Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello in the City listeners, I'm Francis Lacua and I
Speaker 2: wanted to give you a heads up. This week's show
Speaker 2: is a little bit different. Firstly, this episode is hosted
Speaker 2: by Stephen Carroll, our amazing colleaguen host of Bloomberg Radio's
Speaker 2: Daybreak Euroup. And Secondly, the podcast episode was recorded in
Speaker 2: front of an audience at an event held recently in
Speaker 2: London called gross Summit.
Speaker 3: Now.
Speaker 2: Gros Summit brings together UK tech scale up entrepreneurs and
Speaker 2: investors to share ideas and connect, and part of this
Speaker 2: year's event included a conversation between Stephen and two outstanding
Speaker 2: voices from the tech scene, Eben Upton, CEO of Raspberry
Speaker 2: Pie and Cherry Cutu, serial entrepreneur and angel investor. They
Speaker 2: discussed the success of Raspberry Pie, London as a place
Speaker 2: to list and whether the UK is leading on AI literacy.
Speaker 4: Enjoy Welcome to the City of London, the.
Speaker 5: City of the City of London.
Speaker 2: Please mind the gap.
Speaker 4: Between the tree and the financial hearts of the country,
Speaker 4: the city, the city.
Speaker 3: Welcome to in the city.
Speaker 2: Stand clear of the doors.
Speaker 5: Pea Welcome to in the City a podcast from Bloomberg
Speaker 5: where the story is important to the city of London.
Speaker 5: I'm Stephen Carrol. We're here in front of a live
Speaker 5: audience at the Grow some of It's Future Horizons of
Speaker 5: in London. This is a gathering of founders, investors and
Speaker 5: others focused on the next generation of technologies and how
Speaker 5: they might change our lives. Today we're talking about a
Speaker 5: UK success story in this sector. Raspberry Pie is the
Speaker 5: world's largest single board computer company.
Speaker 3: Cambridge.
Speaker 5: Firm is also a bright star in the gloomy London
Speaker 5: listing's landscape, having held its IPO in June last month,
Speaker 5: the company reported more than sixty percent jump in revenues
Speaker 5: in the first half of this year, and we have
Speaker 5: two of its leading lights with us today. Evan Upton
Speaker 5: is the founder and CEO of Raspberry Pie. Cherry Cootu,
Speaker 5: a serial entrepreneur investor in her own right, founded Interactive Investor,
Speaker 5: brought back to IPO as well and as a board
Speaker 5: member of Raspberry Pie as well. Great to have you
Speaker 5: both with us here at the Future Horizon's event. So Evan,
Speaker 5: let's bring us back a little bit. First, you founded
Speaker 5: raspberry Pie, or rather the company started in twenty twelve.
Speaker 5: Did you ever think that twelve years later he'd be
Speaker 5: where you are now?
Speaker 6: Absolutely not, we had I think the interesting thing when
Speaker 6: you look back on twenty twelve is how how small
Speaker 6: the dreams were. Right, you know, we were a group
Speaker 6: of us in Camege concerned about the dearth of young
Speaker 6: people applying to study commuter science at the university. We
Speaker 6: were down to a non actionable advice in two thousand
Speaker 6: and eight. If you wanted to get your child in
Speaker 6: to study any quantitative subject of the University of Cambridge,
Speaker 6: the best way for them to do that was to
Speaker 6: apply to computer science and then switch once they were there.
Speaker 6: We were down to something like two applicants for every place,
Speaker 6: which is just you know, a terrible ratio. And really
Speaker 6: the dream for raspberry Pie is, well, suppose we could
Speaker 6: get build a thousand raspberry pies, get them into the
Speaker 6: hands of a thousand young people at the right put
Speaker 6: in their lives, and then if one in ten of
Speaker 6: them applies to Cambridge, then that's a fifty percent increase
Speaker 6: in a number of applicants. So this is an organization
Speaker 6: which is now we're closing in what is that? That's
Speaker 6: four orders of magnitude, you know, between four and five
Speaker 6: orders of magnitude large. We sold over sixty million Raspberry
Speaker 6: pies and the twelve years they've been on sale. So yeah,
Speaker 6: it's an organization which is operating in all sorts of
Speaker 6: ways of the scale vastly beyond what we could have imagined.
