WEBVTT - Airbnb CEO on Earnings, MicroStrategy CEO Steps Down (Podcast) 0:00:02.240 --> 0:00:05.600 From the heart of where innovation, money and power collive 0:00:06.400 --> 0:00:10.920 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:26.760 Emily Jay him Emily Chang in San Francisco, and this 0:00:26.800 --> 0:00:29.280 is Bloomberg Technology coming up in the next hour. Summer 0:00:29.320 --> 0:00:32.959 travel help boost Airbnb to a record quarter, but expectations 0:00:33.320 --> 0:00:35.280 are even higher for the current quarter. I'll talk to 0:00:35.280 --> 0:00:39.960 CEO Brian Chesky about investors raising the sticks, plus Michael 0:00:40.000 --> 0:00:43.400 Sailor's next chapter, The micro Strategy co founder is stepping 0:00:43.440 --> 0:00:47.080 down as CEO to focus on wait for it, more Bitcoin. 0:00:47.479 --> 0:00:50.280 Sailor joins us later to talk about why he's making 0:00:50.320 --> 0:00:54.840 moves in a continuing crypto winter, and despite record inflation 0:00:54.880 --> 0:00:57.680 and pressure on consumers, so far had better than expected results, 0:00:57.680 --> 0:01:00.680 bucking a bad news trend for fintech. See EEO Anthony 0:01:00.720 --> 0:01:03.240 Nodo will share his view on the macro environment and 0:01:03.280 --> 0:01:07.200 spending plans as competitors like robin Hood sort of massive 0:01:07.280 --> 0:01:09.679 round of layoffs. We will get to all of that 0:01:09.760 --> 0:01:11.959 in a moment, But first, Airbnb, as I said, just 0:01:12.080 --> 0:01:15.440 notched its best second quarter revenue ever. The home sharing 0:01:15.520 --> 0:01:18.000 giant says it's only going to get better. The travel 0:01:18.080 --> 0:01:21.080 rebound has given hosts more pricing power, which with average 0:01:21.160 --> 0:01:25.840 daily rates now tire than pre pandemic. Airbnb chair and 0:01:25.880 --> 0:01:28.280 CEO Brian Chesky joins me. Now, so, Brian, I have 0:01:28.319 --> 0:01:31.000 to ask you about the market reaction here because shares 0:01:31.040 --> 0:01:33.559 open down. They've paired most of their losses for the day, 0:01:33.640 --> 0:01:36.080 but they're still down thirty so far this year. What 0:01:36.120 --> 0:01:40.280 do you think investors are missing? I think there's a 0:01:40.280 --> 0:01:43.720 lot of insertinty on travel right now, and um, you know, 0:01:43.880 --> 0:01:45.640 but I think the best thing we can do is 0:01:45.760 --> 0:01:48.960 continue to tell our story. Our revenue was up fifty 0:01:49.040 --> 0:01:52.160 eight percent year of a year. We generated eight million 0:01:52.240 --> 0:01:55.520 free cash flow in the quarter, nearly nearly three billion 0:01:55.560 --> 0:01:57.760 dollars in the last year, and I think one of 0:01:57.800 --> 0:02:01.200 the things we shared with investors is that our bookings 0:02:01.280 --> 0:02:04.800 actually accelerated from jundist July. So I think one of 0:02:04.840 --> 0:02:07.080 the things we saw is that there's a lot of 0:02:07.120 --> 0:02:10.000 demand for our Q three Q four summer travel. And 0:02:10.160 --> 0:02:13.000 you know, we're just we're focused on things we can control, 0:02:13.080 --> 0:02:16.760 so that's what we're doing. Still, there's some disappointment about 0:02:16.760 --> 0:02:19.840 your forecast still going to grow, but growing the same 0:02:19.919 --> 0:02:23.919 rate as last quarter. We had Brent phil who covers 0:02:23.960 --> 0:02:26.680 Airbnb from jeffreys On saying, look, I might be the 0:02:26.680 --> 0:02:28.920 perfect example of a person I just took a big trip. 0:02:29.400 --> 0:02:31.919 Now I'm back home. Maybe I'm gonna slowly spending down. 0:02:31.919 --> 0:02:34.320 Slow might traveled down just because of what's happening in 0:02:34.360 --> 0:02:38.440 the macro environment. How concerned are you about that? You know, 0:02:38.560 --> 0:02:41.160 we're not too concerned right now about the macro environment. 0:02:41.440 --> 0:02:44.400 One of the things we learned was two years ago. 0:02:44.800 --> 0:02:46.960 I mean, we experienced something that we think is going 0:02:47.000 --> 0:02:49.120 to be much worse than this current macro end of 0:02:49.160 --> 0:02:53.200 my environment when the pandemic hit our business shop in 0:02:53.280 --> 0:02:55.840 eight weeks. But the thing that was remarkable is what 0:02:55.919 --> 0:02:59.200 happened next. We recovered really fast round any other travel company. 