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Speaker 1: From Marhart where Innovation, Money and power Collie in Silicon Valley, NBN.

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Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

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Speaker 2: I'm Caroline Heide of Bloemug's world headquarters in New.

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Speaker 3: York, and I'm Ed Ludlow in San Francisco. This is

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Speaker 3: Bloomberg Technology coming up.

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Speaker 2: Apple hit with its second downgrade in a week as

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Speaker 2: analysts cautional slowing iPhone demand more analysis ahead.

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Speaker 3: A Mobili plunges is its four year revenue forecast, full

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Speaker 3: short of all street estimates, Full coverage on the autonomous

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Speaker 3: driving company's guidance.

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Speaker 2: Ahead, plus new data painting a bleak picture for Silicon Valley.

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Speaker 4: Will break down the state of.

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Speaker 2: Venture capital as startup saw their worst year for funding.

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Speaker 2: This is twenty nineteen, the first let's check in on

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Speaker 2: these markets. And while the good news is bad new

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Speaker 2: the resilient job market means maybe we can't anticipate a

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Speaker 2: FED cut as much as the market had been already

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Speaker 2: pricing in. We're just down only slightly on the NASDAC,

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Speaker 2: but it is five straight days, longest losing streak since

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Speaker 2: October of twenty twenty two.

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Speaker 4: I'm looking at the ten year yield just.

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Speaker 2: Backing up again, up seven basis points. Notably, we are

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Speaker 2: seeing a lot of supply coming into the system. Corporate

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Speaker 2: bond sales means supply issues ahead, and that means, of course,

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Speaker 2: some of that pricing does just fade a little bit.

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Speaker 4: New York crued off by one point nine.

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Speaker 2: Percent, having seen tensions, of course, red sea concerns, middle

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Speaker 2: least geopolitical concerns. We're actually more worried about a global

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Speaker 2: slowdown at the moment, so supply seems to win out

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Speaker 2: there a little bit at the moment as well. Move on,

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Speaker 2: have a look at what's happening in terms of bitcoin.

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Speaker 4: Because we're actually getting a little.

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Speaker 2: Bit more resilience on the day after what had been

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Speaker 2: some big volatility yesterday.

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Speaker 4: In the price point.

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Speaker 2: We're at forty nine hundred and sixty, so back up,

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Speaker 2: but not quite at that forty five thousand dollars level

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Speaker 2: ed that we had seen in the run up to

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Speaker 2: what everyone anticipates will be the sign off of these

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Speaker 2: spot bitcoin ETF What if you got it.

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Speaker 3: Well, one big move to the downside, and that is

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Speaker 3: mobili We're down around twenty five percent in the session.

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Speaker 3: If we close at that drop. It will be the

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Speaker 3: biggest drop on record. The story is actually really clear. Mobilized,

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Speaker 3: maker of advanced chip or chip systems that power advanced

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Speaker 3: driver assistance in cars, think about lane change or cruise control,

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Speaker 3: and their customers have big inventories of these chips, so

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Speaker 3: they've stopped buying. Mobil has given us an outlook for

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Speaker 3: sales in twenty twenty four, which is about one point

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Speaker 3: eight nine billion at the midpoint. The street looking for

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Speaker 3: two point five eight billion, significantly higher than that. So

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Speaker 3: something has gone wrong here in the cycle for chips

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Speaker 3: as it relates to the automotive sector and advanced driver assistants.

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Speaker 3: We're going to go really deep on this story later

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Speaker 3: in the program. As you mentioned, all eyes on Apple,

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Speaker 3: this is critically important. We're down for a four straight session,

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Speaker 3: one hundred and seventy billion dollars of market cap shed

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Speaker 3: during that four day period and a second downgrade. Piper

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Speaker 3: Sander's a neutral, and there appear to be basically three things.

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Speaker 3: They're looking at inventories going into the first half of

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Speaker 3: this year, they're worried, they're looking at growth of unit

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Speaker 3: sales going into this first half of the year, and

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Speaker 3: they're worried, and then they're looking at China and the

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Speaker 3: macro picture. I want to bring in Bloomberg Intelligence and

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Speaker 3: list sanaag Rana for his take. Those were the three

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Speaker 3: kind of key points of Private Sandler. There's some read

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Speaker 3: through from Berkleys who had similar concerns when they downgraded

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Speaker 3: earlier this week. Do you share those concerns?

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Speaker 5: Yeah, this is the same exact thing we talked about

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Speaker 5: when they last time reported that the big issue is

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Speaker 5: China and China remains a wild guard for them. You know,

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Speaker 5: in my view, there isn't any new information from these downgrades.

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Speaker 5: We already knew China was going to be bad. In fact,

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Speaker 5: we have been hearing about it for almost you know,

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Speaker 5: two and a half months right now, and when they reported,

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Speaker 5: they really missed that China number by a big amount. So,

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Speaker 5: I mean, I completely agree that sales this year is

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Speaker 5: going to be tepid at the best.

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Speaker 6: But you know, it's not new news. On jan first.

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Speaker 5: We have known this for a.

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Speaker 2: While, and so why the caution now, Anna rag Is

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Speaker 2: it more evaluation questioning a fundamental well a more macro perspective.

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Speaker 2: We're now seeing perhaps the anticipation rates not being cut

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Speaker 2: and we're just questioning valuations across all key tech companies

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Speaker 2: or is there something bespoke to Apple in the here

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Speaker 2: and now?

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Speaker 5: No, I think you're right about valuations and the big

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Speaker 5: tech names. Last year, they were really the safe heavens

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Speaker 5: for people to go in when they didn't know what

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Speaker 5: was happening in the economy, what was not happening, what

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Speaker 5: was going to happen with eight cuts, I think it

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Speaker 5: seems at this point we're not going to have a

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Speaker 5: hard landing. And if the economy stays okay and rate

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Speaker 5: increases are not going to happen, then you know, people

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Speaker 5: do tend to go out of safe havens into more

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Speaker 5: riskier stocks and a rag.

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Speaker 3: Apple was the only big tech firm or one of

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Speaker 3: the cy called Magnificent seven that had four straight quarters

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Speaker 3: of sort of decelerating revenue growth. It has the fewest

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Speaker 3: by ratings of any of those megacaps, as per the

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Speaker 3: chart were showing. Now, what is it unique to Apple

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Speaker 3: that it was not able to thrive in twenty twenty

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Speaker 3: three and that there is such a change of set

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Speaker 3: entiment now for twenty twenty four different to those other

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Speaker 3: Magnificent seven.

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Speaker 5: Yeah, I mean the thing that the most important part

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Speaker 5: is it's an enterprise It's not an enterprise technology company.

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Speaker 5: It's a consumer technology company. You know, when you look

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Speaker 5: at somebody like an AWS or a Microsoft or in video,

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Speaker 5: they're all going you know, they should benefit in the

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Speaker 5: long run or even in the short term because of

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Speaker 5: a lot of the AI investments that are going in

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Speaker 5: or for that matter, a rebound in corporate tite spending.

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Speaker 5: Apple doesn't work on that end. I mean, that's a

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Speaker 5: consumer technology company and it's completely different from a you know,

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Speaker 5: enterprise technology.

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Speaker 2: We want to thank you and our ground a Bloomberg

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Speaker 2: Intelligence really just dovetailing all of what feels very fresh

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Speaker 2: and concerning for Apple. But in the long term, nothing

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Speaker 2: has changed in January first, as you put it, well,

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Speaker 2: let's get that broader macro perspective and some of the

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Speaker 2: headwinds that are facing Apple and more broadly the markets.

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Speaker 2: So Christina Hooper, chief Global Market Stretch is over at Invesco.

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Speaker 4: And Christina, it's always a great talk with you.

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Speaker 2: In fact, it's luckily enough to speak to you before

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Speaker 2: the turn of the new year, and at that point

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Speaker 2: you were liking emerging markets, but you had some key

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Speaker 2: thoughts in China, and I am interested as to whether

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Speaker 2: you think these headwinds is worry about. For example, Apple's

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Speaker 2: resilience in China is something that you also rewarried about.

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Speaker 7: Well, I think when we look at China, there are

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Speaker 7: certainly some question marks. We just don't know what policy,

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Speaker 7: what stimulus measures will come out this year.

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Speaker 4: That could be supportive.

