Antler partner Fady Abdel-Nour, CFA spoke to David Bogoslaw at VCJ about Antler’s latest global seed-stage research, which shows US startups priced far higher than peers, creating a structural “valuation arbitrage” opportunity for investors who back strong teams in lower-priced markets and help them scale into global businesses. Read the full article at the link below 👇
I was recently catching up with Josephine Wu and our very own Dilan Mizrakli Landgraff when Josephine brought up an interesting idea: a VC Big Mac Index. For those unfamiliar, the Big Mac Index was created as a simple way to think about purchasing power parity. By comparing the price of the same burger around the world, it highlights how differently currencies can be valued across countries. Her question was: What if we applied a similar lens to venture capital? If a seed-stage startup is broadly the same asset class regardless of where it's founded, how differently is that asset priced around the world? That got us curious, so we looked at the data across the Antler platform. Analyzing roughly 150 seed investments made over the past two years, we found significant dispersion in entry valuations. Median seed valuations ranged from around $25M in the US to approximately $6–7M in parts of Southeast Asia. Importantly, dilution was broadly consistent across markets, suggesting these are genuine differences in entry pricing rather than differences in deal structure. But what makes venture different from the Big Mac Index is that the outcomes are increasingly not local. The best companies today raise from global pools of capital, hire talent globally, sell into global markets, and often establish themselves in multiple geographies as they scale. In other words: Pricing remains local. Outcomes are increasingly global. That creates a potentially powerful disconnect for investors. If entry prices are determined by local ecosystems, but winners ultimately compete on a global stage, then geography itself can become a source of alpha. Of course, capturing that opportunity requires more than simply investing in lower-priced markets. Founders still need access to global capital, talent, customers, and networks to realize those outcomes. That's one of the reasons we've built Antler as a global platform — investing locally across 25+ markets while helping founders scale globally. I recently shared some of the data and observations with Venture Capital Journal. Would be interested to hear whether others are seeing similar valuation dispersion across regions. https://lnkd.in/gAY5A-2t