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Silicon Data Head of Research @stevehou on why Nvidia is willing to pay a reported $12.9B for Hugging Face: "Hugging Face similarly is sort of a depository for open models." "They are unique assets that have scale to the network externality." "I think that is something truly valuable." "I suspect that's also not how they actually thought about it." "If you see this as a very strategic piece of asset that will more than anything help the development of open source models in the US, and if…
Nvidia acquires Hugging Face for ~$12.9bn. But who gets the 💰? My usual breakdown below 👇 *Investors are sharing ~$7.3bn of profits on <$400m invested. A cool ~20x blended.* *1) The single biggest winner here? Lux Capital.* 👑 Lux is taking the crown for the most $ returned in this transaction. The two rounds they led (Series A & Series C) generated ~$2.6bn combined. They also participated in the Series B. Congrats to @wolfejosh and team. The $15.0m Series A alone will return ~132.5x the capital invested, or ~$2.0bn. The most lucrative round in absolute $ returned. *2) Backing an exceptional team paid off with a >1,000x return for Betaworks and the angels* 📈 The story few people know: Hugging Face started life as a chatbot for lonely teenagers... You sent it a selfie and a sad emoji, it told you it understood. Quite far from where it landed! That is why backing an exceptional team in @ClementDelangue, @Thom_Wolf and @julien_c is always the right thing to do. It paid over 1,000x for Betaworks, Kevin Durant and Thibaud Elziere. *3) Founders and team are crushing it: not taking too much dilution along the way paid off* 👏 I estimate they will share ~$5bn in proceeds, assuming no secondary was taken along the way. A life changing outcome for them and many employees. Taking a 15% attributed option pool at exit, this would mean ~$2bn for the team and >$3bn to share for the three co-founders. Legendary! *4) Salesforce Ventures is cementing its reputation as one of the very best corporate VCs.* 🥇 Salesforce is adding Hugging Face to its long list of successful exits: Snowflake, Zoom, DocuSign, nCino, Auth0... Very few investors can claim as many successes, let alone corporates. The $235m round they led returned $675m in just three short years. Meanwhile, Salesforce's own stock has been flat for the period. Capital well invested! *5) This is a little bit of a heartbreak: but I wanted to congratulate @joinstationf here:* Hugging Face walked into StationF as a 4-person team on day one, June 2017. Back when it was a chatbot for teenagers. They went through multiple corporate programs (Microsoft, Ubisoft, then Naver). Unfortunately they were not investing or taking equity at the time - but they contributed to making it possible. And so for that: hats off. And of course, congratulations to all others involved: Addition, Sequoia, Coatue and many others. No one will be left out!