Speaker 1: From Marhart where Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hide and Ed Ludlow.
Speaker 3: Live from Bloomberg's World headquarters in New York. I'm Caroline High.
Speaker 4: And Amed Ludlow reunited in New York City. This is
Speaker 4: Blueboy Technology.
Speaker 5: Coming our full IPO coverage.
Speaker 3: You have Instacart pricing tonight as Clavio prepares to go
Speaker 3: public this week as well.
Speaker 5: Will bring you everything you need to know, and we'll get.
Speaker 4: The inside look into the digital asset industry with Boxchain Capital.
Speaker 4: As the VC firm announces it's raise five hundred and
Speaker 4: eighty million dollars for new funds.
Speaker 3: Prus AI startup writer it raises one hundred million dollars
Speaker 3: to further grow its business.
Speaker 5: We'll have an exclusive conversation with the CEO.
Speaker 3: It is an ip week. The New York Stock Exchange
Speaker 3: and now ZAC are going to be busy. Let's think
Speaker 3: about Instacart first and foremost, because it's finally set to
Speaker 3: take that plunge into public markets, pricing later today, training tomorrow,
Speaker 3: joining us now as Bloomberg's Katie Roofin. It's kind of
Speaker 3: interesting timing. We don't often see IPOs price on a Monday.
Speaker 6: Right, Yeah, it's it's kind of unusual. Usually they debut Wednesday, Thursday, Friday,
Speaker 6: and they praise the night before, so big ones. Yeah,
Speaker 6: not typically on pricing Monday night, but hey why not?
Speaker 5: Why not? Officially?
Speaker 3: Maple Bear Inc. Is of course the name overall.
Speaker 5: Oh dear, we just have some people walking in front
Speaker 5: of the camera. It's Monday madness.
Speaker 3: We're new to this particular studio at the moment, But
Speaker 3: I'm interested in what you think. Ultimately, this is a
Speaker 3: test of there's a test of interest for tech assets
Speaker 3: at this moment.
Speaker 5: But is it a test of kind of the pivot.
Speaker 3: That CEO FGMO has made to focus more on sort
Speaker 3: of an e commerce bellweather player.
Speaker 5: Not just of course delivery.
Speaker 6: Sure, yeah, I mean the market's looking at a lot
Speaker 6: of different things here.
Speaker 5: I mean, first of.
Speaker 6: All, I think it's a big test of whether the
Speaker 6: market cares more about profitability or growth. There's been so
Speaker 6: much that's been said about why all these tech stocks
Speaker 6: went down in the last few years, and a lot
Speaker 6: of people are under the impression that public investors, public
Speaker 6: tech investors care more about the rate of growth than
Speaker 6: they did. They cared more about the rate of growth
Speaker 6: before and now they care about profitability. So instacar has
Speaker 6: a slowed rate of growth, but they've focused on being
Speaker 6: profitable and they've been focusing on new business segments.
Speaker 5: Remind us who's set to benefit. Who are the vcs
Speaker 5: that back to curly so Sequoia.
Speaker 6: Back to early and a lot has been said. You
Speaker 6: know that there have been vcs that invested at a
Speaker 6: thirty nine billion dollar valuation and that the top of
Speaker 6: the range instacart might just be ten billion dollars. But
Speaker 6: you know, i'd keep in mind that Sequoia invested maybe.
Speaker 5: Around a dollar a share.
Speaker 6: A lot of venture firms invested early, so I would
Speaker 6: say the average cost per share was going to be
Speaker 6: meaningful for a lot of vcs. There are some venture
Speaker 6: firms that, you know, maybe invested too much at the
Speaker 6: pre IPO stage. Actually a lot of them are like
Speaker 6: crossover investors, like hedge funds like d One, although they
Speaker 6: had invested in several rounds prior to the thirty nine
Speaker 6: billion dollar evaluation as well. So yeah, there are some
Speaker 6: investors that will be underwater.
Speaker 3: Okay, we've branking it down for us. We thank you
Speaker 3: and look, it's not the only IPO ed.
Speaker 4: Yeah, yeah, look, I'm not making it up. It is
Speaker 4: a mad Monday. Let's keep the IPO conversation going. Marketing
Speaker 4: and data automation provider clavey O gears up for its
Speaker 4: IPO joining us. Now is the man you saw run
Speaker 4: across set. I've never met anyone as keen to break
Speaker 4: news as Bloomberg's Ryan Gord, who's only a few weeks
Speaker 4: into his time in the Bloomberg newsroom.
Speaker 7: Clavio. Interesting.
Speaker 4: Let's respectfully say that the names we waited for, it
Speaker 4: was the less talked about. But what's going to happen
Speaker 4: in the next twenty four hours or so?
Speaker 8: Yeah? Do you know what's interesting? I think is that
Speaker 8: you say was the one that was less talked about.
Speaker 8: But actually, if you look on paper and think about
Speaker 8: you know, size and profile, Instacard is very similar to Clavier.
Speaker 8: They're both you know, pushing a nine billion dollar valuation.
Speaker 8: Clavier has followed Instacart's lead. Just yesterday we reported that
Speaker 8: they were looking to boost the IPO price range two
Speaker 8: dollars either side of the bottom and top end, So
Speaker 8: they're now pushing a twenty seven to twenty nine price range.
Speaker 8: The SEC finning came out this morning, and I think,
Speaker 8: you know, this just confirms what we what we learned
Speaker 8: last week that you know, this is still a pretty
Speaker 8: tentative time for markets, but you know there's been a
Speaker 8: shot in the arm, so to speak for you know,
Speaker 8: companies who are perhaps thinking, all right, we've got you know,
Speaker 8: a good amount sort of backed up by cornerstones, both
Speaker 8: in instacarts and Klavio's case, and so you know, let's
Speaker 8: play it safe, let's play it smart. And they know
Speaker 8: they're they're put they're pushing that they're going to raise,
Speaker 8: they're raising their range.
Speaker 7: Give me some of their names behind Clavier.
Speaker 4: Some of the existing back is in which banks are
Speaker 4: going to help us take this company public.
Speaker 8: Yeah, so partners is behind Clavio. And actually eleven percent
Speaker 8: of Clavio's revenue comes from Shopify. And you know, I
Speaker 8: think when you start thinking about, you know, how does
Speaker 8: the consumer respond, you know, what's the sort of retail appetite,
Speaker 8: it's pretty interesting to think about the insights that these
Speaker 8: these these guys are sort of giving us across the spectrum.
