The Biggest Deal of the Year!

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1:16So whether you're closing your first deal or gearing up for growth, Vanta makes compliance easy. Join over 9 ,000 companies, including many Y Combinator and Techstar startups, who trust Vanta. simplify compliance and get$1 ,000 off at Vanta.com slash newcomer. That's V-A-N-T-A.com slash newcomer for$1 ,000 off. Welcome back to the show. We're going to start this week off with our deal of the week, which is super exciting because... Deal of the year. Deal of the year. It's the deal of the year. I mean, it's March, I guess. I mean, I'd like to be surprised. Don't speak too soon. We could have an amazing IPO window just open right back up.

2:02We're obviously talking about Google buying Wiz, the cybersecurity startup for$32 billion after Google tried to buy it for$20 billion. Then Wiz walked away. Then it seemed like Wiz was going to go public. And now all cash, money flowing into the venture industry. As much as it pains me to say, the Trump administration has allowed capitalism and big corporations to do what they do best and double down and buy the winners and make sure nobody can ever catch up to them. Yeah, big winners. Talk about the cash flowing today. As of right now, biggest winners in terms of stake are index ventures at 13 % and Sequoia Capital at 10 % per Katie Roof over at Bloomberg.

2:44We have some reporting that that stake at Sequoia is expected to return$3 billion to Sequoia at a 25X multiple, which is, you know, that's a win. Never bet against the Sequoia. They got in at the scene. Home run business. Yeah. Doug Leone, former senior steward at Sequoia. NAB's another one, you know. Medallia and a bunch of other exits already. He made his career. Certainly puts him in the top 10 VCs of all time, if not top five. I mean, also index, you know, Shardul Shah, smart to get into this deal. And he's sort of mid-career in his prime. Index needs that. It's sort of like, oh, this is a guy who's got to win.

3:25It's good signal. Wins beget wins. That's helpful for Index. Absolutely. Inside Partners has about an 8 % stake. And then Green Oaks Capital Partners has about a roughly 6 % stake in WIZ. So they all got some good payouts here. Obviously, also Cyber Starts got a 28x multiple on their 46 million investment, which they co-led the seed with Sequoia. So they were also in super early. Yeah, cybersecurity is hot. Gilly and Cyberstarts are dominant in cybersecurity. I mean, there's been some skeptical reporting about the potential sort of pay to play network that they've built. But at the end of the day, he is very well respected in cyber.

4:11I think people are very excited about Israeli cybersecurity startups, and he's got a network of some of the best early stage cyber startups. So definitely one to watch. I don't think the money is flowing right now. As someone who once celebrated people for the Figma acquisition, it is worth saying that even though it seems likely that all this money is going to flow and that the Trump administration is clearly looser than the Biden administration, it's possible the deal gets rejected. I mean, Google isn't necessarily the best friend of the Republicans. There's a huge breakup fee. I think Part of what got this deal over the line was that Google expanded the breakup fee.

4:49It's$3.2 billion, which is massive. So they want this to go through. They are ensuring that this happens this time, barring regulatory overreach, if you will. I would say that this new FTC chair, Andrew Ferguson, while in public appearances, he hasn't really signaled that he's going to fully back off of big tech. There is reporting that they fired the commissioners that were democratically appointed. that we're the biggest big tech critics. So all signs point to hopefully this going through and being the largest venture exit ever. And we'll all toast and celebrate as if we're part of it too. Google knows what they're doing here.

5:30They have a long history of successful acquisitions. Wiz, obviously known for multi-cloud cybersecurity, Google running Google Cloud platform, GCP, is in third place with AWS and Azure sort of running that table on cloud. So it needs ways for its customers to be multi-cloud and want a reason to use Google. And yeah, Google has an insane track record of acquisitions. Well, this is all hunky-dory. We're so happy. Hopefully this goes through. What does this mean for exits going forward? Like, is the door open? Are we going to have M &A wave? Definitely. We've seen exits. Moveworks was acquired for just under, I think,$3 billion by ServiceNow in agent automation.

6:18So yeah, I think we're going to see deals. I don't know that it's going to save SaaS necessarily. Companies still need to be worth something. I think part of the problem with the deals getting slowed down is that there were companies that maybe would have gotten acquired while they had some momentum and then done poorly within the mother company that now don't have enough juice to even get acquired. So I don't know that it's going to fix our sort of graveyard of dot-com unicorns necessarily, but I think people who are leaning into the AI wave, some of them are going to get gobbled up by the big tech giants who want to be relevant.

