WEBVTT - China Targets Foxconn; Hollywood Returns to Negotiating Table 0:00:01.280 --> 0:00:05.600 From Marhart where Innovation, money and power Collie in Silicon 0:00:05.680 --> 0:00:06.560 Vallet NBN. 0:00:06.920 --> 0:00:10.960 This is Bloomberg Technology with Caroline Hyde and ed Love Love. 0:00:26.840 --> 0:00:29.560 We are live from London for the Bloomberg Technology Summit. 0:00:29.800 --> 0:00:32.879 I'm Caroline Hyde and this is Bloomberg Technology. Coming up 0:00:32.920 --> 0:00:35.400 on the program, we'll speak to a range of UK 0:00:35.560 --> 0:00:38.800 based tech entrepreneurs to discuss everything from much capital, fintech, 0:00:38.880 --> 0:00:43.240 cybersecurity and so much more. Plus, China rattles foreign firms 0:00:43.280 --> 0:00:45.879 again as it opens an investigation into one of Apple's 0:00:45.920 --> 0:00:49.839 most critical suppliers, Fox Con details ahead. Plus we go 0:00:49.960 --> 0:00:52.519 back to the picket line as Hollywood studios return to 0:00:52.560 --> 0:00:56.240 negotiations with actors this week to end the month's long strike. 0:00:56.760 --> 0:00:59.800 But first check in on those markets. And boy has 0:00:59.800 --> 0:01:02.880 there been some volatility, particularly in treasuries, abbagailty Little, what's 0:01:02.920 --> 0:01:03.680 the readacross here? 0:01:03.800 --> 0:01:07.400 Well, there's been tremendous volatility at the surface level, Caroline, 0:01:07.440 --> 0:01:10.240 so much so let's actually start beneath the surface, because 0:01:10.240 --> 0:01:11.760 if we had been looking at this board an hour 0:01:11.800 --> 0:01:13.600 and a half ago, there would have been at least 0:01:13.600 --> 0:01:15.399 some red on it. But we've had a flip to 0:01:15.520 --> 0:01:18.880 the upside. Microsoft and Meta too. Of the megacap companies, 0:01:19.240 --> 0:01:22.240 megacap tech companies that are reporting this week, Microsoft tomorrow 0:01:22.280 --> 0:01:26.480 and Meta on Wednesday. A big piece of this turnaround 0:01:26.520 --> 0:01:30.200 for sure from a micro standpoint and from Meta excuse me. 0:01:30.240 --> 0:01:32.760 For Microsoft, one of the keys could be their outlook. 0:01:32.800 --> 0:01:35.119 For Azure, that cloud business was a little bit disappointing, 0:01:35.200 --> 0:01:37.720 plus color on AI. For Meta, it will be all 0:01:37.720 --> 0:01:41.319 about whether or not they can maintain mid teens growth. 0:01:41.319 --> 0:01:42.760 That could have a lot to do with price. 0:01:42.760 --> 0:01:44.839 And we also have Bitcoin in rally mode up seven 0:01:44.880 --> 0:01:48.480 of the last ninety days that is helping out Riot 0:01:48.520 --> 0:01:52.080 platforms up ten point two percent and in video receiving 0:01:52.160 --> 0:01:55.680 some favorable commentary from a Wall Street investment bank. Now, 0:01:55.760 --> 0:01:58.200 let's put this together with the NAZAQ one hundred and 0:01:58.240 --> 0:02:00.840 see what it means. Here's this roller coaster ride. Now 0:02:00.880 --> 0:02:03.120 to your point at the lows, it was more of 0:02:03.120 --> 0:02:05.120 a macro story, Caroline. The fact that you had that 0:02:05.160 --> 0:02:08.639 ten year yield back above five percent following the two 0:02:08.680 --> 0:02:11.480 year yield, the whole yield curve really flattening out. That 0:02:11.560 --> 0:02:14.840 of course makes stocks look more expensive, but big cap 0:02:15.000 --> 0:02:19.080 tech in particular, that growth, the liquidity, it tightens the 0:02:19.120 --> 0:02:22.200 situation overall, but as the ten year yields slip back 0:02:22.200 --> 0:02:23.960 to four ninety, take a look at the rally we 0:02:24.000 --> 0:02:26.400 have plus some of those individual movers we were just 0:02:26.400 --> 0:02:27.880 taking a look at now on the year. 0:02:27.880 --> 0:02:29.720 It's very interesting because over. 0:02:29.600 --> 0:02:31.639 The last three months we've had stocks down, the S 0:02:31.680 --> 0:02:33.520 and P five hundred down about eight percent so on 0:02:33.560 --> 0:02:36.080 the year up about ten percent, the Nazak one hundred 0:02:36.120 --> 0:02:38.560 at one point up more than forty percent, so about 0:02:38.560 --> 0:02:40.799 ten percent or so, very roughly coming off of both 0:02:40.800 --> 0:02:41.720 of these indexes. 