Speaker 8: But I think, you know, I would caution and say
Speaker 8: that Clavio and instagart are very different businesses. I think
Speaker 8: it's probably good not to draw too many comparisons, but
Speaker 8: you know, come come tomorrow, we would have had both,
Speaker 8: you know, instacart pricing today, trading tomorrow, and then Clavio
Speaker 8: pricing tomorrow afternoon too for trading on Wednesday.
Speaker 3: There are some similar larities across all the IPOs of
Speaker 3: having some cornerstone investors involved. But focus on the difference
Speaker 3: for a minute. What is a marketing and data automation provider?
Speaker 3: What what is Clavio up to from a business model perspective.
Speaker 8: Yeah, I mean, you know, it's really getting down and
Speaker 8: down into the weeds as to what people want to
Speaker 8: or what they think people are interested in. How they
Speaker 8: can better vie that those insights to those who are
Speaker 8: ultimately looking to.
Speaker 7: Make the most the most money.
Speaker 8: You know, I think when you think about Instacart, it's
Speaker 8: you know, grocery delivery. How do you provide them with
Speaker 8: the best insights into what people are wanting to give
Speaker 8: a moment And you know, I think even outside of
Speaker 8: the IPO, you know IPO candidates, there are even quite
Speaker 8: a few companies on the on the sort of strict
Speaker 8: MNA side who are you know, exploring options so to
Speaker 8: speak for businesses that are exposed to marketing, data, information services,
Speaker 8: insights across the piece.
Speaker 5: We're making us.
Speaker 3: Buy the right thing at the right time. You need
Speaker 3: data that wrangled, Thank you very much. Indeed, all things IPOs. Meanwhile,
Speaker 3: coming out, we'll talk look.
Speaker 5: A bit more about the world of crypto to digital assets.
Speaker 3: There's some fundraising going on friends, block Chain Capital General
Speaker 3: Partners to go that his firms just raise five h
Speaker 3: eighty million dollars in some fresh funds. We'll get into
Speaker 3: it as a remote technology Chinese fintech joint and I
Speaker 3: was planning to unwind its investment in A and T Capital,
Speaker 3: pulling back from one hundred million dollar fund there was
Speaker 3: actually central to it's bet on digital assets. Anti Capital
Speaker 3: is losing one of its biggest financial backers. It seems
Speaker 3: unclear if actually the bench firm will continue to operate
Speaker 3: or well snag a new key investor. But meanwhile, bucking
Speaker 3: that particular trend and the down rounds and concerns about crypto,
Speaker 3: we've got crypto focused Blockchain Capital joining us, who's actually
Speaker 3: raise funds five and eighteen million dollars of them cost
Speaker 3: two new funds. We understand one of the biggest raises
Speaker 3: for the asset class this year, not just ever for
Speaker 3: the bench firm in its tenure history. So please to
Speaker 3: welcome to the show. Spenzer Boga Blockchain Capital General Partner,
Speaker 3: and are you bucking a trend or is there more interest,
Speaker 3: more LP interest in coming into crypto.
Speaker 9: There's certainly plenty of LP interests.
Speaker 10: Listen, we're doing what we've always done, which is continue
Speaker 10: to double down on the industry.
Speaker 9: That we have long term conviction in.
Speaker 10: The middle of a bear market, and so we're looking
Speaker 10: forward to to deploy this capital into some fresh opportunities.
Speaker 3: Okay, so talk about the fresh opportunities. Where in the
Speaker 3: space do you think that valuations aren't elevated, that people
Speaker 3: are really proving some disruption in this moment.
Speaker 10: Sure, so we see opportunities at both the early stage
Speaker 10: and the later stage.
Speaker 9: You know, if we go back to twenty twenty to
Speaker 9: twenty twenty two, I'd.
Speaker 10: Say that the industry was mostly characterized by an influx
Speaker 10: of new large allocators that were deploying very large sums
Speaker 10: of capital to the mid and late stage segment.
Speaker 9: Of the market.
Speaker 10: All of those capital allocators have walked off the playing field.
Speaker 9: Right, they're no longer active in the industry. But meanwhile,
Speaker 9: during this.
Speaker 10: Last kind of market cycle that we saw from twenty
Speaker 10: twenty to twenty twenty two, we did have a lot
Speaker 10: of early stage companies that were funded, and a few
Speaker 10: of those are growing up into that kind of mid
Speaker 10: stage of the market.
Speaker 9: And that's what we're keeping a close eye on.
Speaker 4: Because I just want to check some of the mechanics
Speaker 4: with you, because you guys already had two billion dollars
Speaker 4: of assets, right, is it that that capito had already
Speaker 4: been committed and now you're bringing new funds because you've
Speaker 4: got opportunities to write new checks.
Speaker 10: Correct, So our assets under management grew to two billion
Speaker 10: over the past decade that we've been doing this. So
Speaker 10: we're now to pointing capital out of our sixth to
Speaker 10: early stage fund and again our first opportunity fund, so
Speaker 10: that's doing Series B in later.
Speaker 9: Okay, so that two billion came from the prior five funds.
Speaker 4: The focus decentralized finance and gaming. Just explain how the
Speaker 4: focus of the sort of target startups changed.
Speaker 7: Then with this new fund.
Speaker 10: You know, it continues to cover a lot of the
Speaker 10: opportunities in the space, but I'd say early on in
Speaker 10: our first fund vintages, we're really focused on, if you
Speaker 10: think from a sequencing perspective, which opportunities.
Speaker 9: Need to work first.
Speaker 10: And that's largely thinking about things that we broadly bucket
Speaker 10: under centralized finance.
Speaker 9: So these are largely on ramps right and off ramps.
Speaker 10: So it's things like coinbase and crack and bitco anchorage,
Speaker 10: you know, the largest exchanges and custodians, because nothing else
Speaker 10: can really work unless you have robust, reliable on ramps
Speaker 10: and off ranks.
Speaker 9: Now, over time we've blended and moved.
