From Mahard where Innovation of Money and Power Collie in Silicon Valley, NBM.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
I'm Caroline. He had of Rumberge's world headquarters in New York. Ed Ludlow, He's off. This is Bruebag technology coming up well as the market's drop. We'll talk all things ipo ARM completes the biggest of the instacart gives up to go public next week. We have so much more ahead and we'll talk the state of fintech with a former CEO of so far as his company joins others in
withdrawing applications for banking charters. Why, plus how will the uaw's unprecedented strikes impact automakers and the electric vehicle market. An ARM still managing to treadwater buck the trend. We're at more than two percent after its initial public offering, and let's stick with that theme. The comeback. It's here and of course this week was the biggest debut of the year. We of course were speaking with the CEO, Renee Has, who was confident in the outlook for his business.
We also have a very unique business model that gives us the ability to have a very very good vision in the future in terms of when people use our products. So relative to our confidence in the outlook, we have a very very high confidence that the growth rate that we have talked about will be sustained.
So how do your syncratic was that event or how can we read across the rest of the IPO's Katie Roof is here in New York discuss it all. You are the person who marries venture backed businesses as well as M and A as well as into the public markets and the banks, and I'm ultimately interested as to how your sources are saying this read across for armor is for the likes of instacrat, for Clevio and other companies that want to hit this market running.
Well, the IPO window is open.
We've been talking about this for almost two years. You know, tech IPAs came to a halt in late twenty twenty one, and arm is just been the first big one and it went well. It went up twenty five percent, which is you know where they often aimed for these things to go. So, you know, we saw instacart they raised their price range probably partly because of this. It shows
that there's public investor enthusiasm. Of course, ARM and instacart are very different companies, but bankers are still going to argue that this is, you know, a sign of tech enthusiasm. Broadly, instacart raised their range from twenty six to twenty eight to twenty eight to thirty. At the top of that range they would be ten billion dollars on a fully deleuted basis, so still lower than where they were, but better than where they were hoping.
A few days ago.
One we hear the reports of just how hands on Massa was in this process, and the idea that maybe he decided to undershoot in the overall price range that he could have got for the shares, leave money on the table to get that pop. I mean, we'd like you to see that replicated by the others that want to come to this market. How how difficult to balancing act.
Is this at the moment, So what happened was pretty unusual where they thought, you know, they could have priced a banker spot that they could have priced the company at fifty two a share, but ARM went with fifty one, partly because Masa just wanted to ensure, you know, a big pop on the first day, but of course that means that a little less money was raised for the company. I would say usually companies are going to take the
banker recommendation where whatever it may be. They do these pops to incentivize new investors for taking a risk on day one. Otherwise, why would you invest on day one? You'd wait until and see how it went. But you know, if you leave, if you do too much of a pop, then that's more that the company could have raised, So they try to time it. But of course it's all
just a guess. They do these road shows where they're talking to all these public investors trying to figure out what they're going to buy, how much they're going to buy, and it. You know, they do some math, but it's also a lot of.
Guessing, and they've gotten art of a guess that you were just telling me before that. Well, the CFO of instacart knows these banking worlds well, having come from Goldman.
Yeah, exactly. Nick Giovanni, the CFO of Instacart, he used to run Gordman's TMT, their investment banking group for tech, so he was the one praising all these tech IPOs in the past. So if there's anyone that knows how to optimize Instacar's success, it would be him.
All lies on him or lives in Clavio as well. For next week, we wait with beta breath, Katie Rufe, We thank you for being here and save trip back to La. Meanwhile, well, let's dig into more broadly the market here and sentiment around technology names as we look for this IPO window to be back up and running with Laura Cooper black Rock, senior macro strategist for ices EMEA, indeed a former strategist over here at Bloomberg as well. Laura, and I'm interested as to you're in the world of ETFs,
So what's so interesting about the ARM listing? And I know you can't go into individual names, but it's like not going to get into ETFs more broadly as it is an ADR of course a foreign company, but also very small floats overall. What sort of focus are you're putting for your clients on these new companies to come to the market.
