From Mahard where Innovation, money and power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
And Caroline heind of Bloomberg's World headquarters in New York, and I'm Ed Ludlow in San Francisco.
This is Bloomberg Technology coming up.
Crypto assets.
They surge as a court overturns the SEC and paves the way for the first US Bitcoin ETF will keep you covered throughout the hour.
Claus will bring you the latest from the earnings front as China's PDD surges, MIDA revenue b and show me tops profit estimates.
More ahead, an Apollo io raises one hundred million dollars to reach a one point six billion dollar valuation and up round.
We'll sit down with the CEO later this hour to discuss.
But first, well, let's hone in on what has been the story of the last hour. Bitcoin surging, that sudden move to the upside. We're back in that twenty seven thousand dollars range on the og of the crypto space, up five point six percent. Why because it seems as though this federal court has gone against the grain of the SEC has a side that maybe we can carve away for a spot bitcoin ETF.
This is all about the Grayscale ruling ED.
Yeah, and we're also seeing that app unsurprisingly play out in crypto related stocks, coinbased, for example, jumping by the most in more than six weeks. Our colleagues at Bloomberg Intelligence have a note out that kind of applies to all of these names, that each part of the universe relates.
Crypto may benefit as more ETF SKED approved, but they do note that there are multiple applications, right, so black Rock being one institution that has an ETF application in how does coinbase benefit, as an example, from servicing those up thirteen point four percent. I think we've got to go to the understanding what has happened. It was a
bit of a surprise. That's bringing Bloomberg's Shnale Bassek, and I guess a good place to start Shanale is what did the appeals court say about the original SEC decision to block an application for a bitcoin ets.
Now, I think the part that's very important here at is this idea that the denial of Grayscale's proposal, and this is according to the ruling that the denial was arbitrary and capricious because the Commission failed to explain the difference of treatment of similar products, which was a key part of the Grayscale argument.
Here.
When you look at the decision here by the court, and remember there are three drudges that ruled in Greyscale's favor, there is a process that you have to understand. This is this idea that there are now forty five days in which both sides review this ruling and the sec could always push back. Now, the other thing that is a big open question for Grayscale is the idea of whether they have to refile for an etf Remember when you look at grayscales filing relative to many other filings,
including black Rock's own filing. Is this idea of a surveillance sharing agreement that is something that has largely been said to be benefiting some of the filings such as black Rocks. Actually, in the next hour or so, we're also going to be speaking to coinbases top lawyer about the benefits of, for example, a surveill lancher and agreement, in which Coinbase has been a big part of that push. It is unclear how soon Rayscale can get from a GBTC to an ETF conversion, and really right now when
you look at GBTC, it has narrowed. The discount to its net asset value has narrowed quite meaningfully. But in recent years the reason to hold GBTC has really become part of the idea that it would eventually convert to
an ETF. Even just today, in the wake of the ruling, you were looking this morning at a twenty five percent nearly discount to net asset value that has narrowed to fifteen percent, and so you are seeing it come much closer to its net asset value in the wake of this ruling, in the expectation of even with this uncertainty, this is still a large win for Grayscale and the crypto industry, and are seeing to the point you're making earlier bitcoin.
Prices and other crypto related stacks rise.
And synchrony SEC saying that the agency is reviewing the court decision on gray Scale, and of course gray Scale anticipating what five point seven billion dollars could be on Earth could be of value could be sort of given back to the investor base if indeed it could turn from a trust into an ETF Shnali Bassac all over the sort of nuance and really going into some of the micro but let's go a bit more macro. What this means for the industry. And please to say Aya
Kantorovich is with us. She is the co founder and Coco Fractal, it's an infrastructure provider for institutional crypto training on chain. Does this law in more institutional players? Does this mean?
And this is almost a safer space to get into now.
Absolutely, and you can see that in terms of overall market sentiment. So Coinshares published a very interesting report this morning that showed the outflow of dollars into crypto products institutional products was at its highest similar to March during the banking crisis, And so overall sentiment was really negative leading into this news, and I think to all the points mentioned before, the market was really caught off guard in terms of the announcement this morning.
It's really great.
It changes the sentiment in the US and globally for institutions around this is moving forward. We're actually going to get the guidelines we've been looking for in terms of how to approach the space at large and.