6:58Right. I mean, also there was CoreWeave's purchase. CoreWeave, I view hopeful, making a purchase of weights and biases to ramp up their AI game. Anyone sort of that can spin their unicorn status to have some AI relevance is probably in a better place this time around. Madeline, you've been checking in with investors. You know, we've got the whiz deal, the core refiling. What's the mood? Do they think, oh, those are the positives. And of course, the negatives are Trump and tariffs and the general macroeconomic uncertainty and the overall downturn. So between, I don't know, this is our moment. We said we were going to exit an IPO when Trump was president versus Trump is scaring the shit out of everybody in the economies and tatters.

7:44Which which one's winning? Well, certainly. Yeah. No big deal. Just, you know, M &A excitement and economic turmoil and stock turmoil to all wrap up this. If only Canada would become the 51st state, we could move on from all of this. Come on, Canada. My God. Yeah, no, the IPO market is not, I would say, looking as rosy as the M &A market per my conversations with investors. I think people are optimistic that this is still going to be better, but I think most of them that I talked to mentioned the forecast being better a year to three years out from now. This year remains uncertain. It's always the next year.

8:21Next year, it'll be good. Part of that really has to do with this window right now they don't think is closing. I have no evidence to suggest that CoreWeave or Klarin are going to delay going out soon. But after this wave, what comes after that, we could have another lull if the tariff drama continues, if stocks take a turn. And everybody wants to learn from other people's IPOs. So now that we have a couple, if you're planning an IPO, you're like, oh, let's get some data from how these trade and see what happens. Well, that was kind of what I think happened in 2023 too. too. Like Instacart, Arm, Klaviyo all went out and it went OK, but not amazing.

9:01And so Arm was pretty good. But still, they kind of like after that, everyone was like, OK, no, we're going to sit this one out again. I'm not a big antitrust person, but it's sort of the implicit case for antitrust in that the big tech companies are so big and strong and powerful that they can withstand the insanity of Trump presidency and also have the ear of the president. So they can gobble things up. Acquisitions give investors surefire exits instead of the uncertainty of building a sustainable company on the public markets. And so if we have terrifying public markets and a lax regulatory environment, we may very well just have more consolidation over the next couple of years, which not necessarily ideal for the American economy, but could be good for Silicon Valley if the alternative is no exits.

9:52Right. And could be good for their LPs, lots of times, which, you know, are, you know, pension funds, university endowments. Wow, what a true believer. Yeah, yeah. Hey, it is a step beyond just, you know, the rich VCs, right? No, no, no, of course. Yeah, we love to see. And I mean, we like to, I mean, it's a good point. I mean, we talked about, oh, 3 billion to Sequoia, but obviously, you know, that doesn't go to Sequoia, the partners, you know, some percentage of that is carry and the rest of it is going to their LPs who are benevolent institutions for the most part, as you're saying. For the most part.

10:24Right. Yeah, of course. That's, I think, the real test point that we're seeing right now is that while people are kind of dipping their toe in with these IPOs and people are excited about the Wiz deal, there's still a lot of uncertainty and a lot of investors are feeling like we got to get liquidity to our LPs as soon as possible, whether that's, you know, secondaries is a third thing that people are also, you know, really taking advantage of. Last year was the highest year ever for secondary sales. I think$152 billion per some market reports that I was reading. So people are finding ways to cash out because there just simply has not been a way to do it.

11:04And it's seemingly one of the longest IPO droughts that we've had for the history of this industry, which is tough. Who knew 2021 was the glory days? SPACs and sketchy exits. Crypto, bonanzas, Zerp. You never know you're in the moment like, oh, this is the harvest moment when you're in it. It feels like, oh, it's going to go on forever. This is just the beginning. Anyway, historic exit. Will it be the biggest of the year? We'll see. But congratulations to Index, Sequoia, Insight, Cyberstarts, Green Oaks. It's nice to have a win. All right. Should we move on? Let's move on. Yeah. Another Green Oaks investment.