0:02:59.400 --> 0:03:01.959 And that's because are models adaptable. We have nearly every 0:03:02.000 --> 0:03:04.400 type of space and nearly every type of community. So 0:03:04.440 --> 0:03:07.480 whatever happens the economy, people I think are still gonna 0:03:07.480 --> 0:03:09.880 want to live on Airbnb. They're still gonna want to travel. 0:03:10.040 --> 0:03:12.040 If they want to save money. Everything's a great way 0:03:12.080 --> 0:03:14.600 to do that. And you know, we're great for crossing boarders, 0:03:14.639 --> 0:03:16.840 were great urban travel, but we also are great for 0:03:16.880 --> 0:03:19.080 non urban destination stuff you want to get in a 0:03:19.120 --> 0:03:21.280 car and travel nearby. We work from that through that 0:03:21.320 --> 0:03:24.000 as well. So I think we're a very adaptable model 0:03:24.120 --> 0:03:27.240 and in a difficult economic time. Whatever remind people were 0:03:27.240 --> 0:03:29.560 actually born in the recession. During that period of time, 0:03:29.600 --> 0:03:33.040 during the financial crisis, people turned to Airbnb to become hosts. 0:03:33.160 --> 0:03:35.280 People wanted to save money and seek the value that 0:03:35.280 --> 0:03:37.760 they got from Airbnb. So we're actually feeling really positive 0:03:37.800 --> 0:03:40.880 right now. So dark cause RuSHA He I spoke to 0:03:40.920 --> 0:03:43.080 him yesterday, the CEO of Uber. He said he thinks 0:03:43.160 --> 0:03:47.760 Uber is quote recession resistant. Is that how you describe Airbnb? 0:03:47.800 --> 0:03:51.600 Are you recession proof? I mean, you know, we were 0:03:51.720 --> 0:03:55.120 born in the recession. We dealt with a pandemic reloss 0:03:55.160 --> 0:03:57.840 eighty percent of our business in eight weeks. We just 0:03:58.040 --> 0:04:01.720 established that we had a record Q two and we're 0:04:01.760 --> 0:04:04.160 feeling really good about Q three. So I think we 0:04:04.200 --> 0:04:07.680 are as well positioned as anybody for a recession if 0:04:07.720 --> 0:04:10.800 that were to happen. Obviously, we've been talking a lot 0:04:10.880 --> 0:04:15.080 about the companies doing layoffs, big tech companies like Netflix, Shopify, 0:04:15.200 --> 0:04:17.919 coin Base. We're just hearing Walmart doing layoffs. I I 0:04:18.000 --> 0:04:20.840 spoke to Tim Cook just ahead of their earnings call 0:04:21.080 --> 0:04:26.159 Apple planning to slowdown spending on hiring and growth. Also 0:04:26.160 --> 0:04:30.039 said Apple plans to be deliberate about its spending. Are 0:04:30.080 --> 0:04:33.200 you changing your spending or investing or hiring strategy at 0:04:33.200 --> 0:04:38.159 all given the downturn? What's your approach? Absolutely not. We 0:04:38.200 --> 0:04:40.560 are not pulling on the brakes. If anything, I'd be 0:04:40.600 --> 0:04:43.359 interested in stepping onto the gas. And here's why, because 0:04:43.400 --> 0:04:46.359 we've been through this movie before. Two years ago, we 0:04:46.400 --> 0:04:48.440 had to right size our business. We made a lot 0:04:48.440 --> 0:04:51.479 of difficult choices. We got really focused. That's why we 0:04:51.520 --> 0:04:53.800 went from a company that had negative free castle and 0:04:53.800 --> 0:04:56.680 now positive three billion of last year. So we are 0:04:56.720 --> 0:04:59.200 not changing our Harvard plans, We are not changing any 0:04:59.600 --> 0:05:03.440 any investment the thesis. We are staying really focused and 0:05:03.480 --> 0:05:06.520 we've sustained our discipline. We were disciplined over the last 0:05:06.560 --> 0:05:08.880 couple of years when we right sized our business, and 0:05:08.880 --> 0:05:12.080 we're staying discipline, We're staying focused, and actually we're we're 0:05:12.120 --> 0:05:15.920 focused on right now is next travel season. We're focused 0:05:15.920 --> 0:05:17.400 on how can we step on the gas to be 0:05:17.480 --> 0:05:20.320 prepared for the next travel season? All right, So what's 0:05:20.320 --> 0:05:22.839 gonna happen next travel season? It's clear from your results 0:05:22.880 --> 0:05:26.040 that Urban and cross border travel are back. What are 0:05:26.040 --> 0:05:30.640 the locations the destinations that are going to be most popular. Well, 0:05:30.680 --> 0:05:32.800 I think it's gonna be. You know, I thought last 0:05:32.880 --> 0:05:34.799 year was gonna be the travel rebound of the century, 0:05:34.839 --> 0:05:37.120 and it nearly was, but then, of course we had 0:05:37.640 --> 0:05:40.600 the pandemic bounced back with delta strain. This was an 0:05:40.640 --> 0:05:42.719 even bigger year. That's why this was a record cord 0:05:42.839 --> 0:05:45.599 for US. Remember this is before Asia's recovered. You know, 0:05:45.680 --> 0:05:49.919 a large percent of travel is Asia Pacific that is 0:05:49.960 --> 0:05:52.719 not recovered because much of Asia Pacific is cross border 0:05:52.760 --> 0:05:56.440 and people aren't freely crossing borders yet. Also urban and 0:05:56.560 --> 0:05:59.520 cross border more generally is just beginning to recover. Now. 0:05:59.600 --> 0:06:02.400 Prosper order is double what it was this time last year. 0:06:02.880 --> 0:06:06.400 But I think that everything is going to continue to recover, obviously, 0:06:06.440 --> 0:06:09.280 notwithstanding whatever happens the economy. I think it's going to 0:06:09.320 --> 0:06:13.200 be even even bigger travel season next year. Now, Airbnb 0:06:13.320 --> 0:06:16.000 closed shop in China at the end of July because 0:06:16.000 --> 0:06:17.880 it was just so tough to do business. They're given 0:06:17.960 --> 0:06:22.120 the zero COVID policy, But you're now focusing on outbound 0:06:22.760 --> 0:06:26.599 China travel. Do you have any expectation of when restrictions 0:06:26.640 --> 0:06:30.360 will ease and when that uh will open up. No, 0:06:30.440 --> 0:06:32.240 I don't, I mean we are. We're not going to 0:06:32.279 --> 0:06:34.600 try to be in the business of predicting when UM 0:06:34.760 --> 0:06:36.960 countries are going to reopen, but we're going to be 0:06:36.960 --> 0:06:39.240 in the business being the most prepared whenever they do, 0:06:39.320 --> 0:06:42.400 so we'll be ready whenever boarders reopened. And to be clear, 0:06:42.800 --> 0:06:46.080 that China outbound business was always the prize, the biggest 0:06:46.120 --> 0:06:49.400 prize with the Chinese consumer base wanting to travel around 0:06:49.440 --> 0:06:52.400 the world and stay in homes. That's not really uh, 0:06:52.480 --> 0:06:55.080 you know, that's not really a robust business right now 0:06:55.080 --> 0:06:57.920 because people aren't really crossing the border. But when they are, 0:06:57.960 --> 0:06:59.719 we're going to be ready. And the way we're preparing 0:06:59.800 --> 0:07:01.680 is of making sure we have enough homes in all 0:07:01.720 --> 0:07:05.080 the corridors, whether it's Japan, Korea, Southeast Stags or the 0:07:05.080 --> 0:07:07.720 other places that Chinese travelers go. We're gonna be prepared 0:07:07.760 --> 0:07:09.960 to have enough homes. We're gonna market them that this 0:07:10.000 --> 0:07:12.960 is a great option for them. How much more pricing 0:07:13.000 --> 0:07:15.720 power do you think hosts can have in this market? 0:07:15.760 --> 0:07:18.400 I mean, this is the worst inflationary environment that you 0:07:18.440 --> 0:07:24.560 know Airbnb has ever seen. Well, I think that, um, 0:07:24.840 --> 0:07:27.480 we are at we you know, our businesses a somewhat 0:07:27.520 --> 0:07:30.760 seasonal business. So right now it's peak booking windows. So 0:07:30.800 --> 0:07:32.520 a lot of people are traveling right now, and so 0:07:32.560 --> 0:07:35.520 because a lot of people are traveling right now, prices 0:07:35.600 --> 0:07:38.800 will tend to go up a little bit now. Bookings 0:07:38.920 --> 0:07:42.920 right now in August or typically for September on September 0:07:42.960 --> 0:07:46.680 on is really after the peak travel season, and so 0:07:46.840 --> 0:07:50.840 that will provide some pricing relief presumably. So I do 0:07:50.920 --> 0:07:52.440 think there's going to be quite a bit of flex 0:07:52.600 --> 0:07:55.480 