Go global for a moment with us, because look, other places have spot bitcoin ets. What has been the US's issue with it? What more broadly, have you felt as different with the SEC versus other regulators.
At a high level, it's really the different players that are in the space today, whether it is on the fact of the SEC working closely with Coinbase and obviously there's a lawsuit there that they're working through the SEC and Greyscale. There's a bunch of intermediaries today that the SEC is working with, and it is just simply unclear in terms of how the SEC is going to regulate versus them pushing out a rule book or Congress having to just take the step and make guidelines for everyone
in the United States to follow. And unfortunately, even if you compare to the UK with Micah, you know, we just haven't seen that level of proactive guidelines in the United States.
Judge Naomi Rao, who was on the appeals panel, pointed out that specifically the SEC's treatment of Grace the Scale was arbitrary and capricious because they hadn't treated others in the same way. And our colleague Katie Greifeld, who leads our ETF coverage, points out that this is just one thing that might happen this week. There's a deadline Friday for black Rock, there's a twenty one shares in a Vesco deadline Saturday. What happens next to your mind?
Yeah, again, I think the market was just simply caught off guard. We were expecting this GBTC news to come out in the last two weeks, and so on the backs of Mackerel, on the backs of Jackson Hole, you're just seeing that the market was not expecting this news. An overall sentiment was implied, volatility was at its lowest, and so really what that sets us up for is a very volatile Q three and Q four. We're probably going to see the next three months have a lot
of activity between these different players. And listen, the legal bandwidth of Blackrock and Fidelity as well as ARC is going to be far far larger than some of the crypto players, and we will likely see those conversations get pushed further than what we've seen to date. So it's very exciting for the United States.
Who benefits the most from this if an ETFs approved beyond the ETF provided themselves.
Who wins institutional investors, And really the reason they win is institutional investors are looking for regulated paths to get exposure to these assets in structures that they're used to in traditional finance, and that just hasn't been available yet today in the United States. And so really this is a huge push forward for us. We've all said that the institutional wave is coming, but it really can't come until we have very simple, regulated products available in the market.
And this is a bit push forward towards that. And that's exactly what fractal is a little about.
I mean, at atf it's pretty basic at best futures ETF too. You're thinking about options offerings, you're thinking about how you can get basically traditional finance the tradi fly world to see what they can do in normal finance and bring it to crypto.
How easy a role, slow a process.
Is that that's exactly where it's a slow process only because it's taken so long for us to get this to this first base with the SPOTTYTF. But to your point, once we get the SPOTTYTF, it's going to be so much clearer for us to be able to give access.
You saw coinbase CME, who are all able to trade futures in the United States, and that took a long time for that to happen as well in the States, and so you're able to see a path forward for us to really be able to offer not only options but structure products in a regulated way that institutions are comfortable getting access to it.
It's really very exciting, great to have you here.
So we'll talk walk us all through the sort of ramifications more broadly of this very specific ruling that's come from the Appeals court. Ayakon Torovich of course has confractal which is basically.
In the New York.
All right, we're checking in on some earnings movies out of China. These are the US listed shares of some China tech names PDD top line growth sixty six percent, way outperforming names like Ali, Barbera and JD. But it's actually about Timu, their US based business that we're kind of interested in. It came out at the Super Bowl with an ad. We'll dig into that with our team in a second. BYD doubled net income in the quarter.
We'd already talked about how BYD had had a record with both plug in hybrids and battery electric cars in the course had just gone now showing up on the bottom line in terms of profit neo a wide and expected quarterly loss, deletely different story in the EB space, and then show me an interesting one in kind of the smartphone handset discussion. Better than expected financial results so much one pick. I think what they all have in common is that we're getting some more signals about the
Chinese economy and the Chinese consumer. Joining us from with more Bloombergs Isabelle in New York and Henry Wren out in London. Henry, let's start with you with some of the specific names. And I think we'll start with show me first because this was one there was a little bit surprising to some investors.