Speaker 10: More towards the I characterized them maybe as more crypto
Speaker 10: native opportunities. So these are things like decentralized infrastructure, decentralized finance,
Speaker 10: and then especially gaming has been on the horizon for
Speaker 10: the past couple of years and we've made a select
Speaker 10: few investments in that category.
Speaker 3: I'm just interested in aside from the investments you're making.
Speaker 5: You had an interesting ton of phrase.
Speaker 3: You said, these big players who are adding big checks
Speaker 3: have walked off the field. I mean a systems still
Speaker 3: out there with a massive crypto fund. I think a
Speaker 3: Katie Hahn. I mean these players are not writing checks
Speaker 3: at the moment, Are they not deploying the capital they raised?
Speaker 10: No, those are not the large allocators that I'm thinking of.
Speaker 10: So I think most of the crypto native investors have
Speaker 10: stayed true to the industry and continue to deploy capital.
Speaker 10: The ones that I'm thinking about are more of the
Speaker 10: large late stage private equity or hedge funds even that
Speaker 10: were building some pockets of illquid private investments. Several of
Speaker 10: them kind of came in and they said, listen, we
Speaker 10: have zero percent exposure to this sector.
Speaker 9: We'd like to get it up to ten percent in
Speaker 9: a twelve month period. And naturally that.
Speaker 10: Resulted in clearing prices that were above and beyond our appetite.
Speaker 11: That has though been still this potion pull, this tension
Speaker 11: of institutional appetite when we think about more broadly a
Speaker 11: spot etf for bitcoin, but then at the same time
Speaker 11: nervousness from institutional money, from all the guard money because
Speaker 11: of ultimately regulation, particularly here in the US.
Speaker 5: How is that.
Speaker 3: Affecting startups, founders, the companies that are managing to scale
Speaker 3: at the moment.
Speaker 10: Look, I think across whether it's the large institutional allocators
Speaker 10: that are looking at the space or its early stage
Speaker 10: startup founders. I think they're looking at the same thing,
Speaker 10: which is the actual metrics on the ground.
Speaker 9: So, yes, it is a bear market. Yes it's a
Speaker 9: so called crypto winter and the industry speak.
Speaker 10: But if you look at the numbers on the ground,
Speaker 10: we've seen stable coins process over six trillion dollars of
Speaker 10: volume in the past twelve months alone, and that's accounting
Speaker 10: only for transactions in the Ethereum network. If we expanded,
Speaker 10: it'd probably be closer to nine or ten trillion. That's
Speaker 10: just stable coins. Within DeFi, We've got seven hundred million
Speaker 10: dollars of protocol revenue that's been generated by these DeFi applications.
Speaker 10: We've got seven hundred billion dollars of volume going across
Speaker 10: decentralized exchanges in the past twelve months. All of which
Speaker 10: is to say that actually, on the ground, there's a
Speaker 10: lot of healthy things happening. It is not the way
Speaker 10: that I think most people perceive it that in these
Speaker 10: bear markets or crypto winters, that activity just disappears.
Speaker 4: Suspends it a little quickly about gaming, and when I think
Speaker 4: about the use of blockchaining gaming, it's about monetizing right
Speaker 4: in game customization, skins, character shares. Is it limited to
Speaker 4: that though the opportunities you see so no, it's.
Speaker 9: Not limited to that. I would largely characterize the opportunity.
Speaker 10: In gaming is the same as most of the applications
Speaker 10: of blockchain technology, which is to put users at the
Speaker 10: center and to disintermediate some of.
Speaker 9: The economics associated with it.
Speaker 10: The case of gaming, we have, you know, tens of
Speaker 10: millions of people around the world that invest maybe dozens
Speaker 10: or not hundreds of hours a week into acquiring.
Speaker 9: In game assets.
Speaker 10: They spend their time, they spend their money to acquire
Speaker 10: these assets, and the promise from a lot of these
Speaker 10: blockchain startups is that within a gaming context, they can
Speaker 10: give users actual ownership of these assets in the same
Speaker 10: way that they would in the real world or the
Speaker 10: physical world.
Speaker 4: Spencer Bogot Blockchain Capital always good to catch up and
Speaker 4: have you on the shape.
Speaker 7: Time for talking tech and first up.
Speaker 4: Bob van Dyke, CEO of Process, is stepping down from
Speaker 4: his role is head of the tech investment firm Vendi.
Speaker 4: Will remain as a consultant to the board and its
Speaker 4: parently company, Naspers until the end of September twenty twenty four.
Speaker 4: His departure comes after a complicated shareholder structure that was
Speaker 4: highly criticized by some investors and government regulators, and Ali
Speaker 4: Baba's unveiling plans to beef up its investments in Turkey.
Speaker 4: A meeting Friday with Turkey's President Erdawan, the Chinese internet
Speaker 4: company pledged two billion dollars. Ali Baba has already invested
Speaker 4: over one billion dollars through its Turkish unit, Trendill, Turkey's
Speaker 4: biggest e commerce platform. Plus investment firm KKR has agreed
Speaker 4: to buy twenty percent of Singapore Telecommunications Regional Data Center
Speaker 4: business for more than eight hundred million US Singapore's largest
Speaker 4: telecoms provider. We use the capitol to bankroll in expansion
Speaker 4: across Southeast age to The deal also allows KKR to
Speaker 4: take up to two seats on the unit's board, further
Speaker 4: expanding its rees into the server and networks that power
Speaker 4: the Internet. Now, speaking of investing, ours, official intelligence startup
Speaker 4: Writer is planning to invest more in its AI models.
Speaker 4: Writers raised one hundred million dollars in a Series B round,
Speaker 4: the round valuing the company at more than five hundred
Speaker 4: million dollars, joining US now from San Francisco. Writers CEO
Speaker 4: and co founder may have been been may very simple
Speaker 4: question to start for it start with what do you
Speaker 4: use those funds for?
Speaker 7: Oh?
Speaker 12: Thanks so much, Ed, great to be here. While we're
Speaker 12: using the funds to further invest in our large language
Speaker 12: model technologies and our full stack generative AI platform. Enterprises
Speaker 12: are ready to move from you know, all the talk
Speaker 12: of the promise of generative AI to real impactful applications
Speaker 12: they can put into production. And we're going to keep
Speaker 12: beefing up our platform to do that.
Speaker 3: Talk about real impactful revenue for you as well, because
Speaker 3: there is so much optimism, dare I say hype around
Speaker 3: how much revenue this is going to bring in for
Speaker 3: the key public companies already?