11:43Rippling is fighting. Suing deal. You want to give people the rundown? they haven't heard this story. I'd say our audience is probably pretty familiar with this story, but I'll give the high points. Basically, Rippling and Deal are both these multi-billion dollar private HR software startups, big success stories. Parker Conrad, ousted from Zenefits, but now leading Rippling, tweeted out on Monday the court filing of the lawsuit that they've placed against Deal for corporate espionage, citing that one of the Dublin employees for the Rippling office had really been looking up things that were very suspicious within different Slack channels.

12:24They set a honeypot trap for this guy. They basically like, Rippling sends an email to basically, I think like three deal execs, including like the outside legal counsel and the CFO, who's the father of the CEO, which is one of the reasons many people have been suspicious of deal. But not just generally, if your dad's the CFO, people are like, what? So they have this honeypot, according to the lawsuit, that has the execs at the company, according to the lawsuit, then suggest to their insider to check a particular Slack thread that's set up to catch him. The insider does. He searches it like 30 plus times, something ridiculous, like the click-throughs.

13:08Rippling goes to the courts in Ireland to get permission to get the guy's phone they confront him he's in a bathroom they say if you don't come out you're gonna get like a legal trouble you're obligated to give us the phone the guy says i'm willing to take that risk and he like scrambles he bolts out of the building like it's literally like what is this like spy thriller hr drama i know this is all this is all according to rippling um but so interested to see see what deal has to say to defend itself but it's it's definitely fun intrigue. And for what it's worth, I had been hearing chatter from VCs who were like, I thought the company was sketchy.

13:49It's making a lot of money. Seems like it's going well. I feel like there have been sort of buzz building about Deal, which I guess maybe it's because they're great at corporate espionage. Certainly we're waiting to see more of a statement from Deal. As of right now, they have denied the allegations. There has not been a court filing, as far as I know, as like a rebuttal in that sense. So we'll wait to get a little bit more into it. But I hope their lawyers are as great writers as Rippling's lawyers, you know, and Rippling got Alex Spiro, who's like one of the, you know, lawyers of the moment, I think, in Elon world.

14:24So a deal is going to need to get some, you know, I don't know, Trump lawyer of the moment to fight in the muck here. But I corporate espionage broadly has been super interesting. You know, it's like, I think there's an assumption that every company has a Chinese spy embedded in it. Very hard to know how to fend it off. And then this is going to be a cynical capitalist take. But there is a certain like, if everybody's doing it, it raises the question like, oh, there are national spies. And surely there are some corporate spies. Is deal, if the allegations are true, just really good at what everybody's doing?

15:03Or how rare is the idea that somebody would have a deep corporate spy? And, you know, I don't know if we'll ever have a clear answer. That's the thing with spies. They're pretty secretive about that kind of thing. All the corporate global ethics and compliance people are horrified by hearing what you say right now. I covered Uber. I grew up in tech covering Uber. You know, it is a company where it is like the number one prerogative is to win. The old Uber. Uber 1.0. The winner Uber. Moving on, would we be a tech podcast if we didn't talk about abundance? Congratulations to Ezra Klein and Derek Thompson on your effort.

15:42To Ezra Klein, to Marc Andreessen. I feel like the craziest thing about abundance is like it's the left now, but it's time to build the Marc Andreessen essay. It's the Marc Andreessen essay. And then Matt Iglesias has the one billion Americans where I do think he gave some credit to Andreessen. It's funny that Tex, now arch-Trumpus, is the intellectual forefather for the Democratic talking point of the moment. I mean, there's something to be said. I think it's cool to see some people on the left embrace this mindset of getting things done and building things. It's a narrative I think people in Silicon Valley are certainly happy to see from prominent voices on the left.

16:27What do you make? Right. Yeah, and I don't think it's altogether new. I mean, it's been obviously building, but I think it's a good rallying cry. I mean, I think Democrats and the left or liberals know that they need a positive vision besides just like we don't want Trump. I mean, the challenge is just going to be sort of, you know, where the metal meets the road or whatever. You know, it's just if the recipe for abundance is unfettered capitalism, that's not usually the provenance of Democrats. And so I think if it's, you know, government building trains, as Ezra Klein and Derek Thompson say, you know, government has been very bad at building trains.

17:06Now, maybe we can make government good at it by stripping out some of the regulations and that would be one path. But if it's deregulatory, I mean, I guess I can get on board with that. But it's hard to imagine that becomes sort of the Democratic Party's core message. Right. It's very invigorating in theory. I personally also have not read the book, so I don't know how they fully solve all of this. I'm going off of takes, but we'll need to see. Takes all the way down. Takes all the way down. Isn't that a great place to end a podcast? The latest Jason Kalkanis is like, oh, these liberals will never come on.

