Connect with us

Published

on

Joseph “Joe” Montana, co-founder of iMFL and retired National Football League (NFL) quarterback, speaks during an interview in San Francisco, California, U.S. on Tuesday, April 30, 2013.
David Paul Morris | Bloomberg | Getty Images

Joe Montana won his first Super Bowl as an NFL quarterback in 1982. Almost four decades later, he’s about to get his first IPO as a venture capitalist.

Montana, who led the San Francisco 49ers to four Super Bowl victories and was inducted into the National Football League Hall of Fame in 2000, has spent the past six years investing in start-ups through his firm, Liquid 2 Ventures. He started with a $28 million fund, and is now closing his third fund that’s almost three times bigger.

One of Liquid 2’s first investments was announced in July 2015, when a code repository called GitLab raised a $1.5 million seed round after going through the Y Combinator incubator program. GitLab’s valuation at the time was around $12 million, and other participants in the financing included Khosla Ventures and Ashton Kutcher.

On Thursday, GitLab is set to debut on the Nasdaq with a market cap of almost $10 billion, based on a $69 share price, the high end of its range. Montana’s initial $100,000 investment, along with some follow-on funding, is worth about $42 million at that price.

“We’re all pretty pumped,” Montana, 65, said in an interview this week, while vacationing in Italy. “This is going to be a monster for us.”

Joe Montana #16 of the San Francisco 49ers celebrates after they scored against the Cincinnati Bengals during Super Bowl XVI on January 24, 1982 at the Silverdome in Pontiac, Michigan. The Niners won the Super Bowl 26 -21.
Focus On Sport | Getty Images Sport | Getty Images

While famous athletes dabbling in start-ups has become a trend in Silicon Valley — from NBA stars Stephen Curry and Andre Iguodala to tennis legend Serena Williams — Montana jumped into the game much earlier. Prior to Liquid 2, Montana was involved with a firm called HRJ, which was founded by ex-49ers stars Harris Barton and Ronnie Lott.

HRJ, which invested in other funds rather than directly into companies, collapsed in 2009 and was sued for allegedly failing to meet its financial commitments.

But rather than return to the sport that brought him fame in an executive role or as a broadcaster, like so many fellow all-star quarterbacks, Montana stuck with investing. This time he took much a different route.

Convinced by Ron Conway

Ron Conway, the Silicon Valley super angel known for lucrative bets on Google, Facebook and Airbnb, started showing Montana around the world of early-stage investing, primarily through Y Combinator. Montana, along with a growing crop of seed investors and celebrities, would attended Y Combinator Demo Days, where entrepreneurs show slides of their companies with growth that’s always up and to the right.

“We were trying to see what their secret sauce was and who they looked at and what they were really looking for in early-stage companies,” Montana said referring to Conway and his team. “He started taking us there, and we started doing a handful of investments here and there, and then he talked me into starting a fund.”

In 2015, Conway was speaking to the latest group of founders in the Y Combinator program, and he invited Montana to attend the event. That’s where Montana met GitLab CEO Sid Sijbrandij, a Dutch entrepreneur who had turned an open-source project for helping developers collaborate on code into a company that was packaging the software and selling it to businesses.

“We got together, and said, ‘hey this is a special guy,'” Montana said. “We committed that night.”

GitLab had just come out of Y Combinator. In his presentation at Demo Day that March, Sijbrandij told the audience that his company had 10 employees along with 800 contributors working on the open-source project. GitLab was on pace for annual sales of $1 million, he said, and paying customers included Apple, Cisco, Disney and Microsoft.

GitLab CEO Sid Sijbrandij at company event in London
GitLab

GitLab now employs over 1,350 people in more than 65 countries, according to its prospectus. As it prepares to hit the public market on Thursday, GitLab’s annualized revenue is over $230 million. Sales in the second quarter jumped 69% to $58.1 million

However, because GitLab spends the equivalent of three-quarters of its revenue on sales and marketing, the company recorded a net loss of $40.2 million in the latest quarter. Much of the marketing budget is focused on expanding its DevOps (the combination of software development and IT operations) user base.

“To drive new customer growth, we intend to continue investing in sales and marketing, with a focus on replacing DIY DevOps within larger organizations,” the company said in the prospectus.

‘Still listening to pitches’

For Montana, GitLab marks his firm’s first IPO, though he said “we have 12 or 13 more unicorns in the portfolio,” referring to start-ups valued at $1 billion or more. They include Anduril, the defense technology company led by by Oculus co-founder Palmer Luckey, and autonomous vehicle testing start-up Applied Intuition.

