Speaker 1: From the heart of where innovation, money and power. CALLI
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Caroline Hyde in New York. In Family
Speaker 1: Chang this is bring Bag Technology. Coming up in the
Speaker 1: next hour. Airbnb hosts attempt to navigate tricky legal maze
Speaker 1: amid state abortion bands while hosting women seeking to get
Speaker 1: abortions may not be all that easy. Plus, as the
Speaker 1: biggest names in tech and media gather at some valley,
Speaker 1: we'll hear from Amajiki twenty three and me about the
Speaker 1: company's new study on well long COVID, in the current
Speaker 1: state of biotech stocks, and door Dash and uber sink.
Speaker 1: After Amazon agrees to take a stake in grub Hub's business,
Speaker 1: details of the deal and why prime members might start
Speaker 1: to favorite grub as in every service. Let's talk about
Speaker 1: the U. S. Supreme Court ruling, of course, to end
Speaker 1: federal protection for abortions happened last month. Already, many people
Speaker 1: wanted to try and find a way to help. Some
Speaker 1: hosts on Airbnb offered to open their homes to guests
Speaker 1: who needed to travel to states that will still allow
Speaker 1: the procedure. However, some of those hosts, well, I'm realizing
Speaker 1: it isn't as easy a solution as it might seem.
Speaker 1: Bloomberg's Michael Tobin wrote all about this. Joins US now
Speaker 1: talk to us about how hosts were looking to potentially
Speaker 1: step in and allow travel to states that allowed abortions
Speaker 1: right after the Supreme Court decision came out. Hosts immediately
Speaker 1: we're changing some of their listings to say, if you're
Speaker 1: a woman and needed to travel across state lines to
Speaker 1: get an abortion, you're welcome to stay at my place
Speaker 1: for free. And this is host really stepping up at
Speaker 1: a time where abortion access is being limited in almost
Speaker 1: you know, half of US states. And quickly host learned
Speaker 1: that it was not as easy to do this as
Speaker 1: they thought. There are very restrictive laws in states like
Speaker 1: Oklahoma and Texas that will actually put out bounties on
Speaker 1: people who aid in a bet abortions. And this was
Speaker 1: an issue that came up last year and companies like
Speaker 1: Uber were saying that we're going to defend our drivers
Speaker 1: if they are implicated um in these lawsuits. And quickly
Speaker 1: what we've seen happen is some of these hosts takedown
Speaker 1: these listings and then partner with local nonprofits who are
Speaker 1: able to provide housing, so perhaps be a little less obvious,
Speaker 1: a little less implicating to anyone who's looking to use
Speaker 1: that home. I'm also interested in whether Abb said how
Speaker 1: Uber came to try and help an offer to pay
Speaker 1: the legal fees of its drivers. What have I been
Speaker 1: be done for their hosts? Right? So Airbnb has said
Speaker 1: that if any of its hosts are implicating these laws,
Speaker 1: they will defend them, and they said that last September.
Speaker 1: And they also said if any other states pass laws
Speaker 1: that are similar to the one in Texas, will step
Speaker 1: up and do the same. The company has also made
Speaker 1: an unspecified donation of Planned Parenthood last year, but they
Speaker 1: haven't said anything else aside from you know, what's happened
Speaker 1: after the Supreme Court ruling. And this is a company
Speaker 1: that's really stepped up to provide housing to Ukrainian Afghanistan
Speaker 1: refugees when those crisis were happening, But we haven't heard
Speaker 1: about any of their plans or partnerships domestically. I mean,
Speaker 1: it has to be said in many ways, the Ukrainian
Speaker 1: refugee crisis is in no way politically divisive. We still
Speaker 1: know that one third of the US population, at least
Speaker 1: on a Pew survey, agreed that abortions should be illegal.
Speaker 1: So we have to realize that this is a very
Speaker 1: politically charged conversation, and indeed not everyone agrees. I'm interested in, therefore,
Speaker 1: whether we expect the companies to stand to make comments
Speaker 1: about how they support their employees as well, because this
Speaker 1: is something we've seen many businesses say that's correct, and
Speaker 1: Airbnb has said that they will pay for employees who
Speaker 1: need to go across state lines to get an abortion,
Speaker 1: but we haven't seen that extended to hosts yet or
Speaker 1: to guess, so at that point, it's still re meant
Speaker 1: to be seen what the company plans to do. What
Speaker 1: about therefore, solutions that some of the actual hosts have
Speaker 1: been coming up with. You say that they've been working
Speaker 1: with not for profits? Is that largely in the way
Speaker 1: in which that they If you're looking to be able
Speaker 1: to offer your home for free to those who want
Speaker 1: to travel, is that the way to partner with nonprofits charities?
Speaker 1: That's what I've seen so far. One host that I
Speaker 1: spoke to, who is in Virginia, said that they're going
Speaker 1: to be partnering with a local nonprofit and they actually
Speaker 1: have two women who are coming to stay at their homes.
Speaker 1: So this is somebody who's been able to partner with
Speaker 1: a local nonprofit and make it successful. They've taken down
Speaker 1: the language from their listing on Airbnb, but they're still
Speaker 1: making it available through their nonprofit. Another host that I
Speaker 1: spoke to in New Mexico said that they had to
Speaker 1: take down the listing because of a threat that they
Speaker 1: got against their family. So it really does show how
Speaker 1: serious this can be, and they really hope that the
Speaker 1: organization's um They hope that Airbnb will partner with the
Speaker 1: organizations to make this safe for all parties involved. And lastly,
Speaker 1: what about sort of the next step of of investigative
Speaker 1: reporting for yourself, Like when you're looking at the ways
Speaker 1: in which this conversation continues to happen, are there other
Speaker 1: companies that you're discussing this with. Is there are other
Speaker 1: ways in which you think a BB and the likes
Speaker 1: will have to eventually become more clear in some of
Speaker 1: their advice. I think what we're going to see is
Speaker 1: he's come news. You're just going to be continued to be,
Speaker 1: you know, put under public pressure, in the public spotlight
Speaker 1: to what they're going to do to support employees and hosts.
