Speaker 1: From Mahart where Innovation, money and power Collie in Silicon
Speaker 1: Vallet Nbon.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Hyde at Bloomberg's World head quarters in New
Speaker 3: York and Ourmed Ludlow in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 5: Coming up from private markets to public.
Speaker 3: We have got you covered data Bricks raising funds at
Speaker 3: are forty three billion dollar valuation, while instacart and of
Speaker 3: course it's filed for its IPO details ahead.
Speaker 6: Class Apple revamping the iPad pro for the first time
Speaker 6: in half a decade. We'll have more on the iPhone
Speaker 6: makers plans to spark growth for the tablet market.
Speaker 3: And SpaceX's Dragons successfully docks with the International Space Station,
Speaker 3: marking its seventh human spaceflight mission to the ISS.
Speaker 5: But what's next EEno Musk's.
Speaker 3: Company will discuss, but first as checking on these public
Speaker 3: markets and they're here. And then now the volumes are
Speaker 3: still thin. It's the end of August. We're down about
Speaker 3: twenty five percent, but remember how far we've actually fallen
Speaker 3: the Mange benchmarks in fact, and that's that on course
Speaker 3: for its worst month since well the beginning of the year,
Speaker 3: we're down about four percent. Today we're just ebbed a
Speaker 3: little bit higher, up about four tens percent. But as
Speaker 3: I say, low volumes at the moment, the two year
Speaker 3: yields stabilizing. We're just down by about one basis point,
Speaker 3: but still above that five percentage point level. How fast
Speaker 3: we have run up in terms of those borrowing costs.
Speaker 5: Now, of course, all.
Speaker 3: Eyes and what China is trying to do to stoke
Speaker 3: its economy at the moment, and it managed to fizzle
Speaker 3: out a little bit in terms of Chinese trading. They
Speaker 3: put some emphasis in trying to support the economy, and
Speaker 3: we are seeing that pull over a little bit into
Speaker 3: some of those Chinese names that are traded here in
Speaker 3: the United States. But again it has fallen off hard
Speaker 3: over the last few training days. Today we stabilize and
Speaker 3: the now's that golden dragon. I'm seeing up more than
Speaker 3: two percentage points some of those internet names traded here.
Speaker 3: Let's move on, look what's happening in the world of crypto,
Speaker 3: because remember that took a tumble in the last couple
Speaker 3: of weeks, and I want to shine a light in
Speaker 3: the fact that we are actually stayed at a new level.
Speaker 3: It feels like ED and we've come down a lem
Speaker 3: percent from that thirty twenty nine thousand level.
Speaker 5: We're nowvo just in a range bound.
Speaker 3: Twenty six thousand seems to be your number at the
Speaker 3: moment as we have all eyes on the macro policy perspective.
Speaker 5: But go into the micro for a moment.
Speaker 6: Yeah, no crazy moves for specific names. But there are
Speaker 6: tech stories from all over the world. So x Pong
Speaker 6: Chinese EV maker, nice bit of m and A buying
Speaker 6: DD's smart auto business that seems to be supporting the
Speaker 6: US listed shares or ADRs for that Chinese EV name.
Speaker 6: Apple's basically flat now. But later in the program, Mark
Speaker 6: Gumman's going to bring us his latest power on. He's
Speaker 6: giving us reporting about the next gen iPad pro coming
Speaker 6: twenty twenty four, some new specs that we're looking out for.
Speaker 6: Two other names moving related largely to analyst calls. But
Speaker 6: I want to bring you a new name we haven't
Speaker 6: discussed on the show, which is Nerdy ticker NRD. Why
Speaker 6: why am I picking out Nerdy? You know why? Because
Speaker 6: I'm nerdy. But it's an education online platform. Raymond James
Speaker 6: reinitiated with an outperformed lots of growth, it thinks because
Speaker 6: it's moving to a subscription model powered by guess what
Speaker 6: AI in Nvidia has been resumed by another or initiated
Speaker 6: sorry with another buyer rating at sealand Securities. The story
Speaker 6: last week, remember was that had finally shaken off it's
Speaker 6: our cell rating. We continued to see sales side names
Speaker 6: bullish on Nvidia as the AI leader in semis. Those
Speaker 6: are the public sort of stories and movers that we're
Speaker 6: looking at in.
Speaker 4: The private space.
Speaker 6: Data Bricks, the closely held software maker widely viewed as
Speaker 6: a candidate to go public, is in discussions with tiro
Speaker 6: Price about a new funding round that would value the
Speaker 6: company at forty three billion dollars. That according to Bloomberg sources.
Speaker 6: Bloomberg's Katie Roof with us she has that story, Katie,
Speaker 6: What other details do we have?
Speaker 4: Sure?
Speaker 7: Yeah, So, as we reported that tiro Prices and talks
Speaker 7: to potentially lead an investment that would be an up
Speaker 7: round a forty three billion. We don't see a lot
Speaker 7: of those these days. It was last valued around thirty
Speaker 7: eight billion in twenty twenty one. You know, there aren't
Speaker 7: a lot of free IPO companies that can even raise
Speaker 7: at all, let alone at an increase valuation. But you
Speaker 7: know a lot of people are drawing comparisons to Snowflake,
Speaker 7: which is almost a fifty billion dollar company. Data Bricks
Speaker 7: also has been getting more involved in artificial intelligence, which
Speaker 7: is obviously a hot space. They recently acquired Mosaic and
Speaker 7: artificial intelligence business that targets enterprises for over a billion dollars.
Speaker 7: And so what we understand is they've had a lot
Speaker 7: of inbound interest with investors trying to invest, trying to
Speaker 7: get in what could be the last round before they
Speaker 7: go public, and yeah, it's looking like it could fall
Speaker 7: at forty three billion.
Speaker 6: Well let's take into that a bit deeper. This is
Speaker 6: interesting timing because a lot of companies that are now
Speaker 6: in the IPO discussion may have done a down round
Speaker 6: in the last two years, but they're raising or they're
Speaker 6: looking to do something at this interesting valuation pre IPO.
Speaker 6: What do we know about Data bricks near term intentions
Speaker 6: to go public?