Well, I think probably what's the most interesting is that we've seen a fairly muted IPO backdrop this year. It has been a little bit stronger than last year, but well below the levels that we saw back in twenty twenty one, for example. And I think this reflects a couple of factors. One is the fact that we are
in this environment of heightened macro uncertainty. Investors have uncertainty about wherely where rates are going, what's the growth dynamics going to be, like, will this actually be a profitable
type of backdrop to enter into this market? And then second, I think there's this greater scrutiny around valuations because investors aren't necessarily chasing the next big growth stock, but it's really about looking at those margins, looking at the profitability and demand dynamics to gauge is this actually you know something we want to invest in at this uncertain time.
Uncertainty also geopolitical in when we think of the China expose that ANAM has, we also think of the AI hype that was satisfying at that moment. How much is artificial intelligence leaning into the valuation conundrum for many of your clients.
I think certainly the AI hype has been a key driver around just the outperformance that we've seen in some of those US tech stocks a year to date, Yes, we have seen that come off a bit in recent weeks, but I think underlying this AI euphoria there is still strong fundamentals, and it's one of the reasons why we do see artificial intelligence as a key secular megaporce over the coming years. If we think about the profitability backdrop,
this was clearly coming through in earnings. These are really those companies that can generate the type of earnings that investors are demanding. If we look at earnings estimates for the next twelve months, they're sitting at about that fifteen percent mark. That's well above other sectors, and it's probably the only sector that can actually meet those earnings expectations.
So as those earnings potentially are justified in the coming quarters, we do think there's further scope for this tech rally to run. Even as we start to see probably greater bouts of volatility around some of the negative headlines coming through, it doesn't really curb what we still see as a favorable long term demand backdrop for these tech stocks.
Go global.
As of course, you currently sit in that NEA role and I'm looking at technology on the stock six hundred, the worst performing sector over the last three months overall, it's one of the worst performing on the day as well. Laura, how global is this view that technology is a sected to be in.
I think it really depends on where we're going to see those beneficiaries from some of the long term trends around for example, re shoring in some of that semiconductor space that is probably tilted a little bit more towards the US, but it really does reflect this market concentration, So that's leaning US probably more of a US equity tilt over Europe at this juncture. But if we think about kind of broader in the tech space, it's not really known to be kind of the driver of those
European benchmarks. So I think overall, when we look at positioning in these tech stocks, it's probably tilted towards the US. That's probably where it's going to be the greatest demand resiliency.
But for example, semiconductors is a very strong conviction call for US on the back of these medium term AI dynamics, and that we advocate for taking a global exposure because we do think there's pockets of opportunity and really not taking too much of a concentrated risk because some of those geopolitical fragmentations could arise and we don't want to have any particular exposure in that broader semiconductor space.
Good on the day. If you're looking at the socks, I'm interested in digging into some of the individual intricacies of what makes an AI company an AI company for you, or indeed an AI opportunity. Which are the areas of application that you think is most profuitful.
Well, I think there's really three ways of framing artificial intelligence from an investment perspective. The first would be around, Okay, how does AI actually boost a company's earnings? How are we going to see this kind of change pricing models, revenue growth going forward, Particularly if we think about software providers, how are they actually going to deploy this to the
broader landscape. So those companies that have actually been able to secure AI patents actually have seen an increase in their economic value, so they're already showcasing the impact of AI at the company level. Then we can think about, okay,
how is AI going to impact operational efficiency? Are we going to see more streamlined businesses, more cost cuts, or the other side of that, are we going to see this AI generated boom drive this efficiency, this productivity gains that in turn will have some benefits for some of these companies. And then third, I think is probably the key question that we've been asked by clients more recently, is really around how is AI going to disrupt this on a sector basis? So which of those sectors are
going to be the greatest beneficiaries. Some are quite obvious, for example, the software providers, semiconductors as well if we think the next step around cybersecurity, some of those proprietary data providers. But it's also the thing about healthcare, medical device innovation, in the legal field, where are we going to see a disruptions. So it's about capturing those areas where we think is not actually in the price yet, but they're probably going to be net beneficiaries. As is AI trend.