Speaker 5: What about you? What are you seeing in times of growth?
Speaker 8: Oh?
Speaker 12: Thanks so much, Caroline. So we are four x, you
Speaker 12: know since the beginning of the year, so absolutely an
Speaker 12: influx of folks who you know, have gotten their hands
Speaker 12: already working with large language models, but are kind of
Speaker 12: stuck in poc purgatar, you know, proofs of concepts that
Speaker 12: don't make it to production. And so we succeed and
Speaker 12: our customers succeed when we can really help them realize
Speaker 12: that promise building applications that people actually use that involve
Speaker 12: you know, their data and are secure and their environments.
Speaker 3: And their employees becoming ultimately more productive. May this comes
Speaker 3: at a tough time, doesn't it, just from the mentality
Speaker 3: of yes's productivity to be had. But boy, or we
Speaker 3: worried about the dislocation, the disruption it caused for labor
Speaker 3: in particularly, I'm thinking the strikes happening over on the
Speaker 3: West coast down here on the East coast for writers,
Speaker 3: for actors AI as a worry there. How much are
Speaker 3: you thinking you might end up displacing workers.
Speaker 12: Yeah, it was a big concern of a lot of
Speaker 12: the executives that you know took a chance on us
Speaker 12: and executives who have joined this round, customers like Vanguard
Speaker 12: and Loreal and Eccentria, And you know, those executives aren't
Speaker 12: there promoting AI to displace jobs at all. We're really
Speaker 12: all in concert to help transform work, to make it
Speaker 12: more creative, more interesting, and really take away the kind
Speaker 12: of cognitive manual labor in a lot of these workflows.
Speaker 12: So you know, I would say we're quite different in
Speaker 12: that regard in the way that writer is use case
Speaker 12: based and workflow based people are the heart of making
Speaker 12: generative AI work.
Speaker 4: May you've got that access to capital, but I think
Speaker 4: I'm right saying you're also in the h one hundred club,
Speaker 4: aren't you. How important is it to have that compute
Speaker 4: access you have a cluster in the thousands.
Speaker 7: I think I'm right in saying so.
Speaker 12: Nvidia is a close partner. They're a customer of Writer
Speaker 12: as well. You know, we really wouldn't be where we
Speaker 12: are if we didn't have that partnership. And I think,
Speaker 12: you know, very importantly a philosophy of smaller models are
Speaker 12: more agile, they're easier to manage, they're easier for our
Speaker 12: customers to put in their virtual private clouds. And you know,
Speaker 12: bigger isn't always better.
Speaker 4: That is a good point you raised, Caroline, and I
Speaker 4: have covered a lot of these raises foundation models that
Speaker 4: are raising increments of hundreds of millions and at high valuation.
Speaker 4: And do you worry about the sort of hype around it?
Speaker 4: Do you think that your own valuation was fair in
Speaker 4: this round in terms of your potential?
Speaker 12: Yeah, Ed, we could have done this at a billion's evaluation,
Speaker 12: which I think is absolutely absurd. I think some of
Speaker 12: what is happening is not good for the industry. We
Speaker 12: want you know, unhyped use cases. We want unhyped you know, transformations, augmentations.
Speaker 12: You know, the real use cases here are when you
Speaker 12: put people in AI together and I think of over
Speaker 12: focus on the large language models, the size of them,
Speaker 12: the you know, valuations of the companies. It's really distracting
Speaker 12: from actually getting valued.
Speaker 5: What about the way in which that built, that constructed.
Speaker 3: May we come off a week where a lot of
Speaker 3: ke CEOs thought leaders were out there in Washington thinking
Speaker 3: about future regulation. How do you think about your role
Speaker 3: informing that.
Speaker 12: Yeah, well we already get RFPs that ask us about
Speaker 12: the EU AI Act, Caroline, and it's not even law yet,
Speaker 12: and so you know, we are enterprise first.
Speaker 5: Bottoms up.
Speaker 12: We've built for customers being able to audit our training
Speaker 12: and really look at you know, if there is copyrighted
Speaker 12: information in there, there isn't. I think the companies that
Speaker 12: really make it in the enterprise have to think about
Speaker 12: a world where regulation is here, and it's here pretty globally,
Speaker 12: not just in Europe.
Speaker 4: May really quickly what kind of roles are priority for
Speaker 4: you to hire?
Speaker 7: What kind of people do you need?
Speaker 12: Ed literally everything. If you're in tech and you want
Speaker 12: to work in AI, please email me.
Speaker 3: Well, we won't ask you to give us your email
Speaker 3: address on live television, but maybe you can go to
Speaker 3: your Twitter and social media accounts.
Speaker 5: We thank you so much.
Speaker 3: May it be great to have you on today on
Speaker 3: the round of course, CEO and co founder of.
Speaker 4: Writer, welcome back to Bloombay Technology, Ed Ludlow here in
Speaker 4: New York City, Caroen, Yeah, it's so good to.
Speaker 5: Have you here. Let's have a quick check on these markets.
Speaker 5: I'm Caroline High. Let's get a quick look.
Speaker 3: At as we get through midday training, Nasdaq actually turning
Speaker 3: a little bit to the high. And that's that one
Speaker 3: hundred in particular when in this nervous macro period where
Speaker 3: we get not only the Federal Reserve come Wednesday, you
Speaker 3: get the Bank of England on Thursday, the Bank of
Speaker 3: to round out the week, where is well the pressure
Speaker 3: point's going to be for some of these central bankers
Speaker 3: to the upside. It feels like on the two year
Speaker 3: yield we're up against just about two basis points overall
Speaker 3: because we're worrying again about whether we pause this time,
Speaker 3: but have to keep on raising in the fight of
Speaker 3: inflation that you see.
Speaker 5: Prices are oil on the rise and seeing.
Speaker 3: Bitcoin actually interestingly managed to shake off some of this anxiety.
Speaker 5: We're up almost three percent.
Speaker 3: Ask not the reason why many people are saying like
Speaker 3: this is thin liquidity at the.
Speaker 5: Moment, but we're above that twenty seven thousand level. Moving on,
Speaker 5: go to some of the individual movers that are on
Speaker 5: our minds.
