Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>Introducing AI Flow Private Pools Newsletter. Using data from PM Insights, we examine the monthly valuation changes in private companies in the AI space.</li><li>Unlike traditional company valuation assessments done quarterly, PM Insights data show equity price fluctuations between funding rounds and regular financial reporting periods.</li><li>We are following ~46 private companies in AI from PM Insights data and created a WTR AI Private Pools Index, with a market value (as of 3/9/26) of $1.73 trillion.</li></ul>

Introducing AI Flow Private Pools Newsletter. Using data from PM Insights, we examine the monthly valuation changes in private companies in the AI space.Unlike traditional company valuation assessments done quarterly, PM Insights data show equity price fluctuations between funding rounds and regular financial reporting periods.We are following ~46 private companies in AI from PM Insights data and created a WTR AI Private Pools Index, with a market value (as of 3/9/26) of $1.73 trillion.

AI Flow Private Pools Newsletter : Exploring Private Company Valuations in AI

Private Markets, Angel and Secondary Investing, Sacra

Sacra

Private Markets, Angel and Secondary Investing

Bringing transparency to private markets so investors, founders, and employees can build on conviction. Sacra delivers deeply researched insights on the private companies shaping tomorrow's markets. By surfacing the data, context, and operator perspective that are missing from private markets today, we help secondary buyers and sellers price equity accurately and unlock liquidity for the people building these businesses.

Private Capital Markets

<ul><li>Sacra estimates that Together AI hit $1B in annualized revenue in February 2026, up from ~$618M at the end of 2025.</li><li>Together AI raised $800M in a Series C round led by Aramco Ventures in July 2026, valuing the company at $8.3B.</li><li>Together AI's August 2026 partnership with Humain in Saudi Arabia—providing 250 MW of power and 120,000 chips—represents a major capacity expansion.</li></ul>

Sacra estimates that Together AI hit $1B in annualized revenue in February 2026, up from ~$618M at the end of 2025.Together AI raised $800M in a Series C round led by Aramco Ventures in July 2026, valuing the company at $8.3B.Together AI's August 2026 partnership with Humain in Saudi Arabia—providing 250 MW of power and 120,000 chips—represents a major capacity expansion.

<ul><li>Sacra estimates that Cursor hit $4B in annualized revenue in May 2026, up from $1.2B at the end of 2025.</li><li>On June 16, 2026, SpaceX signed a definitive agreement to acquire Cursor for $60B, with the deal expected to close in Q3 2026.</li><li>Cursor was founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT.</li></ul>

Sacra estimates that Cursor hit $4B in annualized revenue in May 2026, up from $1.2B at the end of 2025.On June 16, 2026, SpaceX signed a definitive agreement to acquire Cursor for $60B, with the deal expected to close in Q3 2026.Cursor was founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT.

<ul><li>Sacra estimates that Fal.ai hit $400M in annualized revenue in February 2026, up from approximately $285M at the end of 2025, which was up 1,040% year-over-year from $25M at the end of 2024.</li><li>In December 2025, Fal.ai raised $140 million led by Sequoia at a $4.5 billion valuation.</li><li>Looking into 2026, the company has indicated it will reinvest new capital into expanding infrastructure footprint, accelerating product lines (workflows, training/fine-tuning), and broadening its model marketplace.</li></ul>

Sacra estimates that Fal.ai hit $400M in annualized revenue in February 2026, up from approximately $285M at the end of 2025, which was up 1,040% year-over-year from $25M at the end of 2024.In December 2025, Fal.ai raised $140 million led by Sequoia at a $4.5 billion valuation.Looking into 2026, the company has indicated it will reinvest new capital into expanding infrastructure footprint, accelerating product lines (workflows, training/fine-tuning), and broadening its model marketplace.

<ul><li>Wafer employs a B2B business model, targeting smartphone manufacturers rather than selling directly to end consumers.</li><li>The core monetization strategy focuses on partnerships with smartphone manufacturers, particularly companies like Samsung that control 30% of the global Android market.</li><li>Wafer positions itself as hardware-agnostic, potentially supporting these experimental form factors while maintaining compatibility with mainstream devices.</li></ul>

Wafer employs a B2B business model, targeting smartphone manufacturers rather than selling directly to end consumers.The core monetization strategy focuses on partnerships with smartphone manufacturers, particularly companies like Samsung that control 30% of the global Android market.Wafer positions itself as hardware-agnostic, potentially supporting these experimental form factors while maintaining compatibility with mainstream devices.

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AI-powered search tool for answering complex, multi-sentence queries with cited summaries

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Perplexity (PERPLEXITY US)

Primer: Together AI - 31 Aug 2026

API and compute layer for developers to train and deploy open-source AI models

Sacra

Primer: Cursor - 01 Jul 2026

AI-native IDE for developers to write, edit, and debug code with LLMs

Sacra

Primer: Fal.ai - 23 Mar 2026

Platform for developers to create AI-generated audio, video, and images

Sacra

Primer: Wafer - 17 Mar 2026

Android-native operating system designed for AI agents

Sacra

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52-week Range

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AI Flow Private Pools Newsletter : Exploring Private Company Valuations in AI

Introducing AI Flow Private Pools Newsletter. Using data from PM Insights, we examine the monthly valuation changes in private companies in...

Water Tower Research

Primer: Together AI - 31 Aug 2026

API and compute layer for developers to train and deploy open-source AI models

Sacra

Primer: Cursor - 01 Jul 2026

AI-native IDE for developers to write, edit, and debug code with LLMs

Sacra

Primer: Fal.ai - 23 Mar 2026

Platform for developers to create AI-generated audio, video, and images

Sacra

Primer: Wafer - 17 Mar 2026

Android-native operating system designed for AI agents

Sacra