Speaker 5: A Sarry, tell us about how you got involved in
Speaker 5: the Raspberry Paie, you've been on board since the early days.
Speaker 1: Yes, well, amazingly there is a link to to this
Speaker 1: summit in that we were having an exhibition of you know,
Speaker 1: companies in Cambridge and one of the speakers that we
Speaker 1: had over from Silicon Valley came to me and said,
Speaker 1: I've just met a really interesting person over there doing
Speaker 1: something you need to know about. He grabbed me and
Speaker 1: he walked me over to you know, to Eban and
Speaker 1: also at that point Jack Lang and you showed me,
Speaker 1: well it was, and that's what piqued my interest. So
Speaker 1: you know, you never know what happens at these summits
Speaker 1: and these exhibitions, but that that was the memory, and
Speaker 1: you know, I loved you know, again the network effects.
Speaker 1: Someone's saying to me, you should be interested in that.
Speaker 1: It's going to change the world and so far so and.
Speaker 6: You've been a director of the Commercial Bit, the trading
Speaker 6: entity since it was founded at the end of twenty
Speaker 6: twelve and even and you did six years tour of
Speaker 6: duty as a trustee of the foundation as well.
Speaker 1: Yep, so yeah, joined immediately and then we kept on
Speaker 1: giving you know, like a huge amount of money to
Speaker 1: the foundation. It was like, I'd really like to join
Speaker 1: them as a trustee and find out how they're spending
Speaker 1: this money and just sort of make sure it's okay.
Speaker 1: And did that and then timed out after six years
Speaker 1: and then came back, you know, solely to the Training Foundation.
Speaker 1: And then really that was the ride up to what
Speaker 1: would be brilliant in you know, how can we grow
Speaker 1: this bigger, faster, better and how big can we actually
Speaker 1: get it?
Speaker 5: And well, I mean that's where I suppose where we
Speaker 5: go from here as part of the story. But I
Speaker 5: do wonder. I mean, the world was arguably a very
Speaker 5: different place than twenty twelve. You know, we were before Brexit,
Speaker 5: we were, you know, before all of the changes we've
Speaker 5: seen in the politics in the US. Arguably a more
Speaker 5: stable world at that time as well. Do you think
Speaker 5: that it's possible to have done what you've done with
Speaker 5: Raspberry Pie in twenty twenty four.
Speaker 6: I think the interesting thing is there aren't many places
Speaker 6: in the world where you could I think you could
Speaker 6: definitely still do it, but there were not many places
Speaker 6: in the world where you could have done it. Then
Speaker 6: obviously you could presumably have done it in Silicon Valley.
Speaker 6: You could do it in Cambridge or in London. We
Speaker 6: are very privileged here that we are located in one
Speaker 6: of the world's pre eminent turk clusters, probably the pre
Speaker 6: eminent tech cluster outside North America. I don't think things
Speaker 6: have got harder. I think they've got different. But you know,
Speaker 6: certainly we were glad that we did it. We're glad
Speaker 6: we did it when we did it, because, of course
Speaker 6: we found a This was one of these kind of
Speaker 6: blue ocean stories. What did we discover when we launched
Speaker 6: Rosberry Pie? That there was an enormous pool This happens sometimes,
Speaker 6: that there is a pool of latent demand for a
Speaker 6: particular object that doesn't exist. And then when you we
Speaker 6: saw one hundred thousand Rosby Pies on our first day,
Speaker 6: didn't we In the twenty ninth of February, the rather
Speaker 6: quixotic twenty ninth of Febry Lunge. Dight we have terrible
Speaker 6: birthday party. We have amazing birthday parties, we just don't
Speaker 6: have them very I hope every year. We spent a
Speaker 6: few thousand hounds on fireworks every four years, don't we?