um entering the system as we kind of go off 0:07:55.520 --> 0:07:58.560 of high season. There also seems to be a trend 0:07:58.800 --> 0:08:02.160 in companies by being up short term rentals in bulk, 0:08:02.240 --> 0:08:04.360 and I wonder if that makes you at all concerned 0:08:04.560 --> 0:08:07.920 about inventory and what do you what do you mean 0:08:07.960 --> 0:08:10.600 by that? I just make sure I understand the question. Well, 0:08:10.680 --> 0:08:13.200 you've got these property companies, these property managers that are 0:08:13.240 --> 0:08:16.239 buying up short term rentals in bulk, which I wonder 0:08:16.280 --> 0:08:20.280 if that could be more competition for Airbnb or inventory 0:08:20.680 --> 0:08:24.200 growth more difficult, you know, I think that like for 0:08:24.240 --> 0:08:25.920 the most part, I think it's just good to remember 0:08:25.960 --> 0:08:29.360 the scale that Airbnb operates in. We have four million hosts. 0:08:29.360 --> 0:08:32.480 We have six million listings around the world, hundreds of 0:08:32.480 --> 0:08:35.360 millions of guests. So I think the scale of Airbnb 0:08:35.679 --> 0:08:38.200 is critical, and I think that ultimately what hosts decide 0:08:38.280 --> 0:08:40.080 is they usually want to go to platform where they 0:08:40.080 --> 0:08:43.120 get the most demand, and they always typically want incremental demand. 0:08:43.120 --> 0:08:46.480 And Airbnb has probably more demand for homes than any 0:08:46.480 --> 0:08:48.839 other platform in the world. So I think that we're 0:08:48.880 --> 0:08:50.840 still going to be the place for people to go. 0:08:51.320 --> 0:08:53.920 This is the category that we created, and it's you know, 0:08:53.960 --> 0:08:55.320 it's gonna be something that I think you can stay 0:08:55.320 --> 0:08:59.040 really strong. Airbnb employees might be driving some of that demand. 0:08:59.120 --> 0:09:01.400 I know. You know obviously earlier this year and you 0:09:01.440 --> 0:09:03.960 announced that Airbnb employees could live and work from anywhere, 0:09:03.960 --> 0:09:07.320 And I'm so curious to learnings from this policy so far. 0:09:07.840 --> 0:09:11.440 What's been great, what's been more challenging, anything that you 0:09:11.520 --> 0:09:14.760 think needs to be tweaked. Yeah, it's been a really 0:09:14.800 --> 0:09:17.199 great experiment so far. I mean, what we announced is 0:09:17.240 --> 0:09:20.080 that employees can live and work anywhere. We won't change 0:09:20.080 --> 0:09:21.960 their pay if they move within the country, and we 0:09:21.960 --> 0:09:23.640 are going to make it easier for them to travel 0:09:23.679 --> 0:09:26.120 and work from up to a hundreds seven different countries. 0:09:26.640 --> 0:09:29.040 What we found is that number one, the reaction was 0:09:29.080 --> 0:09:32.440 incredibly amazing. We've actually had hundreds of thousands of people 0:09:32.520 --> 0:09:35.559 visit our jobs paid, so clearly people want this. I 0:09:35.600 --> 0:09:37.400 think it's going to open up access to tons of 0:09:37.400 --> 0:09:40.440 the talent all over the world. We begin, we've begun 0:09:40.480 --> 0:09:43.560 to gather employees. Our guidance isn't to only be on Zoom. 0:09:43.720 --> 0:09:45.280 Our guidance is that we would like people to be 0:09:45.360 --> 0:09:48.160 together at least a week of quarter. So we're trying 0:09:48.200 --> 0:09:50.400 to do is balance the best of Zoom the best 0:09:50.440 --> 0:09:52.840 of real world. And we don't think that's necessarily being 0:09:52.840 --> 0:09:54.600 in the office three days a week. We think that's 0:09:54.679 --> 0:09:57.960 less frequent, more meaningful engagements. What I've learned is it 0:09:58.000 --> 0:10:00.240 takes central plan and you don't want a free for all. 0:10:00.720 --> 0:10:02.600 Whether or not you bring people back to an office, 0:10:02.640 --> 0:10:05.120 you allow remote work, you want to have it centrally 0:10:05.200 --> 0:10:07.920 planned because if one team does an off site, that 0:10:07.960 --> 0:10:10.720 can stop everything if they're clapping another team. So I 0:10:10.720 --> 0:10:14.160 think the key is being really organized, really disciplined. But 0:10:14.200 --> 0:10:15.800 if you do that, you don't need to be an 0:10:15.880 --> 0:10:18.080 office to see people working, to know they're getting their 0:10:18.160 --> 0:10:20.400 job done. You just need to be really organized. And 0:10:20.440 --> 0:10:22.760 more organized you are, the more flexibility you can offer. 