Unfolds still totally all encompassing this AI conversation or a cooper create us some time with you happy weekend, of course, a black roll meanwhile coming up well before AI, we're all talking about the hype around crypto. We're going to go back to that hype, but talk about its application right now, and indeed, more broadly, where we're seeing fintech firms finding some concerns around actually wanting to become banks. We'll discuss with a figure co founder of Mike Cagney.
That's next. This is Bloomback. Now we wait with Beta breath for potentially a statement coming from the White House. President Biden going to be speaking about the strike action currently underway. We know it's actually kind of been a focus across many in industry, but members of the moment united at Auto Workers Union, they voted to strikers midnight after negotiations with what Fords, Atlantist General Motors they all fell through. In fact, GM CEO Mary Barrow weighed in
earlier today on Blue Make Tevitlevision. Take a listen.
I will say we're ready for this. You know, as we've dealt with the COVID and dealt with the semiconductor shortage as well as other supply chain challenges that have you know, continued to persist from COVID. Our team knows how to manage these situations. They're staying agile and we're going to do what's right for the company. We're going to make sure everyone stays safe.
We now can go to the White House. We understand where President Biden is addressing the nation.
Began the last few weeks and over the last the past decade, auto companies have seen record profits, including the last few years, because of the extraordinary skill and sacrifices of the UAW workers. Those record profits have not been shared fairly, in my view, with those workers. Just as the Treasury Department has released the report pointing out that the most Comperhence report ever dealing with how unions are good for both union workers and non union workers to the annual overall economy.
Unions raise workers wages, they.
Said, incomes, increase home ownership, increased retirement savors, increase access to critical benefits like sickly and childcare, and reduced inequality, all of which strengthen our economy for all workers. That's because unions. Unions raised standards across the workplaces and entire industries, pushing up wages and strengthening benefits for everyone. That's why strong unions are critical. They're growing economy and growing from the middle out the bottom up, not the top down.
That's especially true as we transition to a clean energy future, which are in the process of doing. I believe that transition should be fair and a win win for issued me,
for auto workers and auto companies. But I also believe in the contract agreement must lead to a vibrant, made in America future that promotes good, strong, middle class jobs that workers can raise a family on, where the UAW remains at the heart of auto economy, and where the Big three companies continue to lead an innovation, excellence, quality and leadership. Last night, after negotiations broke down, the UAW announced the targeted strike and a few Big three auto plants.
Let's be clear, no one wants to strike. Say it again, no one wants to strike. But I respect workers right to use their options under the collective bargaining system, and I understand the worker's frustration over generations. Auto workers sacrifice so much to keep the industry alive and strong, especially the economic crisis and the pandemic. Workers deserve a fair share of the benefits they help create for an enterprise.
I do appreciate that the parties have been working around the clock, and when I first call them at the very first day of the negotiation, I said, please stay at the table as long as you can to try to work this out. And they've been around the clock, and the companies have made some significant offers.
But I believe they.
Should go further to ensure record corporate profits mean record contracts for the UAWM stated again, record corporate profits which they have should be shared by record contracts for the uaw And just as we were building an economy of the future, we.
Need labor agreements for the future.
It's my hope that the parties can returned the negotiation table to forge a win win agreement to continue our active engagement. I'm deplug dispatching two members of my team to Detroit, Acting Labor Secretary Julie Schue and White House Senior Advisor Gene Sperling. Both of them have been involved loutching now to offer their full support for the parties and reaching a contract. The bottom line is that auto workers help create America's middle class. They deserve a contract
that sustains them in the middle class. So thank you very much. It's on. I'm going to say thanks you.