Speaker 1: And this kind of is similar to you know, the
Speaker 1: conversation about who's an employee and who's a contractor, right,
Speaker 1: and that's very clear with what you see with Uber
Speaker 1: and Uber is stepped up to say, and the Airbnb
Speaker 1: two to their credit if you're implicated in any of
Speaker 1: these lawsuits will defend you. So we'll see if that
Speaker 1: actually happens. Michael Tobin, it's a great story. Thank you
Speaker 1: so much for coming on to talk about it. Meanwhile,
Speaker 1: another story that we continue to watch, the crypto crash
Speaker 1: has claimed another victim, this time broke A. Voyage and
Speaker 1: Digital has filed for Chapter eleven bankruptcy protection. Now the
Speaker 1: firm sites market volatility and of course the collapse of
Speaker 1: the all important hedge fund, and had lent money to
Speaker 1: Three Arrows Capital. Last month, Voyager had secured a five
Speaker 1: million dollar credit line from the cryptomogul and White Knight himself,
Speaker 1: Sam mag Munfreeze. I'll meet a research Interestingly, they'll meet
Speaker 1: a research too. Let's get out live to Sun Valley
Speaker 1: for Alan and Co's conference Media Mobile Zeo business tycoons.
Speaker 1: They gather there are annually rope Place to say, also
Speaker 1: gathering with them and Lovelow, you've got a very special guest. Yeah,
Speaker 1: let's go from billionaires and deals to health and data.
Speaker 1: Bring in the CEO of twenty three and me and
Speaker 1: would you hi? How are you? I'm good? How are you?
Speaker 1: The weather is beautiful, but it's been busy. You've been
Speaker 1: coming to this conference for a long time, but you're
Speaker 1: very busy generally speaking. Correct twenty three and you're coming
Speaker 1: out of the pandemic. The consumer around the world is
Speaker 1: thinking a lot about their health. How's that helped you people?
Speaker 1: You know, it's interesting with COVID, it was the first
Speaker 1: time when we would publish articles that that would actually
Speaker 1: drive sales. So COVID definitely spurred people to be hyper
Speaker 1: aware of health, definitely interested in what's going on. And
Speaker 1: three me definitely saw a bump that people were interested
Speaker 1: in the research that we were doing. And people are
Speaker 1: definitely interested in health. And as we enter this second
Speaker 1: half and economies are opening and many people are double
Speaker 1: vaccinated boosted, are they still coming to you? What is
Speaker 1: their consciousness about health data? I think people come to
Speaker 1: twenty three and me there's there's you know, clearly half
Speaker 1: of our customers come for ancestry and then another half
Speaker 1: definitely are very interested in the idea that they're empowered
Speaker 1: to take care of themselves and they're empowered with information
Speaker 1: about prevention. And I think people have learned with the pandemic.
Speaker 1: There's like obviously like we think about mass when we
Speaker 1: think about vaccines, like all of that ties in with
Speaker 1: the world of prevention. So suddenly being able to tie
Speaker 1: that as well with saying type two diabetes, are there
Speaker 1: things that you can actually do to prevent it? Are
Speaker 1: there actions that you can take? So lifestyle environment, I
Speaker 1: think it all wraps in. People definitely start to think
Speaker 1: about that more and more. What can they do to
Speaker 1: just be healthier in general. There's about Spasics twenty three
Speaker 1: and me just run through what it is you offer
Speaker 1: and how it works three me. It's it's incredibly simple.
Speaker 1: You spin in a tube, we collect your DNA, and
Speaker 1: we help you interpret your DNA. And we're different than
Speaker 1: all the other companies out there, and that we never
Speaker 1: said we're just ancestry, we're just health We really wanted
Speaker 1: to have this holistic vision of like we're about you
Speaker 1: and understanding your DNA and DNA is fascinating, like you
Speaker 1: share it with all this life around us. You and
Speaker 1: I are ninety nine point you know, five percent the same.
Speaker 1: So how is it can we understand the DNA to
Speaker 1: understand why we're different? Some people, you know are introvert,
Speaker 1: Some people are extroverts. Some people love you know, our
Speaker 1: high risk for type you diabetes, some people are not.
Speaker 1: Um how can we actually understand how the DNA influences
Speaker 1: all of that? So we return near ances to results
Speaker 1: to people, and we return health results to people, and
Speaker 1: we engage them with their own personal DNA. How many
Speaker 1: of these kits are you selling and where are they
Speaker 1: doing best? Is it here in the United States? Is
Speaker 1: it in other markets? Where is their most engagement? We're
Speaker 1: focused mostly on the US right now. UM. We also
Speaker 1: sell in the UK, we sell in Canada, we sell
Speaker 1: in sixty six countries, but we don't sell health everywhere.
Speaker 1: Health is still highly regulated and most of the world,
Speaker 1: so it's mostly in the US. UM we have you know,
Speaker 1: we still see we see good update from our customers
Speaker 1: that are really interested in again both understanding ancestry and
Speaker 1: understanding health. And what's interesting is that there's a real
Speaker 1: tie in of like most people can relate and say like, Okay,
Speaker 1: if you're of Jewish descent or if you're of African descent,
Speaker 1: you're potentially at higher risk for certain conditions. So there's
Speaker 1: a real tie in between the ancestry and what your
Speaker 1: health predispositions are. You made an interesting acquisition Lemonade telehealth.