0:10:22.880 --> 0:10:24.480 Last quick question, I know you're back at your home 0:10:24.480 --> 0:10:27.560 in San Francisco, but you've been living on Airbnb for 0:10:27.559 --> 0:10:30.480 for some time now. I know I've seen some pictures 0:10:30.480 --> 0:10:33.160 of you and your dog Sophie. What what have been 0:10:33.200 --> 0:10:37.360 your favorite destinations and where are you off to next? Well, like, 0:10:37.400 --> 0:10:39.280 one of my favorite ones is Sophie and I went 0:10:39.320 --> 0:10:41.600 to ann Arbor, Michigan, where we stayed in a Frank 0:10:41.679 --> 0:10:44.640 Lloyd Right home. And who knew that franklid Right homes 0:10:44.679 --> 0:10:47.040 are on Airbnb. Well, we have actually the entire collection 0:10:47.080 --> 0:10:50.640 of them under our design category on Airbnb, so that 0:10:50.800 --> 0:10:54.079 was amazing. I'm actually going to Europe and a little 0:10:54.080 --> 0:10:55.880 over a week, so I'll be looking forward to staying 0:10:55.880 --> 0:10:58.280 in some really great airbnbs as well. And I think 0:10:58.320 --> 0:11:01.600 I've stayed in like twelve to third different airbnbs obay 0:11:01.760 --> 0:11:04.160 my last count um since the beginning of the year, 0:11:04.240 --> 0:11:06.640 so I've gone to like places all over the country 0:11:06.800 --> 0:11:08.520 and it's really great. It turns out you can run 0:11:08.520 --> 0:11:10.760 a really large public company from a laptop and someone 0:11:10.800 --> 0:11:12.800 else's home. I'm gonna have to track down your your 0:11:12.840 --> 0:11:17.600 twelve to thirteen reviews on Airbnb. Bryan Tesky, CEO of Airbnb, 0:11:17.679 --> 0:11:19.880 always good to have you. Thank you for stopping by. 0:11:19.960 --> 0:11:30.640 Thank you. How Speaker Nancy Pelosi I did her visit 0:11:30.640 --> 0:11:33.760 to Taiwan pledging the US would not abandon its commitment 0:11:34.000 --> 0:11:38.640 to the democratically elected government. China reacted, announcing the series 0:11:38.720 --> 0:11:42.680 of military exercises and trade sanctions on Taiwan are Bloomberg 0:11:42.679 --> 0:11:46.800 News political director Jody Schneider joins US now from Washington. So, Jody, 0:11:46.920 --> 0:11:48.640 what do you make of this trip and the way 0:11:48.679 --> 0:11:51.480 that it has played out. Well, it's interesting, Emily, because 0:11:51.520 --> 0:11:54.120 before the trip, we were hearing a lot of threats 0:11:54.320 --> 0:11:59.040 from China from President Hu jumping directly from Chinese officials 0:11:59.080 --> 0:12:02.920 who warned a gray of consequences if Nancy Pelosi made 0:12:02.920 --> 0:12:06.520 that trip to Taiwan. She's humping. The president himself said 0:12:06.760 --> 0:12:09.360 that there would be uh that the U s and 0:12:09.440 --> 0:12:12.800 Taiwan would get burned if that happened. But now she went, 0:12:13.280 --> 0:12:16.240 She got there safely, She spent the night, she met 0:12:16.280 --> 0:12:20.439 with the Taiwan's president and some other government officials, and left. 0:12:20.920 --> 0:12:23.920 Uh said a lot of things about the US commitment 0:12:24.040 --> 0:12:28.640 to Taiwan, uh and Uh. Now China is sort of 0:12:28.960 --> 0:12:33.120 backing off that belligerent tone and saying give us some time, 0:12:33.240 --> 0:12:37.360 have patience with us while we develop our strategy for 0:12:37.800 --> 0:12:42.920 determining what we do about Taiwan in terms of that retaliation. 0:12:43.240 --> 0:12:46.160 So it really has been a market difference in tone 0:12:46.400 --> 0:12:49.679 in the past twenty four hours and since Nancy Pelosi 0:12:49.800 --> 0:12:53.840 left the island. How are we expecting China to retaliate. 