Speaker 7: So you know, usually I would say if a company
Speaker 7: is raising money, they're not on the verge of IPO
Speaker 7: because you don't want to dilute your ownership right ahead
Speaker 7: of an IPO. So this to me is a signal
Speaker 7: that they might be delaying their IPO further. And now
Speaker 7: Data Bricks obviously is a company at scale. They have
Speaker 7: the kind of revenue that's necessary to go public, but
Speaker 7: they also don't have to go public because they're able
Speaker 7: to keep you know, raising capital in the private markets,
Speaker 7: and so they just haven't. They don't have that impression
Speaker 7: that pressure just yet. But certainly they are a company
Speaker 7: that we expect to go public at some point someday.
Speaker 3: And of course we all wait with bated breath as
Speaker 3: to the reopening of the IPO market. We've got Arm,
Speaker 3: of course waiting. We've got the likes of instacar, where
Speaker 3: we've got the details, the devil in the detail and
Speaker 3: coming in their latest numbers in the finding of the
Speaker 3: IPO on Friday.
Speaker 5: What did we learn from that overall?
Speaker 7: Katie Right, So we've got ARM, Instacart, Quavio, all of
Speaker 7: them came out with IPO filings last week. It's going
Speaker 7: to be busy for tech IPOs. Instacart was interesting, you know,
Speaker 7: I had mentioned the other day on Bloomberg TV, I
Speaker 7: was hearing that their financials were better than what people
Speaker 7: were thinking, and it turns out they were profitable. They
Speaker 7: had you know, revenue growth and managed to make money,
Speaker 7: which is pretty rare for tech companies and newly public
Speaker 7: tech companies, so that surprised the folks. But what we
Speaker 7: learned is they're getting a strategic investment from Pepsi COO
Speaker 7: of one hundred and seventy five million, so obviously that's
Speaker 7: a voto confidence in the industry. But we also learned
Speaker 7: that they've made a shift in their business model or
Speaker 7: they've added.
Speaker 5: New lines of business.
Speaker 7: They've really been focusing on e commerce technology, software that
Speaker 7: can help with logistics and other analytics, and also focused
Speaker 7: on advertisers, so they're really expanding beyond just giving you groceries,
Speaker 7: which they absolutely still do.
Speaker 3: Pgcimo already coming into bed when it comes to leadership
Speaker 3: that company.
Speaker 5: We thank you so much.
Speaker 3: kJ if they're really detailing some of the news we've
Speaker 3: got Friday and then throughout the weekend, let's carry it
Speaker 3: on a little bit in terms of what the IPO
Speaker 3: market's gearing itself for. Rgi Goring when police to say,
Speaker 3: joins us, she's been leading the IPO practice over earned
Speaker 3: some young Americas. You've got twenty years experience and really
Speaker 3: guiding companies at this pivotal moment in their direction or travel.
Speaker 3: I know we won't dwell on individual names and individual
Speaker 3: business models, but ultimately, when we're seeing a company at
Speaker 3: instacrat that's had to put off going public, had to
Speaker 3: take cuts to its market valuation, how important is this moment?
Speaker 8: I think it's a really important moment for the broader
Speaker 8: IPO market and particularly the tech IPO market. It's certainly
Speaker 8: a predictable way of having a market reopening occur with
Speaker 8: the anticipated deals that everyone is expecting over the coming weeks.
Speaker 8: And you know, there's three common theme themes that these
Speaker 8: companies are sharing that are coming to market right now.
Speaker 8: One and that you are we're just speaking of this
Speaker 8: profitability scale and then name brand recognition. These are all
Speaker 8: factors that investors are finding important in today's environment and
Speaker 8: placing a premium on.
Speaker 4: Rachel.
Speaker 6: Good morning to you from San Francisco. Look from a
Speaker 6: new cycle perspective, a lot seems to have happened since
Speaker 6: ARM made its move. If ARM makes the jump and lists,
Speaker 6: do you think mechanically lots of listings will follow in
Speaker 6: quick succession. It's kind of like a game of brinkmanship.
Speaker 6: Who can jump first and see if the others will follow.
Speaker 8: I don't know that it's one company that's going to
Speaker 8: make a massive reopening, but it's certainly a start that
Speaker 8: we need to have occur. But like I said, what
Speaker 8: investors are really paying close attention to right now and
Speaker 8: are rewarding our companies that are profitable or if not
Speaker 8: yet profitable, a very clear path to profitability. So we're
Speaker 8: not in that growth at all cost environment we were,
Speaker 8: you know, just eighteen twenty four months ago. So it's
Speaker 8: those companies that are going to really lead the way
Speaker 8: in paving the way for the next entrance of IPO aspirants.
Speaker 6: You know, Caroline, there are two sides of the table
Speaker 6: in any transaction, and you and I know quite a
Speaker 6: few venture capitalysts that really want this to happen, really
Speaker 6: want this window to open.
Speaker 5: Yeah, boy, they've been waiting for these exits. It can't
Speaker 5: all be about M and A.
Speaker 3: And there's not much of that either, And Rachel, to
Speaker 3: that point, we're hearing that there is a lot of
Speaker 3: stress in the bench capital environment and a lot of
Speaker 3: them are raised huge funds that they're now juster really
Speaker 3: trying to allocate in this environment as well. What did
Speaker 3: you make of the fact that Data Brooks, a big
Speaker 3: company in the private market, is also able to raise
Speaker 3: in the private environment at the moment, where do you
Speaker 3: think the real rubber meets the road for some of
Speaker 3: these companies that can still fundraise, perhaps not going for
Speaker 3: an IPO at this moment.
Speaker 8: Yeah, well, I mean a few things that it tells me. One,
Speaker 8: there is money to be deployed out there. But venture
Speaker 8: capitalists investors broadly are being very discerning and where they
Speaker 8: deploy that capital, so investing in companies that they feel
Speaker 8: have a strong growth story. The merits behind the transaction
Speaker 8: are being very much reviewed and and so forth. So
Speaker 8: we're not seeing the volumes of investments that we have
Speaker 8: seen before, but we're seeing very targeted interests, particularly around
Speaker 8: key technologies such as AI and so forth. So there's
Speaker 8: continues to be a strong investor focus.
Speaker 6: In that investors focused on AI. How focused to you
Speaker 6: on China and the impacts of the Chinese economy on confidence?
Speaker 8: Well, the geopolitical tensions are continuing to be there still.
