- Scott Kupor is the managing partner of Andreessen Horowitz, the venture-capital turned financial-services firm that was an early investor in tech successes including Facebook, Slack, and Airbnb.
- At the recent CNBC Institutional Investor Delivering Alpha Conference, he explained why he disagreed with the notion that the venture-capital space is "frothy," and discussed one area of tech that the firm is bullish about.
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At CNBC's recent Delivering Alpha conference, the opening question to a panel of tech investors was predictably about valuation.
The question could not have been timelier given that WeWork, the shared-workspace provider, had just postponed its initial public offering after investors closely scrutinized its business model. Uber and Lyft were also on investors' minds after taking significant haircuts on the public market in less than six months of trading.
It seemed like a great time for any cautious tech investor to speak up about the market's supposed frothiness.
He is not in the camp that's screaming about a new tech bubble on the verge of bursting. In fact, he's of the view that tech valuations have improved over the last couple of years.
"If you look at where valuations are today relative to probably three or four years ago, we used to have a much bigger disconnect between where private and public companies are," Kupor said.
He added: "Over the last four years, public market valuations have definitely gone up. But you see much greater parity at least between private and public market values."
An early investor in companies like Facebook and Slack, Andreessen Horowitz is still hunting for budding success stories.
One fertile ground is artificial intelligence. Kupor reckons that AI will be almost as core to technological infrastructure as databases over the next 10 years.
"The way we view AI is it's a very broad, foundational technology," he said. "It will not be a category of its own. I think we will see AI applied in almost every area."
More narrowly, he is interested in internet-of-things companies that use sensors to gather useful data from the physical environment. He cited the private company Samsara as an example.
Samsara uses sensors to collect data that can improve safety and operations in a variety of industries from trucking to oil and gas. For example, Samsara's products can help delivery drivers identify the points along their routes that consistently cause delays, and redirect them to more efficient circuits.
Earlier in September, Samsara announced that it raised $300 million in fresh funding from existing investors including Andreessen Horowitz and two new investors. The round valued Samsara at $6.3 billion, according to a company statement.
The statement added that over the past year, Samsara has grown its revenue at a 200% rate, more than doubled its customer base, and expanded into 10 new countries.
Public-market investors who want to participate in the AI boom could consider the Global X Internet of Things exchange-traded fund.