0:12:53.880 --> 0:12:55.960 We spoke to an analyst yesterday who say, we're not 0:12:55.960 --> 0:12:57.800 going to see it right away, but you're gonna see 0:12:57.840 --> 0:13:01.720 them hold this against certain companies and this is going 0:13:01.800 --> 0:13:06.160 to play out over years, not days. Yeah, I think 0:13:06.200 --> 0:13:09.240 that's probably right. China is famous for its you know, 0:13:09.320 --> 0:13:14.319 having a long view in terms of geopolitical kinds of things, uh, 0:13:14.360 --> 0:13:17.440 and certainly political kinds of events. One thing, I mean, 0:13:17.480 --> 0:13:21.040 there's two different categories. One is military. And while no 0:13:21.080 --> 0:13:25.120 one expects uh that China and Ji Jimping are going 0:13:25.200 --> 0:13:28.559 to try to do something that that could be um, 0:13:28.600 --> 0:13:30.880 you know, that would be very dramatic to try to 0:13:31.040 --> 0:13:35.000 unify Taiwan with the mainland. We do expect that things 0:13:35.040 --> 0:13:38.440 like missile tests and military drills will certainly be part 0:13:38.480 --> 0:13:41.360 of this, and they've already announced that. They've said that 0:13:41.520 --> 0:13:43.840 missile tests could occur at any time to kind of 0:13:43.920 --> 0:13:49.760 showcase the strength of China's army and China's defense forces. 0:13:49.800 --> 0:13:53.400 But they and then also uh, these drills which they've 0:13:53.440 --> 0:13:56.480 said we'll start soon, So I think we will see 0:13:56.520 --> 0:14:00.480 some of that, but also economic the thing about some 0:14:00.559 --> 0:14:05.959 of these military drills, as these could disrupt the Taiwan airspace, 0:14:06.000 --> 0:14:09.240 and Taiwan today complained about that, saying they wouldn't be 0:14:09.280 --> 0:14:12.720 able to have commercial flights uh, and you know, operate 0:14:12.760 --> 0:14:16.600 the same kind of way. Also shipping, shipping could be disrupted, 0:14:16.880 --> 0:14:22.160 and trying to make some announcements today already about how 0:14:22.520 --> 0:14:26.680 they would not send some products to Taiwan. Also, as 0:14:26.720 --> 0:14:31.720 you note tariffs and it could become economically punitive in 0:14:31.880 --> 0:14:34.520 some categories of goods. So that could be a real 0:14:34.560 --> 0:14:36.720 way to try to punish Taiwan. So I think we 0:14:36.760 --> 0:14:41.360 will see this more over time, and perhaps a variety 0:14:41.400 --> 0:14:45.920 of strategies being used to try to squeeze Taiwan. Interesting, Okay, 0:14:46.240 --> 0:14:48.960 lots of complicated dynamics to continue to watch play out 0:14:49.040 --> 0:14:52.880 over years. At Jody Schneider E Bloomberg political director. Thank 0:14:52.920 --> 0:14:55.560 you all right, Come at more companies moving out of 0:14:55.560 --> 0:14:58.160 San Francisco, including one of the most chrominent venture capital 0:14:58.160 --> 0:15:10.920 firms in tech. That story next. This is Bloomer Technology, 0:15:13.280 --> 0:15:15.800 one of Silicon Valley's most prominent venture capital firms, has 0:15:15.800 --> 0:15:19.600 announced the location of its new headquarters in the Cloud. 0:15:20.000 --> 0:15:22.800 Andrews and Harrowitz is the latest in a mass exodus 0:15:22.880 --> 0:15:26.320 around the Bay Area since the pandemic. But as companies relocate, 0:15:26.360 --> 0:15:29.800 Silicon Valley still remains the top draw for venture capital dollars. 0:15:30.080 --> 0:15:33.160 San Francisco attracted fifty two billion in VC funding in 0:15:33.160 --> 0:15:34.960 the first half of the year, more than one third 0:15:35.640 --> 0:15:38.480 of the total that according to Pitchbook. Bloom Brigs was 0:15:38.480 --> 0:15:40.680 at Chapman covers venture capital and start outs for us. 0:15:40.680 --> 0:15:42.880 She's with me here now. So it's a pretty big 0:15:42.880 --> 0:15:47.120 deal that Andrewson Harrowitz is moving its headquarters, if you will, 0:15:47.120 --> 0:15:49.880 to the cloud, opening these offices in Miami and other 0:15:49.920 --> 0:15:52.240 parts of the country. Right, it's a major deal. This 0:15:52.320 --> 0:15:57.400 is a watershed moment, uh for Silicon Valley Andrewson Horowitz. 0:15:57.400 --> 0:15:59.840 For people that aren't as familiar with it, it's one 0:15:59.840 --> 0:16:03.520 of the largest um you know vcs with the most 0:16:03.600 --> 0:16:07.520 under management, you know, the backed household names including Airbnb, Roadblocks, 0:16:07.880 --> 0:16:10.240 Lift as well as and Roll and coin based and others. 