Speaker 1: It was another kind of big pandemic era ticket. Yeah,
Speaker 1: how has that gone for you? The reason why we
Speaker 1: bought Lemonade is very different than why other groups got into,
Speaker 1: you know, telehealth. It's not because we wanted to get
Speaker 1: into urgent care and you know strep throats in the
Speaker 1: whole telemedicine craze. But rather, we saw suddenly this opportunity
Speaker 1: that people are comfortable talking to their clinicians online and
Speaker 1: that frankly, most clinicians are not trained on genomic medicine,
Speaker 1: meaning that if you go and you get your genetic
Speaker 1: results for Alzheimer's or chronic kidney disease or other conditions,
Speaker 1: most physicians today are not trained on what to do
Speaker 1: with that. And so twenty three and me, by acquiring Lemonade,
Speaker 1: now has the opportunity to offer the full stack, meaning
Speaker 1: that I can give you access to a direct to
Speaker 1: consumer approved FDA cleared test. I can get you your
Speaker 1: genetic information, and now I can actually provide clinicians who
Speaker 1: are trained on genetic information and a pharmacy that is
Speaker 1: also trained on how your genetics interplay with medications. So
Speaker 1: I can offer now that full service too of our customers.
Speaker 1: That was a successful acquisition, it's been missing. I mean,
Speaker 1: you out there looking for similar opportunities to build out
Speaker 1: the twenty three and me offering well. Acquisitions take a
Speaker 1: lot of time to integrate, so I would say the
Speaker 1: first step is like is the integration, but then really
Speaker 1: be able to start to train missions um and provide
Speaker 1: those to our customers and provide that full package. Like
Speaker 1: people today still don't necessarily know what to do with
Speaker 1: all their genetic information. So there's a whole process for
Speaker 1: us of educating our customers like we're gonna we're gonna
Speaker 1: give you healthcare providers now who can help you actually
Speaker 1: understand how do you actually potentially translate that into your life,
Speaker 1: and lots of ways that we can actually leverage the
Speaker 1: service to help you encourage behavior change. You're the CEO
Speaker 1: of a publicly traded company. Now healthcare is important for
Speaker 1: consumers that we're in a challenging inflationary environment, and we've
Speaker 1: been having a lot of discussions in the last twenty
Speaker 1: four hours about where does the consumer stop spending. Do
Speaker 1: you think that the consumer will continue to assign importance
Speaker 1: to spending on healthcare data monitoring metrics or is that
Speaker 1: something that there's a risk that consumer spending slows down.
Speaker 1: I think I think there's a couple of interesting trends.
Speaker 1: So I think first off is people are really frustrated
Speaker 1: aided with a lack of transparency and healthcare, the surprise bills,
Speaker 1: and I think that there's definitely an encouragement people want
Speaker 1: to have more control. And I think one thing that
Speaker 1: twenty three and ME has really led on is being
Speaker 1: a low cost provider of information and making it really
Speaker 1: affordable and accessible. So I think more and more there's
Speaker 1: going to be a trend where people want to be
Speaker 1: in control, they want to know exactly what they're paying for,
Speaker 1: and they want to be able to know that they're
Speaker 1: actually getting a reasonably priced service. So I think that
Speaker 1: twenty three ME, at our current price for a health
Speaker 1: and answerstree kit, it's in that range of reasonable for people.
Speaker 1: What is the energy. He big picture outlook for the
Speaker 1: rest of this year and beyond, well for this year
Speaker 1: and beyond. I mean I look at I focus on beyond.
Speaker 1: So for me, I've always been very much focused on
Speaker 1: the long term vision. And the long term vision is
Speaker 1: a totally different type of healthcare system that is frankly
Speaker 1: about your best interest. Today's healthcare system makes money when
Speaker 1: you are sick and you go into the system, and
Speaker 1: so I've all has been focused on a self pay,
Speaker 1: direct a consumer model because my relationship is directly with you.
Speaker 1: How is it that I can win as a company
Speaker 1: and you can win as an individual if I can
Speaker 1: keep you healthier? So I really look at a world
Speaker 1: how do I actually empower you to be healthy? At
Speaker 1: a hundred? How do I empower you to be as
Speaker 1: healthy as you possibly can and not actually get sick?
Speaker 1: To begin with final question very quickly, do you think
Speaker 1: twenty three and me is seen as a potential partner
Speaker 1: from a big for a bigger health care system or
Speaker 1: even a potential acquisition that have you ever thought about
Speaker 1: doing that? I think now that we've acquired lemonade Um
Speaker 1: and the focus that we have on genomic medicine and
Speaker 1: the delivery delivery of medicine. I think that twenty three
Speaker 1: and Me could play a really important role in helping
Speaker 1: bridge consumers who actually have their genetic information with the
Speaker 1: rest of the medical world and how they're operating, and
Speaker 1: start to bridge that genomic divide, like help people actually
Speaker 1: understand what is this information, how to use it in
Speaker 1: a clinical setting as well as how to use it
Speaker 1: in a lifestyle setting. Right, three and C and mujiki,
Speaker 1: It's not just billionaires and deals, it's health and data
Speaker 1: as well. Caroline back to you in New York. She
Speaker 1: might well be a million billionaire. We'll have to check
Speaker 1: the Blombo billionaire's list. But what a wonderful interview, what
Speaker 1: a fascinating CEO and majiki they're trying through me and
Speaker 1: our own ed Ludlow. We'll be back in Some Valley
Speaker 1: on Thursday live with event Right CEO Kevin Hart's Don Gavern,
Speaker 1: Major League Soccer Commissioner. Make sure you tune in at
Speaker 1: five pm Eastern two pm Pacific. Coming out door dash
Speaker 1: shares draw up after competitor grub hub struck a deal
Speaker 1: with Amazon. Our grub Hub will have easy access to
Speaker 1: Amazon's broad consumer base. That's next as a Broomberg. Apple's
Speaker 1: latest mapchips have shaken up the personal computer or industry,
Speaker 1: driving sales of Apple's map books and imax and pushing
Speaker 1: rivals to search for new solutions. In just the last
Speaker 1: year and a half, Apple has output the M one
Speaker 1: to the M one Ultra, to the M two and
Speaker 1: over the next year, I expect new M two Pro
Speaker 1: and Max chips, as well as the first M three chips.