Speaker 8: I can speak more to the US market, and the
Speaker 8: US market is very dominant, continue to be you know,
Speaker 8: the place that most companies want to to lift, and
Speaker 8: companies are going to still continue to navigate the broader
Speaker 8: geopolitical environment as well as many other factors that have
Speaker 8: been impacting companies for the past twenty four months.
Speaker 6: Rachel Garing, IPO leader Ernst and Young America's great insight
Speaker 6: and finally bit of activity in this space. Good to
Speaker 6: have you on the program. Fox con founder Terry Goer
Speaker 6: has joined a crowded race to become Taiwan's next president,
Speaker 6: in the process up ending an election that will have
Speaker 6: wide ranging implications for security in the Western Pacific. The
Speaker 6: tech billionaire denied Beijing could pressure him through his extensive
Speaker 6: operations in the country, which include much of Apple's supply chain.
Speaker 6: Speaking of Apple, the company working on a revamped iPad
Speaker 6: pro for next year. It's first major overhaul of that
Speaker 6: product in half a decade. From all, let's bring in
Speaker 6: Bloomberg's Mark Gunman. You brought us those details in the
Speaker 6: latest power on the keyp It for me is M
Speaker 6: three chip.
Speaker 4: Right. Every time they have a new generation of chip.
Speaker 6: They have more CPU, cause more graphics, cause more memory.
Speaker 6: But this is a major hardware overhaul.
Speaker 9: This is a major hardware overhaul. I mean, as you know,
Speaker 9: the iPad market, or more generally, the tablet market has
Speaker 9: been in a bit of a funk lately. Right Shipments
Speaker 9: for the overall tablet market were down thirty percent you
Speaker 9: overy year in the second quarter. iPad revenue has been
Speaker 9: down several quarters in a row. Actually, in the third quarter,
Speaker 9: iPad revenue was its lowest since the cusps of the
Speaker 9: pandemic in the beginning of twenty twenty. Apple is really
Speaker 9: hoping that this new iPad Pro, which will come out
Speaker 9: in the first half of next year twenty twenty four,
Speaker 9: will sort of rejuvenate sales with a new design.
Speaker 5: They're going to be moving.
Speaker 9: This is the most significant thing, I think, to OLED
Speaker 9: displays for the first time in an iPad. If you
Speaker 9: remember the move from LCD to OLED in the iPhone
Speaker 9: ten in twenty seventeen, it's a really significant change. So
Speaker 9: now the iPhone of the iPad will use the same
Speaker 9: screen technology. That's going to be a really robust upgrade
Speaker 9: of that M three chip you mentioned, but also more
Speaker 9: laptop like capabilities. There's going to be a new magic
Speaker 9: keyboard attachment. They'll probably price it anywhere between three hundred
Speaker 9: and four hundred dollars, But it'll essentially turn your iPad
Speaker 9: into a laptop. This new version will likely have a
Speaker 9: function row at the top like a Mac, and it'll
Speaker 9: also have a.
Speaker 4: Bigger track pad.
Speaker 9: So this is clearly going to be aimed at iPad
Speaker 9: power users, and I'm excited to get my hands on
Speaker 9: one as well.
Speaker 3: Mark, how many other people are excited to get their
Speaker 3: hands on iPads at the moment because it has been
Speaker 3: an area that just hasn't been firing on all cylinders
Speaker 3: for Apple.
Speaker 4: Yeah, that's a good question.
Speaker 9: Well, anyone who's a big iPad pro user and has
Speaker 9: had an iPad since twenty eighteen, that was the last
Speaker 9: time they redesigned the iPad Pro, We're coming up on
Speaker 9: five years, right, They introduced that in October of twenty eighteen,
Speaker 9: So we'll get this big revamp within five years of
Speaker 9: that window. So I think anyone on a twenty eighteen
Speaker 9: model or even a twenty twenty model like myself could
Speaker 9: be looking to upgrade to this next generation. So I
Speaker 9: think they're going to get a pretty significant upgrade cycle,
Speaker 9: at least for an iPad for this new range.
Speaker 6: If you go on Apple's website and you click on
Speaker 6: the iPad section and you put compare. There is just
Speaker 6: infinite possibilities. Mark, there are so many iPads, they all
Speaker 6: are quite similar and very different, and you write and
Speaker 6: power on that. That's been a bit of a tricky
Speaker 6: situation for Apple.
Speaker 9: Well, when you're a customer, right, and you're not ingrained
Speaker 9: in this ecosystem like I maybe or you twoe might be,
Speaker 9: you really don't know what to buy. And a lot
Speaker 9: of these iPads are very similar or they're very differentiated
Speaker 9: by a couple hundred dollars, but with very minor tweaks
Speaker 9: in between. So it's unclear if you should buy the
Speaker 9: base ten generation iPad, should you buy the eleven inch
Speaker 9: iPad Pro, should you buy the iPad air right, And
Speaker 9: so I'm not sure that this new iPad pro will
Speaker 9: doom much to fix that problem with perhaps too many iPads,
Speaker 9: too many choices, and lack of clarity between the many options.
Speaker 9: But what it will do is it'll help differentiate the
Speaker 9: iPad Pro and make that more of a halo product
Speaker 9: at the top of the line. It maybe push more
Speaker 9: people to the high end, which of course would raise
Speaker 9: overall Apple asps and overall Apple revenue.
Speaker 3: At a time, while we question maybe some costs going
Speaker 3: up for Apple as it has to rejigger mark it's
Speaker 3: entire supply chain. You did a really great deep dive
Speaker 3: Bloomberg did and its big take about how much this
Speaker 3: is really changing the environment for making this equipment across
Speaker 3: the whole evasion, not just China.
Speaker 4: Yeah.
Speaker 9: The interesting thing about what we've discovered based on the
Speaker 9: data is something we've been talking about or I've been
Speaker 9: talking about.
Speaker 4: For a long time.
Speaker 9: Apple is not necessarily moving out of China, but it's
Speaker 9: augmenting its operation outside of China. So you're not seeing
Speaker 9: many new product lines being developed in China. You're seeing
Speaker 9: a lot of status quo in China. So the number
Speaker 9: of supply in China for Apple, the number of production sites,
Speaker 9: it has stayed stagnant, right, It hasn't really gone down.