Speaker 6: And but you know, there was a huge pool of
Speaker 6: latent demand just sitting there waiting for rasbary Pie, and
Speaker 6: it crystallized when we dropped the first little crystal into
Speaker 6: the solution. I'm not sure we could have relied on
Speaker 6: that that pool of demand remaining unsatisfied if we'd waited
Speaker 6: twelve years to try and satisfy.
Speaker 5: And from a broader investment landscape as well, I mean,
Speaker 5: is is the UK still as vibrant a place? Do
Speaker 5: you still? Can you still attract and find and attract
Speaker 5: attention of investors in twenty twenty four versus in twenty twelve.
Speaker 1: I would argue it's easier because of you know, easier
Speaker 1: now than before. I mean it used to be very
Speaker 1: hard to get funding and the talent and also have
Speaker 1: the capacity in the you know, the sort of the
Speaker 1: leadership capacity as well. We've gone from you know, in
Speaker 1: twenty twelve we were thirteenth in the globe in terms
Speaker 1: of the number of scale ups per thousand, and we're
Speaker 1: now three. And in AI and some other industries number
Speaker 1: were number one. And I think we're focused on, you know,
Speaker 1: not only starting companies, but the infrastructure for scaling companies
Speaker 1: so that they can ten x and then ten x
Speaker 1: again and then ten x again is there. And creating
Speaker 1: you know, we were earlier, you know, creating decacorns and
Speaker 1: centercorns rather than just focusing on unicorns.
Speaker 3: It's absolutely possible.
Speaker 5: Part of the conversation that we've been hearing a lot
Speaker 5: particularly we're thinking about, and you huge experience in London's
Speaker 5: capital markets as well, is the journey to scale and
Speaker 5: how you get beyond a certain level. It feels like
Speaker 5: a lot of people go to the US after a
Speaker 5: certain level. Raspberry Priie hasn't. Why do you think that
Speaker 5: it's that others are choosing the US over you know,
Speaker 5: a London listing. I'll come back to the London listing
Speaker 5: choice you made in a moment.
Speaker 1: Well, well, I actually think London is a brilliant place
Speaker 1: to to float a company, and you know, and I think, well, Evan,
Speaker 1: we'll talk about the great reasons why we choose here
Speaker 1: rather than elsewhere.
Speaker 3: I have been involved in floats.
Speaker 1: On the New York and the Nasdaq markets, and in
Speaker 1: those cases that the talent was over there, the customers
Speaker 1: were over there, and we felt the liquidity would be
Speaker 1: there as as well. But that doesn't mean that it's
Speaker 1: that it's not here. I think it really is company
Speaker 1: specific on which is the right exchange to go.
Speaker 5: To count attach companies. Is London is still a good
Speaker 5: place to list absolutely? I mean, tell us about White
Speaker 5: Trovy to lift in London, because I'm sure they were,
Speaker 5: there was interest.
Speaker 6: Yeah, So so I went out to I went. I
Speaker 6: went out to New York about thirteen fourteen months ago,
Speaker 6: and I've said I think I got on the plane
Speaker 6: seventy to thirty in favor of listing in New York.
Speaker 6: I think there is a slite geist around the idea
Speaker 6: that there is some at least that there is a
Speaker 6: squad of liquidity, probably not not super relevant for a
Speaker 6: company on our scale, but that perhaps there is a
Speaker 6: multiples advantage your company would be more highly valued. I
Speaker 6: think what the London Stock Exchange people will tell you
Speaker 6: is that that is a that's a kind of a
Speaker 6: it's a data artifact that what you're really measuring there
Speaker 6: is you're measuring that there are different sorts of companies
Speaker 6: listed in New York and listed in London. Once you
Speaker 6: stratify down and compare apples to apples, you find that
Speaker 6: there's no real liquidity, no real multiples arbitrage. And of
Speaker 6: course you wouldn't expect that. It's a weird idea that
Speaker 6: there would be some long term, durable arbitrage in valuation
Speaker 6: between companies in London and New York. Went out to
Speaker 6: New York, really got the you know, feedback that from
Speaker 6: investors there that there wasn't an arbitrage. Maybe, I mean,
Speaker 6: you could perhaps persuade somebody to suggest US fund managers
Speaker 6: maybe a little bit more tiggerish, you might get fourteen
Speaker 6: x rather than thirteen X out of somebody, but you're
Speaker 6: not talking about twenty x us as ten x. And
Speaker 6: then said against that, there are a lot of disadvantages
Speaker 6: for companies at our scale, so they sort of kind
Speaker 6: of roughly billion dollar valuation companies. There's a noise flow
Speaker 6: in New York, and there's a risk that you would
Speaker 6: fall into this noise flaw. Struggle to get investor attention,
Speaker 6: struggle to get analyst attention, and so got back on
Speaker 6: that plane, sort of convinced that we could make it
Speaker 6: work in London, convinced that we could attract American money.