Speaker 3: Of course, Apple actually managing to make up some of
Speaker 3: that sell off on Friday.
Speaker 5: This is we see some good moon.
Speaker 3: Music coming around the early sales and interest at least
Speaker 3: in the IFM fifteen in all of the array. Tesla
Speaker 3: on the downside, off by two point six percent. Some
Speaker 3: analysts writing that they're concerned about the future earnings potential
Speaker 3: of this particular company, so keep an eye on some
Speaker 3: of the analyst notes there today.
Speaker 5: And Microsoft, this was an interesting.
Speaker 3: One, maybe a bit of a revolving door, but ultimately
Speaker 3: they had a product who I might add has been
Speaker 3: at the business for a very long time driving the
Speaker 3: likes of the surface and indeed Microsoft Windows of late,
Speaker 3: but panas Pane will be staying long enough to help replacements.
Speaker 3: We understand transition into the role. But after more decades,
Speaker 3: having joined since two thousand and four, panas Panee is
Speaker 3: leaving Microsoft ED.
Speaker 4: Yeah, speaking of departures and returns, it's been a pretty
Speaker 4: rough year for Meta employees after twenty thousand of their
Speaker 4: teammates were laid off over.
Speaker 7: The past year.
Speaker 4: But now they're starting to enjoy coming back into the office.
Speaker 4: One reason is the company has revived a number of
Speaker 4: popular pre pandemic perks, from branded T shirts to happy hours.
Speaker 4: That's bringing in Boxatia counts out of SF for more
Speaker 4: and ah. This is interesting because when you and I
Speaker 4: reported the rounds of layoffs at the end of last
Speaker 4: year and beginning of this year, we covered how deep
Speaker 4: and sudden and wide they were, and many people were upset.
Speaker 4: Talk to us about some of the cultural fixes that
Speaker 4: Meta's bringing back in.
Speaker 13: Yeah, as you mentioned around the time of the layouse,
Speaker 13: I mean, people were anxious, they were scared that they
Speaker 13: could lose their jobs at any moment.
Speaker 5: They started to.
Speaker 13: Scale back perks, and now those are coming back. Some
Speaker 13: employees I was talking to were saying happy hours on
Speaker 13: Thursdays are happening again. Dinner time, which used to be
Speaker 13: like six thirty or seven, is now at six and
Speaker 13: people are super excited about that.
Speaker 5: The restaurants are opening.
Speaker 13: Up again, and even some of the more sort of
Speaker 13: luxurious ferks like laundry services and haircuts are back. So
Speaker 13: people are excited that things are actually coming back, and
Speaker 13: it's definitely boosting spirits.
Speaker 5: There's enough Lacroix to go around a show. What about though,
Speaker 5: enough jobs to go around. I'm actually in the detail
Speaker 5: of your story.
Speaker 3: People are actually being brought back they've previously been laid off.
Speaker 13: I talked to Yeah, some employees that had been rehired,
Speaker 13: and there are other people that are in the process.
Speaker 13: It's slow and they have to sort of go through
Speaker 13: the application process again. But Meta is rehiring and they
Speaker 13: said this too on the earnings call right, that they
Speaker 13: want to hire more people in hot areas like AI,
Speaker 13: especially generative AI. So yeah, they are slowly starting to
Speaker 13: bring some people back.
Speaker 4: I think what's so interesting now issues we're in a
Speaker 4: time where we're not really either talking at about the
Speaker 4: metaverse and the sort of losses that that unit was
Speaker 4: going on. We are talking more about the work that
Speaker 4: Meta is doing in AI Lama to open source. What
Speaker 4: is the latest signal we're getting out of matter of
Speaker 4: what the priority is for Mark Zuckerberg.
Speaker 5: It's still AI.
Speaker 13: I mean, they'll tell you on the earnings call that
Speaker 13: you know, the meta versus is still a priority and
Speaker 13: the company is still putting money there, but it really
Speaker 13: is AI. Even employees that I've talked to you said
Speaker 13: like everyone wants to be on the generative AI teams.
Speaker 13: That's sort of like the hot team that's doing well,
Speaker 13: that's getting money. So even just from where employees are
Speaker 13: going on what teams they want to be on, you
Speaker 13: can see that. And then of course, as you mentioned,
Speaker 13: they have code Lama, Lama one, Lama two. They're really
Speaker 13: sort of pushing to be a leader in the AI space.
Speaker 5: As counts brilliantly.
Speaker 3: Thank you for that story, and we are and I mean,
Speaker 3: ultimately here you are in New York with all your
Speaker 3: knowledge of really the anxiety that has been in the
Speaker 3: past for San Francisco, Silicon Valley more broadly but meta.
Speaker 3: It is notable that they had a long way to
Speaker 3: work to get back that.
Speaker 5: Marah.
Speaker 7: Yeah.
Speaker 4: The way it was described to me at the time
Speaker 4: is like at first they used a scalpol and they
Speaker 4: were like, Okay, let's very clearly work out what we
Speaker 4: need to do. But the year of efficiency was the priorities.
Speaker 4: So they later chucked out the scalpel and they brought
Speaker 4: the sledgehammer, which is one way that some executives put
Speaker 4: it to me, and they realized, well, hold on, we
Speaker 4: actually need some of these people. And it's amazing to
Speaker 4: see Asia report they're now as individuals being high back
Speaker 4: and at.
Speaker 3: The time where share prices on the rise, that's always
Speaker 3: helpful for your new music as well. But there is
Speaker 3: still this ongoing concern about really the future of social media.
Speaker 5: It's bread and butter, the future.
Speaker 3: Direction of WhatsApp, of Messenger, but notably of Instagram and
Speaker 3: of Facebook, the og the blue and how we regulate
Speaker 3: that going forward, how we make it a safer space.
Speaker 3: And we want to stick on that particular point because
Speaker 3: we understand that more than one hundred parents of transgender
Speaker 3: kids have signed an open letter urging the US Senate
Speaker 3: to oppose the Kids Online Safety Act or KOSOS.
Speaker 5: It's known the legislation aims to.
Speaker 3: Make the Internet safer for kids, but look, some LGBTQ
Speaker 3: advocates are raising some concerns against particularly a CeNAT to
Speaker 3: Marshal Black Friends the legislation that could give new power
Speaker 3: to state attorneys general to dictate what children can access
Speaker 3: online and perhaps that cuts trans children off from what
Speaker 3: the parents are saying is life saving online resources and community.