Speaker 1: But all of this has taken a toll on Apple's
Speaker 1: chip efforts for its other products. Case in point two,
Speaker 1: of Apple's most popular devices, the iPhone and the Apple Watch,
Speaker 1: will not be getting their typical big chip upgrades this year.
Speaker 1: For the first time since Apple began designing its own
Speaker 1: iPhone processors, the base iPhone four team models won't be
Speaker 1: getting an all new chip. Those phones will stick to
Speaker 1: the eight fifteen from the iPhone thirteen instead. Only the
Speaker 1: more expensive iPhone fourteen Pro line will get a faster
Speaker 1: A sixteen processor. Similarly, for the first time in its
Speaker 1: own history, the Apple Watch will be sticking to the
Speaker 1: same processor technology for the third year in a row. Well,
Speaker 1: the Series eight will get an ESS eight chip. The
Speaker 1: processor will be on par with the S six chip
Speaker 1: from the Series six. Apple has also been facing hurdles
Speaker 1: with the development of its first cellular modem, with test
Speaker 1: versions of the component facing overheating issues. I don't expect
Speaker 1: an Apple modem to arrive until at the earliest. I
Speaker 1: believe all of these issues are in part the result
Speaker 1: of Apple's chip department being spread too thin, as well
Speaker 1: as a new focus on the Mac. It's also, of course,
Speaker 1: due to industry wide battlenecks like the chip shortage, which
Speaker 1: is leading to higher prices, as well as rising shipment
Speaker 1: costs and t SMC. Apple's manufacturing partner is also not
Speaker 1: without blame due to its somewhat rocky transition to new
Speaker 1: three nimeter processor technology. I'm Mark German. This is power
Speaker 1: on thanks to putting gum and then don't forget sign
Speaker 1: up from max weekly power on news dot com. Now
Speaker 1: I'm still got Amazon because it's stuck a deal to
Speaker 1: take up of grub hub and it will say will
Speaker 1: offer it's primary is in the US in one year
Speaker 1: membership to the feed delivery service. Now. Clubhub is owned
Speaker 1: by the Dutch company Just Eat Takeaway, which announced plans
Speaker 1: to find an investor or bitter for the US business
Speaker 1: in April and he's saying new meg intelligence some place
Speaker 1: to say it's here to tell us why why did
Speaker 1: Amazon want to get into the delivery service? Well, the
Speaker 1: lines are clearly blurring between what Amazon is doing in
Speaker 1: terms of last smile delivery versus what these companies are
Speaker 1: doing in terms of food delivery and grocery delivery. And
Speaker 1: I think Amazon used them as a threat. And for Amazon,
Speaker 1: it's an easy way for them to you know, partner
Speaker 1: with grubhub, which has been losing share, but it does
Speaker 1: have a good, you know, customer base in cities and
Speaker 1: urban areas, so it is also a way for them
Speaker 1: to segment the market. They did a similar partnership at
Speaker 1: Delivery in the UK, so they're really targeting that high
Speaker 1: end users that grubbub has, albeit its losing share, but
Speaker 1: I think that's the play here. And then over time
Speaker 1: they want to bundle everything. You know, they already have
Speaker 1: music video, well at one more service and their prime
Speaker 1: subscription becomes something that customers can do with that. Why
Speaker 1: go to the high end is certainly for me delivery
Speaker 1: it started by really doing the top end restaurants, then
Speaker 1: went a little bit lower but it is the high
Speaker 1: end by more recession proof in the moment, is that
Speaker 1: the idea, yes, And and also they have higher repeat purchases,
Speaker 1: so you know, when when you talk about subscriptions in
Speaker 1: this business, it's all about frequency and how can you
Speaker 1: have the customer you know, order more kind of more
Speaker 1: times than they would have done otherwise. So in this case,
Speaker 1: I think the other problem that I see for door
Speaker 1: Dash and Uber is they charge a take rate based
Speaker 1: on the basket size or you know, Amazon can say, okay,
Speaker 1: we'll give you a flat fee. Yes, it doesn't matter
Speaker 1: in terms of you know, how many times you order,
Speaker 1: and that could be very disruptive to the business model
Speaker 1: of Uber and door Dash. I mean they're already struggling
Speaker 1: with profitability. If this was to come, I think that
Speaker 1: would be a big pressure on on their take rates.
Speaker 1: Talked to us about the structure of the deal and
Speaker 1: about their option basically to eventually own the full assets
Speaker 1: that they wish. I think Amazon in this environment can't
Speaker 1: make a big acquisition. They already bought MGM, they bought
Speaker 1: Whole Foods, but now I think the regulatory environment is
Speaker 1: more challenging. Even the delivery partnership went through intense deal
Speaker 1: scrutiny and so my hunches. You know, even though they
Speaker 1: would have gotten this asset very cheap. I mean, just
Speaker 1: he paid seven point five billion for groub Hub. It
Speaker 1: will be substantially marked down in this environment. But I
Speaker 1: think for Amazon, they really think partnership is one way
Speaker 1: for them to gain you know, access to grow hub
Speaker 1: customer base, and they can do everything that they would
Speaker 1: have done if they had acquired the asset, So makes sense.
Speaker 1: In general, we can see more consolidation in the space.