Yeah, so shall mes revenue fell by about four percent during the last quarter, but that decline has been better than analyst expectations, so that does show that the smartphone market slumb might have been past its worst period. Remember shall Me sells smartphone devices to all over the world, so it's not just in mainland China, but also in India, in many emerging market countries, and Latin America some parts of Europe as well, So its results does seem to
be a buometer for the global smart market sentiment. And remember that shell Me is also prioritizing its profitability, and it's pushing through its strategy for premium offerings, and it does seem to be bearing fruit. Its average selling price in China has expanded by twenty four percent in the last quarter, and the company set our earnings call is that it seeks to expand its strategy to not just
in China, blosso overseas. It says, we just need to focus on these premium products like these voldable phones, and we do well in this category.
It's interesting, isn't it that they're saying, yeah, let's go for a higher price point, let's actually still be thinking about overall profitability over growth when their overall macroeconomy as well.
It's a pretty painful place.
We just look at how much they're having to up the ante with what we understand going to be cutting mortgage rates for example, to try and spur on the Chinese ecomy.
What do any of these earnings really tell us about that?
So I think these two and Henry can go way into more detail, especially with PDDs. They're good earnings. As you can see, the stocks are really just reacting very positively to them. But then they come with a new one. So for instance, just to touch on lightly and PDD its focus is more lower income consumers, so then that might bode well for China's faltering economy. So it kind of works reversed in that way, but Chinese economy still really isn't doing as well. Nearly every day you see
one gloomy headline after the other. For instance, today we have Country Garden Holdings, it's a big property giant, it's making fresh effort to avoid a default. And then we have China Great Weall Asset Management. That's a state that run manager and it's also suffering a bond slum. So one after the other, the ceaseless warning we're just seeing, especially from their credit market. It's just really underscoring one
thing that the economy is weak. And to your point, we also have a lot of developments in the regional bank space and the mortgage space, so it's not looking that good to see it. Although I mean it's not all gloom and doom because as we can see, some standout companies like PDD and cl ME are doing well. So sometimes what's good for one thing can be bad for another.
You know, Henry, we're showing that big jump on the pdd A DR's US listed shares. You know, there's a story here about them beating out other domestic Chinese names in terms of top line growth. But we learned a lot about their US business that we don't discuss pdd A lot on this show. Just explain what happened in the quarter.
Yeah.
Sure, So the overall results are good, as we can see in the market reaction, it's a sharp positive reaction from investors, twenty percent of sheer price expansion like during the during the session.
But as you.
Said, the focus is really on Tea Mood. It's a but just shopping app overseas. That app has been expanding very fast in Europe, but.
As well as in US as well.
So the company disclosed very little about this team mod shopping app, but it does include that in one of its lines called transactional services revenue.
So that transactional services.
Revenue includes some things including the t mood, the international business, but also the grocery buying business. But that revenue has been well above analyst estimates. So it does seem to show that that team who has been gaining tractions overseas. However, there's another concern. It's on the profitability side, on the margins. So the company is there expending overseas, so it's investing more, so the margins could be hit because of that.
We want to thank both of you, of course, Henry ren Isbelli across the macro micro picture of China and indeed a little bit of what the US consumer is telling us as well. And let's dig in there for a moment, because best Buy says that.
Look, it's reached the low point in tech.
Demand after a pretty strong second quarter report pointed to an optic or maybe at least a bottoming in demand for consumer electronics and household of plants. Is let's go to our own running casees in Dallas with more. Look, it's still pretty ugly in the court.
Ha just gone. But it seems as though maybe they think there's a turning of the tide.
Yeah, they're What they're saying is that they're starting to see light at the end of the tunnel. The backdrop of course here is that the sales declines at best Buy has been among the biggest, you know, in the world of big US retailers. And what they're saying now is that, you know, they're starting to get a little bit less bad, and they have a line of sight to you know, being kind of flat, maybe even growing a little bit next year.
They also said that short refresh cycles and the tech are being driven by guess what, Caroline, artificial intelligence our thanks to Bloomberg's Brending case. Now coming up here on the show, we're going to talk about the state of buy now, pay later and speak to a CEO of a company that launches in opposition to the movement.
This is Bloomberg, all right.
We're checking in on some earnings movies out of China. These are the US listed shares of some China tech names. PDD top line growth sixty six percent, way outperforming names like Ali, Barbera and JD. But it's actually about Timu, their US based business that we're kind of interested in. It came out at the Super Bowl with an ad. We'll dig into that with our team in a second.
