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