Speaker 3: Let's be again someone who's trying to find the nuance
Speaker 3: within all of this. Frank McCourt junior is a founder
Speaker 3: of Project Liberty Action Network and Project Liberty and Organization,
Speaker 3: which strives to address the harms of social media and
Speaker 3: technology on society and.
Speaker 5: Especially for children.
Speaker 3: You've been a proponent of the kids online safety, but
Speaker 3: at the heart of it, Frank, you're someone who wants
Speaker 3: technology to be the answer.
Speaker 6: Here.
Speaker 3: Can technology, when we talk about AI and the folks
Speaker 3: ever solve for the nuance, for the ability to get
Speaker 3: this very difficult context satisfied.
Speaker 5: Yeah, I think it can.
Speaker 14: And yeah I'm glad you mentioned AI because all this
Speaker 14: is moving very quickly now, right, and we, I think
Speaker 14: need to really focus on the infrastructure. And I'm a
Speaker 14: builder at heart, right, I'm from a family of fifth
Speaker 14: generation builder one hundred and thirty years. We've been building
Speaker 14: large infrastruction projects and when we look at the design,
Speaker 14: the current design of big tech, in particular our social
Speaker 14: media platforms are being.
Speaker 5: Used and being brought forward.
Speaker 14: We have a design problem and an infrastructure problem, and
Speaker 14: fortunately now we have the technology to actually fix it right.
Speaker 14: We can provide a digital identity, we can provide ownership
Speaker 14: and data control to individuals. We can actually share value
Speaker 14: within individuals. So I think we need to fix the
Speaker 14: tech to fix the problem. But fixing the tech alone
Speaker 14: once solved.
Speaker 4: Because that's the thing, Frank, that you just heard Karen
Speaker 4: and I talking there to Asha about what Meta is
Speaker 4: working on. It's good at artificial intelligence, the cutting edge
Speaker 4: of foundation models. From a regulatory perspective, their position was
Speaker 4: always that we don't know who should have oversight. We
Speaker 4: just don't think we should do ourselves. But why do
Speaker 4: we not talk more about them finding technological fixes for
Speaker 4: their own the problems on their own platforms.
Speaker 14: Because they don't want to fix it. Because these big
Speaker 14: platforms have our data, they aggregate it, and they exploit
Speaker 14: it and monetize it.
Speaker 9: And we need a new.
Speaker 14: Design for the technology where individuals ownly control their data.
Speaker 14: You mentioned regulation. I think regulation is part of it,
Speaker 14: but it's not going to solve the entire problem. And
Speaker 14: for me, what's very interesting about this COOSA. Uh, you know,
Speaker 14: the Kids Online Safety Act is we've seen the level
Speaker 14: of concerned parents have with the current tech architecture. We
Speaker 14: know it's broken. KOSA is an effort in the right direction,
Speaker 14: right to let big techno We're not going to We're
Speaker 14: not going to live with this any longer.
Speaker 5: We're going to we're going to fix it.
Speaker 14: So I think it's not the bi all end all,
Speaker 14: but it's a step in the right direction.
Speaker 7: So what is the technological fix? Is it algorithmic? Is it?
Speaker 4: You know I've asked that question to the companies many
Speaker 4: times over the years, and I'm yet to hear aim
Speaker 4: straightforward answer.
Speaker 14: Yeah, because they don't want to give you an answer,
Speaker 14: because what is your answer fr return ownership and control
Speaker 14: of data.
Speaker 5: To the individual.
Speaker 14: Well, I'm saying using blockchain, but it's not a think
Speaker 14: about it. First, at the infrastructure level, I mentioned that
Speaker 14: we're in the third generation of the Internet now. The
Speaker 14: first generation was enabled by a protocol called TCPIP, the
Speaker 14: second generation by a protocol HTTP. We need a third
Speaker 14: generation of the Internet now enabled by another protocol. We
Speaker 14: would suggest it's DSNP, a decentralized social networking protocol which
Speaker 14: enables people individuals to own and control their data and
Speaker 14: by deploying blockchain, derive value from their data.
Speaker 3: We of course come into this conversation talking about meta
Speaker 3: But first I want to push back at that. I
Speaker 3: think a lot of people who work at the company
Speaker 3: do want to see a fix. They never built this
Speaker 3: because they thought this would be a negative to in
Speaker 3: any way. They want to be able to try and
Speaker 3: ensure that kids aren't in any way exposed to harmful content.
Speaker 3: But also there's this conversation that this is just about
Speaker 3: US companies and US regulations. This is about Chinese players
Speaker 3: for example, and TikTok of course owned by Bykedance. I
Speaker 3: just want you to take a listen to what Mike
Speaker 3: Pence had to say about the regulation.
Speaker 15: Of TikTok, and we will to be banning TikTok. TikTok
Speaker 15: is a platform of the communist Chinese government. They're collecting
Speaker 15: data on Americans every single day. What young Americans deserve
Speaker 15: to know is that their privacy is being compromised with
Speaker 15: participation in the TikTok platform.
Speaker 3: Does self regulation, technological regulation, or indeed, in the end
Speaker 3: regulation coming from the US ever solve for international players
Speaker 3: at this point.
Speaker 14: Well, I think this TikTok example is a good one. Right.
Speaker 14: Autocratic technology is awesome if you're an autocracy. So autocratic
Speaker 14: technology is going to work very very well for China.
Speaker 14: But I would argue that you can't have a democracy
Speaker 14: with autocratic technology.
Speaker 7: In this circumstance. Right.
Speaker 4: The proposal from TikTok and Oracle was a technological solution.
Speaker 4: How's the data in a US data center with oversight
Speaker 4: from the US governm, then not have any data locally
Speaker 4: housed in China? Why was that your mind, Frank not
Speaker 4: an Well, was it, to your mind a good enough solution? I?
Speaker 14: No, it's not a good enough solution. I think we're
Speaker 14: playing around the edges. It's you know, bug, mister Fuller
Speaker 14: had a great saying, and I'm going to paraphrase it.
Speaker 14: When the model is so broken, don't waste your time
Speaker 14: trying to fix it. Build a new model and make
Speaker 14: the old one obsolete. That's where we're at right now.