0:02:41.960 --> 0:02:42.960 You can see though, that the. 0:02:42.880 --> 0:02:46.320 Megacap tech indexes that have some of these stocks that 0:02:46.360 --> 0:02:50.280 are reporting this week up much more. What makes us interesting, Caroline, 0:02:50.280 --> 0:02:52.480 if we go into the Bloomberg terminal, it means that 0:02:52.520 --> 0:02:54.200 the S and P five hundreds doing something that the 0:02:54.280 --> 0:02:55.799 Nazak one hundreds not doing. 0:02:56.000 --> 0:02:57.440 The Russell two thousand. 0:02:57.120 --> 0:02:59.160 Led it, but the S and P five hundred on 0:02:59.200 --> 0:03:01.320 the day was firmly below the two hundred day moving 0:03:01.360 --> 0:03:04.400 average back above. It looks like we're probably going to 0:03:04.480 --> 0:03:06.640 see some more weakness through the downside. The question is 0:03:06.639 --> 0:03:08.959 will the Nazak one hundred of these big KEP tech 0:03:09.000 --> 0:03:10.920 names file at some point? It could have just as 0:03:11.000 --> 0:03:13.120 much to do with yields as it could with earnings 0:03:13.160 --> 0:03:13.720 this week and. 0:03:13.760 --> 0:03:18.040 Next Macro Charts Tech. You do it all, Abigail, we 0:03:18.080 --> 0:03:20.320 thank you. Meanwhile, of course, a key corporate story of 0:03:20.320 --> 0:03:23.480 the day has been Chinese authorities again shaking the confidence 0:03:23.480 --> 0:03:26.400 of foreign companies, in particular, that's with a series of 0:03:26.520 --> 0:03:30.120 arrests across industries and an investigation into the all important 0:03:30.120 --> 0:03:32.359 tech name that is fox Con. It's a key supply 0:03:32.440 --> 0:03:34.360 to Apple, of course, and for more. We want to 0:03:34.360 --> 0:03:37.440 really dig into this narrative. Riva Goujon's with us director 0:03:37.480 --> 0:03:40.000 at the Rhodium Group, and really your expertise here, Weaver, 0:03:40.160 --> 0:03:43.720 is so important you advise, of course within China, and 0:03:44.480 --> 0:03:46.360 I'm interested as to whether you think this is an 0:03:46.440 --> 0:03:50.320 ongoing pushback because of well the tech issues that we've seen, 0:03:50.400 --> 0:03:51.920 the rivalry between US and China. 0:03:52.000 --> 0:03:53.440 Is it something different entirely. 0:03:54.800 --> 0:03:58.320 Well, lots of layers of intrigue here, of course. Now, 0:03:58.480 --> 0:04:02.800 any multinational corporation operating in China knows that there is 0:04:02.880 --> 0:04:06.240 always the risk of tax and compliance audits. This runs 0:04:06.240 --> 0:04:10.200 from technology to retail, really across the gamut. 0:04:10.920 --> 0:04:11.680 But in this. 0:04:11.640 --> 0:04:15.760 Geopolitical climate, of course, whenever these moves are taken. There's 0:04:15.960 --> 0:04:20.600 always the question of whether there's more of a political 0:04:20.720 --> 0:04:24.560 tinge here of economic coercion, and of course Fox Convene 0:04:24.600 --> 0:04:30.000 so closely tied to Apple is more of a question 0:04:30.080 --> 0:04:33.200 mark here in terms of targeting. There have been rumors 0:04:33.240 --> 0:04:37.279 of informal bands against Apple products. This comes in the 0:04:37.279 --> 0:04:42.160 wake of revelations around Huawei's breakthrough making it a more 0:04:42.240 --> 0:04:46.960 formidable competitor to Apple as well, So lots of different 0:04:47.000 --> 0:04:50.120 things to entangle here. Other companies also facing crackdowns from 0:04:50.160 --> 0:04:53.480 china S data security laws. But there's a bit more 0:04:53.480 --> 0:04:55.679 to unpack here on whether this is truly a case 0:04:55.839 --> 0:04:58.799 for coercion and how it could tie into the Taiwanese 0:04:58.800 --> 0:04:59.560 election as well. 0:05:01.080 --> 0:05:03.760 Yeah, let's dig into that in a moment, Honhai Precision Industry. 