You can directly involved in negotiations, should Hunter get a part in.
Mister President President Joe Biden there speaking on the uaw workers strike, really reiterating that the workers have his support. Nobody wants to strike, he says, but they are dispatching officials to offer support in the talks, and he wants the parties to return to the negotiating table and reach an agreement that he says would be a win win.
Let's first and almost then go out to Washington. I think we have Katie Lion standing by just to wrap up what is quite a difficult balancing act for the president because he wants to be pro worker, pro union, but also wants to be pro ev transition.
Yeah, that's exactly right, Caroline, and you certainly see that pro union sentiment coming through in the remarks he just made, among many other things, him saying that they should go further because record corporate profits should be shared with a record contract for the United Auto Workers, saying that autoworkers help build the middle class and deserve a contract that
helps sustain them and the middle class. So clearly trying to be on the side of the union here, even as he says that nobody does want to strike, because that strike also puts the other objective this administration has, or one of them, at least, Caroline, which you alluded to. They're desire for a clean energy economy of transition to EVS potentially at risk depending on how long this strike goes. Remember this is an administration that, through the Inflation Reduction Act,
is offering massive subsidies on new electric vehicle sales. It also has a goal of having half of all vehicle sales new vehicle sales by twenty thirty be electric. So these two goals are really in conflict here for this administration, it is a very difficult line to walk, but obviously what they ultimately want at the end of the day is this conflict resolved, which is why he is dispatching both being Spurling and acting Labor Secretary. Julie's to Detroit.
Perfect wrap up, Thank you so much, Kaylie. Lions on the ground in Washington. Let's get you more contacts from the auto perspective for a moment as well, being most Gabrielle coomfolos with us and Gabby. What's what's so interesting is I immediately think of Tesla in all of this ev race and of course doesn't work with unionized workers. So how much is this going to be affecting basically the competition against Tesla of this moment, If Ford, if Stilantis, if GM are affected by such strikes.
Yeah, you know, I think it does make it even harder for the Detroit three to compete with Tesla, at least in this moment, because you know, they are plowing all those record profits and you know these record car car prices we've been paying, they've been putting that money into battery plants, into designing new electric vehicles. So but they have a long way to go to catch up
with Tesla. Tesla has a ten year head start. And let's not forget about even though we don't see a lot of Chinese automakers here in the US, they are you know, not on the door around the world, So they are under a lot of pressure, and you know, it's attention because I think what the problem is that the automakers for the last ten years have kind of you know, after two thousand and eight, they kind of that was it. They got the monkey off their back.
You know, they had mass they really you know, at the bargaining table in two thousand and seven or at a financial crisis, the workers really sacrificed a lot, and I think the automakers kind of thought that was the end of the story and we're moving on now. And I think what Sean Fayn the UAW is doing is showing them, hey, not so fast, you're not we're not going to agree that this you know now or and over man, that's what's happening.
A new tactic at work, new leader to carry a couple of absolutely brilliant to talk to you. Thank you very much. Indeed, we're going to do a hard pivot now we're going to return back to a conversation that is much more about tech, but actually largely maybe about regulation, about an administration, and it's desired to be adopting blockchain
companies in particular. We just want to be talking to the chain firm Figure, in the latest fintech company actually to withdraw its application for a bank charter, a move made after years of waiting for answers from US financial regulators joining us. I'm very peace to welcome Mike Cagney, here's the former CEO of SOFI, co founder of Figure, which uses blockchain to build financial products such as loan origination, for example. But also very pleased to welcome Shananali Bessett
to the shows. Help bring about this interview, and I think, first and foremost a great article that you've helped pen in other media. At the moment, Mike just talking about the decision making process of not becoming a bank, and it is in large part because of regulators.