Speaker 1: I think when you're talking about the pricing structure as
Speaker 1: thinking of my instacat bills and how much I'm assessing
Speaker 1: how much you know, I get added on from me
Speaker 1: just walking into a store. Are we seeing more insolidation
Speaker 1: likely in the space in general, Well, there will be
Speaker 1: a lot of pressure, right So if you're getting into
Speaker 1: a slow economic environment where customers are pulling back on spending,
Speaker 1: there are just too many subscriptions out there that a
Speaker 1: customer has and they have to pay back on what
Speaker 1: is a discretionary versus what is not, and that will
Speaker 1: be a catalyst for you know, consolidation because order growth
Speaker 1: will slow down substantially. Remember they're up against COVID comps
Speaker 1: georda Ash and Uber grew triple digit order volume growth
Speaker 1: and and so those comps are very tough, and that
Speaker 1: would be a catalyst for install Card and the smaller
Speaker 1: guys to give in and say, okay, we need to
Speaker 1: partner with a Walmart or a Target or you know
Speaker 1: one of the big retailers out there. Man saying always
Speaker 1: say small, bling back intelligence, great analysis. As always, this
Speaker 1: is bag technology. I'm Caroline Hide in New York. She
Speaker 1: has a ribban surging. On Wednesday, the electric vehicle maker,
Speaker 1: reaffirming it's in port auction. Target revealed the production accelerated,
Speaker 1: in fact in the second quarter. Riven still on track
Speaker 1: to produce twenty five tho units this year. Bloomberg's and Ludlow, well,
Speaker 1: we're never going to let him relax over there in
Speaker 1: some valley, and we're going to keep you on top
Speaker 1: of all the ev news. As we know you love it,
Speaker 1: ed and you know this is a market like market reaction.
Speaker 1: Why because they are making progress. You know, they've produced
Speaker 1: twenty vehicles approximately in the first quarter. They've jumped to
Speaker 1: fort hundred in the second quarter. You know, this is
Speaker 1: about a production ramps. You remember, Caroline two thousand and eighteen,
Speaker 1: how kind of micro focused we were on Tesla and
Speaker 1: the production hell and Rivian is showing that it is
Speaker 1: making progress, and the street basically looking at that and saying, okay,
Speaker 1: we believe you. The vehicles is possible this year. And look,
Speaker 1: I know I'm in some valley, but guess who else
Speaker 1: is in something? J Scaringe, Rivian CEO, may already said
Speaker 1: hello to him, so you know, it's kind of interesting
Speaker 1: for him to be here, but this is certainly a
Speaker 1: company now heading in the right direction in factory at least,
Speaker 1: so he said hello. Did he say anything that he did?
Speaker 1: You know, Garrange is an interesting guy. You know. A
Speaker 1: lot of sources tell me that he is often the
Speaker 1: smartest person in the room, but he comes across as
Speaker 1: incredibly humble. It's an interesting one because Allen and co
Speaker 1: hosts a tech media and telecoms conference, and you wouldn't
Speaker 1: think the automotive really fits into that. He's not the
Speaker 1: only automotive executive here. Of course, Mary Barra, the GM CEO,
Speaker 1: is also here. But I said, what are you going
Speaker 1: to be talking about? And I think you know, for
Speaker 1: them it's a little bit of a victory lap. They
Speaker 1: did the sixth biggest I, P O and U S
Speaker 1: history in November. The stock has been under immense pressure since,
Speaker 1: but they are still kind of the Golden company with
Speaker 1: some serious Wall Street backing. Okay, so where do they
Speaker 1: go from here? Then? Ed, they're ambitious, and I think
Speaker 1: this has been part of the Street's concerned that they
Speaker 1: talk about being able to ramp production at that Illinois
Speaker 1: facility not just to this year, but to a hundred thousand,
Speaker 1: then a hundred and fifty thousand units annually. They plan
Speaker 1: to break ground on a factory in Georgia very soon
Speaker 1: that could build four hundred thousand units annually and they're
Speaker 1: going to start production on that. So they have a
Speaker 1: lot going in fifteen billion dollars approximately on the balance sheet.
Speaker 1: It's really about the month by month and quarter by
Speaker 1: quarter execution. That's what the streets laser focused on. Beautiful head,
Speaker 1: We thank you, stay well. Meanwhile, raising venture capital isn't
Speaker 1: as easy for startups and turning out to be challenging year,
Speaker 1: say the very least, there's a recession potentially looms over
Speaker 1: the economy. Founders are thinking a smarter ways to secure money.
Speaker 1: Joining us now to discuss all this from M thirteen
Speaker 1: is the managing partner, Carl Alama, and it's great to
Speaker 1: have some time with you, Carl, and just talk to us.
Speaker 1: We're just hearing about, you know, companies that recently went
Speaker 1: public and the strain that they've been under from a
Speaker 1: public perspective. In the private market, how are you seeing
Speaker 1: valuations and how are you seeing a willingness of founders
Speaker 1: to want to raise in this sort of environment. Yeah,
Speaker 1: it's a very interesting time for sure in venture capital.
Speaker 1: I think the whole problems everything that's happening in the
Speaker 1: public markets, it is really kind of cacheting back into
Speaker 1: the private markets. At the end of the day, we
Speaker 1: all invest in these companies because we want to see
Speaker 1: them go public, want to see them grow and create
Speaker 1: great valuations. And when there's so much uncertainty in the
Speaker 1: multiples and how to value these businesses, brigaches back from
Speaker 1: the late stage investors who are holding off, waiting for
Speaker 1: the market to settle and find its bottom back through
Speaker 1: the earlier stage investors like ourselves, who ultimately want to
Speaker 1: make sure we're invest in companies that can get later
Speaker 1: stage funding. I mean you've invested in Bird, Butnova's allocate.
Speaker 1: I mean, we all know daily harvest headspace, many people
Speaker 1: using that in this current environment at the moment. Lift
Speaker 1: You're no stranger also to navigating companies during downturns, the
Speaker 1: Great Financial Crisis two thousand and eight, and they're on
Speaker 1: what's different this time? If anything? Yeah, it's interesting. I've
Speaker 1: actually I was an operator before I was an investor.