Speaker 9: But in terms of Apple's growth, all that growth that's
Speaker 9: happening in Vietnam, that's happening in India, the new lower
Speaker 9: en iPhone models. You're seeing a lot of production in
Speaker 9: India as they need additional units for those regions. You're
Speaker 9: seeing production in India. You're seeing Apple Watch production in
Speaker 9: places like Vietnam, you're seeing new types of macs being
Speaker 9: produced in Malaysia. So you're seeing China sort of stays
Speaker 9: stagnant for apple but not growing. Right, So the future
Speaker 9: of apple production and supply chain is in China. It's
Speaker 9: the places around China. It's the Indias of the world, Malaysia, Vietnam, Thailand.
Speaker 9: To a lesser extent, there's some work being done in Japan. Right,
Speaker 9: So that's really the story here China, Apple, China that's
Speaker 9: staying the same, but all that growth that's happening elsewhere
Speaker 9: really interesting.
Speaker 5: Mark, thank you so much.
Speaker 3: It's going to have you back, Mark gam And on
Speaker 3: all things Apple and its supply chain now just focusing
Speaker 3: in on supply chain. Of course, all of this amitted
Speaker 3: geopolitical tension of US and China. And we know the
Speaker 3: earlier US Common Secretary Ginia Romando was meeting with her
Speaker 3: Chinese counterpart. It's all part of the Biden administration's effort
Speaker 3: to or try and reduce some of the tensions between
Speaker 3: the world's two largest economies China. It says it was
Speaker 3: a frank meeting, a constructive meeting, talking about tariffs, talking
Speaker 3: about chip policy. Rondo, of course, had been looking to
Speaker 3: stabilize the relations.
Speaker 5: Just take a listen to what she said before.
Speaker 10: We agree to establish a new Commercial Issues Working Group,
Speaker 10: a formal working group which will involve US and Chinese
Speaker 10: government officials and very importantly US and Chinese commercial private
Speaker 10: sector representatives as we seek solutions on trade and investment
Speaker 10: issues and to advance US commercial interests in China.
Speaker 3: Understand, megan to be meeting at least once a year. Now,
Speaker 3: coming up, let's talk bitcoin. So like a teenager in
Speaker 3: need of its sugar high. According to Bloomberg Intelligence, how
Speaker 3: all the details next, there's a room technology.
Speaker 5: Time now for talking tech.
Speaker 3: First up, soft Bang, Well, it's going to take a
Speaker 3: group of its Indian startup founders to Silicon Balley.
Speaker 5: That's next month for an AI tour.
Speaker 3: Now, this is all as the Japanese investor is stepping
Speaker 3: up its efforts to really infuse its portfolio companies with
Speaker 3: the technology. Meanwhile, x Pun shares they sword after it
Speaker 3: agreed to buy DD's smart car development art Now. The
Speaker 3: deal both eliminates a potential competitor in the crowded EV
Speaker 3: market and gives US a tech savvy partner a new venture.
Speaker 5: Plus more on evs.
Speaker 3: Now Japan's advanced electric battery technology company Noko is now
Speaker 3: training on the Nasdaq.
Speaker 5: It plans to enter the demestic leasing business with evs
Speaker 5: that use.
Speaker 3: As battery separated technology to help improve longevity and hate resistance.
Speaker 5: And I know that's all of.
Speaker 3: Your focus point in evs, but now we're going to
Speaker 3: some of my focus point, right yeah, And.
Speaker 6: Let me take you back to twenty seventeen. That's when
Speaker 6: Bitcoin first reached its current level relative to the Nasdaq
Speaker 6: one hundred stock index. The question can crypto now outperform?
Speaker 6: A Bloomberg Intelligence note out today says it's unlikely. Federal
Speaker 6: funds futures in one year hovering around five percent and
Speaker 6: deflating producer prices are very different from that past easy
Speaker 6: money day that Bitcoin grew up in. Let's bring in
Speaker 6: Mike mcgloan from BI who wrote this peek and Mike,
Speaker 6: you write your latest note. Bitcoin's a teenager and may
Speaker 6: miss its sugar high.
Speaker 4: What are you talking about?
Speaker 11: Well, Hello, I think I guess you can appreciate. I've
Speaker 11: raised a few teenagers there.
Speaker 4: Are not adults.
Speaker 11: But the bottom line in our marketers is never forget
Speaker 11: from where you're from and what got you there. So
Speaker 11: I look over at that tun your note every day
Speaker 11: and I see it's a giant sucking sound for risk
Speaker 11: assets and bitcoins. When the risky assessets in bitcoins whole premise,
Speaker 11: it's whole lifetime. It's been under a zero or very
Speaker 11: low interest rate environment. Now interest rates are very high
Speaker 11: and attractive. So then I look at performance far. How
Speaker 11: much has bitcoin performed? Well, okay, the best in history.
Speaker 11: If you look at the first time it traded a
Speaker 11: dour that was around twenty eleven, it's up twenty six
Speaker 11: thousands times that. So to me, the risk is greater
Speaker 11: that Bitcoin continues to ververt lower and all indications are
Speaker 11: showing that it's showing divergent weakness versus the stock market,
Speaker 11: particularly in Q three, and then you point it out
Speaker 11: versus the nasdick. It's still at the same level since
Speaker 11: twenty seventeen in the nasdick, and I look at it's
Speaker 11: a much higher vole till the acid and it's showing
Speaker 11: divergent it's showing lack of performance to really take it out,
Speaker 11: it's higher. So I look at it as okay, risks
Speaker 11: are tilt the lower, particularly if we look it at
Speaker 11: what the fed's doing. You don't see any liquidity to
Speaker 11: coming from the FED, and if they keep tightening, what
Speaker 11: stops them from tightening potentially the stock market going down,
Speaker 11: which means most risk asses.
Speaker 5: Another mike that I was speaking to this weekend.
Speaker 3: All about that sucking sound was my Novegrats, of course,
Speaker 3: of Galaxy Digital, and he's been getting more concerned about
Speaker 3: some of the headwinds, even though he himself is in
Speaker 3: line to be getting one of these spottytfs. So too
Speaker 3: was Kathy Wood, and I was on stage with her
Speaker 3: as well. I'm interested as to what, if any tailwinds
Speaker 3: could make you change your.
Speaker 5: Opinion on this.