0:05:03.760 --> 0:05:06.520 It's the public arm of Fox Cohn basically saying they 0:05:06.560 --> 0:05:09.560 will collaborate with authorities. And indeed you mentioned this is 0:05:09.800 --> 0:05:12.240 in some ways to do with reviewing of land use 0:05:12.279 --> 0:05:16.320 and in particular tax audits. Tell us a little bit 0:05:16.320 --> 0:05:20.280 more about the added complexity that the founder of Fox 0:05:20.400 --> 0:05:22.560 gone or Honhai, has stepped down of course, because he's 0:05:22.640 --> 0:05:23.760 running for the Taiwanese election. 0:05:25.360 --> 0:05:29.640 He is, and of course that changes up the race 0:05:29.720 --> 0:05:32.560 a bit. He's running as an independent, and this is 0:05:32.600 --> 0:05:37.039 a very complex electoral dynamic for Beijing in trying to 0:05:37.120 --> 0:05:40.640 favor an outcome for the KMT which is more friendly 0:05:40.760 --> 0:05:46.840 to mainland policies. It's hard to conclude though, that a 0:05:46.880 --> 0:05:52.760 move against Fox KHN would translate into a political favorability 0:05:53.400 --> 0:05:56.200 toward Beijing. When it comes to the upcoming Taiwan election 0:05:56.360 --> 0:05:59.640 in January. You know, there's a question of whether Terrygo 0:06:00.279 --> 0:06:04.560 his participation in the race would divide the opposition vote 0:06:04.600 --> 0:06:08.400 in a way that undermines the KMT favors the DPP, 0:06:08.600 --> 0:06:11.760 which Beijing would not like to win. But still that's 0:06:11.800 --> 0:06:15.040 a very complex logic chain, and I doubt that these 0:06:15.080 --> 0:06:18.440 moves against Fox con would translate into Terrygo actually pulling 0:06:18.520 --> 0:06:21.080 back from the race. So again, I think there's a 0:06:21.120 --> 0:06:24.919 temptation to see everything as a highly politicized move. But 0:06:25.279 --> 0:06:27.200 here I think we need to take a closer look 0:06:27.279 --> 0:06:33.360 at Apple's diversification moves, other electronics companies and their diversification moves. China, 0:06:33.400 --> 0:06:36.240 of course, has a very big impulse now to strike 0:06:36.320 --> 0:06:39.560 back at US led technology and investment controls. We just 0:06:39.680 --> 0:06:42.560 had another round of US led ship controls, which is 0:06:42.560 --> 0:06:45.599 putting a lot of pressure on major US tech partners, 0:06:45.640 --> 0:06:48.680 to include Taiwan. So that is really I think the 0:06:48.760 --> 0:06:50.159 hypothesis to test here. 0:06:51.960 --> 0:06:54.680 When you put, of course you say it's easy to 0:06:54.680 --> 0:06:57.039 go for the highly political lens, go for the highly 0:06:57.080 --> 0:06:59.720 economic lens, because all of this comes in a much 0:06:59.720 --> 0:07:00.960 tougher context for China. 0:07:01.000 --> 0:07:07.800 More broadly, absolutely so, anything perceived as retribution are falling 0:07:07.839 --> 0:07:14.360 into the scope of tightening laws around counter espionage and 0:07:14.680 --> 0:07:18.760 countering any type of perceived espionage activity, you know, crackdowns 0:07:18.760 --> 0:07:22.480 around data security. In general, multinational corporations are already on 0:07:22.640 --> 0:07:27.120 high alert, and this certainly doesn't help the souring investment climate, 0:07:27.200 --> 0:07:30.280 as we've already seen FDI inflows into China have been 0:07:30.360 --> 0:07:33.720 leveling off, particularly since twenty nineteen. That's been very worrying, 0:07:34.040 --> 0:07:35.800 to the point where you see the State Council of 0:07:35.880 --> 0:07:39.400 China putting out all kinds of pledges to say it's okay, 0:07:39.480 --> 0:07:42.080 you know, we're doing things to promote foreign investment, to 0:07:42.200 --> 0:07:47.280 include very notable things like easing cross border flows in 0:07:47.680 --> 0:07:51.320 data regulations, a big ask for many of these companies. 