Speaker 14: Twenty thirty years ago, there wasn't the ability to store
Speaker 14: data in a decentralized way, so we needed these large
Speaker 14: centralized server farms gathering up this data. And you're right, Carolin,
Speaker 14: I don't think people went out of their way thinking
Speaker 14: that they were going to do something. You know, most
Speaker 14: of the employees from Meta or these other companies do
Speaker 14: something bad with all this data. But just look at
Speaker 14: where we are now. Just look at where we are right,
Speaker 14: kids anxious, depressed, attempting to kill themselves or killing themselves.
Speaker 14: Our society generally, we can't have conversations anymore, highly polarized.
Speaker 14: Our democracy struggling to survive. And I would argue even
Speaker 14: our economy is going to struggle if the bulk of
Speaker 14: the of the of the value resides in five or
Speaker 14: six platforms. There's a moment here where we can change
Speaker 14: all this, and we need to. It does not have
Speaker 14: to be this way, Frank, can.
Speaker 5: I ask a personal questions to why you're doing this?
Speaker 3: You are a father of six, and I'm sure they're
Speaker 3: grown but to a large extent. But bid you go
Speaker 3: back from a nineteenth century business that's built You say
Speaker 3: you were builders.
Speaker 5: Why turn your attention hand?
Speaker 3: Why do you so, Galvan I so focus on this
Speaker 3: particular part of infrastructure, even though it's not bricks and mortar.
Speaker 14: Well, it started a decade ago, and we started with
Speaker 14: Georgetown Public Policy.
Speaker 9: School in Washington, d C.
Speaker 14: Brand new school and thought that maybe we could contribute
Speaker 14: in that way. Learn very quickly and by the way,
Speaker 14: inside this the public Policy School something we call the
Speaker 14: Massive Data Institute, we learn very quickly that the data
Speaker 14: that these policy makers need is not available to them.
Speaker 14: It's in these large platforms. So that's where we began
Speaker 14: to use our skills as builders, as infrastructure specialists to
Speaker 14: look at the design of the technology and came to
Speaker 14: just a very simple conclusion, why is our data being
Speaker 14: scraped and aggregated by a few platforms. It just doesn't
Speaker 14: feel correct to me. We should own our digital DNA.
Speaker 14: This is our digital this is our lived life. There's
Speaker 14: no separation between now your biological identity and your digital identity.
Speaker 14: Somehow we've let them be separated, but the fact of
Speaker 14: the matter, they're one and the same. And by the way,
Speaker 14: there's a lot of value to be derived from this data.
Speaker 14: So there's a lot of companies that are going to
Speaker 14: be built and innovation that's going to occur. I think
Speaker 14: we should lean into innovation and of course regulate things
Speaker 14: to buy the time, but this is not a regulatory fix. Ultimately,
Speaker 14: this is going to be a tech fix for a
Speaker 14: tech problem. And then this time let's get it right
Speaker 14: by optimizing for the right things, the things that are
Speaker 14: good for kids, good for society, good for democracy.
Speaker 4: Thank Recur, junior founder of the project the Action Network.
Speaker 4: Just terrific conversation here, and actually it's good to be
Speaker 4: out here on the West Coast in New York City.
Speaker 4: But up next we're going to discuss the health of
Speaker 4: the Boston startup ecosystem. That's with Lily Lyman from Underscore
Speaker 4: VC and our VC Spotlight segment coming up next, this
Speaker 4: is Bloomberg Technology. It is good to be on the
Speaker 4: East coast. I know where I am, New York City,
Speaker 4: Reunited Carrow. But on today's VC Spotlight, we're gonna be
Speaker 4: taking a look at the Boston startup ecosystem in full swing.
Speaker 4: And who better to talk to about that than Lily Lyman,
Speaker 4: general partner at Underscore VC, early stage VC firm based
Speaker 4: in Boston, two hundred and forty six million dollars in assets.
Speaker 4: And I want to go straight to Klaviyo, you know,
Speaker 4: potentially a big IPO, a tech company from your neck
Speaker 4: of the woods this week. How excited does that get
Speaker 4: people in your community?
Speaker 7: In Boston.
Speaker 2: Yeah, well, thanks for thanks for having me. You know,
Speaker 2: we're very excited for the Clavio IPO, and I think
Speaker 2: it's in part because it's the type of company that
Speaker 2: gets built here in Boston. It's a great team, it's
Speaker 2: a huge market. They've been very capital efficient in how
Speaker 2: they've built, and I think that's reflected in the ownership
Speaker 2: of Andrew a moment of IPO be over a third
Speaker 2: of the company, and so I think overall it's just
Speaker 2: the type of type of business that's built here in Boston.
Speaker 2: I think to note, you know, there's also not a
Speaker 2: lot of puffery around it. They've just done a good
Speaker 2: job building and I think they've earned the right to
Speaker 2: have success this week.
Speaker 3: I maybe know that much puffery, as you say, because
Speaker 3: it's b to be Ultimately, it's.
Speaker 5: Not b to see. So the retail investors are not
Speaker 5: aware of it. But this is your sweet spot. You
Speaker 5: are b to be investor largely.
Speaker 3: And how much is Boston the ecosystem for that, particularly
Speaker 3: as we start to see the world shift towards AI
Speaker 3: and well San Francisco seems to be sucking a lot
Speaker 3: of the oxygen.
Speaker 2: That Yeah, so as you mentioned, we are B to
Speaker 2: B and vertical SaaS investors, and I think you know,
Speaker 2: Boston's typically known for its biotech and healthcare, but what
Speaker 2: we see is that there are a variety of actors
Speaker 2: that are thriving here in the B to B space,
Speaker 2: whether it's commerce with companies like Salsify, or in sure
Speaker 2: tech with companies like Himari. Also areas like supply chain logistics,
Speaker 2: and then as you mentioned, increasingly in AI and machine learning,
Speaker 2: and we've had the pleasure to back several great companies
Speaker 2: in that space, a company like Tetrascience, which is you know,
Speaker 2: snowflake for scientific data. You know, I think in part
Speaker 2: what makes this ecosystem unique is the universities that we
Speaker 2: have in our backyard and a lot of the leading
Speaker 2: edge technology and also talent coming out of those ecosystems
Speaker 2: consistently fuels what is now powering the AI and machine
Speaker 2: learning revolution that we're seeing across the board. So, you know,
Speaker 2: we continue to expect to see a lot of great
Speaker 2: both tech and talent coming through this ecosystem here and
Speaker 2: fueling a lot of what people are excited about.