Speaker 4: Yes, we need some kind of change.
Speaker 11: At first, I think I have better hair than mister Novo.
Speaker 11: The significance the first sign of tailwinds is I need
Speaker 11: to see Listen, let's say, at least see some signs
Speaker 11: of strength. So right now, all the big picture moving
Speaker 11: averages are tilting lower, like one hundred week moving average.
Speaker 11: The market's bumped up to there and it's heading lower,
Speaker 11: and it's doing for a good reason. It sees that
Speaker 11: FED fun future still tighten in the future. I need
Speaker 11: to see some divergent strength. Maybe versus stock market weakness,
Speaker 11: that would be a good sign. We're not seeing that now.
Speaker 3: I'm a glad BlueBag Intelligence. Welcome back to Room Meg Technology.
Speaker 6: I'm Caroline Hyde in New York and Imed Ludlow in
Speaker 6: San Francisco.
Speaker 4: Quit check in on the market.
Speaker 6: So I think it's important to think about this on
Speaker 6: a weekly basis, right son, as that one hundred is,
Speaker 6: it's a little bit higher two tens to one percent.
Speaker 6: We're coming off a strong week last week where then
Speaker 6: as that one hundred posted a gain of around one
Speaker 6: and a half percent, but it snapped three straight weeks
Speaker 6: of losses and it was the first time this year
Speaker 6: we'd seen that. This week on the weekly basis, we
Speaker 6: just have a flood of economic data from around the
Speaker 6: world here in the US hard data and sort of
Speaker 6: more soft data that we're tracking everything from PCEE, the
Speaker 6: Fed's preferred gauge of inflation, through to other gauges of
Speaker 6: manufacturing confidence and activity, and economic check data out of China,
Speaker 6: and increasingly when we worry about tech, we are worried
Speaker 6: about China as kind of the engine room of the
Speaker 6: global economy. Here's an interesting one for you as well.
Speaker 6: We talked about door Dash and it's AI efforts. A
Speaker 6: new one out this Monday morning, an AI powered voice assistant.
Speaker 6: Now it's really interesting because in the statement door Dash
Speaker 6: is nap right, but saying that so many people still
Speaker 6: phone in their food orders, but the restaurant's too busy
Speaker 6: to answer the phone. Here's their solution, get AI to
Speaker 6: do it. They're saying that fifty percent of all calls
Speaker 6: are missed. So now they're trying in multiple languages in
Speaker 6: AI power syst and you phone up, the AI interacts
Speaker 6: with you. It's just in trial phase right now. It
Speaker 6: had boosted the stock earlier in the session, but was
Speaker 6: software by three tenths a one percent.
Speaker 4: More AI, More AI.
Speaker 5: More on door Dash for a little bit as well.
Speaker 3: Then let's talk about a competitor that's about to go public.
Speaker 5: I'm talking a course of Instacart. We want to get
Speaker 5: back to.
Speaker 3: The conversation all around this year's IPOs. We're all bracing
Speaker 3: for them. Greg Martin and Polas a Say, co founder
Speaker 3: and managing director of rain Maker Securities, which specializes in
Speaker 3: pre IPO investing.
Speaker 5: You're also, of course still an active v C.
Speaker 3: Greg and much experience in prior history of working with
Speaker 3: these sort of companies to build them up for this moment.
Speaker 3: I'm interested in door Dash, of course what five to
Speaker 3: six times overall focus on on in terms of active
Speaker 3: user base compared to instacar. That's what the Bloue meg
Speaker 3: and tell WHI not is telling us today. How are
Speaker 3: you looking at the perspective? How are you looking at
Speaker 3: the filings and thinking, oh, but it's profitable.
Speaker 12: You know, and sahart will most certainly always be compared
Speaker 12: to DoorDash and thank you for having me this morning,
Speaker 12: but it is it is different in a few important ways,
Speaker 12: you know.
Speaker 2: It's it has.
Speaker 12: A pretty significant advertising business, which is very profitable, very
Speaker 12: high margin. In fact, actually even larger than Uber's advertising business.
Speaker 12: So I think that's a big distinguishing factor. They obviously
Speaker 12: they don't have the same kind of order order growths
Speaker 12: as door dash has, which I think is one potential,
Speaker 12: you know, low light of the business. But they've been
Speaker 12: able to increase transaction fees per user and per order,
Speaker 12: which which has enabled them despite flat order growth in
Speaker 12: the first half of twenty twenty three, it's enabled them
Speaker 12: to actually grow their transaction revenues by thirty one percent
Speaker 12: you know, if you look at their revenues, they probably
Speaker 12: project to be around three billion in twenty twenty three,
Speaker 12: with better margins than way better margins than door Dash.
Speaker 12: You know, if you look at door Dashes, you know,
Speaker 12: revenue multiple, it's in the three and a half times range.
Speaker 12: So it probably portends an IPO offering for Instacart, assuming
Speaker 12: they're able to make it to the finish line in
Speaker 12: the ten to you know, twelve billion valuation range, which
Speaker 12: I think would you be an appropriate level relative to
Speaker 12: where door dash sits.
Speaker 3: Of course, what Instacart did, unlike some currently private companies,
Speaker 3: is they took that bitter pill. They decided to slash
Speaker 3: their overall valuation in the private market and then some
Speaker 3: has that been important? How much a pentop demand is
Speaker 3: there from public investors now for this sort of a name.
Speaker 5: What are you seeing on your platform?
Speaker 12: Well, it was a necessary reduction in evaluation. Their last private
Speaker 12: round was in the thirty nine billion range. You know,
Speaker 12: they kind of slash their slash their internal evaluation to
Speaker 12: to around ten billion, which which frankly gives their employees
Speaker 12: who were you know, issued options, any recent investors and
Speaker 12: most likely any public market investors upside, so they you know,
Speaker 12: I think it was important for them to level set,
Speaker 12: and frankly, they didn't have a choice. The market spoke
Speaker 12: to them and that's where the valuation is more appropriate.
Speaker 2: I do.
Speaker 12: I do think it bodes well for public offering. I mean,
Speaker 12: the company is demonstrating solid growth, solid profitability. You know,
Speaker 12: they've talked about ways in which AI is going to
Speaker 12: help them. And if you look at our platform at
Speaker 12: rain Maker, we handle a very large volume of private
Speaker 12: secondary transactions. We're starting to see orders come in, which
Speaker 12: is reflecting you know, strong demand for you know, a potentially.