Speaker 1: I had a company back in the late nineties that
Speaker 1: I was able to exit through the bubble bust of
Speaker 1: two thousand and had a fintech company in two thousand
Speaker 1: and eight that we navigated through. We eventually were able
Speaker 1: to exit in two thousand and and so, Uh, definitely
Speaker 1: went through these challenges myself. I think that every every
Speaker 1: economic downturn is different in its own right. Uh, this
Speaker 1: downturn is you know, a lot of people, there's a
Speaker 1: lot of conjecture about what's driving it, but ultimately there's
Speaker 1: a lot of international activity going on that's driving inflation,
Speaker 1: that's driving some of these things that are really scaring
Speaker 1: the you know, the market. The one big difference is
Speaker 1: um whereas in two thousand and eight, really money just
Speaker 1: dried up. I think the situation we have today is
Speaker 1: there is a lot of money sitting on the sidelines.
Speaker 1: The money hasn't dried up. I think the market volatility
Speaker 1: has created nervousness and created caution on the part of
Speaker 1: the investors themselves, and so that money is going to
Speaker 1: have to come back to work. Uh, these funds, these
Speaker 1: later stage funds and investors have to put that money
Speaker 1: to work within a certain predetermined period of time. And
Speaker 1: so really as the market really finds its bottom, there's
Speaker 1: a lot of money ready to come back in. So
Speaker 1: we actually are very very positive and hopeful about the
Speaker 1: future are um and the opportunity for these companies to
Speaker 1: raise money in the future. But the period between here
Speaker 1: and there is really the unknown. You were, of course,
Speaker 1: as he said, in fintech and one key fintech name
Speaker 1: pin up of where you and I originally helm from
Speaker 1: in Europe corner, I mean huge downgrade in terms of
Speaker 1: its overall market valuation. How did as a previous leader
Speaker 1: of businesses in this time, how do you ensure they
Speaker 1: were able to weather these storms? Have these companies raised
Speaker 1: enough previously? If they're not, how they're also helping their employees? Well,
Speaker 1: who kind of wanted a liquidity moment. Yeah, that's a
Speaker 1: it's an interesting question. You you have to consider the
Speaker 1: amount of capital you have, your ability to run. I
Speaker 1: think you know, the companies that have a lot of
Speaker 1: capital on the balance sheet, whether they're private or whether
Speaker 1: they're public, are the highest potential to see through this time.
Speaker 1: If you do think of it as a prefixed period
Speaker 1: of time, really just have to manage the business through it,
Speaker 1: and once you get through the other end, hopefully the
Speaker 1: market begins to turn you begin to see the benefits
Speaker 1: of the building and running a solid business. But your
Speaker 1: question about employees are so important, especially in the earlier stage.
Speaker 1: You know where in this market as well, where there's
Speaker 1: very low unemployment, employees do have a lot of options
Speaker 1: to think about moving around and think about the things
Speaker 1: they want to do. A lot of companies are thinking
Speaker 1: about layoffs and some kind of tightening on their earnings potential.
Speaker 1: And the one really really important thing is to keep
Speaker 1: your best performers and to motivate them. So one thing
Speaker 1: we really speak to our CEO is about is just
Speaker 1: how to really deliver that vision, bring them along for
Speaker 1: the ride. Make sure everybody realizes that you know, these
Speaker 1: businesses aren't changing. It's just that they vision is something
Speaker 1: that they have to be much more efficient about achieving,
Speaker 1: and so bringing the best team along with you and
Speaker 1: making sure they're motivated to see through the end of
Speaker 1: that journey is incredibly important. Camp companies as give us
Speaker 1: your assessment of the overall econ economy and recessionists that
Speaker 1: you see, because the companies that you have fun and
Speaker 1: in a pass are sort of very discretionary names tonal
Speaker 1: of course, the likes of Headspace and Lift and Daily Harvest,
Speaker 1: all of these things are kind of well treats. Really,
Speaker 1: if you're thinking of those that don't have all the
Speaker 1: cash washing about, do you worry that they are going
Speaker 1: to have a tougher time as people are pulling back
Speaker 1: slightly on their purse strings to a degree, Yes, I
Speaker 1: mean you're talking about really the latest stage businesses. Some
Speaker 1: of these have already edited, of course, so they're are
Speaker 1: really in up portfolio any longer. So we don't really
Speaker 1: you know, we we realize our benefit at the exit point,
Speaker 1: whether it's an EM and a transaction or an I
Speaker 1: p O, so we don't necessarily maintain our ownership through
Speaker 1: you know, the public status of the business um those
Speaker 1: public companies across the border, tech companies across the border
Speaker 1: obviously suffering massive compression of their valuations, and realistically, when
Speaker 1: you see the multiples and the evaluations that were in
Speaker 1: place last year, they were probably unrealistically large. So have
Speaker 1: they overcompressed. Probably if they've overcompressed, then there's opportunity for
Speaker 1: growth again once they at bottom. And that's really as
Speaker 1: an as an investor in my personal private or public
Speaker 1: portfolio of my own, you know, it's really about for
Speaker 1: me waiting it out and allowing these good companies that
Speaker 1: have good fundamentals see through the downturn and begin to
Speaker 1: get recognized for their value again. Car, So it's great
Speaker 1: to catch up with you when you have such portfolio
Speaker 1: as yours and then exited and ones that remain, of course,
Speaker 1: the companies that you still wait for that exit to occur.