BYD doubled net income in the quarter. We'd already talked about how BYD had had a record with both plug in hybrids and battery electric cars in the court had just gone now showing up on the bottom line in terms of profit. Neo a wide and expected quarterly lost, a completely different story in the EB space, and then jaw Me an interesting one in kind of the smartphone handset discussion. Better than expected financial results so much to
one pick. I think what they all have in common is that we're getting some more signals about the Chinese economy and the Chinese consumer.
Joining us from with.
More Bloombergs Isabella Leie in New York and Henry ren Out in London. Henry, let's start with you with some of the specific names, and I think we'll start with Shaumi first because this was one there was a little bit surprising to some investors.
Yeah, so shall We's revenue fell by about four percent during the last quarter, but that decline has been better than annas expectations, so that does show that the smart form markets plumb might have been past its worst period. Remember shall Me sells smartphone devices to all over the world, so it's not just in mainland China, but also in India, in many emerging market countries, and Latin America some parts of Europe as well, so its results does seem to
be a barometer for the global smartphone market sentiment. And remember that show Me is also prioritizing its profitability, and it's pushing through its strategy for premium offerings and it does seem to be bearing fruit. Its average selling price in China has expanded by twenty four percent in the last quarter, and the company set on earnings calls so that it seeks to expand its strategy to not just
in China, blosso overseas. It says, we just need to focus on these premium products like these votable phones, and we do well in this category.
It's interesting, isn't it that they're saying, yeah, let's go for a higher price point, let's actually still be thinking about overall profitability of growth when their overall macro economy is about it's a pretty painful place.
We just look at how much.
They happen to the ante with well, we understand going to be cutting mortgage rates for example, to try and spur on the Chinese economy. What do any of these earnings really tell us about that?
So I think these two and Henry can go way into more detail, especially with PDDs. They're good earnings. As you can see, the stocks are really just reacting very positively to them.
But then they come with a new one.
So for instance, just to touch on lightly, and pdd its focus is more lower income consumers, so then that might bode well for China's faltering economy. So it kind of works reversed in that way, but Chinese economy still really isn't doing as well. Nearly every day you see one gloomy headline after the other. For instance, today we have Country Garden Holdings, it's a big property giant, it's making fresh effort to avoid a default. And then we
have China Great Wall Asset Management. That's a state that run manager and it's also suffering a bond slum. So one after the other, the ceaseless warning we're just seeing, especially from their credit market.
It's just really.
Underscoring one thing. The economy is weak, and to your point, we also have a lot of development in the regional bank space and the mortgage space, so it's not looking that good to see it, although I mean it's not all gooom and doom, because as we can see, some standout companies like PDD in me are doing well. So sometimes what's good for one thing can be bad for another.
You know, Henry, we're showing that big jump on the pdd A DR's US listed shares. You know, there's a story here about them beating out other domestic Chinese names in terms of top line growth.
But we learned a lot about their.
US business that we don't discuss PDD a lot on this show. Just explain what happened in the quarter.
Yeah, sure, So the overall results are good, as we can see in the market reaction, it's a sharp positive reaction from investors, twenty percent of sheer price expansion like during the session. But as you said, the focus is really on Timu. It's but just shopping up overseas. That app has been expanding very fast in Europe, but.
As well as in US as well.
So the company disclosed very little about its team shopping app, but it does include that in one of its lines called transactional services revenue. So that transactional services revenue includes some things including the tea mood, the international business, but also the grocery buying business. But that revenue has been well above analyst estimates, so it does seem to show that that team has been gaining tractions overseas. However, there's
another concern. It's on the profitability side, on the margins, So the company is expanding overseas, so it's investing more, so the margins could be hit because of that.
We want to thank both of you, of course, Henry ren Isabeli across the macro micro picture of China and indeed a little bit of what the US consumer is telling us as well. And let's dig in there for a moment, because best Buy says that, look, it's reached the low point in tech demand after a pretty strong second quard a report pointed to an optic or maybe at least a bottoming in demand for consumer electronics and
household plants. Is let's go to our own running cases in Dallas with more Look, it's still pretty ugly in the court had just gone, but it seems as though maybe they think there's a turning of the tide.