0:07:52.160 --> 0:07:55.280 At the same time, every time that the US engages 0:07:55.600 --> 0:07:58.960 in another round of technology and investment controls. There is 0:07:59.000 --> 0:08:03.400 this impulse and to strike back, and you're seeing this 0:08:03.560 --> 0:08:07.680 through landmark legislation coming out of China, everything from counter 0:08:08.520 --> 0:08:11.480 kind of espionage law, the foreign relations law. It's a 0:08:11.520 --> 0:08:15.040 form of codifying retribution. And so as we start to 0:08:15.080 --> 0:08:19.600 see things translate into actions. For example, MOFCOM export controls 0:08:19.600 --> 0:08:24.280 on artificial and natural graphite. Artificial graphite is a very 0:08:24.280 --> 0:08:28.240 critical input for eed batteries. We've seen recent restrictions on 0:08:28.320 --> 0:08:32.960 gallium and germanium experts. Those are important for semiconductor manufacturing. 0:08:33.600 --> 0:08:38.320 And so all of this only underscores the unreliability of 0:08:38.400 --> 0:08:41.480 China in these critical value chains, and so that can 0:08:41.720 --> 0:08:45.679 energize diversification moves. But of course China's looking to show 0:08:45.720 --> 0:08:48.439 where it can create pain in the here and now. 0:08:49.760 --> 0:08:53.000 And it infects pain on its own publicly traded companies. 0:08:53.040 --> 0:08:55.520 I'm looking at the Stall fifty index, which is only 0:08:55.520 --> 0:08:57.720 conceived of about three years ago to really try and 0:08:58.040 --> 0:09:00.880 be the rival the version, the Chinese version of the 0:09:00.920 --> 0:09:03.280 NASDAQ one hundred, and it's hit a record low since 0:09:03.280 --> 0:09:05.840 its inception. We are worried about growth concerns we're worried 0:09:05.880 --> 0:09:09.000 about global liquidity and a weak export outlook, not to 0:09:09.040 --> 0:09:11.760 mention some of these political elements to it all, So 0:09:12.480 --> 0:09:15.080 go back to what you advise clients. 0:09:14.640 --> 0:09:15.480 In the here and now. 0:09:15.559 --> 0:09:18.319 Ever, of course you are someone who need client engagement 0:09:18.480 --> 0:09:22.400 for Rodium's China corporate advisory. If I'm about to think 0:09:22.400 --> 0:09:25.640 about entering the country, do you say I wouldn't. 0:09:27.160 --> 0:09:30.360 Well, it depends on where you are, which value chain 0:09:30.400 --> 0:09:34.560 we're speaking of. Even as diversification is happening. You can 0:09:34.720 --> 0:09:36.600 look at Apple for example. You can even look at 0:09:36.679 --> 0:09:42.200 fox CON's footprint and how it has a notable presence 0:09:42.240 --> 0:09:47.680 in China, but you know emerging presence in places like India, Mexico, Vietnam. 0:09:48.200 --> 0:09:52.160 So that trend is happening, of course, But these companies 0:09:52.160 --> 0:09:57.760 are also greatly exposed Apple in particular, And as these 0:09:57.760 --> 0:10:01.079 companies are engaged in this balancing act, it is very 0:10:01.120 --> 0:10:07.360 important to understand the intent behind China's policy moves this. 0:10:07.840 --> 0:10:10.760 It's caught between trying to promote a healthier foreign investment 0:10:10.800 --> 0:10:17.120 climate to counteract the forces of its structural economic downturn, 0:10:17.679 --> 0:10:19.839 and that is something that is going to last for 0:10:20.360 --> 0:10:23.000 a while. At the same time, to stay alert to 0:10:23.679 --> 0:10:27.520 US LED and partner moves on technology and investment controls. 0:10:27.600 --> 0:10:30.520 This is a fast evolving space. There is a lot 0:10:30.640 --> 0:10:34.800 packed into the for example, the four hundred some pages 0:10:34.840 --> 0:10:36.720 of controls that came out just last week from the 0:10:36.800 --> 0:10:39.680 US that is making it very hard for technology companies, 0:10:39.720 --> 0:10:42.640 in particular at the leading edge to continue operating in China. 0:10:42.920 --> 0:10:44.760 You only have to look at a company like Samsung 0:10:44.840 --> 0:10:48.280 for example, to see how actively they are diversifying outside 0:10:48.280 --> 0:10:52.960 of China already. So lots of moves in play balancing 0:10:53.040 --> 0:10:56.480 acts are hard to pull off in those geopolitical climate 0:10:57.040 --> 0:10:59.480 but really depends on what where you have a credible 0:10:59.480 --> 0:11:02.520 competitor in the Chinese space, where you're at the leading edge, 0:11:02.880 --> 0:11:05.160 and where are their opportunities lie outside of China. 