Well, it's really around the state of regulation with blockchain, and the Figure is a Blochain holding company. We have two Blochain centric businesses one and lending one in markets and we have over two hundred state licenses. So you can see the appeal of having a national charter and not having to deal with the overhead of two hundred state licenses. Also the ability to have liabilities to fund
the assets that you generate. But Figure fundamentally is a market's business and are lending business is more of a means to an end to build that marketplace out, and we felt without clear identification of what we could and couldn't do as a bank, it didn't make sense for us to move forward. There were other reasons as well, but that was the key one.
I'm curious what you think this means about the future of financial technology. Your alma mater so far is really leaning into the idea of being a bigger and bigger bank. You have the regional banking system that may not be the ultimate form of capital for people like you moving forward, So what role do the upstarts start to play.
So I think you're in a macro trend right now where the banks are contracting credit and that would be exacerbated in the basal three M game went through that that's unlikely to happen at least you know, with the current regulatory or the legislative position. But you're in a
situation you're aspected where banks are pulling back. You're also in a situation where the asset liability ratio, where banks traditionally have at least over the last several years, especially through COVID, have had massive amounts of excess liabilities and had to deploy that into assets that's now flipped. Those banks are now liability constrained, they're having to sell those assets.
And so I think systemically, over the next five years you're going to have a situation where non bank lenders are going to be able to lean in and participate access wholesale capital markets in a way that the banks are going to not be able to do. So they're going to fill that gap.
It's also we'd be remiss not to talk about this idea of it being a humongous week in the IPO market after such a massive drought. We've reported that your lending business you're considering.
An IPO for.
How has this week changed your calculus about how you're thinking about speaking to investors?
Sure, I think rather than talking to the IPO per se, I'd say that the lending business itself is a mature business. Although it's still doubling every year, it's a profitable business, and it's really found an interesting opportunity in terms of lending technology. But what it is, again is ultimately a marketplace business. And so when you think about what that vertical really looks like, it's not so much that it looks like an upstart or a sofar with multi product solution.
It actually looks a lot more like ice. And that's ultimately the objective we're trying to go to is to stand up private capital markets to take advantage of this contraction that's happening in the banking system. And we think there's a great opportunity to do that.
When you're thinking about being that marketplace, when you're thinking about intertwining trad fi with qrypto and blockchain technology, how much institutional buyd have you had of your product, of your offerings, of the way in which you want to be servicing.
Sure. So we've done over fifteen billion dollars of transactions on blockchains with banks, with institutions, and right now we're in the middle of a transaction with two very large private equity firms where we're issuing an asset backed security, a triple A rated asset back security Native two blockchain, so it won't be on DTC, it'll actually be trading on the blockchain. And this is the beginning of what
I think is going to be a systemic trend. I think by the middle of next year, we'll have tens of billions of dollars of native assets on chain in a true marketplace being developed out serial entrepreneur.
Nice having a talking about your latest one and indeed well the views towards maybe even a public listing in the next year or so. Mike, great to have you in the show. Thank you, Mike Cagney. Of course we want to thank Shnanibasset as well for that conversation with Figure. Welcome back to roomback Technology and Caroline had in New York.
But now let's pivot into the world of where private money is flowing at the moment, and is it tackling climate Climate tech investments may be dipping actually this year, but Galvanized Climate Solutions still managed to close its first venture and growth equity fund over one billion dollars. Let's bringing Code executive chair Tomstire for more and how you're going to be deploying this capital. This is about startups, but with real world implications right here, right now.
Tom, Absolutely, Caroline, I mean we are the need to solve the climate crisis is an immense tailwind for investment. So these companies can take advantage of an absolute necessity to solve a multitude of problems in terms of the waves we generate, use energy, and build huge profitable companies as a result, so that in fact, solving a huge crisis is what is built for to serve the needs of society.
And that's exactly what we're trying to do.
And how will was the appetite to want to come and invest behind this at the moment when we have seen valuations hit, we have seen a pull away from risk taking and particularly venture having a tough time of it.
Well, I think that there are a lot of people in the world of professional investing who are just getting educated about the need to invest in climate response and let me say this, Caroline. You know, in investing, when it's hard to get money and when valuations are coming down, that's a great time to have money.