Montana has three other partners in the firm: Mike Miller, who co-founded Cloudant and sold it to IBM; Michael Ma, who sold a start-up to Google and became a product manager there; and Nate Montana, Joe’s son, who previously worked at Twitter.

Montana said he’s involved in the fund on a day-to-day basis and attends the partner meetings every Tuesday. He said his partners, who are more experienced in technology, handle much of the technical diligence and sourcing of deals, while he focuses on helping portfolios with connections in his network.

“Until the pandemic, I was still speaking around the country,” Montana said, adding that he didn’t start taking a salary until the third fund. “I was out speaking to companies like SAP, Amex, Visa and a lot of large corporations, like large insurance firms down to Burger King.”

Specific to GitLab, Montana said he connected Sijbrandij early on with a senior executive at Visa, when the company was looking to do a deal with the payment processor.

“I’m still listening to pitches, I go to pitches and do all that,” Montana said. “But my time is better spent now helping with connecting these companies as they mature.”

WATCH: GitLab co-founder and CEO on the future of work during and after the pandemic

Continue Reading

Technology

Oracle’s Federal Electronic Health Record experienced a nation-wide outage

Published

on

By

Oracle's Federal Electronic Health Record experienced a nation-wide outage

Jaque Silva | Nurphoto | Getty Images

Oracle’s Federal Electronic Health Record experienced a nation-wide outage on Tuesday, the Department of Veterans Affairs confirmed to CNBC.

The agency said “all users” of the company’s Federal EHR, including the VA, the Department of Defense, the U.S. Coast Guard and the National Oceanic and Atmospheric Administration, were impacted. Six VA medical centers, 26 community clinics, and remote VA sites experienced disruptions, the agency said.

“Affected VA medical facilities followed standard contingency procedures during the outage to ensure continuity of care for Veterans,” a VA spokesperson said in a statement Thursday.

An electronic health record, or an EHR, is a digital version of a patient’s medical history that’s updated by doctors and nurses. It’s crucial software within the U.S. health-care system, and outages can cause serious disruptions to patient care.

Oracle is one of the largest EHR vendors thanks to it’s $28 billion acquisition of the medical records giant Cerner in 2022. 

The company’s Federal EHR initially started experiencing issues at around 8:37 a.m. Eastern on Tuesday, the VA said. Users reported that the software froze and they were unable to access applications. Access was restored and cleared by 2:05 p.m. Eastern that day after Oracle restarted the system.

Oracle is carrying out an investigation to determine what caused the outage, the VA said. Oracle did not immediately respond to CNBC’s request for comment.

The outage marks Oracle’s latest stumble in a thorny, years-long EHR rollout with the VA, which has been marred by patient safety concerns. The agency launched a strategic review of Cerner in 2021, before Oracle’s acquisition, and it temporarily paused deployment of the software in 2023.

Four VA facilities in Michigan are slated to deploy Oracle’s Federal EHR in 2026.

In October, Oracle unveiled a brand-new EHR equipped with fresh cloud and artificial intelligence capabilities. The early adopter program for the software begins this year, though it’s not clear if the VA has plans to utilize it.

Oracle is slated to report third-quarter fiscal 2025 earnings on Monday.

Watch: Oracle CEO Safra Catz: Being number one is very important

Oracle CEO Safra Catz: Being number one is very important

Continue Reading

Technology

Broadcom shares soar 16% as earnings top estimates on demand for custom AI chips

Published

on

By

Broadcom shares soar 16% as earnings top estimates on demand for custom AI chips

Broadcom CEO Hock Tan.

Lucas Jackson | Reuters

Broadcom reported first-quarter earnings on Thursday that topped analysts’ expectations, and the chipmaker offered strong guidance for the current quarter. The stock jumped 16% in extended trading.

Here’s how the company did versus LSEG consensus estimates:

  • Earnings per share: $1.60 adjusted vs. $1.49 expected
  • Revenue: $14.92 billion vs. $14.61 billion expected

Broadcom said it expects about $14.9 billion in second-quarter revenue, higher than the $14.76 billion forecast by Wall Street analysts. Revenue in the last quarter rose 25% from $11.96 billion a year earlier.

The company said net income increased to $5.5 billion, or $1.14 per share, from $1.33 billion, or 28 cents per share, in the same period last year.

Broadcom’s artificial intelligence business is at the center of the company’s recent boom, which saw its stock price more than double last year. The company is one of the primary data center infrastructure vendors for AI, working both on Google’s custom AI chips as well as providing essential components for networking thousands of other chips together to develop advanced AI software.