Yeah, they're What they're saying is that they're starting to see light at the end of the tunnel. The backdrop of course here is that the sales declines at best Buy have been among the biggest, you know, in the world of big US retailers. And what they're saying now is that, you know, they're starting to get a little bit less bad and they have a line of sight to you know, being kind of flat, maybe even growing a little bit next year.
They also said that short refresh cycles in the tech are being driven by guess what, Caroline, artificial intelligence and thanks to Bloomberg's Brending cases.
Welcome back to Bloomberg Technology. I'm Caroline Hyde in.
New York and I met Ludlow in San Francisco. Let's get a talking tech and first up. Open Ai is now a corporate version of chat geep with privacy safeguards and added features like longer text prompts. This in an
effort to make money from its well known chatbot. And speaking of AI, Google is adding AI tools from companies like Meta and Anthropic to its cloud platform, weaving more generative AI into its products and positioning itself as a one stop shop for cloud customers seeking to tap into the technology.
Plus.
Senate majority leader Chuck Schumer plans to bring together several tech industry chiefs to discuss the ramifications of AI next month. That meeting includes Tesla CEO Elon Musk, Meta CEO Mark Zuckerberg, but also the CEOs of Google, Microsoft, and many others. This will be the first of Schumer's AI Insight Forums, aimed at giving Congress more influence over the future of AI.
Caroline now mentioned forcage match. Meanwhile, let's stick with AI though.
How is well changing the game of basically everything, but particularly your wealth management.
Let's talk about it.
With Braggenzer Founer, CTO of Father, a startup focused on utilizing pretty cunning edge to anology to advance wealth management in particularly the sort.
Of mass affluent area. I suppose and you.
Of course were busy building the AI team over at Goldman when it came back to sort of the wealth private wealth management part.
How have you brought that over with Father? What are you offering this different?
He Caroline first ed, Caroline, thanks for having me on. It's fun to be here. It's a fun time to be in wealth management technology. And you know, when you talk to someone like me, it's really been four years in the trenches farther kind of grinding away and realizing the opportunity ahead, and now we have these big moments where it comes out to the public. So we've been at this for a very long time and just really
quickly to sort of adjust there. We are focused on kind of the core high net worth market, but you'll find that if you use technology, you can actually.
Broaden your audience. It's an operational problem.
We put these wealth management kind of verticals around wealth because it's profitable operationally, sort of higher net worth. It's all the same operations all the way down. So just to your question about about how we're bringing forth AI, we broadly believe that quantitative methods are going to help us to meet the opportunity in our industry.
And if we look at how our industry.
Is is covering the opportunity, there's about four hundred and twenty trillion dollars of net worth in the United States, and if I add up what the biggest players are doing, it's hard for me to get to twenty trillion. So we're talking about a massive opportunity to bring everything out towards out to a broader set of people.
And that's what AI can bring us.
But ken it in the here and the now, when we're still looking at perhaps regulatory headwinds.
At least it seems to be garnering more oversight.
From Garaganzweth, Well, it certainly does seem to be guarding more oversight. But you know, I think that we're fortunate in this in this time to say, to have someone heading the SEC for example, who knows about this technology and actually is able to talk talk about it, because I don't know that you have that across the board and government right now. You know, if you look back at how Gary Gensler has written about AI technology, he.
Wrote a paper in twenty twenty.
This is three years ago, one year after Father was founded, and this is really the time that we started to see all the pieces come together for AI to start to start delivering. So he has a mission to do here and now it's protect investors.
I hope that as we go forward he.
Also realizes and sort of leans into protect investors but also get maximum number of people exposure to markets, because this is a true miracle being in the markets.
Right.
Could you explain how your technology for proprietary tech works. I see that you know on your website you still toolk up the experience of the human advisors that work with you at Father.
Yes, And I think it's really really important that you hit on that d that we fundamentally believe and this is from this is from deep knowledge of the technology as someone who's been a leader and been around it for a very very long time that humans are are required to have a great wealth experience and will be
for the foreseeable future. I think that if you ask anyone, and we ask people, hey, would you like would you like AI to fully manage your money in a general in a very very general way, people say, well, one, what doesn't mean to manage my money?
And advisors helping that?
And also they tend to say, no, we want to interact with people. It's just that technology can allow more humor human interaction.
Really, Brad, you talked about, you know, your your leadership of the technology. You were at Goldman Sachs for for several years. His David Solomon phoned you up and said, Brad, I need your help with this AI thing.