0:16:10.600 --> 0:16:13.400 And they employ more than than most other VC firms. 0:16:13.440 --> 0:16:16.320 So for them saying hey, Silicon you no longer need 0:16:16.400 --> 0:16:18.720 we no longer need to be in Silicon Valley green 0:16:18.840 --> 0:16:22.880 lights UM, that practice for founders who are already finding 0:16:22.960 --> 0:16:26.040 that working remotely works really well. So is this the 0:16:26.040 --> 0:16:28.360 start of a trend? Well, I would say that it's 0:16:28.400 --> 0:16:31.280 a continuation of a trend that actually began before the 0:16:31.320 --> 0:16:35.920 pandemic UM, and this simply accelerates it. For example, if 0:16:35.920 --> 0:16:40.760 you look globally, UM, you know how venture capital was distributed. UM, 0:16:40.880 --> 0:16:44.040 the US got eighty four percent of the total venture 0:16:44.080 --> 0:16:47.080 capital back in two thousand four. In two thousand twenty one, 0:16:47.360 --> 0:16:52.640 the US only got Silicon Valley UM share of that 0:16:52.680 --> 0:16:56.640 continues to go down UM over time, and this is 0:16:56.800 --> 0:17:00.480 accelerating that. And the reason why is because as there 0:17:00.520 --> 0:17:04.080 are so many new places to get funding, it's not 0:17:04.160 --> 0:17:07.359 just Sandhill Road anymore. So is your expectation that Silicon 0:17:07.400 --> 0:17:09.760 Valley will still maintain some sort of dominance, but that 0:17:09.760 --> 0:17:12.000 there will be a lot of mini Silicon Valleys across 0:17:12.080 --> 0:17:15.000 the United States and really around the world. Right. Um, 0:17:15.040 --> 0:17:17.880 I think that's a pretty fair bet. Um. I think that, 0:17:18.200 --> 0:17:20.600 you know, based on some of the talent here, I 0:17:20.640 --> 0:17:24.439 don't think it's um, you know likely for you know, uh, 0:17:24.480 --> 0:17:27.679 you know, a massive exodus of people to suddenly say no, 0:17:27.760 --> 0:17:29.640 we're gonna rip, We're gonna sell all of our homes, 0:17:29.720 --> 0:17:31.640 rip our rips, our kids out of schools and all 0:17:31.680 --> 0:17:35.159 of that. But um, you know, there's there's definitely competition 0:17:35.200 --> 0:17:39.560 from other hubs with lower costs of living, lower taxes, 0:17:40.080 --> 0:17:44.439 and um, you know, equally equal access to cash and talent. 0:17:44.600 --> 0:17:46.800 And some of them are pretty loud. I'm thinking about Miami. 0:17:46.880 --> 0:17:51.199 Miami is very loud, la Is and l a is 0:17:51.320 --> 0:17:53.879 very loud. Um as well as well as a number 0:17:53.920 --> 0:17:59.119 of other markets that have been increasingly gaining steam, like 0:17:59.200 --> 0:18:02.800 including you Salt Lake City, Atlanta. Um. You know, you 0:18:02.840 --> 0:18:05.760 look at some of these other markets that were overlooked 0:18:05.840 --> 0:18:08.520 by venture capitalist who didn't want to get on a 0:18:08.600 --> 0:18:11.359 plane or arrange the travel to go and do a 0:18:11.440 --> 0:18:13.560 seed deal and do the work with the very early 0:18:13.600 --> 0:18:16.359 stage companies when they really need that one on one. 0:18:16.680 --> 0:18:18.400 They weren't willing to do that. So in a way 0:18:18.440 --> 0:18:22.760 remote work makes venture capital more accessible to a larger 0:18:22.840 --> 0:18:26.680 number of founders that maybe were historically overlooked. All right, fascinating, 0:18:26.760 --> 0:18:29.119 will certainly continue to follow this trendler was that Chapman 0:18:29.400 --> 0:18:32.480 always get to have you back on the show. By 0:18:32.480 --> 0:18:35.800 the way, Bloomberg LP, which owns Bloomberg News, has invested 0:18:35.920 --> 0:18:46.879 in Andres and Harrowitz. Welcome back to Bloomber Technology and 0:18:46.920 --> 0:18:50.560 Emily Chang in San Francisco. Many fin tech stocks have 0:18:50.640 --> 0:18:52.760 gotten claubed in the first half of the year, lagging 0:18:52.760 --> 0:18:56.840 the SMP five hundred with growth slowed by COVID. Add 0:18:56.880 --> 0:18:59.720 to that rising interest rates