0:11:06.800 --> 0:11:09.400 Such complexity and you help break it down. Thank you, 0:11:10.000 --> 0:11:22.439 Va gujan O the Roodium Group for expertise. The Bloomberg 0:11:22.480 --> 0:11:25.199 Technology Summit is going to kick off tomorrow right here 0:11:25.240 --> 0:11:28.280 in London, showcasing whole range of startups, maybe in the 0:11:28.280 --> 0:11:29.800 biotech field, the healthcare stand. 0:11:29.840 --> 0:11:30.640 That's for example. 0:11:30.920 --> 0:11:34.680 During a series of discussions about the UK's global role 0:11:34.880 --> 0:11:37.400 in the most pressing questions in technology today, whether it 0:11:37.440 --> 0:11:39.840 be climate change, whether it be AI as well, and 0:11:39.880 --> 0:11:42.120 in fact, just in a few weeks the UK government 0:11:42.160 --> 0:11:46.320 plans it can mean hundreds of international finances executives of course, 0:11:46.400 --> 0:11:50.200 government leaders to promote well some investing opportunities in British companies, 0:11:50.240 --> 0:11:53.320 including those working on nuclear fusion, on deep tech, but 0:11:53.360 --> 0:11:57.520 most notably thinking about how AI safety can be deeped 0:11:57.559 --> 0:11:58.440 and seeped. 0:11:58.080 --> 0:11:59.280 Into the global narrative. 0:11:59.400 --> 0:12:01.960 Right now, let's dive deeper into the world of the 0:12:02.000 --> 0:12:04.240 tech scene here in the UK with a standout startup. 0:12:04.320 --> 0:12:06.360 Philip Benemoth's the leader, the CEO of Zilch. 0:12:06.360 --> 0:12:09.120 It's Europe's fastest growing fintech company, to go from Series 0:12:09.120 --> 0:12:12.720 eight to Unicorn status in just fourteen months self professed growth. 0:12:12.760 --> 0:12:16.200 And I'm interested at this time that what have been 0:12:16.280 --> 0:12:19.000 your business model? And I know it's of consumer credit 0:12:19.120 --> 0:12:23.679 basically reducing costs. How has that managed to see that 0:12:23.720 --> 0:12:25.360 growth in what has been a much tougher time for 0:12:25.400 --> 0:12:26.240 tech more broadly form. 0:12:26.920 --> 0:12:29.440 Yeah, I think what's interesting to note here is that 0:12:30.000 --> 0:12:32.480 the landscape, which if I kind of paint the picture 0:12:32.520 --> 0:12:35.760 a little bit, it'll explain why we're seeing this disproportion 0:12:35.840 --> 0:12:37.440 that growth to the rest of the market, and that 0:12:37.520 --> 0:12:40.000 is that the landscape today is. 0:12:39.960 --> 0:12:41.880 That we have high cost of capital. 0:12:42.160 --> 0:12:44.680 What that typically means is that your high street lenders, 0:12:44.720 --> 0:12:48.160 your banks tend to actually withdraw themselves from lending, so 0:12:48.240 --> 0:12:51.600 you have financial exclusion at its highest. So the demand 0:12:51.679 --> 0:12:54.520 goes crazy for credit products. At the same time, you 0:12:54.559 --> 0:12:56.920 have the cost of living has gone up, and so 0:12:57.000 --> 0:12:59.840 you have demand from the mass market is really intense 0:12:59.880 --> 0:13:02.680 for credit products. And typically what happens is you have 0:13:02.800 --> 0:13:05.559 lenders actually thrive in a market like this, but they 0:13:05.600 --> 0:13:08.199 make a lot of money off the customer. What's unique 0:13:08.240 --> 0:13:11.200 about Zilch is that we found a way to generate 0:13:11.320 --> 0:13:14.880 ad revenue from brands when our customers shop, and we're 0:13:14.960 --> 0:13:17.800 using that to offset the cost of credit to customers 0:13:18.280 --> 0:13:21.640 whilst servicing this mega demand. So for us, we're seeing 0:13:22.120 --> 0:13:25.560 ultra high growth through the next year to two years 0:13:25.880 --> 0:13:29.000 based on all of this coming together. Of course, most 0:13:29.120 --> 0:13:32.040 uniquely