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Speaker 7: We know that the Chinese economy needs to be stabilized,

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Speaker 7: we need to see more growth coming from it, and

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Speaker 7: I think we will get that. It's a question mark

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Speaker 7: about timing and just how effective the policies are going

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Speaker 7: to be coming out of the gate in twenty twenty four.

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Speaker 7: And so of course it makes sense that those companies

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Speaker 7: that count China as an important part of their revenue, says,

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Speaker 7: an important part of their customer base are worried. But

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Speaker 7: I think it's a very short term kind of concern. Obviously,

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Speaker 7: it's going to impact earnings, but I don't think it's

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Speaker 7: a long term problem. It's just a matter of getting

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Speaker 7: the stimulus the policies right, improving confidence for consumers and

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Speaker 7: businesses in China because there's a lot of potential there

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Speaker 7: for that economy.

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Speaker 2: And what about the geopolitics that dovetails into all of

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Speaker 2: that because on the one side, Apple's worrying about the

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Speaker 2: resilience of a consumer, but also a pushback against well,

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Speaker 2: it's ownership of Apple by government related entities, people working

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Speaker 2: within government institutions.

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Speaker 4: Geopolitics, is that a risk for you? More broadly, well.

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Speaker 7: Geopolitics can be a fly in the ointment, but it

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Speaker 7: tends to be something that is very short term in nature,

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Speaker 7: so there typically are workarounds. Smart companies can figure out

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Speaker 7: workarounds to policy changes, to changes in you know, particular

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Speaker 7: you know, areas of treatment for company working and selling abroad.

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Speaker 4: The key though, is that it's a.

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Speaker 7: Short term problem and you know, typically a workaround will

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Speaker 7: be found, So I don't think it's it's a problem

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Speaker 7: for the long term, but of course it can create headwinds,

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Speaker 7: and investors are looking in the short term right They're

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Speaker 7: reacting and concerned about what earnings are going to look

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Speaker 7: like in the next quarter, the next two quarters, And

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Speaker 7: of course we have seen a nice run up in tech,

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Speaker 7: so it makes sense that we're seeing a bit of

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Speaker 7: a pullback, especially with rates having gone higher.

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Speaker 3: Christina, Caroline and I have been reflecting on a sense

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Speaker 3: of deja VU this week because the conversations we're having

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Speaker 3: into the new year are basically the same as we

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Speaker 3: had throughout twenty twenty three. And that's so true of

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Speaker 3: the FED. You know, I feel like we started twenty

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Speaker 3: twenty three asking where will the FED go? We're starting

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Speaker 3: twenty twenty four with confusion about the FED. And we

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Speaker 3: always remind ourselves in this program, higher rates discount the

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Speaker 3: present value of future cash flows in the context of

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Speaker 3: the tech technology sector. Is that the case in your

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Speaker 3: analysis and your outlook for this year?

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Speaker 4: Ed?

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Speaker 7: Absolutely, monetary policy has driven markets in general, but the

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Speaker 7: reality is that tech has been particularly affected by monetary policy.

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Speaker 7: It's a long duration asset class and so it's very

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Speaker 7: sensitive to rates, so when they go up, it can

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Speaker 7: be a problem, and that's what we're seeing. But I

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Speaker 7: think we have to look at the root cause of

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Speaker 7: why rates have gone up. Markets have gotten very easily

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Speaker 7: persuaded by a little FED talk and a little fear

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Speaker 7: and are now convinced that we're going to get a

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Speaker 7: very different FED than they thought we were going to

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Speaker 7: get just a few weeks ago. And I just don't

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Speaker 7: buy it. I think what we are going to see

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Speaker 7: is a FED that cuts rates between one hundred and

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Speaker 7: one hundred and fifty basis points this year, not because

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Speaker 7: the economy deteriorates a lot, but because policy is restrictive

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Speaker 7: in the face of significant disen inflation. We're going to

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Speaker 7: see progress on disinflation, and so the FED is going

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Speaker 7: to be forced to cut rates, and I don't think

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Speaker 7: that the movement higher for long rates is going to continue.

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Speaker 3: We use the word technology is a blanket term and

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Speaker 3: learn that not all technology companies are the same. And

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Speaker 3: Ana rag Ran a our Bloomberg Intelligence and it's just

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Speaker 3: made the point on Apple, right, it is not an

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Speaker 3: enterprise company. It's a direct consumer to all intents and purposes.

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Speaker 3: How are you distinguishing within the broad umbrella of technology

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Speaker 3: this year, those you think will thrive and those you

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Speaker 3: think will fall behind.

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Speaker 7: Well, that's a great question, and I would say that

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Speaker 7: it's not so much whether a company is a consumer

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Speaker 7: based company, but more about what exactly the businesses that

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Speaker 7: they're in, right, and they are going to be areas

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Speaker 7: where we're likely to see significant growth even if economic

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Speaker 7: headwinds are worse than we think. For example, cybersecurity, that's

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Speaker 7: an area that companies are likely going to spend on

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Speaker 7: no matter what, because it typically ranks among the top

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Speaker 7: fears among CEOs every year, and I think it becomes

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Speaker 7: a real concern in terms of branding issue. It can

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Speaker 7: get very high profile. So I just want to draw

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Speaker 7: that distinction. It's not about the consumer. It can be

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Speaker 7: more about the regions that companies are selling in that

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Speaker 7: tech companies are selling in, whether it's to businesses or consumers.

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Speaker 7: But I do have to say that in general, when

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Speaker 7: we look at tech, valuations are higher and there is

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Speaker 7: far more sensitivity to rates.

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Speaker 3: Christina Hooper of Investigo, great to have you on the program,

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Speaker 3: Thank you so much. Okay, this is one of the

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Speaker 3: big movies in the technology sector. Israel's most valuable company

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Speaker 3: by market cap, but US listed Mobili down almost twenty

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Speaker 3: five percent if it closes at that.

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Speaker 6: Level, biggest drop on record.

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Speaker 3: It's also impacting other names in the semi space, some

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Speaker 3: of its peers, particularly those that supply chips to the

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Speaker 3: automotive sector. Intel is interesting because remember that mobile I

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Speaker 3: was spun out of Intel, but Intel return retains an

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Speaker 3: eighty eight per cent steak.

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Speaker 6: This is the story. Let's bring up the numbers.

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Speaker 3: It came out with prelim financials and Mobilized telling us

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Speaker 3: that in four year twenty four revenue will be between

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Speaker 3: one point eight six billion and one point nine to

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Speaker 3: six billion at the midpoint one point eight nine billion,

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Speaker 3: but the street was looking for two point five six billion.

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Speaker 3: The story is that this is a company that makes

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Speaker 3: chips or systems that power advanced driver assistance tools. Right

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Speaker 3: think about when you're in your car, the lane keeping technology,

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Speaker 3: the camera technology, the cruise technology. But a lot of

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Speaker 3: the customers that order those types of chips were panicked

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Speaker 3: in twenty twenty when we had a supply crunch. So

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Speaker 3: what did they do. They built up inventories. Now they've

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Speaker 3: stopped ordering and they're working through those inventories. That means

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Speaker 3: that in the first quarter of this year, Mobil's telling

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Speaker 3: us sales will be down fifty percent carrow year on year.

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Speaker 2: Great setup, great deep dive that we now need to

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Speaker 2: do a little bit more as to why this then

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Speaker 2: call the market so off guard. Blue Mugazine King is

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Speaker 2: here to help it break all down the chip news

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Speaker 2: that we've got of the day, and just starting on

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Speaker 2: mobili and starting on just how hard it is to

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Speaker 2: read the end demand for these sorts of chips for

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Speaker 2: inventory levels.

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Speaker 4: More broadly, why had we not got more direction from

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Speaker 4: MOBILEI why.

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Speaker 2: Were we not able to sort of see this coming

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Speaker 2: a little bit clearer.

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Speaker 8: I think the way to look at this is Mobile

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Speaker 8: Eye is essentially at the top of the stack. Its

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Speaker 8: chips go into the most expensive cars. The cars are

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Speaker 8: the most functions and are probably amongst the most expensive components.

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Speaker 8: They're going to cars, So from my perspective, you want

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Speaker 8: to have them on hand so you can sell those cars.

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Speaker 8: But all of us sudden if you think, oh, I

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Speaker 8: can't sell those models, I have to cut some of

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Speaker 8: those models, and you know the market is going more

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Speaker 8: towards say, mid range, then you're going to crash your

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Speaker 8: ordering of somebody like Mobile Eye to obviously save on

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Speaker 8: the build up of inventory and the costs that are

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Speaker 8: involved in that.