I don't get it. Come in here and help us.
You know, I don't know.
I must be off his text chain, and you know, Chuck Chuck Schumer also hasn't hasn't texted me yet and I'm still waiting for the invite.
Well, we'll get I'm sure you'll get win to them and with some of the backers that you have.
Of course you've got back as like some adventures.
Coast Adventures was these sort of the vcs of the AAR in Washington many a time. I'm interested in the high network professionals that you serve.
What weren't they getting when you were at Gorman.
Why did you feel you had to get out, had to serve and build something different.
So when you think about where we are, if we look back at the history of wealth management, we had for the fidelity of the world, vanguards of the world who were bringing mutual funds. That's like execution and some strategy involved. What we really get to do now in AI is we get to have a deeply personalized plan. And personalization is an overused thing in our industry, but really we are fully contextualizing and able to fully contextualize
the relationship. So that's based on your taxes, where you live, what's going on in your bank accounts, and we can broaden the breadth of what wealth management is to provide much better experience and deliver it at scale. And again I've talked about how we're not really covering the opportunity that well as an industry.
Brad, how concerned are your clients about their data, you know, protection of it and how it's used. And by extension, I already asked you about the technology but is it a case that you're kind of technology agnostic you take an existing large language model and vectorize your own client data, or how does that work.
So one of the things that and this is where you'll continue to hear me say as I talk about AI and the broad market, we have a lot of frameworks in history that's already been solved around these problems. In wealth management, discretion is one of the most important things that the advisors bring to the table. You are talking about the most deeply sensitive subjects in your life. You're talking about how you feel about your family, you're
talking about how you feel about your job. And that has always been a core tenant of a good wealth advisor, and it extends to technology as well. So when we think about when we think about data in managing it, we actually don't ever send your.
Personal data to large language models. We may send ten.
Plates to populate that data, but we retain all of that data. And as you pointed to chat, GPT has an enterprise version, but still we're waiting for more robust tools before we start sending across Brad Genser, founder and CTO father, just really interesting to draw the link between the technology and your industry.
Thank you so much for your time.
Now coming up here on Bloomberg Technology, Apollo Io, a platform for sales and marketing workflow tools, nabs a one point six billion dollar valuation. Our exclusive conversation coming up with Apollo Io CEO Tim Jeng and Baine Ventures Merritt Hammer.
That's coming up next. Character.
Yeah.
Meanwhile, before we puvot to the world of BC, let's just well, shiner light, what's happening in crypto?
It is the story of the day.
It feels like up seven percent on bitcoin at the moment, in fact, the biggest move for the asset since March of twenty twenty three, so clearly managing to trade though basically that's higher since August sixteenth. Remember we have significantly sold off throughout the month of August, as we have across most of the tech asset classes from New York and San Francisco.
This is Bloomberg.
Technology sales tech platform. Apoloio has raised one hundred million dollars in new financing, placing it at a one point six billion dollar valuation. The Series D investment was led by Baine Capital Ventures, with participation from existing investors including Sequoia Capital Tribe Capital and Nexus Venture Partners at a higher valuation than it had before. Let's bring in a poloio CEO Tim Jeng and Bain Ventures partner Merrit Humma for this.
Marrit, I'll start with you. I Apollo's a great.
Example of a company where AI is basically adding to the value and utility of customer data. But you point out their track record is why you were interested to do this round and indeed at a higher valuation.
Yes, absolutely so. You know, we were really struck by the fact that Apollo is growing so quickly and so officially at scale, more so than the vast majority of companies in the market today, and it was a very unusual combination of characteristics that God is very excited about the company.
Now, Tim, you have more than five hundred thousand companies, millions of uses. Why do you need one hundred million dollars?
Yeah, I feel like it's the perfect time for us to raise money right now.
We've grown our revenue over in Nix in the last couple of years.
We're according after a giant market. Although we're still really efficient. We just feel like now is the perfect time to pour poor fuel under the fire.
Okay, let's talk about that fuel.
You said you're gonna be investing in product, Tim, You're gonna be investing in R and D.
But also talent.
Just how expensive has that talent become and where do you add to it?
Tim?