providing lots of savings. We're talking about hundreds of 0:13:32.040 --> 0:13:35.040 millions in savings in interest and fees for consumers as 0:13:35.040 --> 0:13:37.880 they use our product and move away from traditional lending 0:13:37.880 --> 0:13:40.040 products like revolving credit cards and things like this. 0:13:40.480 --> 0:13:42.280 So that's the opportunity they can improve a credit score 0:13:42.360 --> 0:13:44.679 not have to depend on credit cards. I'm interested in 0:13:44.720 --> 0:13:47.960 Philip as well as a South African entrepreneur to come 0:13:48.000 --> 0:13:48.880 and build in London. 0:13:49.360 --> 0:13:49.640 Why. 0:13:50.440 --> 0:13:52.200 I mean, I think it's part of why there's the 0:13:52.200 --> 0:13:54.720 Tech Summer tomorrow. There's a lot going on in London. Obviously, 0:13:54.760 --> 0:13:57.400 we look at the market here and say, you know, 0:13:57.440 --> 0:14:00.920 we really wanted to have that was going to hours 0:14:00.960 --> 0:14:04.559 access to Europe, of course to the United States. 0:14:04.280 --> 0:14:06.360 And you still got access to Europe, and we still do. 0:14:06.480 --> 0:14:07.960 I mean, you know a lot of people, of course 0:14:07.960 --> 0:14:10.000 have spoken about Brexit, and what does that change the 0:14:10.040 --> 0:14:12.079 reality of the situation is is that you just need 0:14:12.120 --> 0:14:14.360 to make sure your licensing is correct and you understand 0:14:14.360 --> 0:14:16.880 how to operate in that environment. Regulation, by the way, 0:14:17.040 --> 0:14:19.440 as long as it's clear, is a fantastic thing. We've 0:14:19.440 --> 0:14:22.000 also said this for our industry, which is why Zilch 0:14:22.120 --> 0:14:24.400 is one of the only regulated providers in the space. 0:14:24.760 --> 0:14:27.440 We're calling for regulation in B and PL and so 0:14:27.840 --> 0:14:30.320 i'd make this come in the vein that you just mentioned. 0:14:30.360 --> 0:14:32.800 As long as the rules are clear, you can engage 0:14:32.800 --> 0:14:34.720 with those rules and you can transact. 0:14:35.000 --> 0:14:36.520 And so we do have access to Europe. 0:14:36.520 --> 0:14:39.800 We understand Europe very well from the United Kingdom and 0:14:39.840 --> 0:14:43.040 equally the United States, which is a massive opportunity for us. 0:14:43.280 --> 0:14:45.080 So we really wanted to be in London. We think 0:14:45.120 --> 0:14:47.320 we can control what we're doing from here really well. 0:14:47.720 --> 0:14:50.480 Great unique pool of talent, lots of walks of life 0:14:50.520 --> 0:14:52.920 and different types of backgrounds in our business, and we 0:14:53.000 --> 0:14:55.720 really wanted that diversity in the company as we built 0:14:55.720 --> 0:14:58.359 this mass spirational product, something we want everyone. 0:14:58.080 --> 0:15:01.920 To enjoy, mass rational About those that you were in 0:15:02.200 --> 0:15:04.480 for money, you just said, of course you're now viewed 0:15:04.480 --> 0:15:07.280 as a unicorn. Money has been allocated from venture capital. 0:15:07.760 --> 0:15:10.480 Is that pool of money UK based and is it 0:15:10.520 --> 0:15:12.680 firm at this moment when people are questioning those sorts 0:15:12.680 --> 0:15:13.400 of valuations. 0:15:14.160 --> 0:15:15.680 I think it just depends on the business. 0:15:15.720 --> 0:15:19.520 I mean, we've seen a lot of companies raising flat rounds, 0:15:20.040 --> 0:15:22.680 up rounds. You've also seen of course down rounds. There's 0:15:22.720 --> 0:15:25.360 been an adjustment, There's no doubt about that. The way 0:15:25.400 --> 0:15:28.160 we think about it ourselves is do you have enough 0:15:28.200 --> 0:15:31.280 capital and do you have a sustainable business model to 0:15:31.360 --> 0:15:33.720 get yourself to break even and beyond right now in 0:15:33.720 --> 0:15:35.600 this market? I think that's how we see at least 0:15:35.600 --> 0:15:40.120 our company and you know, the strong view is as 0:15:40.160 --> 0:15:42.720 long as you can demonstrate that and that is the case, 0:15:43.160 --> 0:15:45.680 you're probably quite a standout business right now. 0:15:45.920 --> 0:15:47.080 And that's not because there's a lot of. 0:15:47.160 --> 0:15:50.560 Terrible businesses just because a lot of money was chasing 0:15:50.840 --> 0:15:51.440 high yield. 