Speaker 2: I PO that you know in several weeks.
Speaker 12: People often like to get in now because they think
Speaker 12: there's going to be upside, you know, from the IPO
Speaker 12: price and beyond.
Speaker 3: And of course we wait road shows and I mean
Speaker 3: it's going to be a busy stot to set ten
Speaker 3: anythink of all these sand companies having to hit the
Speaker 3: road to explain their stories because it's not the only IPO.
Speaker 2: You know.
Speaker 6: What's astonishing to me is on this program we've been
Speaker 6: talking about how dead, frozen, inactive the market is, and
Speaker 6: all of the news flows happened in just seven days.
Speaker 4: Greg On filed August.
Speaker 6: Twenty First, how much was that starting gun for you
Speaker 6: to kick start the rest of the of the window.
Speaker 12: It was a big starting gun, you know, if you
Speaker 12: look at if you take a little bit of a
Speaker 12: step back, I think one of the sort of you know,
Speaker 12: starting guns started with Kava. I think Kava was an
Speaker 12: eye opener for a lot of people. It was a
Speaker 12: sort of a quiet company that traded up significantly on
Speaker 12: its IPO and has actually held up pretty well, close
Speaker 12: to one hundred percent since at priced. You know, then
Speaker 12: you had odity technology, and then you had obviously Benpaths,
Speaker 12: which has been on a huge, a huge soar incline
Speaker 12: this last week. So I think people see that there
Speaker 12: is receptivity in the IPO markets, and I think what
Speaker 12: started as a trickle could end.
Speaker 2: Up turning into a fly.
Speaker 12: Obviously, last week we had ARM, we had Instacart, we
Speaker 12: had Clavio. Those are much bigger IPOs. I think there'll
Speaker 12: be a bigger test of where the market really is.
Speaker 12: You know, ARM is more of a flat company, but
Speaker 12: it's also telling you know, an AI story. You know,
Speaker 12: as you see you know, kind of riding the coattails
Speaker 12: of Nvidia. So you know, I think arm will be interesting.
Speaker 12: Instacart will also be a large IPO. I mean we're
Speaker 12: talking probably built you know, several billion plus of proceeds
Speaker 12: between the two companies. So I think these will be
Speaker 12: real tests for the market. But I think they're both
Speaker 12: strong companies with good stories, and you know, I expect
Speaker 12: if if they if they succeed, and I do think
Speaker 12: bankers will probably still try and be conservative in pricing
Speaker 12: because they want to show that there's an uptick for
Speaker 12: buyers who take the risk of buying an IPO, that
Speaker 12: we might actually start seeing the floodgates open again. Yeah,
Speaker 12: and we have several other companies that are ready to
Speaker 12: go if they see that happen.
Speaker 6: I had a cup of tv O day with a
Speaker 6: tech banker and we talked about Carver and I said,
Speaker 6: that's not a tech company, and the banker made the
Speaker 6: point that it is a growth company though, And so
Speaker 6: you can see how investors treat a growth name interesting signal.
Speaker 6: Caroline made a really excellent point owner in the show
Speaker 6: Data Bricks is raise money, right an interesting valuation? Is
Speaker 6: that a signal that they won't IPO? Why raise and
Speaker 6: negotiate up with your investors?
Speaker 4: Ahead of a listing.
Speaker 12: You know, it's not necessarily an indication you know, they
Speaker 12: have They're one of the few companies that has been
Speaker 12: continually investing even through the downturn.
Speaker 2: They have such a huge market in front of them.
Speaker 12: You know, they are a significant AI company, a significant
Speaker 12: data company similar to Snowflake. They compete with Snowflake. They
Speaker 12: have massive scale, massive growth potential. So I view them
Speaker 12: as a company that, you know, could go public whenever.
Speaker 12: It may portend more likely a direct listing when they
Speaker 12: go public, because they may not need to raise capital,
Speaker 12: but they may just want to create liquidity for their
Speaker 12: investors and shareholders. So I wouldn't necessarily say it means
Speaker 12: they're not going public. I think, you know, they will
Speaker 12: always take the position that we will go public when
Speaker 12: the market is right for us. And if I think
Speaker 12: if they see a really buoyant IPO market with some
Speaker 12: of these IPOs that we've discussed.
Speaker 2: I actually think they might go sooner than later.
Speaker 3: Greg, I'm interested as to the hunger for this and
Speaker 3: who it's from. Who is coming to your platform to
Speaker 3: get ahead of the listing, Who is going to be
Speaker 3: there to take down this listing, Which kind of investors
Speaker 3: are interested at this moment.
Speaker 12: You know, we're starting to see all manners. I mean,
Speaker 12: for you know, for eighteen months, everybody kind of retreated
Speaker 12: other than other than the investors that had a pure
Speaker 12: mandate to only do late stage private secondaries. We're now
Speaker 12: starting to see the big IPO buyers and obviously we're
Speaker 12: we're hearing of the data bricks investment. You know, we're
Speaker 12: starting to see them big institutions. We're starting to see
Speaker 12: family offices, We're starting to see frankly high net worth individuals.
Speaker 2: We're starting to see a big.
Speaker 12: Flow of people that are are are just there to say, hey,
Speaker 12: I don't want to miss the next KAVA, I don't
Speaker 12: want to miss the next bind pass, I don't want
Speaker 12: to miss the next podity. So I think as investors
Speaker 12: search free yield, and you know, remember the bar is high.
Speaker 12: The risk free yield now is five to six percent
Speaker 12: versus zero. Yes, so it has to be a quality
Speaker 12: IPO to entice investors to come in at this point.
Speaker 3: And Greg, I'm going to go to a sensitive sort
Speaker 3: of topic in the VC space right now, and you
Speaker 3: are still one.
Speaker 5: You've got Archer Venture Capital. Of course, you are at
Speaker 5: red point before.
Speaker 3: There is this really interesting dynamic that's happened is that
Speaker 3: all these VC companies have raised a.
Speaker 5: Ton of money. They need to put that to work.