Speaker 5: When you're in LP and.
Speaker 3: The Haavid Fund and an MIT Fund, how are you
Speaker 3: seeing a desire to build and what is a pretty
Speaker 3: unstable economic environment. It was meant to be the silver
Speaker 3: lining that we had Joe blofs they would go out
Speaker 3: and build things. Is that happening even coming out of
Speaker 3: the universities at the moment.
Speaker 2: Yeah, As you mentioned, you know, we're we are investors
Speaker 2: in some of the on campus funds, so Harvard's Austin Fund,
Speaker 2: MIT Sandbox Fund, and the dorm Room Fund.
Speaker 5: And what that partnership.
Speaker 2: Allows us to see is the most exceptional entrepreneurs coming
Speaker 2: out of those ecosystems as soon as they graduate, and
Speaker 2: we're seeing a lot of thriving ideas and opportunities. Over
Speaker 2: twenty six percent of our portfolio actually comes from that ecosystem,
Speaker 2: and you know, I think in part that's because you know,
Speaker 2: people continue to see opportunities. Yes, this market is difficult,
Speaker 2: but one of the things that we're excited about is
Speaker 2: the caliber of founders. I think you have to be
Speaker 2: bold and you have to have grit to found companies
Speaker 2: in this in this market, and we're continuing to see that. Actually,
Speaker 2: Pitchbog recently did a study that showed the number of
Speaker 2: founders and the amount of capital that they've raised, and
Speaker 2: if you look at Harvard and MIT graduate programs compared
Speaker 2: to that of Stanford and Berkeley's, it's actually higher here
Speaker 2: in Boston. Another way to think about that is, at
Speaker 2: any given moment, between one and four founders of future
Speaker 2: unicorn companies walking around campus and walking around the halls
Speaker 2: here in the Boston ecosystem. So we're certainly seeing that
Speaker 2: entrepreneurial spirit continued to be to be thriving, and it's
Speaker 2: one of the areas we're most excited to invest it.
Speaker 4: That is an interesting data point. And you know the
Speaker 4: story that we hear all the time in San Francisco.
Speaker 4: I'm in New York this week that in San Francisco's
Speaker 4: I went to Stamford, I studied computer science, and I
Speaker 4: dropped out and I started a company. I did it
Speaker 4: in San Francisco because despite the problem of San Francisco
Speaker 4: is a great place to live and work. If you
Speaker 4: were going to pitch Boston, what is it that's keeping
Speaker 4: those founders in the city where they either studied or
Speaker 4: raised their money from.
Speaker 2: Yeah, there's a lot of this ecosystem to like, you know,
Speaker 2: there's access to world class talent both coming out of
Speaker 2: the university systems, but also coming out of some of
Speaker 2: these homegrown tech giants that I mentioned, like the HubSpot's Toast, Cleavio, Salsafies,
Speaker 2: and some of the big tech giants from the West
Speaker 2: Coast have big offices here, so there's no shortage of
Speaker 2: great talent. And then as I said, you know, it's
Speaker 2: hard to find anywhere else in the world that has
Speaker 2: as much R and D coming out of the labs
Speaker 2: and the ecosystems here. So overall, I think the combination
Speaker 2: of those things, plus there's a thriving ecosystem of accelerators
Speaker 2: and incubators and angels, and I think it has all
Speaker 2: the ingredients you need to be successful. One of the
Speaker 2: things that was interesting is, you know, Boston was thriving
Speaker 2: pre pandemic, but I think post pandemic it's accelerated even more.
Speaker 2: And in part is because we learn you know, West
Speaker 2: Coast investors, I think learned that they could invest outside
Speaker 2: of their backyard. So we're actually seeing more later stage
Speaker 2: investment come into Boston. And actually some of these multi
Speaker 2: geography firms are setting people on the ground here.
Speaker 5: To cover this ecosystem. As a result, for.
Speaker 3: The companies, as you see them to have that lates
Speaker 3: stage funding to Linny Lyman, great has in time general
Speaker 3: panner on the school benure capital on a school VC.
Speaker 1: No, we're not fundamentally worried. We have a very strong
Speaker 1: business in China that has grown significantly over the last
Speaker 1: ten years, and we'll continue to invest in China to
Speaker 1: make sure that we bring the product that the Chinese
Speaker 1: customers are expecting for us.
Speaker 4: There was Mercedes Benz CEO Laclenius there. I was being
Speaker 4: asked whether he's worried about China's automakers and pricing wars,
Speaker 4: which were all global threats. Legacy automakers here like Ford
Speaker 4: Stilantis and Geral Motors have been focusing on as work,
Speaker 4: except that now they also need to contend with another
Speaker 4: internal challenge, auto workers striking for better wages and working conditions.
Speaker 7: It has been going viral.
Speaker 4: Everyone has been talking about it through the weekend in
Speaker 4: the largest auto workers striking years and Caroline. What it
Speaker 4: comes down to and what I hear is like this
Speaker 4: transition to ev the Inflation Reduction Act, money money, money,
Speaker 4: does that money protect? The jobs will then be the
Speaker 4: same number of jobs when we all go electric as
Speaker 4: there are now It's the.
Speaker 3: Same conversation we're having around artificial intelligences. Wells Ultimately that
Speaker 3: technological innovation and investment ends up hurting the work, does it?
Speaker 5: In this case?
Speaker 7: What did you yeah?
Speaker 4: I mean? In the writers and actors strike, it's all
Speaker 4: about their copyright, their intellectual property. The funny thing is
Speaker 4: is that no one gives a straight answer from the
Speaker 4: car side. Doesn't ev need fewer people to build than
Speaker 4: a combustion engine car? And we're still working that one out.
Speaker 3: Kara meanwhile, plenty to debate, and luckily we're here for
Speaker 3: the whole week.
Speaker 5: That does it For this edition of Bloomberg Techology, then check.
Speaker 4: Out the podcast wherever you get yours on the terminal
Speaker 4: and other platforms Apples, Spotify.
Speaker 7: iHeart this, It's Bloomberg Technology