And you know, so it's you shouldn't feel the head.
For us, we think of that as this is a huge generational opportunity in general and very specifically, this is a good time to have money and to be looking at investments and to be, you know, looking five to ten years at.
What's't been so interesting is who you've been working with. You set up with Katie Hall, of course deeply experienced way in which of managing money and cross asset perspective, but you've brought on some well, some real experience here when it comes to this particular fund. How are you thinking of intertwining it with Galvanized more broadly, because you
do have a cross asset perspective. You're not only in bench capital and growth equity, but you're in real estate and you're in public equities.
Absolutely, I mean Galvanized the company is very specifically trying to take a multi strategy approach and investing behind the need to solve climate in a very variety of investment areas, but specifically this fund innovation and expansion. We were lucky enough to get three partners to lead it, very Maxwell, Cliff Ryan, and Sloni Multani, who have long professional expertise, great track records, but also great experience and great knowledge
about the climate space specifically. That's very unusual, and as somebody who started a number of investment activities and investment business says, you really don't have anything unless you have great partners to lead it. So anytime you're talking about a specific investment effort, you have to start with great people.
With experience, great track roads, and knowledge of the place.
I mean you speak to your background having led parrel and capital management, hedge fund owner in San Francisco, but then you pivoted more mission driven and indeed more political
in the way in which you've navigated these waters. I'm interested when you're thinking about galvanizing a youth voter in this moment, when we're looking at strikes within the UAW, when you're thinking of a president has to navigate a desire for an auto industry that needs to pivot into a more responsible climate focused to gender, but at the same time needs to share profits with its workers. How are you seeing the administration navigate the need for climate solutions too.
Look, I think the Biden administration has done a fantastic job actually of trying to address our climate crisis in a sense, sable and economically sensitive way. And I think that one thing Caroline to remember, and the reason really that all of us, Katie and the three people running this fund and everybody else in Galvinize is doing it, is we believe that we're going to win in the marketplace.
We believe this is a generational investment opportunity.
And then in fact, the way that capitalism is going to solve this crisis is by producing cheaper, better, faster, and cleaner solutions. And so when we think about what the Biden administration is doing hand in hand with the private sector, it's really to come up with new technologies, new solutions that are better for consumers, so that it's not a question of asking people to sacrifice. It's a question of asking people to make sensible, smart decisions on
their own behalf. That's how it's supposed to work, and that's what we're driving for.
So let's go back to the capitalism and the money being deployed. You've already invested in eleven companies. Now, I know you're not managing this exact fund. You've just talked about the three experience people that you've got very Maxwell for example. But talk about some of the companies that you are choosing to back and why when I'm looking at the routing company, when looking at regrow Pulsora, what are they doing differently?
Look in every one of these companies, they're coming up with a need to solve an existing problem with a new technology, with progressive new ideas in ways that people are going to spend money, and they're going to drive revenue in a way that produces a large company that's going to grow really fast. That's what we're looking for,
early stage companies that can grow and scale. And if you're going to address a global problem, which is our climate crisis, that means by definition, you have to have a significant, important company that's going to be very valuable. So when we look at any one of those eleven companies, we're looking at a huge existing problem that is going to create huge companies. And the question is can you
figure out which ones are the great companies? Can you have them want, can you be the best partner for them, and can you help them scale and grow in such a way that you create real returns for your investors and have measurable impact. That's what we're trying to do in this fund. That's what those three professionals have a history of doing and a specific long knowledge of this area in terms of how we're going to solve these different problems.
And what about companies that are sizable already in the public sector that maybe you could invest in as you go for public equities to responding to basically, well, California where you sit, maybe the EU taking desire for more regulation, but more transparency, but maybe broader US being slower than the rest of the EU. How do you see compliance affecting bigger companies going forward?