Speaker 1: Carl Anama really wiser words coming from the managing partner
Speaker 1: of M thirteen handle weather this particular storm. Another story
Speaker 1: will continue to watch. Walmart, talking of or consumer discretionary,
Speaker 1: reportedly told some supplies they need that new fuel and
Speaker 1: pickup fees are coming. According to The Wall Street Journal,
Speaker 1: the giant retailer will charge companies that use Walmart to
Speaker 1: transport goods to its stores and warehouses. Some are Walnuts
Speaker 1: Walmarts competitors such as Amazon have already imposed similar fees
Speaker 1: this year coming up in the wake of rapid pandemic
Speaker 1: related gaming industry growth. Convoy Ventures so now saying a
Speaker 1: hundred and fifty million dollar fund. But how much of
Speaker 1: that is being allocated to the blockchain gaming we'll discuss.
Speaker 1: There's a Blomberg so crypto the space in what we
Speaker 1: call a winter industry. So I'm saying crisis, But what
Speaker 1: about the underlying technology? What about in the space for gaming?
Speaker 1: Convoy Ventures is seeing potential. The gaming focused VC firm
Speaker 1: has raised a hundred fifty million dollars for a new fund,
Speaker 1: which will include investments in blockchain games. Joining us now,
Speaker 1: Josh Chapman, managing partner at Convoy Ventures. How is the
Speaker 1: gaming space going to ride this out? Do you think? Josh? Absolutely?
Speaker 1: And thank you for having me, Caroline, thank you for
Speaker 1: having me on the show. Um. Blockchain gaming space is
Speaker 1: going to thrive during this next period of macroeconomic cycle
Speaker 1: for a couple of reasons. One is blockchain gaming rises
Speaker 1: on the back of the gaming industry, which already has
Speaker 1: three billion avers worldwide. Uh, the average age is thirty
Speaker 1: six years old. Um, you know gamers or women, and
Speaker 1: this has to become a global industry. You know, over
Speaker 1: the last five to ten years, you're seeing about a
Speaker 1: hundred million people joined the gaming industry in general. On
Speaker 1: the back of that, there has been technological innovation in
Speaker 1: gaming for decades, ever since the nineteen seventies when the
Speaker 1: gaming industry really really started with blockchaining gaming specifically, you're
Speaker 1: looking at an industry that's basically bringing two primary things
Speaker 1: to the gaming industry. One is business model innovation, which
Speaker 1: I can dig into a little bit more, and second
Speaker 1: is the digital asset ownership of the consumer. And those
Speaker 1: two trends are going to drive a success of blockchain
Speaker 1: gaming for the next decade. Now, I don't want to
Speaker 1: say that all of your investments are in any way
Speaker 1: blockchain related and only partially and any partially this one
Speaker 1: will go into it. But you have got some big names,
Speaker 1: and of course sky Maybos would have been the real
Speaker 1: pin up, but that's become a kind of controversial game
Speaker 1: to be associated with Acts Infinity, just because of the
Speaker 1: way in which well suddenly they've moved away in this
Speaker 1: pay play to earn kind of model. How do you
Speaker 1: see the space evolving and and why is it so controversial?
Speaker 1: Do you think, you know, I don't see it as
Speaker 1: a very controversial thing. I would actually pivot that more
Speaker 1: to what they're doing is truly quite innovative and that
Speaker 1: sometimes sees resistance in the gaming industry. And so when
Speaker 1: you look at the success of Skymavis, you're looking at
Speaker 1: a team that has been incredibly ambitious and really pushed
Speaker 1: gaming to ex limits by saying, when you play, you
Speaker 1: can earn this in game token thing that you could
Speaker 1: actually trade on external exchanges. Hence why there is a
Speaker 1: token attached to the Skymavis platform. We have been thrilled
Speaker 1: with how the Skymavis team has navigated, especially the last
Speaker 1: six months and different challenges. They have done a great
Speaker 1: job at reopening the bridge. The founders and the company
Speaker 1: really took ownership of a lot of the things that
Speaker 1: kind of went down, and uh, they've really done a
Speaker 1: great job navigating navigating this period. But what's been most
Speaker 1: controversial that you're kind of getting at is the fact
Speaker 1: that should playtime be rewarded with financial rewards and the
Speaker 1: idea is actually not that novel, because people have been
Speaker 1: gifted things in games for decades, through cosmetic items, through
Speaker 1: gift boxes, through perks, through discounts. What we're talking about
Speaker 1: is that the blockchain ecosystem in general has brought this
Speaker 1: token financial uh personal ownership to the gaming industry, and
Speaker 1: the two combined has actually been quite powerful. And so
Speaker 1: the sky maybe this is truly one of the most successful,
Speaker 1: is not the most successful blockchain centric platform on the planet,
Speaker 1: and we just happened to be fortunate enough to be
Speaker 1: an investor in this amazing team. Of course, actually Infinity
Speaker 1: also suffered a hack. I'm now reporting that it was
Speaker 1: related to a particular tap part of the talent looking
Speaker 1: at the LinkedIn ad and we're looking too those reports
Speaker 1: as to how on earth had happened. But of course,
Speaker 1: when we suffer hacks like this, you, as a backer
Speaker 1: of the company, should you be there is a sort
Speaker 1: of money of last resorts, some sort of bailout options.
Speaker 1: Absolutely well, I can't get into that specifically about how
Speaker 1: that went down, but I can tell you that the
Speaker 1: bridge has been reopened and fully funded, and I can
Speaker 1: also say that we're super impressed with how the team
Speaker 1: at their own expense, and how the company balanced you got,
Speaker 1: its own expense, came forward to protect the community from
Speaker 1: having to take that hit. Right. That hack was you know,
Speaker 1: an unfortunate event, but the team and the company really
Speaker 1: stepped up to own that. When it comes to the investors,
Speaker 1: of course, we're incentivized for the success of this company,
Speaker 1: and so we'll continue to be in their corner. I
Speaker 1: obviously can't get into the exact details on how that
Speaker 1: bridge was kind of plugged in gas, but um, they
Speaker 1: really navigated it incredibly well, and as an investor, we're
Speaker 1: thrilled to continue to be in their corner and support
Speaker 1: them publicly on on on publications like this as well
Speaker 1: as you know, privately in border remedience with them. So
Speaker 1: what kind of other gaming startups there for are pushing
Speaker 1: the envelope, being innovative, using new ways in which to
Speaker 1: use the blockchain as the underlying technology, but also n
Speaker 1: f T s and ways in which to real hold. Yeah,
Speaker 1: so you're seeing a lot of things that we get
Speaker 1: excited about. The convoys were really specialists on investing into
Speaker 1: the technology and platforms and infrastructure for the future of
Speaker 1: the video gaming industry. That technology and infrastructure side on
Speaker 1: the platform stuff that we look at of you know,
Speaker 1: the next Discord, the next Twitch, the next roadblocks. Those
Speaker 1: kind of companies are what we're trying to invest in
Speaker 1: at the early stage at Seeds Series A UM. The
Speaker 1: type of technology the blockchain brings is really things around UH,
Speaker 1: digital asset ownership, digital identities UM and a new business model.
