CoreWeave More Than Triples Valuation in $650 Million Secondary Share Sale
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AI cloud platform operator CoreWeave has closed a $650 million secondary share sale to investors, more than tripling the company's valuation to $23 billion over the past year, reports Reuters.
The investors were led by Jane Street, Magnetar, Fidelity Management, and Macquarie Capital. This significant valuation increase highlights the growing investor interest in the field of cloud infrastructure for generative artificial intelligence (AI).
CoreWeave provides access to data centers and high-powered chips, primarily from its backer and AI leader Nvidia, for AI workloads. This secondary stock sale saw existing investors sell their holdings to new investors.
CoreWeave was previously valued at $19 billion in May following a $1.1 billion Series C investment led by private equity firm Coatue.
The secondary sale demonstrates Wall Street's increasing appetite for taking stakes in promising AI companies before their initial public offerings (IPOs). CoreWeave is considered a potential candidate for an IPO in 2025.
The surge in demand for services like CoreWeave's, which enable the scaling of increasingly sophisticated generative AI applications, has been driven by the emergence of OpenAI's ChatGPT in late 2022.
CoreWeave competes with established cloud computing service providers such as Microsoft's Azure and Amazon's AWS.
The latest stock sale also attracted investment from Cisco Investments, Pure Storage, BlackRock, Coatue, Neuberger Berman, and other notable investors. Morgan Stanley and Goldman Sachs acted as advisors to CoreWeave.
The rise in funding for private AI and cloud companies in the US, Europe, and Israel, following a three-year decline, is expected to reach $79.2 billion by the end of 2024, according to venture capital firm Accel.