Speaker 6: You know, another piece of feedback we've got is, look,
Speaker 6: you know, if you've got a if you've got an
Speaker 6: equity story, if you're prepared to come out and educate
Speaker 6: American investors about your equity story, that money will come
Speaker 6: find you regardless of where you And when we came back,
Speaker 6: picked bankers took a round at it. We had we
Speaker 6: had a I guess, a conviction there would be a
Speaker 6: window this year. There wasn't the window and open. You
Speaker 6: know the challenge with the window It opens and closes,
Speaker 6: and if you wait for it to be open, it's
Speaker 6: going to take you six months to get to it.
Speaker 6: So if you wait for it to be open, by
Speaker 6: the time you try and jump through, it's going to
Speaker 6: slam on your fingers. So we had a conviction there
Speaker 6: would be a window in the second quarter of this year,
Speaker 6: and started running and yeah, my fingers, even my toes
Speaker 6: are intact. So you know, we did we did well.
Speaker 5: I'm thinking about people in this room who might be
Speaker 5: you know, hoping that they're they've got something in their
Speaker 5: sights they want to be listing, and you know, let's
Speaker 5: let's be optimistic and say in the next year, congratulations
Speaker 5: you are what sort of obstacles would you want to
Speaker 5: would you want to make that path easier for people
Speaker 5: that come after you.
Speaker 6: I think we had I think we had a good
Speaker 6: run of it. I think we benefited from having we
Speaker 6: benefited from having I think done the work on the
Speaker 6: board composition. So we've done the work on on on
Speaker 6: adding a few people to the board just to just
Speaker 6: to get public markets ready already. We had some great advisors,
Speaker 6: Peel Hunt and Jefferies, as are joint global coordinators link
Speaker 6: Laters for legal you know. So so I think what
Speaker 6: we've done is we took a run at it. To you,
Speaker 6: I wouldn't recommend anyone do this, but we took a
Speaker 6: run at it. Two years earlier. We'd expect notes in
Speaker 6: this audience. Yeah, we hoped that this is this is
Speaker 6: something really something not to do unless you absolutely have to.
Speaker 6: We took a run at IPO started running at the
Speaker 6: end of twenty twenty one with a conviction that we'd
Speaker 6: be able to float in the second quarter of twenty
Speaker 6: twenty two. Obviously one or two bad things happened. Bad
Speaker 6: things happened, geopolitically, bad things happened to our company. We
Speaker 6: were quite badly affected by the global semiconductory supply chain crisis.
Speaker 6: So in that case, the window did close on the
Speaker 6: window slammed on our fingers. What it did mean was
Speaker 6: that a year ago, when we started the process, we
Speaker 6: were going in with a very mature set of collateral,
Speaker 6: so we were going with an almost complete prospectus. We
Speaker 6: were going in having gone out and spoken to investors
Speaker 6: in twenty twenty one, having made some claims about how
Speaker 6: we were going to evolve our business over the next
Speaker 6: couple of years. And then when we were going out
Speaker 6: to investors a year ago, we weren't saying, Hi, where
Speaker 6: Rasby Pie. You've never heard of us. We're saying hi,
Speaker 6: where Rasby Pie. We were told you we would do
Speaker 6: these three crazy things two years ago, and we've done
Speaker 6: two and a half of them, and here are here
Speaker 6: are two new crazy things. We had to finish that
Speaker 6: half crazy thing, and here are two more crazy things.