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Speaker 6: So that's probably what's going on here.

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Speaker 3: And we know all about the automakers, particularly in the

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Speaker 3: EV context, telling us we're really scaling back in twenty

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Speaker 3: twenty four. The way that I always look at it is

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Speaker 3: that Mobilie also sells to what we call tier ones,

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Speaker 3: but basically companies that make those off the shelf components

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Speaker 3: and those are the ones that built up the inventores.

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Speaker 3: What's also interesting is the reaction in equity markets. All

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Speaker 3: kinds of chip names, particularly those that sell to the

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Speaker 3: car companies, are down.

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Speaker 6: What's the read across there?

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Speaker 8: Yeah, I mean, if you've been looking, if you've been

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Speaker 8: listening to the conference calls for like the last couple

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Speaker 8: of quarters, people like TI, people like NXP have been asked, Hey,

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Speaker 8: the auto markets looking a bit shaky, how can you

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Speaker 8: be so bullish about this? How come your orders are

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Speaker 8: so strong? And what they've been saying is, oh, more

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Speaker 8: chips per car. Don't worry about it, you know, we're

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Speaker 8: not too worried about the you know, the total number

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Speaker 8: of cars getting sold. Now we're seeing that perhaps they

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Speaker 8: have to worry about the total number of cars being

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Speaker 8: built and being sold. And that's really what's happening here, and.

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Speaker 2: It's interesting Qualcom getting caught up in that. We're seeing

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Speaker 2: setting pressure on the day is of course put some

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Speaker 2: focus on the auto industry as it diversifies out of

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Speaker 2: just mobile, but it also has an announcement today on

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Speaker 2: how it's really trying to be owning the VRAR space

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Speaker 2: as well.

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Speaker 4: What's the latest on that?

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Speaker 6: I in.

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Speaker 3: Yeah.

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Speaker 8: I mean, this is, you know, a repeat of a

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Speaker 8: story we've seen several times when Apple get involved in

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Speaker 8: a category that sort of others have been dabbling in,

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Speaker 8: Suddenly it becomes serious. And as we know, Apple's got

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Speaker 8: a major product coming to market in this area. So

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Speaker 8: Whatqualcom's trying to do here is to say, look, let's

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Speaker 8: not repeat the history that we saw with the smartphone

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Speaker 8: with this smart watch. Let's make sure that our Android

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Speaker 8: based offerings, our Windows based offerings have a chip that

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Speaker 8: really really gives the capabilities that will allow the competitors

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Speaker 8: of Apple to have things out there that can fight

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Speaker 8: back and stop Apple just coming waltzing in and owning

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Speaker 8: the sector.

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Speaker 3: Apple has its own proprietary chip inside the Vision pro

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Speaker 3: and as carry points out for Qualcom, this is one

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Speaker 3: of the number of areas moving away from the smartphone.

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Speaker 3: Tell me about the XR two plus chip, you know,

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Speaker 3: do we believe it's at the cutting edge in this

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Speaker 3: use case?

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Speaker 8: I mean, the explanation that we had in the story

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Speaker 8: is up to twelve, maybe even more than twelve cameras,

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Speaker 8: four K projection of visuals in each I sounds pretty aggressive,

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Speaker 8: sounds pretty exciting, But I think, as Qualcom said themselves,

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Speaker 8: everything is in the implementation. We absolutely have to see

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Speaker 8: what its customers will do with it.

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Speaker 6: Bloomberg's e inking.

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Speaker 3: We call him mister Chip and it's a great way

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Speaker 3: to kick off the new year character I Meanwhile.

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Speaker 2: Coming up, we're going to talk Tencent because buying back

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Speaker 2: a record number of shares last month, it seemed to

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Speaker 2: make the most of what was an industry I'd.

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Speaker 4: Sell off in the name.

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Speaker 2: More on what triggered, of course, the move gaming moves

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Speaker 2: by China more broadly, and what's the next for investors?

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Speaker 4: This is remote technology.

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Speaker 3: Okay, time for talking tech, and first up, Microsoft is

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Speaker 3: adding a new key which will activate its AI copilot

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Speaker 3: function to its Windows keyboard. Microsoft says the shortcut will

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Speaker 3: help users create images, write emails, and summarize text with

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Speaker 3: the help of AI. It's the first addition to the

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Speaker 3: PC keyboard since the Windows Start key was introduced in

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Speaker 3: nineteen ninety four, and in an effort to boost domestic

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Speaker 3: output of legacy semiconductors, the US Commis Department will give

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Speaker 3: Microschip Technology one hundred and sixty two million dollars. It's

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Speaker 3: second the second such commitment from the twenty twenty two

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Speaker 3: Chips Act, which set aside billions of dollars to bring

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Speaker 3: chip making back to the United States. While legacy chips

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Speaker 3: are less advanced, they're important and essential for everyday use.

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Speaker 6: Plus.

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Speaker 3: In the latest show of supports for US sanctioned companies,

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Speaker 3: China's number two leader made an appearance at a YMTC factory,

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Speaker 3: a chip maker that competes with the likes of Micron

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Speaker 3: and Samsung. The trip comes as China attempts to revive

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Speaker 3: its struggling economy and bolster Chinese investments in the technology sector.

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Speaker 2: Caroline and also perhaps steady some nerves about the direction

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Speaker 2: of travel for policy making more broadly versus tech in China,

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Speaker 2: and we want to delve into that particular area because

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Speaker 2: we want.

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Speaker 4: To focus on ten cent.

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Speaker 2: Share repurchases by the company have hit a record one

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Speaker 2: point three billion dollars. That was in December, and of

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Speaker 2: course that was kind of making the most of share

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Speaker 2: weakness after China supprise the gaming industry with some new

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Speaker 2: regulations whom most Henry Wren is in London with more and.

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Speaker 4: So is it typical for a company to make the.

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Speaker 2: Most of buying back when shares have been sold off.

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Speaker 9: Yes, definitely typical move for companies, but for Tencent, it

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Speaker 9: has really been ramping up its efforts for share repurchase.

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Speaker 9: So Bloomberg compiled data showed that recently, on every single

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Speaker 9: trading day, Tencent has been buying back about total worth

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Speaker 9: of one billion Hong Kong dollars of its shares on

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Speaker 9: Hong Kong trading market. To put that into perspective, before

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Speaker 9: the Chinese gaming regulators issued a set of surprise rules

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Speaker 9: aiming at curbing players playing time as well as spending

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Speaker 9: on video games, Tencent was buying back at a pace

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Speaker 9: of about four hundred million Hong Kong dollars per single day,

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Speaker 9: So that's an increase of more than one hundred percent.

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Speaker 9: So that really shows that Tencent is ramping up its

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Speaker 9: efforts to restore the market confidence given the recent drops

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Speaker 9: in gaming stocks as well as intents in itself recently.

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Speaker 3: Exactly that it is the mechanism or the reaction from

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Speaker 3: Tencent to what's happened, which is the new rules or

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Speaker 3: gaming which strictions. As a wonderful line in the Bloomberg story, still,

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Speaker 3: for many investors who remain traumatized by a spate of

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Speaker 3: abrupt rules just remind us where we stand with the

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Speaker 3: regulations that came in just before the new year.

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Speaker 6: Yeah, so exactly.

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Speaker 9: So many investors that we talked to have been mentioning

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Speaker 9: about all those memories being involved in the twenty twenty

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Speaker 9: one twenty twenty two regulatory crackdown campaigns where the Chinese

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Speaker 9: government's target fintech giants such as and Financial the gaming

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Speaker 9: giants including Tensent and many others, and in the latest

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Speaker 9: moves in late December, the China's gaming regulators said that

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Speaker 9: it would be issuing a set of drop rules, which

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Speaker 9: is still soliciting opinions from the society that it would

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Speaker 9: curb video game players playing time it's spending on multiple

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Speaker 9: mobile games as well as video games. Of course, that's

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Speaker 9: been badly received by the market. We've been seeing severe

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Speaker 9: drops in shit, but there have been some signs of

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Speaker 9: easing from regulators recently. For example, they've approved one hundred

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Speaker 9: and five video games domestically, including those being run by

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Speaker 9: Tencent as well as NAT's. Also, two media reports recently

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Speaker 9: signaled that a senior official overseeing the gaming regulators have

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Speaker 9: been called to step step down.