Speaker 3: They don't want to particularly have to give money back
Speaker 3: to LPs. I'm just interested as to what tensions are
Speaker 3: being felt in the venture community in this space right
Speaker 3: now as they are looking to have these liquidity moments
Speaker 3: and then also try and find where to put money
Speaker 3: to work. We saw two price interested in of course
Speaker 3: data breaks, but that's a crossover my name.
Speaker 2: Yeah.
Speaker 12: I mean the biggest tension if you look at you know,
Speaker 12: the pandemic and twenty twenty one, there was a real
Speaker 12: grow grow growth, spend spend spend mentality and so a
Speaker 12: lot of their winners created huge burn rates and we're
Speaker 12: consuming cash at an alarming rate. And so the first
Speaker 12: order of business for venture capitalists is to make sure
Speaker 12: that your big, you know, scaling businesses that are also
Speaker 12: spending a lot of money are well capitalized. And because
Speaker 12: they went through massive burn you're seeing a ton of
Speaker 12: reserve and frankly, you know, a retrenchment on new investments
Speaker 12: for venture capitalists to make sure they're supporting these companies.
Speaker 2: So there's not a lot of.
Speaker 12: New investments into new companies, but there's a lot of
Speaker 12: using this capital to make sure that your big scale
Speaker 12: businesses have the cash, and of course they're also making
Speaker 12: sure they're not spending money at the same rate. But
Speaker 12: obviously there was an expectation that there would be a
Speaker 12: lot of liquidity by now. There is an expectation of
Speaker 12: these companies we the public, and now they're seeing, hey,
Speaker 12: the IPO bar is raised. We need two or three
Speaker 12: more years to get the companies to an exit, and
Speaker 12: we need to make sure we have the capital in
Speaker 12: these businesses to sustain those businesses so they can grow
Speaker 12: frankly into the crazy evaluations that they are raised at.
Speaker 2: In twenty twenty one.
Speaker 6: Greg, you mentioned the attractiveness of the yield on benchmark
Speaker 6: notes impacting IPOs. What's the biggest quickly economic factor that
Speaker 6: you take into account right now?
Speaker 12: Interest rates are always number one when you think about
Speaker 12: growth business and tech businesses are mostly valued as growth businesses.
Speaker 12: So when the tenure goes from one hundred and fifty
Speaker 12: to four hundred and thirty basis points, you know, that's
Speaker 12: really significant that crushes multiples, and we obviously saw it
Speaker 12: in twenty twenty two in terms of the NASTAQ, even
Speaker 12: though it's up a little bit since then.
Speaker 2: So interest rates sensitivity is.
Speaker 12: Very high, and you know, we're at a high point
Speaker 12: on the tenure. So I think people are are really
Speaker 12: focused on are we going to have a declining interest
Speaker 12: rate environment and when? Or you know, we're all obviously
Speaker 12: all paying close attention to the September FED meeting, where
Speaker 12: a lot of us are expecting things are still going up.
Speaker 2: I mean, inflation is.
Speaker 12: Still out there and we're not hearing you know that
Speaker 12: the FAT is ready to start lowering rates.
Speaker 3: And boy if we've got a big week in terms
Speaker 3: of economic data even though we've got thin volumes out
Speaker 3: there still now. Greg Martin Brilliant from macro to Micro,
Speaker 3: the co founder managing director of rain Maker Securities, of course,
Speaker 3: still very active in the venture space with Archiventure Capital too.
Speaker 3: Coming up, Look, we'll talk tech investing for the fastest
Speaker 3: growing demographic in the world, the older generation. I mean
Speaker 3: Meller Levy of Primetime Partners joining us. Next, there's a
Speaker 3: bluebog technology.
Speaker 10: I think you have to like healthcare just because of
Speaker 10: the generational tree that's going on, the world is getting.
Speaker 3: Sarah hunt Alpine words there and really the focus on
Speaker 3: generational shifts at the moment, it's going to be the
Speaker 3: focus for our VC spotlight today. We're focusing on investing
Speaker 3: in the technology that's driving innovation for that fastest growing
Speaker 3: demographic in the country and in the world, it's the
Speaker 3: aging population. I'm really pleased to welcome to the show.
Speaker 3: Abbi min Alevi, co founder and managing partner of Primetime Partners,
Speaker 3: an early stage bench capital fund that invests in people
Speaker 3: and companies that transferm quality of life for older adults.
Speaker 3: And at this moment, when clearly the need is there,
Speaker 3: when clearly big companies are thinking of the benefits to
Speaker 3: support those that are supporting the older generation as well,
Speaker 3: is it okay what are valuations like in that space
Speaker 3: right now to be allocating to Well, I'm so glad you.
Speaker 1: Guys are spending time on this tabic. We do proceed
Speaker 1: to Series A investing and one of the best things
Speaker 1: about being an early stage investor is that valuations have
Speaker 1: stayed sane through the crazy bubble, if you will, of
Speaker 1: twenty twenty one. What we're seeing at the later stage
Speaker 1: is that the valuations really are sticking somewhat formulaically to
Speaker 1: what healthcare services and healthcare it typically are, which is
Speaker 1: anywhere from four to ten times, and so within that
Speaker 1: there's quite a wide range, but the valuations haven't yet
Speaker 1: become so astronomical, largely because most of what we do
Speaker 1: is invest in healthcare related businesses and there still is
Speaker 1: usually a human component to a lot of what we do,
Speaker 1: because when you're working with an older population with healthcare delivery,
Speaker 1: we're not talking about robots here, We're talking about human
Speaker 1: to human and so a lot of those valuations stay
Speaker 1: within the four to ten times because of that.
Speaker 3: What's interesting though, is that there are a number of
Speaker 3: you put photio companies. I'm sure that a colony trying
Speaker 3: to understand how all social intelligence can make them a
Speaker 3: little less dependent on the human or indeed you've already
Speaker 3: invested in companies that mo is AI is not becoming
Speaker 3: a theme, even more.
Speaker 1: Absolutely becoming a theme. It's not at the point where
Speaker 1: AI is replacing medical professionals and clinical decisions, but it's
Speaker 1: absolutely an enablement tool. For example, one of our portfolio
Speaker 1: companies called Duos, they work with health plans to engage
Speaker 1: their members to understand what benefits they have both within
Speaker 1: the plan as well as the thirty billion dollars of
Speaker 1: unused federal government benefits, and they're using AI really from
Speaker 1: a personalization perspective to make sure they're delivering the right recommendations.