Yeah, we're definitely an R and D company first and foremost, so we're investing over sixty percent of our revenue typically on R and D hiring.
Very very globally.
The market is definitely not as crazy as it was before in terms of the talent market, hiring a lot of engineers, designers, product pms across the world, especially within.
AI, talking about things that aren'swers crazy. Well, funding isn't as crazy at the moment merit, and it's been a tougher time for venture capitalists who've just raised big funds, just as Bain Ventures has to be trying to allocate in this environment where perhaps there's fewer to choose from. What sort of growth do you want to see from companies? Is it all about annual recovering revenues? Is it about being able to retrench on spending and ensure they're focused on the bottom line?
Is there a rule of thumb here?
Yes, it's a great question. Very timely question. I think what we've seen in the market is, you know, a couple of years ago, topline momentum was really the primary thing that investors were paying attention to in the venture space, and I think that has really shifted to thinking more about effhisient growth. What is the investment required to drive that that topline momentum, And that's where really where Apolo
really stands out. When you look at their efficient growth metrics, metrics like rule of forty, they're really best in class and that's what got us so excited about making the investment.
Tim, what I find interesting about your company is you're based here in San Francisco, but you are remote first. It's a topic we've discussed in the show quite a lot recently. Just explain your thesis of why that's the best way to work.
Yeah, definitely.
I mean, there's so much talent all around the world, and we definitely just want the best access to talent.
Regardless for ever they've located.
Especially you know, there's definitely an exodus of talent from SF as well. It's still the Bay Area, still the center of tech, but now great talent is everywhere in a world.
So really, Mary I.
Know a number of VC board members that don't agree with that thesis. They want to see their port photo companies work together, you know, be in one place. What do you make of the remote work position that Apollo has.
Yeah, you know, I think our view is there's not one size fit's all answer to that. I think for every company it's different. And for some companies a distributed workforce can work really well depending on the nature nature of what they do, and for others it's really important to be es centrally located in one place.
I'm just going to go back to Tim what it is that you offer. I mean, I think what you're the first sales tech unicorn minted in twenty twenty three, and you've been sort of saying what makes you stand out? And of course it's about allowing sales reps to do what exactly that is to sell, to not be having to permanently moving between tools and having cumbersome interaction with CRM.
But one thing that took my eye was the fact that you were saying that some of your competitors, dare I name one of them, zoom Info for example, You say they seem unified, but they're not because they've acquired. Does that therefore mean you won't be using funds to ever acquire other companies?
I'll never see never.
But we're really focused on building the absolute best user experience for the end user from day one. Our goal is to build a unified anoline solution from the bottoms up that is the simplest to use and most successful to get started, and the most delightful user experience. We're now build the most number one rated product for sales. It's the most loved product, and a lot of that has been the way that we've architected the product from from day one.
Mary, on this program, we made the distinction between AI native and sort of AI adjacent companies, those set to most benefit from this next generation of artificial intelligence technology. Does your investment thesis fit that split as well?
Absolutely, although I would frame it differently. I would call it AI enabled. So Apollo is absolutely an AI company, but it had an established distribution and product that wasn't AI native from the start, but it has unique right embed AI into the product over time.
We want to thank both of you fascinating to be able to get into the inner workings of what makes an upround. We congratulated on Apollo Io. Of course, CEO Tim Jang and Bain Ventures partner Merret Hammad.
Almart is planning its longest distance drone deliveries yet by teaming up with Alphabet's Wing unit at two Dallas Areas stores. The Wing drones will be able to drop off food and household essentials as far as six miles from the stores. Let's bring in Wing CFO Shannon Nashal's here with me in San Francisco. There is a caveat, which is that a spotter is needed to look out for any aircraft that can't transmit their location. Just explain that caveat and how the technology works.
So at Wing, we're actually we have permission from the FAA to fly what's called beyond the visual line of sight, right, So for us, we don't have the said spotter that you're talking about. The way that we operate is we have somebody and we have pilots that are able to really look at the area, if you will, in terms of where our drones are flying as opposed to looking at I think people think that there's somebody just looking at the drone and flying and seeing how far I
can go. I've had people say they think there's somebody with a joystick actually controlling the drone. We're completely autonomous, and so that's what we're super excited about this opportunity.