Speaker 6: So that made it easier. As I say, that's not
Speaker 6: an optimal way to do things, but it did work
Speaker 6: for us.
Speaker 5: You mentioned some of the supply chain issues and thinking
Speaker 5: about the events in the United States over the past
Speaker 5: few days, Donald Trump has promised to be more protectionist president.
Speaker 5: He's looking at trade tariffs. Are you concerned about supply
Speaker 5: chain disruption semming from that? How are you preparing for
Speaker 5: what the world might look like next year?
Speaker 6: I don't know. I think we talk about this a lot,
Speaker 6: don't we in board meetings? And I we had a
Speaker 6: the system. The supply chain crisis was a was a
Speaker 6: once in a lifetime, once in an industry dislocation. Right,
Speaker 6: This is nothing like what happened in the last two
Speaker 6: or three years has ever happened in history of solid
Speaker 6: state electronics? Right? And what you saw was a negative
Speaker 6: going transient. Things weren't available. Then you saw a positive
Speaker 6: going transient an overstock result of that. And I think
Speaker 6: that in a lot of people's minds, there's an assumption
Speaker 6: that the supply gym will do this and then settle down,
Speaker 6: and almost no differential equations give you that. Right. While
Speaker 6: I suspect we're going to see irrespective of the political situations, Yeah,
Speaker 6: what I suspect you you're going to see and this
Speaker 6: is irrespective of any sort of political situation in the US.
Speaker 6: It's you may well next year see sporadic shortages of
Speaker 6: components resulting from I guess an over eager return to
Speaker 6: justin time ordering behavior from customers downstream. What have we
Speaker 6: done about this? Where we raise forty million dollars of
Speaker 6: new money of primary at the IPO, invested a lot
Speaker 6: of that in supply chain. So we've invested that in
Speaker 6: component inventory, in finished goods inventory, just to give us
Speaker 6: that resilience as we go into twenty twenty five to
Speaker 6: withstand any any future shocks.
Speaker 5: I want to think about some of the broader challenges
Speaker 5: identified in the UK business environment as well. We had
Speaker 5: a conversation at this event last year with Michaelane Fox.
Speaker 5: The British Chambers of Commerce have said the number one
Speaker 5: problem facing UK businesses that are growing is talent. You
Speaker 5: can't get the people they want with the skills that
Speaker 5: they want. Shar I know this is maybe you're very
Speaker 5: invested in as well. I'm keen to understand how you
Speaker 5: view the situation now from the point of view of
Speaker 5: technology and also how you can have the right people
Speaker 5: with the right skills.
Speaker 3: Great thank you.
Speaker 1: Well, just on on on talent, thinking about some of
Speaker 1: the people that you know work at work at Pie.
Speaker 3: Pretty amazing.
Speaker 1: But you talked about the secondary, which is allowing you
Speaker 1: to secure the chain to make sure that we don't
Speaker 1: have backlogs of orders for customers. But you know, just
Speaker 1: importantly that there was also a secondary for the owner
Speaker 1: of Raspberry Pie, which netted them one hundred and eighty
Speaker 1: million pounds to put into training talent and computing talent,
Speaker 1: which is you know, a pretty a pretty good gift
Speaker 1: for anyone to give to a charity and thinking about
Speaker 1: how they're going to deploy it on AI and education.
Speaker 1: And we were speaking earlier about Salcan and you know
Speaker 1: his book and you know, creating Tutors. There is an
Speaker 1: organization you know again the foundation behind behind Pie that
Speaker 1: is been given a really great legacy to deploy and
Speaker 1: I'm excited about that. I think that I'd be interested
Speaker 1: to hear what others thought. I think, you know, mass
Speaker 1: underlies a lot of what we need. But every day
Speaker 1: you guys are solving problems. You think about what does
Speaker 1: a CEO know? You're solving problems every single day you
Speaker 1: use those skills which aren't necessarily taught in class, but
Speaker 1: equipping the world so that we can run companies and
Speaker 1: work for companies and organizations is super important. And I
Speaker 1: think some of the things that raspberry Pi are doing great.
Speaker 1: There are some you know, other other organizations you know
Speaker 1: working away at that.