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Speaker 2: What I mean, we've got thirty seconds Henry, But what

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Speaker 2: is it that investors need to track their eyes on

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Speaker 2: to ensure that they are reading these tea leaves?

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Speaker 6: Right?

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Speaker 9: Yeah, so more signs of easing, for sure, is comforting,

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Speaker 9: but I think investors at this time do need to

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Speaker 9: see the concrete signs that the government is supporting the sector,

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Speaker 9: not just saying that it's supporting its stands on the newspaper,

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Speaker 9: on the state media at this point.

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Speaker 3: All right, Bloomberg's Henry ran all across the China tech bait. Great,

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Speaker 3: have you on the program. Welcome back to Bloomberg Technology.

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Speaker 3: I'd love low here in San Francisco and.

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Speaker 4: I'm Karen Hider, New York.

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Speaker 2: Let's get a quick check on these markets and the

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Speaker 2: names that are on the move. I start with the

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Speaker 2: micro just to keep you on your toes. What's happening

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Speaker 2: in terms of mobile I of course Key Faller on

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Speaker 2: the day this after they guide that their revenue is

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Speaker 2: gonna be down some fifty percent, clearly an inventory back up.

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Speaker 2: And one of course is these chips that are focused

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Speaker 2: particularly on the auto sector.

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Speaker 4: So ed we dived into that story a little bit.

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Speaker 2: Earlier with Ian King, but it's still a clear market mover.

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Speaker 4: To the downside.

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Speaker 2: Interestingly, Apple is managing to be on the downside too.

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Speaker 2: It's got its second straight downgrade this week. Now, of

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Speaker 2: course this is not to a sell as we've seen previously.

440
00:22:35,800 --> 00:22:38,879
Speaker 2: Barklays this is at least going neutral over at Pipersanna,

441
00:22:38,920 --> 00:22:42,560
Speaker 2: and they're once again worrying about China about consumer resilience.

442
00:22:42,720 --> 00:22:43,760
Speaker 4: So Apple under pressure.

443
00:22:43,800 --> 00:22:45,840
Speaker 2: It's key because it's of course biggest points move are

444
00:22:45,840 --> 00:22:48,359
Speaker 2: off and on some of these benchmarks. One to the upside,

445
00:22:48,359 --> 00:22:49,680
Speaker 2: and we're going to dig into this in a moment.

446
00:22:49,800 --> 00:22:53,159
Speaker 2: Peloton to the higher about nine percent as it strikes

447
00:22:53,200 --> 00:22:55,720
Speaker 2: up a partnership with TikTok, gonna be able to consuming

448
00:22:55,760 --> 00:22:59,159
Speaker 2: some of their live fitness applications and indeed some of

449
00:22:59,160 --> 00:23:00,200
Speaker 2: their classes.

450
00:23:00,080 --> 00:23:02,160
Speaker 4: On your TikTok device if you have the app there.

451
00:23:02,200 --> 00:23:04,160
Speaker 2: Meanwhile, let's have a look at what's happening not only

452
00:23:04,160 --> 00:23:05,800
Speaker 2: in the world of sports, but more broadly in the

453
00:23:05,800 --> 00:23:07,520
Speaker 2: world of macro. I want to focus in on what's

454
00:23:07,520 --> 00:23:10,199
Speaker 2: happening with NASDAG is in under pressure only slightly, but

455
00:23:10,280 --> 00:23:12,879
Speaker 2: it is what fifth straight day of losses for the

456
00:23:12,960 --> 00:23:15,400
Speaker 2: NASDAQ one hundred and longest losing streets It is December twenty

457
00:23:15,480 --> 00:23:15,960
Speaker 2: twenty two.

458
00:23:16,560 --> 00:23:18,119
Speaker 4: That is, as we see question.

459
00:23:17,880 --> 00:23:19,920
Speaker 2: Marks of where the Federal Reserve goes, and also into

460
00:23:19,920 --> 00:23:22,720
Speaker 2: the mixes geopolitics now interesting in McDonald's. I wanted to

461
00:23:22,760 --> 00:23:24,639
Speaker 2: shine a light on this particular company because it has

462
00:23:24,760 --> 00:23:28,119
Speaker 2: a macro read across they're posting on LinkedIn the CEO

463
00:23:28,160 --> 00:23:30,920
Speaker 2: they're saying it is having a meaningful impact of the business.

464
00:23:31,119 --> 00:23:33,520
Speaker 2: What's happening in the Middle East, So clearly that is

465
00:23:33,560 --> 00:23:37,800
Speaker 2: having an effect on consumers and on overall big corporate America.

466
00:23:37,960 --> 00:23:39,200
Speaker 4: I'm looking at though, at Bitcoin.

467
00:23:39,280 --> 00:23:41,240
Speaker 2: Let's end on the green up two point eight percent

468
00:23:41,280 --> 00:23:43,000
Speaker 2: and actually just pouring back some of those.

469
00:23:42,840 --> 00:23:43,960
Speaker 4: Losses that we saw yesterday.

470
00:23:44,080 --> 00:23:46,560
Speaker 2: Not forty five thousand, but forty four thousand looks pretty

471
00:23:46,600 --> 00:23:48,760
Speaker 2: healthy in terms of recent numbers. R this is all

472
00:23:48,800 --> 00:23:51,399
Speaker 2: about the anticipation of whether we get a spot bitcoin.

473
00:23:51,440 --> 00:23:54,199
Speaker 2: ETF signed off as soon as January the tenth.

474
00:23:54,280 --> 00:23:55,679
Speaker 3: I think there's still a lot to talk about when

475
00:23:55,720 --> 00:23:58,480
Speaker 3: it comes to bitcoin. I feel like we have consensus

476
00:23:58,520 --> 00:23:59,800
Speaker 3: on what the catalyst is here.

477
00:24:00,040 --> 00:24:01,440
Speaker 6: Let's keep the conversation.

478
00:24:01,119 --> 00:24:05,199
Speaker 3: Going with ragu Ya Lagada falcon X CEO, and you know,

479
00:24:05,320 --> 00:24:08,280
Speaker 3: we're only three shows into the year, but you know,

480
00:24:08,600 --> 00:24:12,240
Speaker 3: it is not uniform that all of the trading activity

481
00:24:12,320 --> 00:24:15,960
Speaker 3: is being driven by enthusiasm that the SEC will approve

482
00:24:16,040 --> 00:24:19,320
Speaker 3: bitcoin spot ETF. There are others out there argue that

483
00:24:19,480 --> 00:24:24,200
Speaker 3: argue this is either a market functioning an institutional level

484
00:24:24,400 --> 00:24:27,600
Speaker 3: impact on the market. Where do you stand in this

485
00:24:27,680 --> 00:24:28,520
Speaker 3: New year's debate?

486
00:24:30,000 --> 00:24:33,199
Speaker 10: Yeah, thanks so much for having me ed first and

487
00:24:33,240 --> 00:24:36,960
Speaker 10: foremost the context of the market. We're seeing some of

488
00:24:37,000 --> 00:24:39,960
Speaker 10: the highest open interest in the market since the collapse

489
00:24:40,000 --> 00:24:42,399
Speaker 10: of Teleluna, which is more than the year. So in

490
00:24:42,440 --> 00:24:46,480
Speaker 10: that context of very high open interest, now, there were

491
00:24:46,520 --> 00:24:48,240
Speaker 10: a couple of sparks over the last twenty four or

492
00:24:48,280 --> 00:24:51,080
Speaker 10: forty eight hours. The one spark was the major export report,

493
00:24:51,480 --> 00:24:54,720
Speaker 10: seeing that UTF approval is probably not likely, and in

494
00:24:54,760 --> 00:24:58,119
Speaker 10: the context of very high open interest and leverage, that

495
00:24:58,280 --> 00:25:02,240
Speaker 10: spark triggered a bunch of quidations, so liquidations all to

496
00:25:02,359 --> 00:25:04,040
Speaker 10: the tuna of like, you know, two hundred and thirty

497
00:25:04,080 --> 00:25:08,639
Speaker 10: million dollars in bitcoin and eat alone. Now one of

498
00:25:08,720 --> 00:25:11,480
Speaker 10: the tier questions, one of the big sentiments that we

499
00:25:11,520 --> 00:25:13,639
Speaker 10: are hearing. So we checked again with some of the

500
00:25:13,720 --> 00:25:17,200
Speaker 10: largest hedge fonds, asset managers, and the crypto native funds.

