Benchmark’s Bill Gurley says SPACs are ‘remarkably cheap compared to mispriced IPOs’

Published

4 years ago

July 9, 2021

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Nextdoor’s decision to go public through a special purpose acquisition company was largely the result of favorable pricing compared with a traditional IPO, said Bill Gurley, a partner at Benchmark and an early investor in the neighborhood social network.

Gurley has been among the most vocal supporters of direct listings, another IPO alternative in which companies go public without selling shares at a steep discount to new investors. He said the average IPO in 2020 came with a 57% cost of capital.

“SPACs are remarkably cheap compared to mispriced IPOs,” Gurley told CNBC’s “TechCheck” on Friday.

Nextdoor announced plans earlier this week to pursue a SPAC sponsored by an affiliate of Khosla Ventures, Vinod Khosla’s investment firm. In a SPAC, a so-called blank check company raises capital through a public offering and then shops around for a potential target, which becomes the operating entity after the transaction closes.

The pace of new SPACs slowed earlier this year after smashing a record in 2020 and setting a new high in the first quarter of this year. The pullback came after the SEC issued accounting guidance that would classify SPAC warrants as liabilities instead of equity instruments.

However, activity has resumed. In addition to Nextdoor, fintech company Circle, space companies Planet Labs and Satellogic and solar power firm Heliogen all announced deals this week. Still, the proprietary CNBC SPAC Post Deal Index, which is composed of the largest SPACs that have announced a target or those that have already completed a SPAC merger within the last two years, is down 3.8% in 2021, after tumbling in February and March.

Nextdoor’s transaction will bring in $686 million and value the company at $4.3 billion. Benchmark first invested in 2011 at a post-money valuation of just over $30 million, according to PitchBook.

The company says its site is now used in more than 275,000 neighborhoods around the world and in nearly 1-in-3 U.S. households. It allows users to organize events, sell or give away items and alert neighbors to danger. Earlier this year, Nextdoor debuted an anti-racism notification after long facing criticism for racist comments on its platform.

In 2018, Nextdoor hired Sarah Friar, who was finance chief at Square, as its new CEO, replacing the company’s founder, Nirav Tolia. Before that, Friar spent over a decade at Goldman Sachs.

Gurley said Friar ran all the numbers and closely considered an IPO before making the ultimate decision.

“Sarah Friar is an extremely experienced CEO with tons of Wall Street experience, both having worked at an investment bank and as CFO of a public company,” Gurley said. “She dual-tracked it, was looking at the IPO and just said I have more control and get better economics by going the SPAC route.”

Investing to fix the labor shortage

Gurley appeared on “TechCheck” alongside Sumir Meghani, the co-founder and CEO of Instawork, an online jobs marketplace. Instawork on Thursday announced it raised $60 million in a financing round led by Craft Ventures.

The start-up connects workers in the restaurant, hospitality and retail industries with hourly jobs at companies in need of labor. The transaction comes a week after Suzanne Clark, CEO of the U.S. Chamber of Commerce, told CNBC that the biggest problem facing American businesses is hiring enough qualified workers. She pointed to a lack of skilled labor, Covid-era jobless benefits, insufficient access to child care, and work visa restrictions.

“Our professionals make nearly double minimum wage,” Meghani said. “Our best professionals can make even more than that. They can get paid instantly when they clock out of a shift. We’re rewarding quality on Instawork with faster pay, higher pay but most of all flexibility.”

Gurley, who was one of the earliest backers of Uber, said Benchmark is focusing heavily on the category and has made about eight investments in “these types of marketplaces.”

— CNBC’s Pia Singh contributed to this report.

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Technology

Bitcoin price rises as Israel-Iran ceasefire begins, and Senate unveils major crypto bill

Published

7 hours ago

June 24, 2025

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Bitcoin price rises as Israel-Iran ceasefire begins, and Senate unveils major crypto bill

Crypto prices, including bitcoin, rose on Tuesday after President Trump announced a ceasefire between Iran and Israel.

By midday Tuesday, bitcoin had passed the $105,000 level, ether jumped back above the $2,400 mark, and XRP climbed to $2.19.