0:15:51.520 --> 0:15:53.080 They wanted growth at all costs. 0:15:53.320 --> 0:15:55.000 And the meant is the problem with that is they 0:15:55.040 --> 0:15:57.560 sacrifice the margin and a real business model in some 0:15:57.600 --> 0:15:59.760 cases for that. And the chickens are coming home to 0:16:00.520 --> 0:16:03.680 If you have a real profitable margin and you've got 0:16:03.800 --> 0:16:06.440 enough capital to get to break even or beyond, we 0:16:06.480 --> 0:16:09.480 still think that you can demonstrate the real value in 0:16:10.080 --> 0:16:13.880 your company and you can grow in and beyond your valuation. 0:16:14.280 --> 0:16:16.560 And that's really how we thinking about our business. So 0:16:16.840 --> 0:16:19.040 pools of capital wise, I mean, I think in the 0:16:19.440 --> 0:16:23.000 UK we sometimes underestimate. Second deepest pools of capital on 0:16:23.000 --> 0:16:26.360 this planet are in the United Kingdom, But we certainly 0:16:26.400 --> 0:16:28.760 do see in our business are spread of capital from 0:16:28.760 --> 0:16:31.040 the US and the UK. And that begs the question 0:16:31.240 --> 0:16:32.800 where do you go next? What do you do next? 0:16:32.880 --> 0:16:34.760 As a company which we are evaluating right now. 0:16:35.000 --> 0:16:38.800 Okay, leave using on the idea that we're seeing some 0:16:38.880 --> 0:16:40.840 are raising of funds from Philip Bellamont of Ziltch will 0:16:40.840 --> 0:16:42.480 be at the Bloomberg Technology Summit tomorrow. 0:16:42.600 --> 0:16:44.840 We thank him very much for joining, and we'll be. 0:16:44.800 --> 0:16:47.440 Talking about that wealth of more money coming from various 0:16:47.440 --> 0:16:48.360 pools later in the show. 0:16:48.400 --> 0:16:50.480 Whether it's of course well vcs. 0:16:50.520 --> 0:16:53.200 We've got Emily Heath, general partner over at Cybersecurity VC 0:16:53.360 --> 0:16:56.760 firm cyber starts joining us as she wants to discuss 0:16:56.760 --> 0:16:59.360 some of the trends she's seeing across the sector. And meanwhile, 0:16:59.400 --> 0:17:01.160 let's just get in the public markets for a moment 0:17:01.160 --> 0:17:03.320 as well. Let's tune into what's happening with the shares 0:17:03.360 --> 0:17:06.639 of Airbnb again, a rally on our hands, a bounce 0:17:06.720 --> 0:17:07.440 back from what has. 0:17:07.359 --> 0:17:09.200 Been so questions regarding regulation. 0:17:09.240 --> 0:17:12.320 We're just talking a lot about financial fintech regulation there 0:17:12.400 --> 0:17:14.840 and certainly in New York. Airbnb has been a focus 0:17:14.880 --> 0:17:17.639 in terms of regulatory pushback. We're currently go up almost 0:17:17.640 --> 0:17:21.240 four percent from New York, usually from San Francisco, usually 0:17:21.520 --> 0:17:22.040 from London. 0:17:22.040 --> 0:17:44.160 Today. This is a bluemotechnology. Look. 0:17:44.200 --> 0:17:46.720 We were remiss if we weren't thinking about some of 0:17:46.720 --> 0:17:50.080 the geopolitical situation that we currently live within. And it's 0:17:50.119 --> 0:17:53.120 notable that in the concerns around conflict in the MIDDLEAE. 0:17:53.119 --> 0:17:56.080 Government and private companies are looking to continue to beef 0:17:56.119 --> 0:17:59.920 up their cybersecurity and cyber startups are turning two venture 0:18:00.000 --> 0:18:03.240 capital firms like cyber Starts for backing. So far, it's 0:18:03.320 --> 0:18:05.919 portfolio is valued at one thirty billion dollars. Joining us 0:18:05.960 --> 0:18:09.320 now from London is Emily Heath, general partner at Cyberstats. 0:18:09.320 --> 0:18:12.000 It is wonderful to have some time with you and Emily. 