
The COVID-19 vaccine race is heating up…
We are seeing tons of money pour into companies developing COVID-19 vaccines right now. The race to get a working vaccine on the market is heating up.
German company CureVac just closed on a $640 million late-stage VC round. That’s a staggering raise for a private company.
And CureVac was able to raise this money without any clinical evidence that its vaccine works. All CureVac had to show was encouraging preclinical data. Still, the money flowed in.
And interestingly, pharmaceutical giant GlaxoSmithKline bought a 10% stake in CureVac. This speaks to CureVac’s innovative synthetic biology approach.
CureVac is developing a messenger RNA (mRNA) vaccine for COVID-19. The vaccine uses synthetic mRNA to tell the body to produce proteins that look like COVID-19. That helps the body produce antibodies to fight the virus and build immunity.
If that sounds familiar, it is because this is the same approach Moderna is taking. We talked about that back in May.
And speaking of Moderna, it just issued a $1.3 billion common stock offering in May. That was on the back of presenting positive data from the Phase 2 clinical trials of its mRNA vaccine.
Moderna has now started its Phase 3 trial. The company plans to include about 30,000 participants in the trial. These participants will get the injection, and then we’ll see if they produce the proper antibodies and if those antibodies persist over time – for example, six months.
And Moderna is betting that some of these participants will contract COVID-19 at some point during the evaluation period. When that happens, we’ll see if the provided antibodies do in fact provide immunity.
So the next several months will be exciting. We’ll see just how effective this new mRNA approach is. And that has big implications not only for the COVID-19 pandemic but for the entire biotechnology industry as well.
Editor, The Bleeding Edge
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That’s compared to $38.2 billion for the entire year last year.
This massive investment in biotechnology will lead to all kinds of developments, innovations, and therapeutic solutions that will change the medical industry forever. That’s why I am on record as saying that the 2020s will go down in history as the decade of biotech.
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See you there.
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