• Anthropic's S-1 finally dropped.
• The IPO is set to bring historic wins to a number of VCs who invested early.
• A version of this story originally appeared in Business Insider's weekly VC Insider newsletter. Sign up for the newsletter here.

Katie here. The Anthropic S-1 is here, and it confirms what VCs have been whispering for months: this is a company moving at warp speed. Just over three years after its first major VC round, Anthropic is poised to break IPO records and deliver historic wins to its earliest backers.

What stood out to me was how incredibly fast Anthropic has scaled. Spark Capital was the first firm to lead a round into the AI giant in spring 2023 — just three and a half years ago. They own more than 1% of the company, an investment that could be worth tens of billions of dollars in short order.

It was just months ago that SpaceX set the record for the largest ever IPO, but that timeline was remarkably different: the first venture capitalists invested in 2002!

"There's no company that's gone from zero to where they are today in this period of time," said Byron Deeter, partner at Bessemer Venture Partners. The firm has spent $800 million investing in Anthropic since 2024, the largest bet in its history, netting Bessemer an almost 1% stake.

At the time Bessemer first invested, many in the industry considered the $18 billion price tag to be steep for a startup that wasn't the industry leader. Some dismissed Anthropic as a "FOMO bet," that investors were just disappointed that they missed out on OpenAI.

Deeter knew that was the perception, but said he had conviction that Anthropic could take the lead or come close, believing that "even if they didn't fully get there, they were going to be a hell of a challenger."

They not only challenged OpenAI, but they also beat them to the IPO. The ChatGPT-maker expects to go public next year.

Although Anthropic's numbers quieted some (but not all) financial critics, other AI-related issues are still expected to be controversial at the ballot box next week. Right now, the tech industry wants more compute, and the populists are against data centers...

The Buzz

Ben Bergman here in New York. I'm in town for The Long Play, featuring media mogul Barry Diller, Take-Two's Strauss Zelnick, Ro's Zach Reitano, and many more. I hope to see some of you there today, or tonight at the Eniac Ventures Halloween party. Costumes are required, so I'll be curious to see what VCs are choosing this year. I'm tempted to go as filmmaker Nathan Fielder.

I went on a walk this week with a VC at a large firm on a sunny fall day in the West Village. Even though they are based here, they said they spend nearly all their time in San Francisco these days because it's the epicenter of the AI boom and home to the startups they care about.

Separately, I asked New York-based VC Jesse Middleton, a general partner at Flybridge, for his read on New York these days, and he texted me: "It's true that SF is where most of the models have been trained, and the dollars are certainly there for the big guys, but New York is where founders turn them into products for the rest of the world (not just developers). The app layer here is booming, including Clay, Hebbia, Rogo, and ElevenLabs. Every industry that actually has to buy this stuff sits within a few subway stops of our office."

By the way, New York is still the more expensive city to rent an apartment, but San Francisco is rapidly closing the gap. Median asking rent for a one-bedroom is about $4,580 a month in New York City, versus roughly $4,400 in San Francisco, a difference of only $180, according to Zumper. Who wants to bet San Francisco will be more expensive next year?

Post of the week

Around the Cap Table

• We tallied the founders and many of the VC stakeholders in Anthropic ahead of the company's expected IPO.
• Spark Capital was mentioned more than 50 times in Anthropic's IPO paperwork. Here's why.
• A scoop from Katie: AI coding startup Cognition has received fresh offers valuing it between $70 and 80 billion.

• Software business Guidewire announced that it was acquiring UK-based agentic insurance startup Hyperexponential for $1.7B.
• Canada's fintech Wealthsimple said that it raised financing at a $13.8B CAD valuation.
• Ferring acquired fertility startup Gameto for $1.4B.
• Elizabeth Holmes' husband Billy Evans' blood-testing startup has the support of Palantir board member Lauren Friedman Stat, who co-founded it with him.
• Intel acquired Israeli quantum startup Classiq for $2.3B.
• Andreessen Horowitz expanded its crypto fund to include other emerging technologies and rebranded as a16z Frontier.
• The US Department of Justice is asking questions about whether Nvidia's deal to buy Hugging Face for nearly $13 billion would hurt competition in AI.

