Allocate CEO Samir Kaji warns of private market disconnect as $500M rounds flow to companies smaller than Airtable

Private market disconnect

Samir Kaji has spent 27 years in venture, starting at Silicon Valley Bank in 1999 lending into the dot-com boom. His read on the current market is blunt: this is the craziest he's seen it, and he's seen a few.

Allocate sits at the intersection of that activity. The platform connects independent wealth advisors with private fund managers, giving advisors a single place to discover, access, execute, and report on private market investments. The pitch is structural: the $10 trillion managed by independent wealth advisors has only 3% allocated to alternatives, compared to 20–50% at endowments, foundations, and pensions. That gap is the business.

“I know a SaaS company that has a tiny tiny tiny fraction of Airtable's current revenue that is doing a new round well beyond Airtable's valuation. And it's just because they're squarely serving other AI companies. And ultimately they're just as much of a software company as Airtable was. And so you see this massive kind of disconnect between exits and private valuations.”

The Airtable problem

The more pointed concern is valuation. Airtable peaked at an $11.7 billion valuation, raised nearly $1.5 billion, and sold to Bending Spoons for roughly $1.25 billion in equity value, with common shareholders seeing little to nothing. Kaji treats that as a cautionary data point, not an outlier.

There are now companies raising rounds well beyond Airtable's peak valuation with a fraction of Airtable's revenue, purely because they serve AI-adjacent customers. Kaji's warning is that being a software company serving AI companies doesn't change the underlying business model risk. The multiples aren't quite as extreme as 2021, he says, but the durability questions are just as hard: will a frontier model subsume you? What happens when open-weight models commoditize the stack?

The historical pattern he keeps returning to is that companies that do win in platform shifts win bigger than ever. The problem is the expensive mistakes that accumulate around them. He puts the odds at roughly 6% of companies returning over 60% of total venture returns, and expects that concentration to be even more pronounced this cycle.

When gravity returns

Kaji doesn't claim to know the timing. His range is six months to five years, but he says a pullback in private market valuations is likely within the next few years. The tell will be which companies hold up when the tide goes out.

He draws a direct parallel to 1999, when the single metric was eyeballs. Today it's ARR, which he notes can be "a little creative." The technology itself, he argues, is likely bigger than the internet, mobile, and cloud combined, possibly the most significant innovation since the railroads. The issue is that capital supply has far outrun the ability to distinguish durable businesses from expensive experiments.

Fund formation

New fund formation has slowed from its 2021 peak, when the asset manager count had already grown from 3,000 to 30,000 over 15 years. The firms Kaji sees succeeding with a traditional Series A strategy, leading $20 million rounds, tend to look like Chemistry, which assembled partners from Index, Sequoia, and Bessemer with a clear mandate to sit between seed funds and mega-shops. That model is rare. Of every ten new funds he evaluates, roughly one falls into that category.

Solo GPs can still work, and Kaji points to Oren Zeev as someone who has executed the model with genuine discipline. But the structural drag is real: four years in, running a $20 million fund in a compressed fee environment, with no partners and no support staff, the economics look poor against alternatives. Many find it lonelier and less lucrative than the brand suggested.

The leverage question

On whether VCs should play in public markets, Kaji is clear: LPs generally don't want it, and it requires a different skill set. The closest historical parallel he offers is pre-GFC warehousing, where some funds borrowed from banks like SVB to begin deploying capital before a first close, then found themselves holding a warehouse facility they couldn't pay down when fundraising stalled. It happened more on the fund-of-funds side than direct, but it happened. The current cycle has seen NAV lines but not widespread leverage, at least not yet.