Well, I think that this has always been solving this problem has always been a question of a public private partnership. And if you look at the Inflation Reduction Act, which was by the Biden administration last year, in which I think is having a huge impact, that's really a question of saying to people, we're going to give you a carrot to get this done faster. We're going to help
you get it done. If you look at what the EU is doing, by and large, they're more going towards policies and rules that insists that you get it done. In each case, what we're really trying to do is accelerate the move, to make it possible for people to invest more successfully, move faster and bigger because the crisis is very much at hand. And last thing I'd like to say, Caroline is when you look at transparency, when
we start to get real information. You know, the old saying is if you can't measure it, you can't manage it. We're seeing a demand for transparency about who is creating the real emissions because once we have that, the managers can solve it. And really companies can look and say, okay, we absolutely have to get that down.
How can we do it? And that's why they're going to look to those kinds of companies.
Tom screat to have some time in the Tomstyre Galvanized Climate Solutions Co Executive Chair on the latest funding one billion. It's today's VC spotlight moment and we're going to be talking about Moto. It's a Brazilian motorcycle rental company, but actually more than that, it's last mile delivery marketplace as well. It's just announced a fifty million dollar series c CO led by QD Investors and also Bicycle Capital, New Benu firm by form A soft Bak executive Marsda Clari and
of course Shunietta. And please to say that joining us now is Shoeieta as well as motor Ceo Roomen's Ruins Zenlato coming all the way from Brazil, and we thank you very much, gentlemen, both of you coming in from Miami, Brazil to talk about the global VC opportunity here and just paint the picture with men's about exactly what Motu is doing, how it's disrupting because it's not just a cleaner way of doing motorcycles.
Yeah.
Actually, the problem we're trying to solve there is high unemployment in Brazil in Latin and people don't have access.
To credit either.
So we are providing them too to work by ranting motorcycles out to people without any requirements of credit. And we started about three years ago and just fifty bikes. In the first year, we deployed one thousand motorcycles and now we are deploying one thousand every ten days. Very excited to be here.
You're looking across Brazil, across Mexico, I mean that must be water your attention the growth, But is it also the opportunity issue here in terms of it being more about delivery as well and engagement on the population.
Yeah, there are two things that got us really excited. First is the metrics. The numbers always speak for themselves, and Moto has incredible numbers. They're growing over three hundred percent. They're not just gross profit profitable, They're not just keep it that profitable. They're net income profitable, which is very rare for a startup, and they're very capital efficient. So that caught our attention. But then the opportunity is huge.
Brazil is dominated in the motorcycle industry by one company, Honda, that has seventy percent of the market, and it's right for someone to come in and offer something different. So you put those together and you have the chance to create something really big and meaningful. And then you just export that playbook to Mexico and do the same thing.
Do you export it to elsewhere? You've just raised money? Is the idea about geographical reach? Is it more about building up the engineering, the talent. How do you deploy money?
We are focusing on Brazil and Mexico. Now our growth from the assets comes from debt investors. So the way we were able to build a profitable company with very good economics is a very safe investment for debt investors as well the capital markets. And the money now is just to bring global talents for the company. We got huge companies like New Buying, GMPEZ and Brazil that we're able to bring top talents and we want.
To do the same.
It's interesting that you went for equity financing that you have taken debt financing in the past. Is that something analyze and look to.
We we are all about doing that. We raised more than seventy million dollars in that so far. One hundred percent of our capects is done with the keptal markets with debts.
Sure, in this moment when you're looking at writing these sorts of checks and seeing this sort of growth, how competitive is it? And I mean there's Tiger Globals on this round as well, there's plenty of other big name vcs and I'm interested as to what valuations you're currently looking at and how you're talking amongst other bench partner.