Speaker 1: That alludes to this a little bit earlier, but the
Speaker 1: business model innovation that blockchain brings to gaming is going
Speaker 1: to be, in our view as big as the rise
Speaker 1: of the free to play gaming business model that emerged
Speaker 1: in the late two thousands. The free to play business
Speaker 1: model UM brought in about fifty to eighty billion of
Speaker 1: value to the gaming industry, which is now valued that
Speaker 1: over two billion. We think blockchain gaming, with the rise
Speaker 1: of a marketplace business model that allows for the transfer
Speaker 1: of transactions automatically without having to rely on counterparties, is
Speaker 1: a very powerful technology that the gaming industry is going
Speaker 1: to absolutely take advantage of and integrate into Web two.
Speaker 1: I think you're going to also see a lot of
Speaker 1: gaming companies not necessarily go the I C O round,
Speaker 1: but they will incorporate some type of n F t
Speaker 1: revenue component to what they're doing. We think this can
Speaker 1: be incredibly powerful and it's already proving to generate billions
Speaker 1: of dollars already in the last twelve d eighteen months.
Speaker 1: Chess Chapman, managing partner of Convoy Ventures, thinking about the
Speaker 1: new ways in which companies will raise funds as well
Speaker 1: as the ways in which they'll continue to develop me
Speaker 1: thank you so much. China accusing the US of technological
Speaker 1: terrorism and it's pushed to stop a SML and Nicon
Speaker 1: from setting key chip making technology to the country. Now
Speaker 1: joining US now as the man who helped break that scoop,
Speaker 1: Eric Martin, And it really is interesting about how the
Speaker 1: US is leaning on SML calls the Dutch equipment maker
Speaker 1: and Japanese make an econ as well, China responding pretty
Speaker 1: aggressively to it. That's right, Caroline. But we've seen is
Speaker 1: China rejecting the pressure that the US is putting on
Speaker 1: a SML as well as on Nikon of Japan. But
Speaker 1: a SML having by far the biggest market share of
Speaker 1: this technology. D you v deep ultra violet lithography that
Speaker 1: etching equipment for chips, I can't tell you how much
Speaker 1: I had to look into that sort of technology when
Speaker 1: I used to report on s MLS numbers and some
Speaker 1: of the other European equipment makers. What do you think
Speaker 1: China could do? In response, what do you what about
Speaker 1: their own innovation within the country to be able to
Speaker 1: develop such such equipment. Well, we've certainly seen efforts by
Speaker 1: the Chinese to develop their own uh DUV equipment. To date,
Speaker 1: they haven't had a whole lot of success with it.
Speaker 1: A SML remains the by and large, the sole provider
Speaker 1: of d u V to China, and these are not
Speaker 1: the most advanced etching etching equipment. This is the kind
Speaker 1: of next The second generation is slightly older generation that
Speaker 1: we're talking about, but still the most commonly used in
Speaker 1: in this industry. And so this is something that the
Speaker 1: Chinese definitely have a desire to to steal a march
Speaker 1: on the advanced countries uh the you know, rich countries
Speaker 1: they are selling and making this equipment, but that they
Speaker 1: have thus far not been very successful in that effort.
Speaker 1: So when the US realizes this is the way it
Speaker 1: can really applied pressure from a technological standpoint, do you
Speaker 1: think it will bear fruit? I know, asked this previously,
Speaker 1: But have we had any further from nikon from a
Speaker 1: SML as to whether they are willing to respond. Well,
Speaker 1: we understand is that a s mL so far has
Speaker 1: not gone along with UH and has objected to the
Speaker 1: U s push on the Netherlands for SML to be
Speaker 1: cut off from these kinds of sales. UH. You know
Speaker 1: they're feeling is that, UH, that this is not something
Speaker 1: that the you know, that the US should be should
Speaker 1: be doing. UM. But we've seen a broad US push
Speaker 1: on China UH and on Smike and some of these
Speaker 1: chip producers in China, and it's something that the Bureau
Speaker 1: of Industry and Security is you know, on a daily
Speaker 1: basis looking at in terms of trying to stop China
Speaker 1: from matching or overtaking the US and this kind of
Speaker 1: technology on the on the national security concern. Next thing
Speaker 1: you're looking for, Eric, well, whether a SML you know,
Speaker 1: eventually does go along with this or whether you know,
Speaker 1: more more aptolutely if the government of the Netherlands goes
Speaker 1: along with this with blocking the sale of this kind
Speaker 1: of technology, because this is a real choke point for
Speaker 1: China's chip industry and something that could really hamstring China
Speaker 1: going forward, Eric Martin, with all the scoops, we thank you.
Speaker 1: We look forward to how that story continues to progress. Meanwhile,
Speaker 1: that does it for this addition of Blow Big Technology tomorrow,
Speaker 1: Well we're back in some valley event, right. CEO Kevin
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Speaker 1: heeart from New York. This is Bloomberg