Speaker 5: But I know that you want to canvass the audience opinion,
Speaker 5: and I think we're a bit tight in time to
Speaker 5: be able to do that. But I want to kind
Speaker 5: of just briefly discuss how we should be thinking about
Speaker 5: this education point of view. What are the kind of
Speaker 5: key skills that we need to train the people that
Speaker 5: everyone in this room is going to be hiring.
Speaker 1: Yeah, we need to train the people that everyone's going
Speaker 1: to hire. And we also need to enable teachers to
Speaker 1: get the people that are you know, the you know,
Speaker 1: people that are sort of working need and if you
Speaker 1: think about the reskilling of five hundred thousand teachers, that
Speaker 1: is not simple. And to enable our children to imagine
Speaker 1: what we actually do every day, or what all of
Speaker 1: the asach engineers do at raspberry Pie, or what you
Speaker 1: might do if you wanted to study campsig a computer
Speaker 1: you know at Cambridge University.
Speaker 3: That's a real hard thing.
Speaker 1: And you know, I would call everyone in the audience
Speaker 1: to make sure that they volunteered their time. And if
Speaker 1: you're running the organization, encourage your employees to volunteer their
Speaker 1: time in schools to help the teachers, because otherwise, you know,
Speaker 1: things are moving too rapidly for them to be able
Speaker 1: to help. But it's already a talent crisis. But there
Speaker 1: are things that every single person in this room and
Speaker 1: every single person on your audience can and please should do.
Speaker 5: And then a final thought from you as well about
Speaker 5: what's next for Raspberry Pie. Everyone I speak to in
Speaker 5: my day to day job, I talked to them about AI.
Speaker 5: I was AI coming into Raspberry Pye story.
Speaker 6: So from our perspective, Rospberry Pie is now that we
Speaker 6: have all our roots and education. From a commercial perspective,
Speaker 6: we are overwhelmingly now and the emb better than industrial business.
Speaker 6: So we sell products to people who want to perform
Speaker 6: computing at the edge of them, generally at the edge
Speaker 6: of the network, and for us, AI workloads are just
Speaker 6: another consumer of compute at the edge of the networks.
Speaker 6: We design our we design our products to be able
Speaker 6: to run many, many inference workloads, even quite heavyweight inference
Speaker 6: workloads themselves unaccelerated. We put a lot of CPU performance
Speaker 6: into our devices these days. I think what you're seeing
Speaker 6: what you've seen from us this year, and I think
Speaker 6: you'll see a little bit more of this as we
Speaker 6: go into twenty twenty five. Is us working with partners,
Speaker 6: particularly our friends at Halo in Israel, to add accelerator options,
Speaker 6: to give people whose influence workloads are beyond the native
Speaker 6: capability of the platform, to give those people a series
Speaker 6: of tiered price performance options, to add external inference capability
Speaker 6: into the platform. Very very popular with our hobbist customers
Speaker 6: at the moment. Starting to see some really interesting industrial
Speaker 6: uptake of that.
Speaker 5: As well, and that could of move into the sort
Speaker 5: of the enterprise and the industrial side of the business.
Speaker 5: How much of that is a focus for for Asbury Pass.
Speaker 6: And it's an enormous focus for us. As I say,
Speaker 6: it's the vast majority of our business today. I think
Speaker 6: what you're seeing, particularly with AI is what you see
Speaker 6: with really many many of our products is an initial
Speaker 6: adoption in the what we would call the enthusiastic community
Speaker 6: hobbyists people are me geeks, and then many of those
Speaker 6: people then take our products with them into their professional
Speaker 6: lives and that's definitely some of us seeing with the AI.
Speaker 5: Okay having Upton, founder and CEO of Asbury Pie and
Speaker 5: Cherryku to investor, entrepreneur and a board member as well.
Speaker 5: Thank you very much for joining us at the Grow
Speaker 5: Summers Future Horizons event. Thank you all for your time
Speaker 5: and your attention. Today you can download this episode of
Speaker 5: In the City available wherever you get Your podcast will
Speaker 5: be out next week. Thank you very much.