pressuring payment stocks, and fears 0:19:00.160 --> 0:19:02.160 over a US for session. It always is a question 0:19:02.200 --> 0:19:05.560 of which payment stocks are best positioned to whether the 0:19:05.680 --> 0:19:08.320 downturn or at ludlow back with us and what do 0:19:08.320 --> 0:19:10.000 you think that are so far kind of case and 0:19:10.040 --> 0:19:12.280 point where you look at the numbers up twenties eight percent, 0:19:12.359 --> 0:19:15.920 biggest jump in the stocks in January, four straight day 0:19:15.960 --> 0:19:18.880 of gains, a really strong top line growth, adjusted net 0:19:18.920 --> 0:19:22.280 revenues up fifty year on year, eighth consecutive quarter of 0:19:22.320 --> 0:19:25.080 positive ebit DAR bring up the numbers, mr direction and 0:19:25.160 --> 0:19:27.359 let's look at what the street was really paying attention to, 0:19:27.440 --> 0:19:30.320 which was this strong guidance for the rest of the years, 0:19:30.359 --> 0:19:34.360 showing growth for the second half this year despite changing 0:19:34.440 --> 0:19:38.520 market in economic conditions, market volatility really interesting. Moving to 0:19:38.600 --> 0:19:41.120 view products as well, Deposits for so Far Bank up 0:19:41.119 --> 0:19:45.359 a hundred quarter on quarter, relatively new product personal loans 0:19:45.480 --> 0:19:48.240 also up, so they seem to be doing well. They 0:19:48.240 --> 0:19:50.840 seemed to be consistent, is what CEO Antoo had to 0:19:50.880 --> 0:19:54.240 say during the earning school. Let's compare year to date 0:19:54.359 --> 0:19:56.600 versus robin Hood as an example, had a lot of 0:19:56.600 --> 0:19:58.719 news out of them this week. They actually will be 0:19:59.160 --> 0:20:02.600 kind of lead, lagging behind robin Hood. But big jump 0:20:02.640 --> 0:20:04.720 in the stock today and investors seem to think that 0:20:04.800 --> 0:20:07.240 so Far as one stock that has some momentum in 0:20:08.320 --> 0:20:10.480 I'd love them. Thank you. I want to stick with 0:20:10.680 --> 0:20:13.879 Sofa now and bring in to you know Anthony himself, Anthony, 0:20:13.920 --> 0:20:16.760 great to have you back with us. So look, strong earnings, 0:20:16.800 --> 0:20:19.119 you're bucking the trend here. How do you explain this 0:20:19.160 --> 0:20:23.120 big uptick in deposit Sure, thank you for having me, Emily. 0:20:23.640 --> 0:20:26.159 The big uptick and deposits reflects the fact that for 0:20:26.200 --> 0:20:30.399 the first time this quarter we had our national bank 0:20:30.480 --> 0:20:33.840 open and having a bank license allows us to actually 0:20:34.320 --> 0:20:36.840 offer the consumer and interest rate and checking or say 0:20:36.840 --> 0:20:39.520 things that we determine as opposed to a bank sponsor 0:20:39.600 --> 0:20:42.440 determining it. And we've taken an approach where we really 0:20:42.440 --> 0:20:45.199 want to be the primary relationship with our members. We 0:20:45.280 --> 0:20:47.240 want them to be with us for all the major 0:20:47.280 --> 0:20:49.720 funcial decisions they make in their lives, in all the 0:20:49.800 --> 0:20:52.639 days in between. In order to be that primary relationship, 0:20:52.720 --> 0:20:54.320 we really need to be the place they do their 0:20:54.320 --> 0:20:58.160 direct deposit. So we're offering them one percent interest um 0:20:58.200 --> 0:21:00.520 if they do direct deposit with us, and that's on checking, 0:21:00.560 --> 0:21:04.240 no minimum balance, no restricting on spending. They could spend 0:21:04.240 --> 0:21:05.800 when they want. They just have to do direct to 0:21:05.880 --> 0:21:08.360 posit with us. And that's allowing us to use those 0:21:08.400 --> 0:21:11.520 deposits to fund their loans at a much lower cost. 0:21:11.840 --> 0:21:15.760 And so the two businesses are really synergistic. Higher restrate 0:21:15.880 --> 0:21:18.600 in checking gives us more deposits at a lower cost, 0:21:18.840 --> 0:21:20.480 so we can lend more to more people and it 0:21:20.560 --> 0:21:23.719 drives a great virtual circle. Now, I know you're expecting 0:21:23.760 --> 0:21:25.840 strong growth in the second half, but you know you've 0:21:25.880 --> 0:21:28.760