501
00:25:17,840 --> 00:25:20,679
Speaker 10: What do you think about bitcoin ETF, And consistently we

502
00:25:20,680 --> 00:25:23,840
Speaker 10: are hearing that bitcoin ETF is very likely going to

503
00:25:23,840 --> 00:25:28,000
Speaker 10: be approved. Now, the one very prominent question that's on

504
00:25:28,080 --> 00:25:30,320
Speaker 10: everyone's mind is Okay, is.

505
00:25:30,280 --> 00:25:30,960
Speaker 11: This price then?

506
00:25:31,640 --> 00:25:31,800
Speaker 6: Now?

507
00:25:31,840 --> 00:25:34,600
Speaker 10: What we're hearing is we've been spending time with a

508
00:25:34,640 --> 00:25:37,359
Speaker 10: lot of our partners as well on this, including falcon

509
00:25:37,359 --> 00:25:40,760
Speaker 10: Ex research. What we are hearing is most people are

510
00:25:40,760 --> 00:25:45,040
Speaker 10: pricing the net inflows into bitcoin ETF in the first

511
00:25:45,080 --> 00:25:47,640
Speaker 10: week or so at one or two billion dollars. So

512
00:25:47,720 --> 00:25:49,959
Speaker 10: if the net inflows are less than one or two

513
00:25:50,000 --> 00:25:52,480
Speaker 10: billion dollars, it will have an adverse effect on the price,

514
00:25:52,880 --> 00:25:55,120
Speaker 10: and if it's more than one or two billion dollars,

515
00:25:55,440 --> 00:25:57,520
Speaker 10: it will have much more positive effect on the price.

516
00:25:57,880 --> 00:25:59,879
Speaker 10: So that's the sentiment that we're hearing.

517
00:26:00,200 --> 00:26:04,000
Speaker 2: But just remind us, Raghu, like for many who come

518
00:26:04,040 --> 00:26:08,000
Speaker 2: into this and think that there's already a bitcoin ATF,

519
00:26:08,000 --> 00:26:09,200
Speaker 2: it's a future's ETF.

520
00:26:09,880 --> 00:26:11,200
Speaker 4: Why are we going.

521
00:26:11,080 --> 00:26:14,160
Speaker 2: To see such seismic move from institutional players retail players

522
00:26:14,200 --> 00:26:17,240
Speaker 2: to get in on a spot bitcoin etf reser v futures.

523
00:26:17,920 --> 00:26:22,200
Speaker 10: Yeah, So we're hearing two main things, Caroline. The first

524
00:26:22,520 --> 00:26:24,880
Speaker 10: thing is, if you look at the Bitcoin Future CTF

525
00:26:24,920 --> 00:26:29,360
Speaker 10: and the architecture underneath that there is a future's rollover

526
00:26:29,480 --> 00:26:33,720
Speaker 10: cost that instrument incurs on a monthly basis, and that's

527
00:26:33,720 --> 00:26:36,639
Speaker 10: a very profitable trade for people who know that bitcoind

528
00:26:36,880 --> 00:26:40,719
Speaker 10: futures issuers are going to come transact in the market

529
00:26:41,480 --> 00:26:45,359
Speaker 10: in a very predictable way, so that the future's rollover

530
00:26:45,440 --> 00:26:48,320
Speaker 10: cost is a meaningful cost. So that's one. The second

531
00:26:48,359 --> 00:26:52,000
Speaker 10: thing we've been speaking to some of the retail investment

532
00:26:52,080 --> 00:26:56,200
Speaker 10: advisors and also the statistics on the self directed retail

533
00:26:56,920 --> 00:27:01,040
Speaker 10: there are arias who cannot transact in few space DF.

534
00:27:01,720 --> 00:27:03,240
Speaker 6: Now for the first time, the.

535
00:27:03,200 --> 00:27:06,240
Speaker 10: Iria market, which is about thirty trillion dollar market, will

536
00:27:06,280 --> 00:27:10,080
Speaker 10: have access to Bitcoin SPOTDF, which is much more efficient

537
00:27:10,320 --> 00:27:12,480
Speaker 10: in a very simless way. So those are the two

538
00:27:12,520 --> 00:27:15,800
Speaker 10: reasons that we are hearing consistently on why is SPOTYDF

539
00:27:16,400 --> 00:27:19,840
Speaker 10: is better? But granted both have their pros and cons

540
00:27:19,840 --> 00:27:20,600
Speaker 10: and nuances.

541
00:27:21,400 --> 00:27:24,040
Speaker 2: It's really interesting that you've given us this number, Raku.

542
00:27:24,080 --> 00:27:27,040
Speaker 2: The fact that you're talking to your clients, those big

543
00:27:27,119 --> 00:27:29,000
Speaker 2: investors and hedge funds.

544
00:27:28,840 --> 00:27:30,880
Speaker 4: That already dabble in a world or crypto.

545
00:27:30,600 --> 00:27:32,320
Speaker 2: And managing to pull out what what did you say

546
00:27:32,400 --> 00:27:35,320
Speaker 2: want two billion dollars in terms of inflows over the

547
00:27:35,359 --> 00:27:39,440
Speaker 2: first same week that the ATF goes live. What if

548
00:27:40,119 --> 00:27:43,120
Speaker 2: that date is delayed? What if you said it's likely

549
00:27:43,200 --> 00:27:45,679
Speaker 2: that these spot ETFs do get signed off, but if

550
00:27:45,680 --> 00:27:48,600
Speaker 2: they're not, does it ultimately matter and the short term.

551
00:27:48,440 --> 00:27:49,080
Speaker 4: To the price point.

552
00:27:50,400 --> 00:27:53,080
Speaker 10: So I'll bring that into two parts. The first part

553
00:27:53,160 --> 00:27:56,800
Speaker 10: is like, what are the odds right it is very

554
00:27:56,920 --> 00:27:59,440
Speaker 10: likely that a bitcoin EDF is going to be approved? Now,

555
00:27:59,480 --> 00:28:01,840
Speaker 10: then you want there is there could be an approval

556
00:28:01,920 --> 00:28:05,880
Speaker 10: with caveats that could delay the launch of that could

557
00:28:05,920 --> 00:28:09,600
Speaker 10: delay the time between an approval an actual instrument traded

558
00:28:09,920 --> 00:28:13,879
Speaker 10: in the secondary markets. So that is one plausibility, But

559
00:28:13,960 --> 00:28:16,440
Speaker 10: we don't expect the delays to be very very long,

560
00:28:16,880 --> 00:28:19,800
Speaker 10: right given the grayscale wordic that came out in October,

561
00:28:20,640 --> 00:28:23,760
Speaker 10: there are very little or few reasons where the caveats

562
00:28:23,800 --> 00:28:26,600
Speaker 10: could delay it by months and months. So that is

563
00:28:26,640 --> 00:28:29,680
Speaker 10: one part of it. Now the second part, what if

564
00:28:29,680 --> 00:28:33,560
Speaker 10: this doesn't happen? Right? A fundamentally think twenty twenty four

565
00:28:33,680 --> 00:28:37,000
Speaker 10: is very well set up for crypto. You have the

566
00:28:37,000 --> 00:28:41,160
Speaker 10: bitcoin EDF new cycle and the expectation the optimism around it.

567
00:28:41,520 --> 00:28:44,719
Speaker 10: You have Harving coming there is a major ethereum upgrade.

568
00:28:45,040 --> 00:28:47,000
Speaker 10: And earlier in the show, we were talking about the

569
00:28:47,120 --> 00:28:50,440
Speaker 10: VC funding in general being a little slow, but if

570
00:28:50,440 --> 00:28:53,800
Speaker 10: you look at Massari's recent report on krypto funding, quarter

571
00:28:53,880 --> 00:28:57,680
Speaker 10: on quarter, the crypto fundraise grew eighty percent to about

572
00:28:57,680 --> 00:29:01,040
Speaker 10: three hundred eighty billion. So if you add all these things,

573
00:29:01,080 --> 00:29:04,760
Speaker 10: even like you know, with EDF, potential dealis it's very

574
00:29:04,800 --> 00:29:07,400
Speaker 10: unlikely that it won't be proven. So even with potential

575
00:29:07,560 --> 00:29:10,479
Speaker 10: dia delias, the year is very well set up, is

576
00:29:10,520 --> 00:29:11,480
Speaker 10: what we feel.

