CoreWeave’s IPO could be a boost to the market
Startup CoreWeave is planning to go public. The company, which specialises in cloud computing and artificial intelligence, has filed for an IPO on the Nasdaq stock exchange. Analysts say the listing could be a good sign for the market. Venture-backed companies have traditionally been slow to go public, but that could change.
New Jersey-based CoreWeave provides GPU rental services via cloud infrastructure.
The company provided the following financials:
1. It had revenues of US$1.9m in 2024.
2. This was an increase of 730% over the previous period.
3. Net loss increased to US$863m. This figure has almost doubled since 2023.
4. Quarterly revenues increased rapidly in 2024. The company recorded a maximum of US$747m in the fourth quarter.
The startup’s biggest customer was Microsoft Corporation. It accounted for 62% of the company’s total revenue last year.
About the company
The startup CoreWeave was founded in 2017 as a cryptocurrency mining project. However, in 2021, the managers revised their business vision. At that time, the boom in the development of artificial intelligence started, which required appropriate technical equipment. The startup began to anticipate demand, and this tactic yielded the desired result. Demand for GPUs is growing rapidly.
One of the holders of CoreWeave shares is the hedge fund Magnetar, which owns 7% of the securities. Nvidia holds a 1% stake which is the largest supplier of processors.
The partnership with Nvidia has made the startup very popular. Currently, the company uses more than 250 thousand processors from the manufacturer. They run in CoreWeave’s data centres.
The new US policy is limiting the company’s ability to scale. The imposition of tariffs on imported goods and increased inspections of chips are making it difficult for the technology sector to operate. Most semiconductor manufacturers, including Nvidia, outsource chip production to TSMC. The new rules could make it much harder to supply graphics processors.
Startup outlook
According to the latest estimates, the startup is valued at US$19 billion. The company reached this level in the spring of 2024 when it raised US$1.1 billion. Investors in the service provider industry include Cisco, Fidelity, Coatue Management, and others.
It is worth noting that 2024 was a period of demand for cloud computing. Venture capital funding for the sector has increased by 270%. In addition to CoreWeave, Lambda, which is also backed by Nvidia, is demonstrating rapid development. The company raised US$480 million in a Series D round of funding. In December, another startup, Crusoe, received a US$600 million investment.
