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Fair Value Measurements

12 Months Ended

Dec. 31, 2021

The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:


	December 31, 2021
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents
Money market funds	$	1,213,543	$	—	$	—	$	1,213,543

Marketable securities
U.S. government securities	418,284		—		—		418,284
Commercial paper	—		13,878		—		13,878
Asset-backed securities	—		2,002		—		2,002
Corporate debt securities	—		18,711		—		18,711
Total assets	$	1,631,827	$	34,591	$	—	$	1,666,418


	December 31, 2020
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents
Money market funds	$	203,592	$	—	$	—	$	203,592

Marketable securities
U.S. government securities	125,864		—		—		125,864
Commercial paper	—		4,991		—		4,991
Asset-backed securities	—		4,315		—		4,315
Corporate debt securities	—		14,733		—		14,733
Total assets	$	329,456	$	24,039	$	—	$	353,495
Other liabilities
Redeemable convertible preferred stock warrants	$	—	$	—	$	2,517	$	2,517
Total liabilities	$	—	$	—	$	2,517	$	2,517

The Company classifies money market funds, commercial paper, U.S. government securities, asset-backed securities and corporate securities within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

The Company classifies the redeemable convertible preferred stock warrants within Level 3 because the Company determines their fair value using unobservable inputs, including the fair value of the Company’s redeemable Series B convertible stock, which the Company determined in the same manner as the fair value of its common stock prior to the IPO. The Company records the change in the fair value of redeemable convertible preferred stock warrants in other income (expense), net in the consolidated statements of operations and comprehensive loss.

Immediately prior to the completion of the IPO in June 2021, the outstanding redeemable convertible preferred stock warrants were converted to Class B common stock warrants and the fair value of the liability as of that date was reclassified into the Company’s Class B common stock and additional paid-in capital.

The fair value of the redeemable convertible preferred stock warrant liabilities was estimated using the following assumptions:


	June 9, 2021	December 31, 2020
Dividend yield	0.00%	0.00%
Expected volatility	49.93%	49.93%
Expected term (in years)	2.34	2.78
Risk-free interest rate	0.31%	0.17%
Fair value of Series B redeemable convertible preferred stock	$27.00	$12.66

The following table sets forth a summary of the changes in the fair value of the redeemable convertible preferred stock warrant liabilities:


	December 31, 2021		December 31, 2020
Balance, beginning of the period	$	2,517	$	569
Remeasurement of redeemable convertible preferred stock warrant liabilities	2,921		1,948
Reclassification of redeemable convertible preferred stock warrant liabilities to common stock and additional paid-in capital upon initial public offering	(5,438)		—
Balance, end of the period	$	—	$	2,517

There were no transfers of financial instruments between the fair value hierarchy levels during the years ended December 31, 2021 and 2020.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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