577
00:29:11,760 --> 00:29:14,080
Speaker 3: Yeah mean, I mean you said the year is very

578
00:29:14,440 --> 00:29:18,360
Speaker 3: well set up for crypto broadly. You didn't say bitcoin.

579
00:29:18,720 --> 00:29:20,840
Speaker 3: And this is the bit that I'm struggling to understand

580
00:29:20,880 --> 00:29:23,800
Speaker 3: when it becomes more than bitcoin. So on a market

581
00:29:23,840 --> 00:29:27,800
Speaker 3: capitalization basis, Bitcoin's forty nine percent of the global dis

582
00:29:27,960 --> 00:29:32,240
Speaker 3: assets market, right, it almost acted as the proxy for

583
00:29:32,280 --> 00:29:36,000
Speaker 3: an industry that was about in twenty twenty three scandal,

584
00:29:36,160 --> 00:29:39,200
Speaker 3: you know FTX, what happened with binance. Towards the end,

585
00:29:39,480 --> 00:29:43,360
Speaker 3: do you think other tokens, other distal assets, other use

586
00:29:43,400 --> 00:29:45,360
Speaker 3: cases will get some limelight this year?

587
00:29:46,200 --> 00:29:49,160
Speaker 10: Yeah, the first off the year we think will be

588
00:29:49,240 --> 00:29:53,800
Speaker 10: dominated by bitcoin. Right, Bitcoin the regulatedly clarity and all

589
00:29:53,880 --> 00:29:56,760
Speaker 10: the asset the institutional interest that we are hearing and

590
00:29:56,840 --> 00:29:59,800
Speaker 10: actually seeing right, I mean, we're seeing some record volumes.

591
00:30:00,280 --> 00:30:03,160
Speaker 10: Everything that happened in the space twenty two to twenty

592
00:30:03,200 --> 00:30:06,640
Speaker 10: twenty three are volumes tripled, and a lot of it

593
00:30:06,680 --> 00:30:09,520
Speaker 10: is around the excitement around bitcoin. So the first half

594
00:30:09,520 --> 00:30:12,840
Speaker 10: of the year we expect a lot of activity around

595
00:30:12,880 --> 00:30:16,360
Speaker 10: bitcoin and the bitcoin domination continuing. But towards the later

596
00:30:16,440 --> 00:30:20,600
Speaker 10: part of the year that's where it gets interesting. Etherium

597
00:30:21,160 --> 00:30:25,520
Speaker 10: could potentially whiper an DAF approval as well spot DF approval.

598
00:30:25,880 --> 00:30:27,760
Speaker 10: So the news cycle around Etherium and some of the

599
00:30:27,840 --> 00:30:31,520
Speaker 10: upgrades coming with Ethereum are things that in social investors

600
00:30:31,560 --> 00:30:33,920
Speaker 10: are watching, but we think in terms of five to

601
00:30:34,040 --> 00:30:36,880
Speaker 10: ten years, and back to the core of the show,

602
00:30:36,920 --> 00:30:39,640
Speaker 10: which is the technology. The reason why I jumped into

603
00:30:39,680 --> 00:30:43,400
Speaker 10: crypto is Scrypto is perhaps the first use case of toganization,

604
00:30:44,000 --> 00:30:46,680
Speaker 10: and if you look at the number of toganization investments

605
00:30:46,720 --> 00:30:50,200
Speaker 10: and the subtle advances that are happening, it's meaningful. So

606
00:30:50,280 --> 00:30:52,800
Speaker 10: beyond twenty twenty four, I think the story is going

607
00:30:52,840 --> 00:30:57,080
Speaker 10: to be about toganization more than just one instrument within crypto.

608
00:30:57,720 --> 00:30:59,160
Speaker 4: You're in hardware and Motorola.

609
00:30:59,280 --> 00:31:02,200
Speaker 2: You're in Google leading product management over at Cromos, who

610
00:31:02,400 --> 00:31:05,640
Speaker 2: of course made that diversion into the world of crypto.

611
00:31:05,680 --> 00:31:08,160
Speaker 2: And thanks for telling us exactly why. Ragu Yo Lagada

612
00:31:08,240 --> 00:31:12,240
Speaker 2: he joins us falcon X CEO the spot point coin ETF. Meanwhile,

613
00:31:12,240 --> 00:31:14,320
Speaker 2: coming up, No, we're going to go back to what

614
00:31:14,560 --> 00:31:16,600
Speaker 2: we were just hearing from Rugu who was talking about

615
00:31:16,600 --> 00:31:18,840
Speaker 2: the VC community perhaps being a bit down in the dumps.

616
00:31:18,840 --> 00:31:21,600
Speaker 2: Max Grazer from CDR Capital is going to be on

617
00:31:21,920 --> 00:31:23,440
Speaker 2: what was he seeing in the world of VC for.

618
00:31:23,400 --> 00:31:24,160
Speaker 4: Twenty twenty four.

619
00:31:24,600 --> 00:31:42,560
Speaker 2: This is a Bloomberg, yet more data painting the bleak

620
00:31:42,600 --> 00:31:43,800
Speaker 2: picture for Silicon Valley.

621
00:31:43,800 --> 00:31:46,520
Speaker 4: That was twenty twenty three. The value of VC deals

622
00:31:46,560 --> 00:31:47,880
Speaker 4: in the US last year.

623
00:31:47,960 --> 00:31:51,160
Speaker 2: Felt lever has not seen since twenty nineteen, according to Pitchbook,

624
00:31:51,280 --> 00:31:54,240
Speaker 2: and while investors poured money into AI startups and the

625
00:31:54,280 --> 00:31:56,720
Speaker 2: rest of the industry pretty much founded. Here to break

626
00:31:56,760 --> 00:31:59,120
Speaker 2: it all down, Bloomberg, Sarah McBride and I guess we

627
00:31:59,160 --> 00:32:01,800
Speaker 2: were bracing ourselves some pretty lousy numbers and then living

628
00:32:01,840 --> 00:32:02,800
Speaker 2: up to expectations.

629
00:32:04,080 --> 00:32:04,800
Speaker 6: Yeah, that's right.

630
00:32:04,960 --> 00:32:09,040
Speaker 1: I mean the numbers for twenty twenty three were bad.

631
00:32:09,080 --> 00:32:13,640
Speaker 1: There's no way around it. Then again back in twenty nineteen,

632
00:32:14,000 --> 00:32:17,200
Speaker 1: we thought the numbers looked okay, and that's back where

633
00:32:17,240 --> 00:32:21,120
Speaker 1: we are right now. Levels just a little bit higher

634
00:32:21,160 --> 00:32:27,280
Speaker 1: than in twenty nineteen. So investors at venture firms invested

635
00:32:27,360 --> 00:32:30,280
Speaker 1: less money in startups and then they also raised a

636
00:32:30,280 --> 00:32:34,000
Speaker 1: lot less money from their backers. So no matter which

637
00:32:34,080 --> 00:32:38,720
Speaker 1: way you looked at it, it was a pretty gloomy year.

638
00:32:39,640 --> 00:32:44,760
Speaker 1: One tiny bright spot is that the fourth quarter numbers

639
00:32:44,920 --> 00:32:48,360
Speaker 1: fell less than in the earlier quarters, so it could

640
00:32:48,400 --> 00:32:51,960
Speaker 1: be an indication that things are starting to stabilize.

641
00:32:52,720 --> 00:32:55,680
Speaker 3: That's kind of the dulla measure of the US venture industry.

642
00:32:56,120 --> 00:32:58,840
Speaker 3: But it's interesting if you look globally because not all

643
00:32:58,920 --> 00:33:01,840
Speaker 3: markets behaved in this same way. You know, the drop

644
00:33:01,880 --> 00:33:05,200
Speaker 3: in the US was I think a two thirds dropped

645
00:33:05,240 --> 00:33:08,280
Speaker 3: from the prior year, but globally half and there were

646
00:33:08,320 --> 00:33:09,080
Speaker 3: bright spots.

647
00:33:09,160 --> 00:33:10,640
Speaker 6: Sarah, what were the bright spots?

