CES 2025, Marinated

ali tabibian, managing partner, GTK Partners

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It was another huge year at CES, amazing given the huge US snowstorm that disrupted a lot of domestic and international travel. Most noticeable to me was the strong showings of attendees from Japan and South Korea, and vigorous booth presence from Chinese companies. The entirety of LVCC and the convention centers of several hotels were consumed by CES, with spectacular, expensive floor displays from the major consumer electronics, automobile, industrial and diverse other players. I’ll repeat what a great friend with whom I walked the floors for last year: CES is how the world should be. A beehive of entrepreneurship, a melting pot of optimism.

I decided to publish a bit later this year, to let my thoughts marinate and benefit from others instant reactions. I’ll share two main insights with you: one, what it Meh as others say or Wow as I say; and is there a correlation with a company’s presence and prospects at CES (seems like it). I’ll also provide an M&A and financing update.

A lot of smart observers, for example, transportation VC Chris Stillman of Fontinalis, and our 2024 guest and sector consultant Marc Amblard who was on our show last year, felt that the technology on display was slightly incremental, without a marquee, “wow” theme. I’ll link their observations. I agree with their assessments, except the last bit: I thought it was “wow”, not because of the technology breakthroughs or grand visions on display, but because the breakthroughs and visions we’ve talked about in the last few years are now prevalent and ingrained. Just last year, my 2024 CES takeaway included “Oddly enough, not much going on at CES on two perennial big subjects: autonomy and powertrains.” What a difference a year makes!

Example one, the often talked about emergence of Chinese auto companies. As if to signal this trend, many of the usual European, Korean, and all of the U.S. car companies were no longer exhibiting on the CES floor, and the frothiest auto booth belonged to Zeekr, the Geely EV subsidiary. And for good reason: Zeekr’s offerings were more diverse and certainly appeared and felt better made than Teslas and the “usual suspect” EVs that we’re used to in the U.S. Other upstarts from Vietnam and Turkey who had booths last year were absent this time. Example two: autonomy. Twelve years ago, I went to a meeting at the Stanford Law School regarding liability strategy in the imminent era of driverless cars. Talk about being too early. But this year, at CES, Waymo, Google’s robotaxi unit, had a large presence, as did Amazon’s Zoox, and other participants, almost all in commercial business. I’ve done 122 rides on Waymos in San Francisco. Third example: electric powertrains and micro mobility. Again, after years of being on the come, the prevalence of presenters focused with commercially available electric powertrains showed that the future is here. From the gaggle of scooters, ebikes, people movers, and cars on display, everything was electric. In my recent travels around the world, electric micro mobility, hybrid powertrains at the minimum, and the 50.5% of Chinese new vehicles that are not gasoline show where the world is headed, regardless of whether the U.S. is leading or not. To quote Ernest Hemingway from “The Sun Also Rises”, “gradually and then suddenly.” Third example: the internet of things. For years, we’ve been wondering when the IoT world will emerge with its new standards, new networking protocols, wondrous devices, etc. An IoT-specific world didn’t get very big, and the IoT segment of the show floor was a bit sedate, but elsewhere in the convention, IoT was everywhere, and it was about connecting familiar products (such as cameras and doorbells) using familiar protocols (WiFi). A testament to this was the very large exhibit that Ring, the Amazon doorbell company, had in the central plaza, easily competing in size and flash with the spreads that NXP and Valeo, two major automotive suppliers, had.

The second major theme that I had great fun thinking about, was whether there was a correlation between a company’s CES presence and prospects. My answer was yes. Now, of course, this isn’t investment advice, and companies can have plenty of reasons to NOT have a booth at CES: whether they get the right return for their presence, where they’d rather make their announcements in a less cacophonous environment and so on. But even the ones that don’t have a booth tend so send a bunch of people to the show, which then begs the question: if it’s important enough to attend in force, why wouldn’t you also present and boast a bit about your offerings? In any case, there seemed to be correlation between a chance in presence and a change in prospects, and I talked about this earlier with the decline of presence from the US, European and other auto companies were used to and the surge in floorspace dedicated to Chinese auto companies and dedicated autonomous vehicle manufacturers. Furthermore, I sensed a correlation between how open the presence was and the company’s prospects. For example, I noticed some of the major Tier 1 auto suppliers were, if present at all, purely by invitation only, but a recent entrant who’s really coming on strong in the space, Qualcomm, had gone the other way: they provided limited public access to their booths (vs. none last year), and had BMW’s emblazoned with their Snapdragon logos around the convention center and Las Vegas. Similarly, major capital equipment providers, where autonomy is really starting to take hold and be applied in the field, such as Caterpillar, Deere and Osh Kosh had massive presences (literally, given the size of their vehicles). My guess is this: if you feel you’re on the rise, that you’ve made good decisions, that your ship is about to come home, usually, you can’t wait to tell people about it, even when it’s not about an immediate sale. You’ve got the budget to spread the word around, and, if you’re a public company, it’s important to get the word out at the retail level to generate and broaden demand for your equity.

Speaking about equity, what about deals, meaning M&A and financings. I felt that most professionals were more positive than last year, in my opinion too much so. As always, what follows is not investment advice. Most people are expecting the new U.S. administration to improve their latitude for deal-making which has been significantly hampered for a few years. The companies in the electronics supply chain, such as Qualcomm, may benefit from this. The mainstream auto companies and their main suppliers, meanwhile, will likely be in consolidation and asset-pruning mode to deal with Chinese competitors and electrification, meaning less bandwidth to pick up exciting startups or to invest in them.

For startup financings, except for very few segments (e.g. AI, or fusion energy), success continues to depend on providing detailed support for revenue projections. Valuations and ease of picking up capital hasn’t changed much over the last 12 months. Series A’s bounce around $30-40MM pre-money valuations, Series B $75-$150, and C’s around $300MM. Large rounds are still happening, and international participation is a big part of it, especially Middle Easter and SE Asia sources.