Prior to the after-hours pop, the stock was down about 23% so far in 2025, as investors rotate out of risk partly due to concern about President Donald Trump’s tariffs.

Broadcom said it recorded $4.1 billion in AI revenue during the first quarter, which is 77% higher on a year-over-year basis. Those sales are reported as part of Broadcom’s semiconductor solutions business, which grew 11% on an annual basis to $8.21 billion during the quarter.

Broadcom CEO Hock Tan said in a statement that the company expects “continued strength in AI semiconductor revenue,” reaching a projected $4.4 billion in the second quarter.

In December, Broadcom said it was developing custom AI chips with three large cloud customers. Tan said on Thursday that in addition to those customers, it had “deeply engaged” with two other hyperscalers, and are working with four other potential customers to develop their own custom AI chips.

Tan said that Broadcom closely chooses partners for developing custom AI chips who can deploy the resulting product in large quantities. “To put it bluntly, we don’t do it for startups,” Tan said.

The other major part of Broadcom’s revenue comes from its infrastructure software division, which includes software from the company’s acquisition of VMware in the fourth fiscal quarter of 2023. Broadcom said it saw $6.7 billion in software sales during the quarter, a 47% increase on an annual basis.

WATCH: Chip stocks see strong performance punished by markets

Chip stocks see strong performances punished by markets

Continue Reading

Technology

HPE to cut 2,500 employees as stock slides 19% on weak earnings outlook

Published

on

By

HPE to cut 2,500 employees as stock slides 19% on weak earnings outlook

Antonio Neri, CEO of Hewlett Packard Enterprise, speaks during an interview with CNBC on the floor of the New York Stock Exchange (NYSE) in New York City, October 20, 2023.

Brendan McDermid | Reuters

Hewlett Packard Enterprise shares slid 19% in extended trading on Thursday as the data center equipment maker issued quarterly and full-year guidance that came in below consensus.

Here’s how the company did in the fiscal first quarter in comparison with LSEG consensus:

  • Earnings per share: 49 cents adjusted vs. 49 cents expected
  • Revenue: $7.85 billion vs. $7.82 billion expected

HPE’s revenue rose 16% year over year in the quarter ending on Jan. 31, according to a statement. The company was left with profit of $598 million, or 44 cents per share, up from $387 million, or 29 cents per share, in the same quarter a year earlier. The adjusted earnings per share excludes stock-based compensation.

“We could have executed better,” CEO Antonio Neri said on a conference call with analysts. The company had higher than normal inventory for artificial intelligence servers because of a shift to next-generation Blackwell graphics processing units from Nvidia.

The backlog for AI systems rose 29% quarter over quarter to $3.1 billion. Total server revenue totaled $4.29 billion.

HPE dealt with extensive discounting in the market while selling traditional servers during the quarter, finance chief Marie Myers said. As the quarter progressed, HPE moved to limit travel and discretionary spending, she said.

“We expect pricing adjustments may negatively impact top-line growth in the near term,” Myers said.

The company said it would implement a cost-cutting program involving layoffs over the next 18 months that will lead to $350 million in gross savings by the 2027 fiscal year. Around 2,500 employees will be affected, a spokesperson said, representing about 5% of the workforce when also factoring in expected attrition. At the end of October, HPE employed 61,000 people, according to its most recent annual report.

In January, the U.S. Justice Department filed in a federal district court to stop HPE from acquiring Juniper Networks. HPE announced the proposed $14 billion deal in January 2024. The court expects a trial to begin in July, according to the statement. The deal should close by October 2025, HPE said. In December, the company had said the transaction would be done in early 2025.

HPE called for 28 cents to 34 cents in adjusted earnings per share for the fiscal second quarter, with revenue coming in between $7.2 billion and $7.6 billion. Analysts surveyed by LSEG had looked for 50 cents per share on $7.93 billion in revenue.

For the 2025 fiscal year, HPE sees $1.70 to $1.90 in adjusted earnings per share. Analysts polled by LSEG had predicted $2.13 per share.

HPE expects to update its prices to reflect higher expenses from U.S. tariffs, Neri said, adding that he has not perceived any business deterioration from President Donald Trump’s so-called Department of Government Efficiency.

As of Thursday’s close, HPE shares were up about 2% so far in 2025, while the S&P 500 index was down 2%.

WATCH: HPE shares fall more than 10% after mixed earnings, layoff plans

HPE shares fall more than 10% after mixed earnings, layoff plans

Continue Reading

Trending