648
00:33:11,400 --> 00:33:14,760
Speaker 1: Okay, it's a very tiny bright spot because it's such

649
00:33:14,760 --> 00:33:18,520
Speaker 1: a small part of the overall venture market. But in

650
00:33:18,640 --> 00:33:23,760
Speaker 1: Latin America funding was actually up, but that's in part

651
00:33:23,920 --> 00:33:28,280
Speaker 1: because it's so small that one outsize fund can move

652
00:33:28,360 --> 00:33:32,160
Speaker 1: the market. And last year we saw the announcement of

653
00:33:32,200 --> 00:33:35,320
Speaker 1: what is a huge fund for Latin America, five hundred

654
00:33:35,360 --> 00:33:41,080
Speaker 1: million dollar fund run by former SoftBank executive Marcelo Klore

655
00:33:41,280 --> 00:33:44,840
Speaker 1: and Shuniyata, And that was enough to really boost things

656
00:33:44,920 --> 00:33:49,400
Speaker 1: in Latin America. But that's just two billion dollars out

657
00:33:49,400 --> 00:33:52,480
Speaker 1: of a market that's well over one hundred and fifty billion.

658
00:33:53,200 --> 00:33:56,040
Speaker 3: All right, Bloomberg Sarah McBride with the latest pitchbook data

659
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Speaker 3: out this morning, let's keep the conversation going in today's

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Speaker 3: VC spotlight bring and CRV general partner Max Gazer. Let's

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00:34:03,400 --> 00:34:07,560
Speaker 3: bring up the data again, the US data, specifically twenty

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00:34:07,600 --> 00:34:09,680
Speaker 3: twenty three, the year that was.

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00:34:10,440 --> 00:34:11,719
Speaker 6: You can show the chart.

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00:34:11,640 --> 00:34:14,399
Speaker 3: And you can go over the dollar values, But what

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00:34:14,600 --> 00:34:17,160
Speaker 3: story does that chart tell you about your industry?

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Speaker 12: Thanks?

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Speaker 9: Ed.

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Speaker 6: I think it's a very simple explanation.

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Speaker 13: Which is that the growth capital markets in twenty two

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00:34:24,600 --> 00:34:26,920
Speaker 13: and twenty three basically dried up. And so if you

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00:34:26,960 --> 00:34:30,600
Speaker 13: look at it by dollar amount, that would explain the

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00:34:30,920 --> 00:34:34,000
Speaker 13: drop off from twenty one, which is to explain that

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00:34:34,960 --> 00:34:38,279
Speaker 13: most VC activity in the growth stage pre IPO has

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00:34:38,320 --> 00:34:38,879
Speaker 13: slowed down.

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00:34:39,160 --> 00:34:40,439
Speaker 6: In the early stages.

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00:34:40,120 --> 00:34:44,000
Speaker 13: Where CRV operates, the activity is still very strong and

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00:34:44,120 --> 00:34:46,439
Speaker 13: many of the companies that we funded, for example, last

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00:34:46,480 --> 00:34:48,560
Speaker 13: year in twenty three are still in stealth, which wouldn't

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00:34:48,600 --> 00:34:52,480
Speaker 13: have been represented by the data there. So it feels

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00:34:52,560 --> 00:34:56,080
Speaker 13: all within sort of the bounds of what's natural and

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00:34:56,080 --> 00:34:59,080
Speaker 13: what feels right. We're very excited about twenty four and

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00:34:59,200 --> 00:35:02,000
Speaker 13: the IPO window possibly opening up to reaccelerate VC.

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Speaker 3: Let's go one layer deeper. You talked about some of

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Speaker 3: your early stage investments being in stealth. The other story

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00:35:08,520 --> 00:35:11,719
Speaker 3: of twenty three continuing from twenty two is layoffs. All

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00:35:11,760 --> 00:35:15,600
Speaker 3: of these talented people were laid off from big tech companies,

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Speaker 3: and we had evidence on this program at least that

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00:35:18,040 --> 00:35:21,120
Speaker 3: they went and started businesses. Was that the main catalyst?

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00:35:21,880 --> 00:35:26,040
Speaker 13: Well, you know, with respect to the layoffs, I think

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00:35:26,040 --> 00:35:27,960
Speaker 13: a lot of that was just right sizing. A lot

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00:35:27,960 --> 00:35:32,080
Speaker 13: of these companies had exceeded what was expected of them

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00:35:32,120 --> 00:35:36,120
Speaker 13: as in the public markets, and so a lot of

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00:35:36,160 --> 00:35:39,680
Speaker 13: that was just sort of the natural right sizing of

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00:35:39,719 --> 00:35:40,400
Speaker 13: those companies.

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Speaker 6: To the point that you made about you.

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00:35:42,560 --> 00:35:46,400
Speaker 13: Know, people leaving and starting new companies, that's absolutely catalyst.

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Speaker 13: We think that we'll continue in twenty four with some

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00:35:50,360 --> 00:35:54,120
Speaker 13: liquidity in the IPOs and people, you know, having an

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00:35:54,160 --> 00:35:56,920
Speaker 13: opportunity to start new companies with that resource.

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Speaker 2: When you're looking at a potential IPO windows, are there

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00:36:00,960 --> 00:36:03,719
Speaker 2: certain names you're anticipating. Do they have to be AI

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00:36:03,880 --> 00:36:06,600
Speaker 2: related names? Can they be ones that have been grown

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00:36:06,640 --> 00:36:10,000
Speaker 2: because many of us sort of have seen these companies

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00:36:10,040 --> 00:36:12,600
Speaker 2: just having to start to write size their own valuations

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00:36:12,640 --> 00:36:14,719
Speaker 2: having taken money back in the heady days of twenty

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00:36:14,760 --> 00:36:16,520
Speaker 2: twenty one on a private market basis.

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Speaker 13: Well, Caroline, there's over one hundred companies when we last

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00:36:22,880 --> 00:36:25,760
Speaker 13: counted that I think are ip already. We have close

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00:36:25,800 --> 00:36:28,040
Speaker 13: to a dozen in our own portfolio at CRV that

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00:36:28,200 --> 00:36:31,200
Speaker 13: are on that path, whether it's you know, this year

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00:36:31,520 --> 00:36:35,360
Speaker 13: or sometime later. We think that based on how the

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Speaker 13: public market reacts to some of these public offerings, it's

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Speaker 13: going to change the narrative, right, And so I think

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Speaker 13: that many are anticipating and expecting AI you know, IPOs.

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Speaker 6: To drive the narrative.

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Speaker 13: It could be something else, but what we've seen over

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00:36:49,760 --> 00:36:52,920
Speaker 13: our history in fifty three years is that the public

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00:36:52,960 --> 00:36:57,040
Speaker 13: markets certainly influence how even early stage vcs think about

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Speaker 13: opportunities and where you know, public investments reward companies the most.

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Speaker 13: We think data and AI are going to be front

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Speaker 13: and center, and there's a long pipeline of great companies

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Speaker 13: that we anticipate will do well.

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Speaker 2: I'm interested in the way in which you said in

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00:37:12,040 --> 00:37:14,680
Speaker 2: the early stage, look, things are still active, checks still

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00:37:14,680 --> 00:37:17,359
Speaker 2: being written. Are they being written at the right sort

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00:37:17,360 --> 00:37:20,239
Speaker 2: of valuations from your perspective, has that right size or

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00:37:20,280 --> 00:37:22,759
Speaker 2: are you seeing sort of bigger funds muscling in an

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00:37:22,760 --> 00:37:25,840
Speaker 2: earlier stage investments because everyone's to worry to try and

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00:37:25,840 --> 00:37:28,799
Speaker 2: write some of the larger series later series checks that

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00:37:28,840 --> 00:37:29,520
Speaker 2: are necessary.

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Speaker 6: Yeah.

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Speaker 13: Well, it's been well documented that the valuation correction the

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00:37:35,000 --> 00:37:38,040
Speaker 13: public markets saw has not quite yet trickled down into

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00:37:38,040 --> 00:37:41,240
Speaker 13: the private markets. And so what you see is vcs

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Speaker 13: being a little bit more selective, paying the price that

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Speaker 13: the market bears, but maybe doing fewer of them, or

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00:37:47,880 --> 00:37:50,160
Speaker 13: you know, being a little bit more selective with the

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Speaker 13: criteria required to underwrite those. And so again, I think

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Speaker 13: that's just a normal cycle until the IPO window opens

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Speaker 13: and vcs concerted document and demonstrate results and raise more

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Speaker 13: capital to fuel the next generation of companies. And so

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Speaker 13: I think that liquidity window is very important.

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Speaker 6: I want to take a look at your portfolio at CRV.