17:47Ezra Klein would never come on. And like, I was just like, I have a book to promote. I'm happy to come on the All In podcast. So I guess we'll see if we can have a true collision of the left-wing abundance agenda with the right-wing that should be supportive of it. And I'd love to see Mark Andreessen write an essay in response to the book. All right. Stick around for my conversation with the CEO of BrowserBase. We are going to publish on Tuesday a list of some of the buzziest companies in enterprise software, according to a survey that Wing, a venture firm we're partnering with, commissioned of venture capitalists.

18:28So BrowserBase was one of the buzziest in the early stage category. You'll have to wait until Tuesday to find out exactly where they ranked, but a super exciting company. I spoke with BrowserBase CEO Paul Klein about their headless browser and how that's allowing AI to travel the internet, to use websites. Yeah, it was exciting conversation for a cool, promising company. Stick around and give it a listen. I'm here with Paul Klein, the founder and CEO of BrowserBase. We're meeting on the podcast. Hey, Paul, how's it going? It's the first time. Yeah, great to meet you virtually and excited to be here.

19:07I guess that's what happens when you have a rocket ship company. We're having you on the podcast because you're one of the top companies on the ET30 list that we're partnering with Wing to publish on Tuesday. And so we wanted to dig in to a company and you guys stood out. I think it's both a sort of category that's interesting and one that's sort of, and your company has clearly caught a lot of investor attention. So excited to talk about browser base. You want to just start off? Yeah. I mean, we're all, we're meeting you. Your company has come onto the scene. Give us a little bit of context of what got you to founding a company in the first place.

19:44Yeah. It's been a pretty crazy year for BrowserBase. We actually started a little over a year ago in January, 2024, but the journey of BrowserBase has really been one that's threaded through my entire career. So maybe I can kind of give a quick synopsis of that and then show you how all signs pointed to BrowserBase. I actually started my career as an intern at Twilio during their IPO, which is a pretty crazy time, you know, to turn 21, you're going into your first all hands. And then Jeff Lawson is saying, Hey, here's our S1, we're gonna go public this summer, really kind of baptized into the final stage of, you know, a dev tools and API company, and seeing them at the one yard line and cross it and then grow to be this, you know, multi billion dollar revenue company after I stayed for three years, it was just a really fundamental part of my career where I learned a lot about how to build these great developer tools, infrastructure companies.

20:38How do you sell to developers? How do you build developer products? Especially these primitives that every developer uses. In that case, it was text-insteaded phone calls. You ended up going to Twilio full-time, right? I did. Yeah. Well, I think the conversion rate on that one was a pretty high intern class. I will say a lot of those interns are now founders and they're good friends of mine since then. What role? What did you do? Yeah. The Twilio intern mafia of 2016. But I did end up staying. I stayed for three years. I was actually working on login identity products. So I was kind of building the API that authenticated all the APIs and then also the login page.

21:08And authentication, we'll come back to that later. It's a lot of experience. It's important for that reason. But after three years, I said, hey, this was great. I'm ready to try my hand at it. I started my first company. It was called Stream Club. We were building Canva, but for live streaming. It was during COVID, of course. And we saw a lot of people wanted to live stream. The software wasn't very good. Actually, kind of similar to what we're using right now, Riverside, in terms of making it easier to create video in a web browser. That company did okay. It was a hard market to play in. But what we learned about was this interesting technology called a headless browser, which is a web browser that you and I run on our computers, but running in the cloud.

21:41And - All right, wait, wait, wait. Yeah, I've seen this term during research for you. Okay. Headless browser is clearly a term I need to understand. Explain it one more time. I want to make sure I understand. Yeah. So we were both novices to it too at stream call i was a cto and i was like okay i need to use this thing called a headless browser and what does that mean so you imagine the browser you're running on your computer maybe it's chrome maybe it's safari you need to run that on a server somewhere but it's probably not going to look the same way that our browser looks on our computer it's it's in a server environment there's no display it's in a data center somewhere so a headless browser is a web browser it's the same as we have on our desktop environments but running without the display without the UI.