You're the CFO of Wing, So I got to ask, you know, it's two stores, but big stores in Dallas. How big a deal is this for Wing commercially speaking?
Yeah, this is a This is a huge deal.
Just just take a step back. Wing has operated and done over three hundred and fifty thousand commercial deliveries and three continents. This allows us to expand in the US. With this Walmart partnership, we will be able to reach sixty over sixty thousand households in the Dallas Fort Worth area and so this is again just part of our scaling opportunity and we're super excited to be working with Walmart.
What sort of demand are you seeing?
How many people are wanting to rush to get to the app to make sure that they can in the Dallas area receive these sourts of well deliveries that we just saw on our screen.
Yeah.
So we spend a lot of time working on community engagement and really and really engaging on the need for our services and local area. We've already been operating in Dallas. We have a partnership with Walgreens, and people have been asking for us to do more. So we're super excited that we're able to come back to the Dallas area. Not only do more with Walmart, we've expanded our hours and we'll be able to reach a lot more of the Dallas Fort Worth area.
And it's interesting.
Medicine medical drone delivery also a focus of yours in Ireland, for example. I'm really interested though in what this stepping stone means because sixty thousand, that's a lot of people, but it's certainly not the millions in the US.
What gets us there?
What's some timeline, What sort of regulatory approval do you need so that me and New York can also get it delivered.
I think those are great questions, and we've spent a lot of time, you know, working with industry partners on really expanding some of those approvals. I say, I think, look, the reality is we are.
Partnering with Wallwright.
Now that is the stepping stone to get to what you're talking about, where this has expanded to the millions. We think that we are building a safe, liable, efficient drone delivery system that is capable of getting to those millions, and so this is the journey that we're taking in Walmart is very important to us expanding in that way.
There's this sort of FAA regulation factor that impacts how quickly you can grow. But there's also different attitudes from different cities states retailers. Where do you feel like you're making most progress, Which areas are most supportive to deploying drone technology.
You know, I think that there's a study that Virginia Tech did in Christiansburg, Virginia, were actually we are doing drone delivery, and it showed that almost ninety percent of those who took that study were very positive about drone delivery and wanted it to come of their communities. We even just recently showcased a couple who's in their eighties who actually have had the most drone deliveries in set of world record. They've gotten over twelve hundred deliveries in
the last couple of years. And my favorite part of about their twelve hundred deliveries is they got almost the one hundred boxes of Girl Scouts delivered to their house. So we think the demand is there.
That's a brilliant story.
I'm not going to ask how many eggs they got delivered as well as I know you do that pretty efficiently.
I mean it needs.
Some like power players, some mass adoption and people to really show how much this works. But ultimately, what are the things sort of the teething issues in your scaling?
I mean, what about talent? What about bringing in then know how.
To continue to expand and ensure that this delivery can happen so succinctly.
Is it something that you think about a lot.
Yeah.
Absolutely.
As most tech companies, innovative companies, you think about attracting and retaining the best talent out there. I think, look, we are very fortunate to be a part of Alphabet. Alphabet is our parent company, and so I think that you know, we continue to attract and try to retain the best talent out there. I think there's a lot of opportunities for people looking to get into new industries.
I think drone delivery industry offers a lot of opportunity, and I think are going to see a lot more talent coming into the industry.
CFO Shannon, Oh, sorry, carry CEO Shann, Actually I get excited about drones. You know that I do, and it's interesting to see and willed real world deployment character.
Yeah.
I get excited about breaking news as well, ed, which is entirely why I tried to step on on your funder there a little bit, because we've got some news coming from X musks X in fact, we understand is going to allow political advertising.
The company is saying in a blog post. When you go to the blog.
Post, it's called supporting People's right to accurate and safe political discourse on X, and they're really talking about how they're currently expanding their safety and elections teams to focus on combating manipulation, servicing and authentic accounts, and closely.
Monitoring the platform for emerging threats.
But notable ed that they're actually thinking of beeping up teams in that area after the head count cuts that we've seen in that business.
Yeah, look, it starts in the US.
They're going to allow paid for promoted political votes, but prohibit false or misleading content.
Sounds familiar, that does it?
In this addition of believe their technology. Tomorrow, we've got a big one. Michael Sonershine is going to be from Graysale CEO, joining at ten thirty am on that landmark ruling the head.
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