Speaker 4: So we see a.
Speaker 1: Lot of AI around personalization. We see AI a ton
Speaker 1: on diagnostics. One of our portfolio companies, Kinsugi can diagnose
Speaker 1: depression in older adults using their voice, not natural language processing,
Speaker 1: but actually voice vibrations, and so AI is helping them
Speaker 1: there within dementia care and diagnostics there as you know
Speaker 1: that population is about to blossom, we're seeing a lot
Speaker 1: of AI on the diagnostics side. We do not invest
Speaker 1: in healthcare discovery drug discovery, but that is huge piece
Speaker 1: of innovation in drug discovery, and the speed of drug
Speaker 1: discovery is AI. So we're seeing really AI as an
Speaker 1: enablement of the ability to scale healthcare to this population that,
Speaker 1: as the you mentioned before, is doubling in size.
Speaker 6: So the population in the US of people way over
Speaker 6: sixty five is about sixteen percent of our US population,
Speaker 6: and we expect it to jump to twenty two percent
Speaker 6: by twenty forty.
Speaker 4: According to the US Department of Health.
Speaker 6: And Human Services, you're a VC with a long time
Speaker 6: horizon to invest.
Speaker 4: How do you ride along the trend?
Speaker 6: How do you make sure that you're invested in parts
Speaker 6: that follow it.
Speaker 1: So there's one piece of it, which is you've got
Speaker 1: this doubling of the older population on a global scale,
Speaker 1: and that absolutely creates huge infrastructure challenges for healthcare, for
Speaker 1: financial services, for housing, and so you've got these very
Speaker 1: big issues, almost like climate change, where the data's always
Speaker 1: been there. People are finally waking up to this seismic
Speaker 1: shift in the demography.
Speaker 5: But what's happening is.
Speaker 1: Really the urgent needs of large fortune one hundred healthcare companies,
Speaker 1: which is they need to take costs out of the system.
Speaker 1: US healthcare spend is eighteen percent of our GDP. We
Speaker 1: have the most expensive healthcare system in the entire world.
Speaker 4: So what we're.
Speaker 1: Investing in are businesses that help take costs out today.
Speaker 1: So for example, fall prevention number one reason why older
Speaker 1: adults go to the hospital. One and four older Americans
Speaker 1: will fall, and that creates fifty billion dollars of cost
Speaker 1: in our healthcare system. You prevent one fall, that's a
Speaker 1: tremendous value. So businesses we invest in like Bold or
Speaker 1: rosarium from home improvement. These are businesses that really help
Speaker 1: take costs out of the system today.
Speaker 6: Are there any areas you stay away from you just say,
Speaker 6: don't do that, don't invest.
Speaker 1: This might be a contrarian point of view, but we
Speaker 1: think when people talk about the tech enabled home, while
Speaker 1: ninety percent of Americans want to age in place, the
Speaker 1: answer isn't necessarily to make everything kind of like the Jetsons.
Speaker 1: I guess I'm displaying my age here. Everything is robots
Speaker 1: and technology and answered by the cloud that we believe
Speaker 1: that that is an area where remote patient monitoring and
Speaker 1: home care in the home is a great place to invest.
Speaker 1: But fully digitize robotic solutions, We're just not there yet,
Speaker 1: and that's not really the type of care that humans
Speaker 1: want for themselves and older adult children want for their parents.
Speaker 5: We love what I'm tiring you Abby. Thank you very much. Adena,
Speaker 5: it's been enjoy having you in.
Speaker 4: All right, Let's head to space.
Speaker 6: The crew Dragon spacecraft launched by SpaceX, successfully docked with
Speaker 6: the International Space Station over the weekend. The docking took
Speaker 6: place while the two spacecrafts were orbiting above Australia as
Speaker 6: its crew of four astronauts began their six month mission.
Speaker 6: Bloomberg News space reporter Lauren Grush here with more. Lauren,
Speaker 6: it's getting routine, But tell us about this mission.
Speaker 13: Yes, speaking of routine, it was the seventh operational CREWD
Speaker 13: flight for SpaceX through NASA's Commercial Crew program. They hold
Speaker 13: an ongoing contract to send astronauts to the International Space
Speaker 13: Station for the Space Agency, and this crew was a
Speaker 13: very international crew. There was a NASA astronaut, a European astronaut,
Speaker 13: a Japanese astronaut, and a Russian cosmonaut. So it really
Speaker 13: just kind of encapsulates what NASA is trying to do
Speaker 13: with these launches by sitting up partner astronauts and NASA astronauts.
Speaker 3: Well, space is going to be doing with all of
Speaker 3: this activity as well, Lauren.
Speaker 13: Well, now that they've launched their latest crew, it's time
Speaker 13: for the recent crew that they launched up roughly six
Speaker 13: months ago to come home. So and it will be
Speaker 13: Crew six will be returning to Earth in their own
Speaker 13: crew Dragon capsule after they greet and make the new
Speaker 13: incoming crew feel right at home.
Speaker 6: Yeah, Lauren, you broke some news Friday. The Starship. The
Speaker 6: explosion in April had big environmental impact. Quickly summarize your reporting.
Speaker 13: Yeah, so there's quite a lot going in space, but
Speaker 13: plenty going on down here on Earth as well. So
Speaker 13: a lot of people might remember the SpaceX Starship test
Speaker 13: launch in April. Well, we did a Freedom of Information
Speaker 13: Act requests looking at, you know, information that we could
Speaker 13: gather between SpaceX officials and the Fish and Wildlife Service
Speaker 13: in the aftermath of that launch, because it was quite
Speaker 13: explosive and it was quite destructive, and we got eleven
Speaker 13: hundred pages of emails and photos giving us a really
Speaker 13: candid look at how those officials with the Fish and
Speaker 13: Wildlife Service, you know, were kind of dog at what
Speaker 13: happened after that flight.
Speaker 3: Almost four ac is a state park burned, Lauren, amazing
Speaker 3: piece of reporting, the long Grash.
Speaker 5: We thank you that is. Have this edition of Really
Speaker 5: Big Technology Ed.
Speaker 6: Yeah, huge week ahead recap on the podcast wherever you
Speaker 6: get your podcast, This is Bloomberg