The Twenty Minute VCPeter Singlehurst: Lessons from Turning Down Stripe, Coinbase and Losing Money on Northvalt
At a glance
WHAT IT’S REALLY ABOUT
Inside Baillie Gifford’s Growth Bets: Discipline, Misses, Anduril, ByteDance
- Peter Singlehurst, who leads private company investing at Baillie Gifford, explains how the firm approaches late-stage growth investing using public-market style rigor, focusing on businesses with proven products, scalable models, and high return-on-equity potential.
- He distinguishes between bad outcomes and true mistakes, dissecting painful cases like Northvolt and Intarcia, as well as major missed or underweighted winners like Coinbase and Stripe.
- Singlehurst details why Baillie Gifford has avoided the headline LLM companies so far, how they think about AI layers, valuation, and probability-weighted 5x return scenarios, and why he’s more excited about select fintech, global outliers, and companies like Anduril, Databricks, Bending Spoons, and ByteDance.
- The conversation also covers staying private longer, the broken state of UK and European public markets, liquidity through secondaries, the institutionalization of growth investing, and why he remains optimistic about the next decade for global growth-stage companies.
IDEAS WORTH REMEMBERING
5 ideasDifferentiate between bad outcomes and genuine analytical mistakes.
Some losing investments (like Intarcia) were known-risk bets where downside scenarios simply materialized, while others (like Northvolt) revealed misjudgments in areas such as team execution and round structure; only the latter should be treated as true process errors to correct.
Focus growth investing on de-risked products and business model scalability.
Baillie Gifford typically enters around $200M revenue, high growth (~70% YoY), and modest losses, avoiding product risk and concentrating on whether the model can scale profitably with high long-run return on equity, as seen with Wise.
Use structured, probabilistic upside modeling instead of rigid valuation rules.
They model every deal to a 5x outcome but vary the probability and assumptions, seeking situations where the chance of a 5x (often 30–50%, versus a base-rate ~5%) justifies paying up; discipline is about when to accept high prices, not never paying them.
Enduring competitive advantage often lies beyond the product itself.
Singlehurst emphasizes advantages rooted in culture, organizational playbooks, and business systems—e.g., Bending Spoons’ M&A and integration engine—over any single app or widget, which may be more vulnerable to AI-driven commoditization.
Avoid consensus hype zones unless you have a sharp edge on where value accrues.
Baillie Gifford owns AI-related infra and chip plays like Databricks and Tenstorrent but has avoided big LLM names (OpenAI, Anthropic, xAI) because they don’t yet see a clear, durable moat at the model layer amid open-source and commoditization pressures.
WORDS WORTH SAVING
5 quotesNot all of our bad investments are necessarily mistakes.
— Peter Singlehurst
Being a disciplined investor doesn’t mean I will never pay more than X multiple.
— Peter Singlehurst
The concept of return on equity is almost an anathema within the venture world.
— Peter Singlehurst
We haven’t taken the plunge into any of the big AI LLM companies because we still are trying to define what we think competitive advantage will look like at the large language model level.
— Peter Singlehurst
I think what people realize today is that you can build a better business by staying private for longer.
— Peter Singlehurst
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