250 or 60 to 4: Antimetal

Happy Wednesday. It’s incredibly hot outside, so you would think after a run in the morning I would be able to jump in my community pool. As it turns out, our maintenance guy thinks that's also the perfect time to chemically shock the pool. Fun start to my Monday.

Also since the last newsletter, we both escalated and de-escalated the war in the middle east. I am a big proponent of when it comes to geopolitics, the media makes it seem like something is going to happen, but nothing ever actually happens.

If you missed what the 250/60/4 segment is, check out the original issue here.

Portfolio Update

Five issues in and we already have an update to the portfolio. The first company I wrote about, Profound, just raised a $20m Series A. When I wrote about them, I marked the investment valuation at $40m. Now, granted they were probably worth more at the time, I can’t help the actions that past Tom made. Based on some quick research from ChatGPT, the most likely valuation for this company sits between $110m-$125m. Because it now benefits me, I am going to mark the company at the top of this range.

New valuation for Profound is $125m.

$60m

Company: Antimetal

Description (from Perplexity): Antimetal is an AI-powered platform that automates and optimizes software infrastructure management for engineering teams. By learning from a team’s workflows and aggregating data across their systems, Antimetal streamlines tasks like deployment, scaling, debugging, and cost control. Its platform encodes best practices and provides automated guardrails, helping organizations reduce manual maintenance, prevent misconfigurations, and ensure efficient, resilient infrastructure operations.

Background: If you have sat around me for more than 5 minutes, or read my thoughts, you know I am a firm believer that AI changes the way that you can build products. Non-engineers can build working prototypes of applications in 10 minutes, and engineers can produce 10x output by utilizing AI to code. As Antimetal puts it best, “Writing code is no longer the hard part. Maintaining it is”. This is being proven by how insane the numbers are on the companies that are helping write the code:

Over $257m over revenue split between these companies. Keep in mind, they are still growing at a mind boggling rate. I think I speak for a lot of us new builders, that yeah, we can now write code and build cool sh*t, but I have no damn clue how to manage it. 

Why I’d Invest

Again, going to break this section down into three main parts. While I truly do wish I had the time to dive into the details of AWS, infrastructure ops, and deployment services, I simply don’t have 17 hours, nor do I want to smell my brain smoking. So I will spend some time talking about the market from the quick research I did, but don’t expect a research report on software infrastructure. 

Writing is easy, maintaining is hard.  

Said perfectly by Antimetal themselves and something I laid out above. There is a gold rush for companies that can help you write code. Code generation has shot so far up and to the right we couldn’t possibly do it justice on a chart. Thing is, eventually all this code has to be managed. While some of these smaller applications being built may not need management to the level that Antimetal provides, the startup that just 10x their code output is now likely looking to do the same efficiency increase across other areas of their business. The next logical step is to look at how to help automate the maintenance side of the code, that’s where Antimetal comes in. Companies have multiple tools that monitor performance and infrastructure, but no tool can autonomously manage and fix incidents like Antimetal can.

Infrastructure Is Screaming for Help 

From some quick research I did, it feels that the infrastructure market is desperate for help. Looking at a cloud report from Flexera, 27% of cloud spend is pure waste and 84% of IT leaders rank “managing cloud spend” as their #1 headache. Site reliability engineers also report that 30% of their job is swallowed by report “toil” and most orgs have 2-10 separate monitoring tools (according to Catchpoint). All in all the gaps in the market account for up to $200b in annual cloud waste, avoidable outage time, and lost engineering productivity. Again, I won’t go in depth with the needs of the market, but while everyone is focused on the gold rush of writing code, Antimetal is ready for the onslaught of customers that need help maintaining the code more efficiently. 

The Team

Antimetal became a hit early in its life when the team spent all $15,000 of the marketing budget delivering branded pizza to potential clients. This stunt actually netted them over $1m in ARR. Decent ROI. Beyond the brains to pull a stunt like this, the company has a team with meaningful experience in the space. Their CTO spent time working at Meta in infrastructure and systems, and an early engineer spent time working in CloudOps at Goldman Sachs. I know it’s a common factor, but when teams understand the problem down to every detail, they know how to build the best product on the market. 

Investment Note

While this isn’t the deep dive a company like this deserves, it hits on a main thesis that I have; AI will make technology and companies more efficient. We have seen this become true on the coding side, so seeing it on the maintaining side is an opportunity I would not pass up. The thoughtfulness and execution by the team also makes this company an extremely attractive investment opportunity. Based on the fact that they just raised $20m in a Series A round, I am pretty confident I can mark their valuation around the $120m mark based on comparable rounds and their early success. Since this is a hypothetical, we have to assume a $60m round would be an extreme dilution at $120m, so we are going to mark this investment around $200m.

So I am investing $60m in Antimetal at a $200m valuation.

In order to see how bad (or great) I do at these investments, we are going to track them on the 250or60to4.com website.