The risk-on action in the markets, which also saw stocks rally on the Mideast de-escalation, wasn’t the only source of momentum, as Republican senators unveiled a major bill to set the rules of the road for crypto. Specifically, the legislation would define when crypto is a commodity or a security, allow crypto exchanges to register with the Commodity Futures Trading Commission, and reduce the Securities and Exchange Commission’s regulation of digital assets — a big reversal from the plans of President Biden’s SEC Chair Gary Gensler to closely regulate the crypto industry.

The new framework was introduced by Senate Banking Committee Chairman Tim Scott of South Carolina and Senator Cynthia Lummis of Wyoming, who heads the panel’s Digital Assets Committee. Robinhood CEO Vlad Tenev said on CNBC’s “Squawk Box” that the regulatory development was important for the U.S. to regain the lead in the crypto industry, where he said it has fallen behind other markets, including Europe.

Last week, the senate passed a stablecoin bill, marking the first major legislative win for the crypto industry, which now heads to the House for consideration of its version of the bill. Both bills prohibit yield-bearing consumer stablecoins — but differ on agency regulatory oversight. Visa CEO Ryan McInerney weighed in on the advancement of the Senate version, the Genius Act, telling CNBC’s “Squawk on the Street” that the credit card giant has been embracing stablecoins.

Meanwhile, investors increased their bets on crypto company Digital Asset, which raised $135 million in funding from several big names in banking and finance, including Goldman Sachs, BNP Paribas and hedge fund billionaire Ken Griffin’s Citadel Securities. The firm, which touts itself as a regulated crypto player, said it will use the funding to advance adoption of its Canton network, which is a blockchain for financial institutions, another sign of how major financial institutions are embedding themselves into the once obscure crypto world.

Technology

Ambarella shares soar 19% on report chip designer is exploring sale

Published

12 hours ago

June 24, 2025

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Ambarella shares soar 19% on report chip designer is exploring sale

Thomas Fuller | SOPA Images | Lightrocket | Getty Images

Ambarella shares popped 19% after a report that the chip designer is currently working with bankers on a potential sale.

Bloomberg reported the news, citing sources familiar with the matter.

While no deal is imminent, the sources told Bloomberg that the firm may draw interest from semiconductor companies looking to improve their automotive business. Private equity firms have already expressed interest, according to the report.

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Technology

Nvidia CEO Huang sells $15 million worth of stock, first sale of $873 million plan

Published

12 hours ago

June 24, 2025

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Nvidia CEO Huang sells million worth of stock, first sale of 3 million plan

Nvidia CEO Jensen Huang attends a roundtable discussion at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris on June 11, 2025.

Sarah Meyssonnier | Reuters

Nvidia CEO Jensen Huang sold 100,000 shares of the chipmaker’s stock on Friday and Monday, according to a filing with the U.S. Securities and Exchange Commission.

The sales are worth nearly $15 million at Tuesday’s opening price.

The transactions are the first sale in Huang’s plan to sell as many as 600,000 shares of Nvidia through the end of 2025. It’s a plan that was announced in March, and it’d be worth $873 million at Tuesday’s opening price.

The Nvidia founder still owns more than 800 million Nvidia shares, according to Monday’s SEC filing. Huang has a net worth of about $126 billion, ranking him 12th on the Bloomberg Billionaires Index.

The 62-year-old chief executive sold about $700 million in Nvidia shares last year under a prearranged plan, too.

Nvidia stock is up more than 800% since December 2022 after OpenAI’s ChatGPT was first released to the public. That launch drew attention to Nvidia’s graphics processing units, or GPUs, which were needed to develop and power the artificial intelligence service.

The company’s chips remain in high demand with the majority of the AI chip market, and Nvidia has introduced two subsequent generations of its AI GPU technology.

Nvidia continues to grow. Its stock is up 9% this year, even as the company faces export control issues that could limit foreign markets for its AI chips.

In May, the company reported first-quarter earnings that showed the chipmaker’s revenue growing 69% on an annual basis to $44 billion during the quarter.