0:18:12.400 --> 0:18:15.320 You're British originally, so I am now based in SF. 0:18:15.359 --> 0:18:17.120 You have worked for a whole host. 0:18:16.840 --> 0:18:19.360 Of companies across industries such as airlines, but you've been 0:18:19.520 --> 0:18:22.399 of course docu signed being a key company and that 0:18:22.440 --> 0:18:25.800 you were chief information security officer. Now you're using expertise 0:18:25.840 --> 0:18:26.800 to allocate capital. 0:18:27.080 --> 0:18:28.440 Yes, why are cyberstats. 0:18:28.920 --> 0:18:31.520 Cyberstrates has a very very unique model. 0:18:31.760 --> 0:18:35.359 We're a very small but mighty cyber only venture capital 0:18:35.520 --> 0:18:38.720 firm and there's a secret source behind this firm. 0:18:38.760 --> 0:18:39.520 They're very small. 0:18:39.520 --> 0:18:42.320 There's three partners, two in tel Avivan, Me and San Francisco, 0:18:42.600 --> 0:18:45.440 and we each bring something very very different. We've got entrepreneurs, 0:18:45.880 --> 0:18:49.520 we've got a traditional venture capitalists and myself being the practitioner, 0:18:49.680 --> 0:18:53.080 so when you think about bringing the operational experience to 0:18:53.240 --> 0:18:56.919 young founders that are in the very early seed stages, 0:18:57.640 --> 0:19:00.320 we forget sometimes as practitioners how much value we can 0:19:00.400 --> 0:19:03.080 actually add to these young companies to make sure that 0:19:03.119 --> 0:19:07.199 we stress test the problem statements that they have and 0:19:07.240 --> 0:19:10.040 make sure that they're building long lasting, meaningful companies. 0:19:10.680 --> 0:19:14.560 Founded in twenty eighteen by a Sequoia partner but also 0:19:14.800 --> 0:19:20.400 the godfather of the Israeli cybersecurity scene. Israeli just talk 0:19:20.400 --> 0:19:22.320 to us at the moment about how you are seeing 0:19:22.320 --> 0:19:24.520 the ecosystem affected there. You must have, of course, a 0:19:24.600 --> 0:19:26.320 large Mountain portfolio company is based there. 0:19:26.400 --> 0:19:28.760 Yes, in fact, every one of our portfolio companies is 0:19:28.800 --> 0:19:29.639 based in Israel. 0:19:29.760 --> 0:19:31.400 And there's a sadness. 0:19:31.520 --> 0:19:35.480 I mean, there's an absolute, profound sadness amongst the community 0:19:35.560 --> 0:19:37.840 right now. And on a personal level, I don't think 0:19:37.880 --> 0:19:40.600 I've met a single founder that hasn't been affected in 0:19:40.600 --> 0:19:43.560 some way, whether they know somebody who has been murdered, 0:19:43.560 --> 0:19:47.000 somebody that's missing, or somebody that's been profoundly affected. So 0:19:47.480 --> 0:19:50.320 on a personal level, it's struck really really close to 0:19:50.359 --> 0:19:54.240 home for us. On a professional level, however, I am 0:19:54.440 --> 0:19:57.760 so impressed with the resilience of the Israeli people and 0:19:57.840 --> 0:19:59.639 of the Israeli startup community. 0:19:59.720 --> 0:20:01.399 It is absolutely incredible. 0:20:01.480 --> 0:20:05.200 I think this concept of business continuity and resilience is 0:20:05.240 --> 0:20:06.919 something that we talk about all the time. 0:20:07.359 --> 0:20:10.040 Israelis have this natural ability. 0:20:09.800 --> 0:20:12.520 To think about what that actually means because they're used 0:20:12.520 --> 0:20:16.639 to living in turmoil. This is, of course unprecedented, but 0:20:16.720 --> 0:20:19.240 what it means is they were prepared in able to 0:20:19.280 --> 0:20:22.600 bounce back. Now, some of the portfolio companies have had 0:20:22.680 --> 0:20:25.000 some of their stuff that are now on reserve duty. 0:20:25.720 --> 0:20:27.120 There's people in the United States that. 0:20:27.080 --> 0:20:31.520 Are standing in for them, but business has remained relatively unaffected. 0:20:31.560 --> 0:20:32.840 I would not say it's business as. 0:20:32.760 --> 0:20:36.320 Usual by any stretch, but these are resilient people who 0:20:36.359 --> 0:20:39.800 really truly have continuity plans that have gone into effect. 0:20:40.119 --> 0:20:43.160 Geopolitics is complex, so too is the world in which 0:20:43.160 --> 0:20:46.320