22:21It's just the browser that can be controlled by code. So you got a headless browser. It's a browser that's controlled by code, not by mouse and keyboard or input. And there are, there are a lot of these already, or this is sort of a product that exists or no. Yeah. It's always been a bit of a hack. It's always been something you kind of need to do for at stream club. We used it because we're doing some really interesting, basically modifying video display or video overlays with HTML and CSS. The browser is incredible at reading and writing and handling HTML and CSS and JavaScript. And it's always been used for things like testing of software.

22:56So if you're building software, you want to test that your login button works. You're running that in your cloud saying, go to the login page, click the button. Does it work? That headless browser is what's used there. People have been using it for things like RPA for a long time. Hey, we have to integrate with some vendor. Here's this hard-coded script that's going to go to this page, find this button using a kind of thing, called a selector it's a very brittle way of like saying it's the fifth dom it's the fifth div on the page it's the 10th button down click that button so this headless browser has always been a way to control a web browser programmatically and developers have used that for a bunch of different use cases and people using for a long time but it's always kind of been a hacky thing so at stream club i spent much time on this like hacky thing a setless browser and it was so painful it sucked building on top of this type of uh infrastructure and what i realized was like man this thing sucks to work with.

23:47We ended up selling Stream Club to Mux, a video API company, in part because of a lot of the headless browser stuff that we built. We really pushed that space forward. I gave a bunch of talks about it. I felt really alone. There weren't many Stack Overflow answers for headless browser questions I had. The source of truth was this guy, Peter's blog. He was the expert. It wasn't like docs on the Chrome website that were that good. So it was a really tiny, small part of the internet, but I knew a lot about it. I stayed at mux for two years one building the headless browser stuff the second year doing what is mux mux is a video api company so okay they um kind of you think like twilio is for telephonic mux is for everything video live streaming video upload video download really killer company i've learned a lot from that team but while we were there this whole ai thing happened and gpt chat gpt came out gp3.5 came out and i started getting a lot of messages from people people were like hey you you've put out a couple talks on headless browsers you have some stuff out here about headless browsers.

24:43We're using headless browsers in this new way where we're having a LLM try and interact with a web page on a headless browser programmatically. And can you help us? Because it's really hard to run this thing in production. People were hitting me up there saying, hey, like, yeah, we kind of get it working, but do you have any advice on how to run thousands of these? And what that kind of turned into was BrowserBase. BrowserBase is a infrastructure company to run many headless browsers at scale to make it easier to interact with headless browsers. We power web browsing capabilities for AI applications and AI agents.

25:17And if you have this kind of new AI application that needs to go out and maybe it's getting data from the web or clicking buttons on a website, you're going to need your AI application to have a headless web browser. And that's what Browser Base provides. It's in the name. It's a base for your browsers. The, you know, like Adept, right? My sense was they were like training a computer with a sense like you're going to operate the browser and we're going to learn to sort of like go through the human browser. Is that still a strategy that people are considering? Or do you think most of the interaction or are people settled on your solution, which is sort of an abstracted browser and not as a human would interact with it?

25:55Yeah, that's a great question. So Adept is one of the earliest players in the space. Now, most of that team is at Amazon, but they really were cutting it. I mean, they're training models really for UI control with a transformer model. So they were saying, hey, given this screenshot of a page, where am I going to click? What do I do? They were actually pretty early to this idea of a computer use model or computer use agent. We know that OpenAI just launched their computer use agent a week ago. Browser base was alongside for that launch. We actually co-launched with them to be the browser infrastructure that a computer use model can control.

26:28So when you think about computer use models, they're models that can look at a screenshot and say, you're going to want to click right here. You're going to want to type in this. You're going to want to send these key presses. So computer use models actually really need the infrastructure, which is often a browser or desktop environment, to take actions, right? And this is part of this future where AI is becoming more than just a chatbot. It's AI is using tools. It's calling APIs. And sometimes if the tool calls unavailable, it might be using primitives like a web browser or a file system or maybe even a native display.

27:03So more and more, AI is getting more sophisticated, more capable. And a browser is just one of those primitives that AI is going to use to complete work on your behalf. And we've spent a bunch of time figuring out how to run browsers at scale because it's not an easy task. It's not like running an API. It's a pretty complex, stateful distributed system. So are you, you're only focused on the headless browser right now, or you're also doing this sort of computer use interface? Yeah, it's a good, so we are, we have a core product, which is browser-based. That is headless browser infrastructure. And what's great about that is that you can run many browsers in many different regions.