Please let us know what you think of the newsletter and send along your tips. Email Ben or Katie anytime, or contact them on Signal at benbergman.11 and kroof.26.

The VC Insider team

Ben Bergman, chief correspondent, in Los Angeles. Katie Roof, editor at large, in San Francisco. Pranav Dixit, senior technology editor, in San Francisco. Leena Rao, executive editor, in Los Angeles.

Get in touch. Email us at vcinsider@businessinsider.com

• AI coding startup Cogniton is fielding offers for a new funding round.
• The round could value Cognition between $70 billion and $80 billion, according to people familiar with the matter.
• The new offers come weeks after the company announced a $2 billion round at a $48 billion valuation.

Just weeks after announcing a new round of funding at a $48 billion valuation, AI coding startup Cognition is fielding new investor interest at a much higher price.

The startup has received offers valuing it at between $70 billion and $80 billion and is seriously considering a round before the end of the year, according to sources familiar with the matter.

The talks around the financing are still early, and valuation targets could still change.

Founded in 2023 by Scott Wu, Steven Hao, and Walden Yan, Cognition is best known for Devin, an AI coding agent designed to automate software engineering tasks. The San Francisco-based company's existing investors include a16z, Accel, Founders Fund, Khosla Ventures, Elad Gil, and Pear VC.

Cognition's rapid valuation climb underscores the investor frenzy around AI coding, one of the hottest and most competitive corners of the AI market. As companies race to sell AI coding agents that can take on more of the work engineers do, investors are placing increasingly expensive bets on the few startups they think could emerge as leaders.

A $75 billion valuation wouldn't be so far-fetched, as SpaceX just acquired fellow AI coding giant Cursor for $60 billion a few months ago.

Last month, Cognition was drawn into a public feud with rival Factory AI, which accused Cognition employees of posing as job applicants to seek product information and faulted a former Factory adviser for meeting with Cognition executives. Cognition and the former adviser denied that confidential information was sought or shared.

Got a tip? Email Katie anytime or contact her on Signal at kroof.26. Sign up for Business Insider's weekly VC Insider newsletter here.

• Spark Capital is mentioned more than 50 times in Anthropic's S-1 filing, released Monday.
• The reason Spark gets the most mentions is because partner Yasmin Razavi has a board seat.
• Spark led the $450 million Series C round at a $4.5 billion valuation in May 2023.

Spark Capital's Yasmin Razavi has a reputation for refusing to make gut calls. Her methodical decision to invest in Anthropic is now set to generate one of the biggest fortunes in Silicon Valley history, as Anthropic prepares to IPO.

Many venture firms, including Lightspeed and Menlo Ventures, are major Anthropic investors, but Spark is the only traditional VC firm named in the filing. And it's not just a few mentions. Spark is named more than 50 times.

The reason Spark gets the most ink is because Yasmin Razavi has a board seat after being the first institutional investor in the company, leading the $450 million Series C at a $4.5 billion valuation in May 2023.

This was just six months after ChatGPT was released to the public, and the jury was out on whether a rival like Anthropic could catch up. Many balked at the price, calling it too expensive.

"It was a big leap of faith, but this was the team that built GPT-3," Razavi told Forbes.

The filing says that Spark has invested $777 million in Anthropic across six financings since then, including $75 million in the first pivotal round at $11.22 per share.

Spark was already known for making early bets on Postmates and Discord, but it was the Anthropic investment that transformed the firm's Silicon Valley reputation from a good venture firm to a great one.

Razavi said she has been continuously wowed by CEO Dario Amodei.

"Every year, he puts out outrageous numbers, but somehow they magically become true," Razavi told Forbes. "Dario never misses."

Soon, Amodei will face a greater test: the public markets.

Please send along your tips. Email Ben or Katie anytime or contact them on Signal at benbergman.11 and kroof.26. Sign up for Business Insider's weekly VC Insider newsletter here.