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Speaker 3: You know, half the job of an early stage investor

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00:38:14,440 --> 00:38:17,839
Speaker 3: is writing checks for new companies. But there are those

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00:38:17,840 --> 00:38:20,960
Speaker 3: companies that you backed almost a decade ago and you

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00:38:21,040 --> 00:38:23,719
Speaker 3: must now be sitting there and thinking, what should I

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00:38:23,760 --> 00:38:27,160
Speaker 3: advise them to do in this environment? Is the one

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Speaker 3: blanket rule at the moment for all.

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Speaker 6: Of them, you know, growing.

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Speaker 13: Responsibly, right. I think it's sort of the still the

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00:38:34,440 --> 00:38:37,960
Speaker 13: sentiment this year. You know, many of the companies that

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00:38:38,680 --> 00:38:43,879
Speaker 13: we've we've demonstrated here Airtable, Iterable for sell Cribble, all

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00:38:43,960 --> 00:38:46,560
Speaker 13: companies that we invest in the very early stages when

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00:38:46,600 --> 00:38:49,960
Speaker 13: the company was in you know a few people, and

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00:38:50,000 --> 00:38:53,200
Speaker 13: so it's very rewarding to see the companies grow. And

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00:38:53,360 --> 00:38:55,880
Speaker 13: we want to make sure that we're creating companies of

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00:38:55,960 --> 00:38:58,440
Speaker 13: enduring value so once those companies go public, that they

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00:38:58,440 --> 00:38:59,960
Speaker 13: can continue to compound growth.

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Speaker 6: But you know, I think the theme.

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Speaker 13: This year is to make sure that we're ready for

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Speaker 13: the IPOs.

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Speaker 6: All right, CRV General partner Max Gazer, Thank you.

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Speaker 1: So.

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Speaker 2: Over the past year, Instagram has released a slot of

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Speaker 2: new features, avatar stickers, new verification program, and bonus program.

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00:39:22,920 --> 00:39:25,360
Speaker 2: And that's a top of dozens of behind the scenes

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Speaker 2: algorithm changes to try and compete of course with TikTok.

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Speaker 4: Now those changes make the.

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Speaker 2: App more about the user's interests rather than who they

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Speaker 2: actually follow, and we'll shell a little tier.

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Speaker 4: Therefore for some of the creators who depend on the.

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Speaker 2: Platform for their livelihoods, and that just makes it harder

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Speaker 2: and harder to predictably reach their fan.

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Speaker 4: Base and therefore, course said generate some real income.

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Speaker 6: Well.

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Speaker 3: Speaking of competition, particularly with TikTok, it's not only Instagram's

778
00:39:50,360 --> 00:39:51,160
Speaker 3: worst nightmare.

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00:39:51,520 --> 00:39:52,400
Speaker 6: It might become.

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Speaker 3: Amazons too, because TikTok is aiming to grow the size

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Speaker 3: of its US e commerce business tenfold to as much

782
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Speaker 3: as seventeen point five billion dollars this year, according to sources,

783
00:40:03,120 --> 00:40:05,520
Speaker 3: an ambitious target that sets up a clash not just

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Speaker 3: with Amazon but also some of the Chinese owned outfits

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Speaker 3: Timu and Sheen. Let's bring in Bloomberg's Alex Brinka. One

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Speaker 3: of the bylines in this report that merchandise volume number.

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Speaker 6: Give me the reporting on it. That's big.

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Speaker 12: Yeah, seventeen point five billion for the US for TikTok

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Speaker 12: Shop US, which you'll recall just fully launched right before

790
00:40:24,200 --> 00:40:25,080
Speaker 12: the holiday season.

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Speaker 11: I want to put that in perspective.

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Speaker 12: Ed Earlier last year, my colleagues and I also broke

793
00:40:29,960 --> 00:40:33,520
Speaker 12: that globally all of TikTok was looking to sell twenty

794
00:40:33,600 --> 00:40:37,080
Speaker 12: billion dollars worth of merchandise in twenty twenty three. So

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00:40:37,239 --> 00:40:41,160
Speaker 12: that US number for twenty twenty four is already close

796
00:40:41,239 --> 00:40:43,719
Speaker 12: to and edging out that global number in twenty twenty three.

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00:40:43,840 --> 00:40:46,600
Speaker 11: The vast majority of that volume came from sales in

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Speaker 11: Southeast Asia. So this is a.

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Speaker 12: Really big move for TikTok, and it's probably the first

800
00:40:51,440 --> 00:40:55,800
Speaker 12: big tech social media company that might have Amazon actually worried.

801
00:40:56,120 --> 00:40:58,480
Speaker 12: TikTok has really gained its presence here in the US

802
00:40:58,520 --> 00:40:59,840
Speaker 12: as an entertainment platform.

803
00:41:00,239 --> 00:41:00,680
Speaker 6: This year.

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00:41:00,719 --> 00:41:03,320
Speaker 11: They've been rolling out an interesting strategy.

805
00:41:02,840 --> 00:41:06,000
Speaker 12: To get people actually purchasing, and the company told me

806
00:41:06,040 --> 00:41:09,680
Speaker 12: that over the holiday month, over Black Friday and Cyber Monday,

807
00:41:10,080 --> 00:41:13,160
Speaker 12: they had about five million new people buy something on

808
00:41:13,239 --> 00:41:15,240
Speaker 12: the app here in the US, So a big push

809
00:41:15,239 --> 00:41:18,120
Speaker 12: for them and a very ambitious target for twenty twenty four.

810
00:41:18,800 --> 00:41:21,319
Speaker 2: E Commerce Front and Center so Too is sort of

811
00:41:21,960 --> 00:41:25,440
Speaker 2: using it for live programming. And what was interesting is

812
00:41:25,480 --> 00:41:28,520
Speaker 2: Peloton today, I mean shares about nine percent on the

813
00:41:28,520 --> 00:41:30,640
Speaker 2: fact that they're doing a deal with TikTok and going

814
00:41:30,680 --> 00:41:33,279
Speaker 2: to be offering some of their live classes through the platform.

815
00:41:33,360 --> 00:41:35,759
Speaker 2: Will e commas be sort of interweaved into that? Do

816
00:41:35,840 --> 00:41:38,520
Speaker 2: we think how much is this about drawing our attention

817
00:41:38,680 --> 00:41:39,760
Speaker 2: more and more to the app?

818
00:41:40,920 --> 00:41:43,360
Speaker 12: It will and I did some reporting last year. TikTok,

819
00:41:43,400 --> 00:41:47,080
Speaker 12: remember really started with live stream commerce in Southeast Asia

820
00:41:47,080 --> 00:41:50,279
Speaker 12: and Indonesia and Malaysia. It's sister company, Douyenne under the

821
00:41:50,280 --> 00:41:54,160
Speaker 12: bytdance Umbrella does live stream commerce in China where people

822
00:41:54,200 --> 00:41:56,799
Speaker 12: get on live videos and they sell things. It's incredibly

823
00:41:56,840 --> 00:41:59,000
Speaker 12: popular in the Asian market.

824
00:41:59,040 --> 00:42:00,480
Speaker 11: Try to port that over first.

825
00:42:00,320 --> 00:42:02,840
Speaker 12: To the UK and then to the US, but users

826
00:42:02,880 --> 00:42:04,759
Speaker 12: here are just not willing to tune in at the

827
00:42:04,760 --> 00:42:07,719
Speaker 12: same time to shop, so they actually split their strategy.

828
00:42:07,800 --> 00:42:09,520
Speaker 11: They said, hey, let's focus.

829
00:42:09,200 --> 00:42:12,200
Speaker 12: On developing live so people tune in for live videos

830
00:42:12,280 --> 00:42:14,640
Speaker 12: even if it's without shopping, well at the same time

831
00:42:14,800 --> 00:42:18,200
Speaker 12: rolling out our shopping business. This Peloton deal Caroline definitely

832
00:42:18,200 --> 00:42:21,560
Speaker 12: falls in the bucket of live that live push.

833
00:42:22,080 --> 00:42:24,640
Speaker 2: As Blorenka always on top of all things social media,

834
00:42:24,719 --> 00:42:26,640
Speaker 2: we thank you so much now does it for this

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00:42:26,760 --> 00:42:29,480
Speaker 2: edition a Bloomberg Technology Don't forget to check out the

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00:42:29,520 --> 00:42:30,920
Speaker 2: podcast this is Bloomberg,