We must stop the IPO-hungry CEO
Welcome to Cautious Optimism, a newsletter on tech, business and power.
Tuesday. The US economy shed 105,000 jobs in October and added 64,000 in November. Employment gains in November were largely concentrated in healthcare and construction (construction employment is flat over the last year). Employment losses in October included 162,000 from the Federal government. The unemployment rate reached 4.6%, up from 4.4% in September. (Job growth in both August and September was revised lower.)
Traders have priced in a 75% chance of no rate cut in January. Expect a great many tweets from above, should that come to pass. To work! — Alex
📈 Trending Up: Job cuts at Amazon … job cuts at Amazon … everything is bank … tech money in the 2026 elections … Japanese military readiness … tech money in the 2026 elections … nuclear power startups … Nvidia’s home-grown AI models … EU-China trade ties? …
📉 Trending Down: Datacenter sentiment … chances that Databricks goes public before my youngest enters kindergarten … free speech in the United States … ethics at Meta … the American consumer? … working for UPS …
Things That Matter
Well, this is a twist: Monzo, the UK-based neobank, announced a CEO swap in October. A former Google executive (Diana Layfield) will step into the office currently held by TS Anil in early 2026. Anil took over the top spot at Monzo after founder Tom Blomfield stepped down from the chief executive role back in 2020.
What’s fascinating about the latest CEO shakeup at Monzo is that it comes down to a private company’s leader wanting to go public faster than their board felt prudent. Here’s the FT:
The timing for Monzo’s planned initial public offering was a key aspect of the board ructions, with Anil arguing for a listing earlier than some of the other directors wanted and signalling that he could leave the business soon afterwards, the people said.
It’s perfectly reasonable that Monzo’s board wanted a CEO in the chair during an eventual IPO that would stay put; after a public market debut you don’t want to serve up surprises to your new shareholders.
Anil has a point, however, in that Monzo is a very large business that is very much ready to list — at least in accounting terms. The company’s most recent fiscal year (2025, or the twelve months ending March 31st) saw £1.2 billion worth of top line (+48%) generate adjusted profit before tax of £113.9 million, up from £13.9 million the year before. In unadjusted terms, Monzo’s profit before tax reached £60.5 million in its most recent full fiscal year.
Throw in 25% customer growth, and you have a profitable, growing, and at-sacle business. Just the sort of company that would have listed in ages past; today, the board wants “more time for the fintech to expand internationally and boost its valuation before floating,” the FT adds.
I think it is perfectly reasonable to bounce a CEO when they are operating at cross-grains to their board. But it is a very surprising twist to see a CEO given the boot over wanting to go public sooner rather than never (Databricks).
It may not be a bad time for a neobank IPO, either. American neobank Chime, itself a recent public debut, has seen its own shares recover from around $17 per share in November to around $25 today.
Tech policy, trade policy: Intertwined technology policy and trade policy agreements might wind up a recipe for progress on neither, at least when it comes to our friends in the United Kingdom. Here’s the NYTimes on the US-UK trade deal that, despite being announced, is still being sorted out:
The United States informed the British government this month that it would pause fulfilling a technology-related agreement between the two countries, which included more collaboration on artificial intelligence and nuclear energy […] The move came because American officials felt that Britain wasn’t making sufficient progress in lowering trade barriers […] American officials have also expressed frustration with Britain’s online safety rules and digital services taxes.
American tech companies are weary of European technology rules, fees, and fines. Given wide differences between their home market and the bloc (inclusive of the UK because Brexit is a temporary aberration, not a final sentencing), US-based tech shops often find themselves running afoul of rules set across the pond.
The recent blowup over the EU fining X nine figures for technical violations of the Digital Services Act is illustrative. American politicians misframed the fee as a free speech issue, which it wasn’t. In fact, X was partially pilloried for not being transparent itself. Anyway.
When it comes to the situation in Europe viz American technology companies, I am often reminded of the phrase you have to play the game on the field, something that many a venture capitalist has told me over the years. The phrase is losing its bite in trade and policy terms, because the United States increasingly wants to dictate European policy to Europeans. And we might get our way, frankly. Why play the game on the field if you don’t consider yourself a country with allies, but instead brattish customers who don’t know their place?
Luminar’s death isn’t surprising: CO does not track the earnings of automotive supply companies, but perhaps we should. On news that LiDAR company Luminar filed for bankruptcy, we sat up; what the hell? Isn’t the self-driving market accelerating, thus boosting demand for the technology partially responsible for making self-driving possible?
It turns out that Luminar wasn’t a business, per se, more than it was a corpse circling the public-market drain. To wit:
Q1 2025: Revenue of $18.9 million, gross profit of -$8.1 million, gross margin of -42.9%
Q2 2025: Revenue of $15.6 million, gross profit of -$12.4 million, gross margin of -79.5%
Q3 2025: Revenue of $18.7 million, gross profit of -$8.1 million, gross margin of -43.3%
Hmm. With a falling cash balance (from $107.6 million at the end of Q2 to $74.0 million at the end of Q3), debts totalling $429 million, and $145.9 million worth of operating cash burn in the first three quarters of the year, Luminar has been cooked for a minute. It’s just now admitting the fact.
No rudeness intended here; I am sure that the team did its best. You just can’t run a business with negative gross margins for long. (Insert your favorite AI wrapper startup joke here.)
Will Waymo reach $1B in revenue next year? In August 2024 Waymo announced it was serving 100,000 paid rides per week. The news item was a critical milestone for self-driving; here was a robotaxi company doing commercial volume at a level of safety that I would peg as far greater than acceptable. In April 2025 Waymo announced 250,000 weekly paid rides. And a week ago, it was delivering 450,000 paid rides per week.
If we presume $15 per, Waymo’s weekly and annual run rates have grown as follows:
At 100,000 weekly paid rides at $15 apiece, Waymo was on a $1.5 million weekly run rate and a $78 million annual run rate.
At 250,000 weekly paid rides at $15 apiece, Waymo was on a $3.75 million weekly run rate, and a $195 million annual run rate.
At 450,000 weekly paid rides at $15 apiece, Waymo is currently on a $6.75 million weekly run rate, and a $351 million yearly run rate.
I chose $15 per ride, by the by, as self-driving rides tend to sell at a premium to regular ridesharing journeys, and I wanted to shoot for a modest figure to ensure conservative estimates.
With new markets coming online and a public with seemingly endless demand for what Waymo has on offer at current supply levels, it doesn’t seem impossible that the robotaxi provider can triple in 2026. It grew more than that in 2025, after all. That would put the Alphabet side project at a more than $1 billion run rate, and with enough growth early in the year, a real shot at $1 billion worth of total revenue for the annum.
Welcome to our self-driving present. Now, when is the Waymo IPO?
Help us, Notion, you’re our only hope
Forbes has the goods on Notion, reporting that it is planning a tender offer at $11 billion, ahead of its 2021-era valuation of $10 billion. Even more, the company has passed $600 million worth of annual recurring revenue (ARR), with a full half of that total coming from “its artificial intelligence products” while generating positive cash flow.
Time capsule headline: Notion Reaches $10 Billion Valuation, Boosted By Remote Work — And TikTok
Stand up and take a bow, Notion. Instead of becoming another reminder of the ZIRP-era venture excesses, Notion has grown into its prior valuation in excellent form.
Even better, Forbes reports that the company’s IPO plans are anything but remote, writing that Notion is “considering multiple rounds of financing in quick succession leading up to an IPO.”
Inject it directly into my veins. The 2025 IPO cohort was fun enough, but we’ve seen much early hype blow off. To wit:
Chime stock is worth around $25 today, down from a 52-week high of $44.94 per share.
Circle stock is worth around $76 today, down from a 52-week high of $298.99 per share.
Figma stock is worth around $35 today, down from a 52-week high of $142.92
The list goes on, but what matters is that it will to be harder to list in 2026 with this year’s own IPOs wrapping 2025 with a market hangover; who wants to wager on IPO returns when the vaunted previous year’s contingent have shed their gains?
What you need is a champion company to arrive and shake up prevailing market narratives— that the gap between private and public market valuations is impassably large, or that AI is more hype than hard revenue. Notion could rebut both in one action.
So long as it doesn’t raise too much at too high a price, too quickly. Notion at $11 billion is worth around 18x its ARR. That’s a functional multiple that, provided its growth figures are impressive, is probably defensible on the public markets. But if Notion raises several rounds and boosts its valuation to the rafters, leaving little to no fat before listing, it could lose altitude based solely on its valuation, and not its inherent value.
No pressure, Notion, but we’re here again. Just as in recent years, the tech IPO market needs a reset, and I don’t think that SpaceX is going to do the trick. That company is so old and so big and so valuable it likely will be a singular event rather than a tone-setting milestone for the many software unicorns of the world.
That said, I’d still rather an overpriced Notion IPO than no Notion listing at all, because I get an S-1 either way. But for the many venture investors hoping that next year is the year they finally turn all that TVPI into DPI, well, all eyes on the software concern.
As an aside, I am not Notion-pilled. But during my time at TWIST I have become a daily active user of the service. It’s pretty neat, even if I find the AI features to be more thing I call up by accident when working quickly than thing I cannot live without.