Yeah, the growth equity market globally has been a bit of a comma. I'd say the patient's toes are twitching, so opportunities are starting to come up, but it's only the ones with really exceptional numbers that are getting people's attention, and those are getting people's attention. We're co leading this with QD, which is a from a respect we've worked with before. The existing investors are all investing, so a
company like Moto will never struggle to attract capital. The valuations are much more reasonable, though, so nobody is over when it comes to the number that they want, and I think that's healthy for everybody. It's healthy for the company. The other thing that's different is the time that these deals are taken to get done is slower, and that's also good for everybody. The companies get a chance to have investors really digin, give them some feedback. Investors get
much more comfortable with the companies. So I'd say we're entering a fairly healthy moment in the market. But only the best companies are able to.
Attract capital right now, and you do your due diligence. You also look at the landscape of Latin America, the countries you know and how to invest in, so well, how does that regulatory landscape look for a company such as Moto. How do you look at other players in this space.
Yeah, the nice thing about tech in Latin America in Brazil is it's inclusive. The government is very supportive. It doesn't matter if it's the right or the left. The tech opportunities about bringing more people into the economy. They're so deeply underserved, consumers and businesses both so deeply underserved. So in the US we tend to think of technology AI is the latest boogeyman as a threat to livelihoods.
In Brazil, technology is often a key that unlocks livelihoods, and that's a fundamental difference, and so the governments get very behind that kind of idea. It's what makes tech in emerging markets so attractive. It's inclusive, it's not disruptive, and that tailwind helps all kinds of companies, especially like more Too, that are so obviously bringing opportunity to people.
What you've done is you're saying you're able to provide these motorcycles, this way of making money to do deliveries to people who have either bad credit no credit. But you must be using technology to understand what the risks are there. How have you managed to build out a credit company, an insurance company, a maintenance company out of basically a motorcycle company.
Basically, we know that we need to be the best option for people every day, so we use technology and everything and to do a no touch experience. In our team also have these through Gallety mentality to do more and less. So this is how we were able to build such a good economy net income company in these three years. I believe that very few companies got to
really net profit company. And we are all about serving people and if we need to help them, we need to do a product that's cheap and better than they have their own motorcycles.
Many would think Brazil political instability at times, economic instability at times. How do you push away from that narrative? How do you ensure that big, great successful businesses can be built out in emerging markets in the Latin America.
We are really a social business. We are pushing to help people and be a way of Latin to make a better place to people drive and people have an opportunity to work. And doesn't matter who is the governing place, we are there to be part of the good.
Sure, you and Macello have really shone a light on Latin America. That's what Bicycle Ventures is all about, and the idea that people aren't seeing the opportunities, but are people seeing them more? When you're having Qued alongside you, when you're seeing repeat investors in the space, is that starting to grow in consensus?
Not really.
Quid are unique. They've been in Latin America on the ground for quite a while, which is unusual for a global firm. We respect them for doing that. They have people in some power or people in Mexico City, so they see what we see, which is markets that are ignored by global capital markets. They're side notes compared to the US and China, maybe even Europe. But the opportunity is much bigger than the capital available. So our fundamental
view is there's just a dislocation of the market. People don't have the appetite or the patients to look past to the headlines that you just called out, political instability, crime, inflation and see the opportunities beneath. But if you look, they're great opportunities. So New Bank is the latest stunning example, probably the most valuable digital bank in the world, forty billion dollar market cap. There are many other companies coming that will go public in the next couple of years.
That'll keep proving that Latin America can create a lot of equity value. And we like the situation where people are not paying as much attention because it's better for us.
M hmmm when you're doing a due diligence. It's great to have some time with you Moto for CEO. Rubin's Senlato, who I say, flying out for this and we appreciate it very much, just for this back to yeah, yeah, lovely to have you over here to fly back to Brazil and Juniata is always flying in from Miami.
We really appreciate it.
Meanwhile, coming up, look, initial talk to the sale of Disney's ABC are getting up. We'll have all the details next. There's some blue meg technology here is what has been going viral. Disney holding initial talks. We understand about selling it's ABC network and TV stations to local broadcaster next Star. That's according to sources. But then media mogul Byron Allen, who are a string of TV outlets Weather Channel as well, also has discussions with Disney. We understand about acquisition of
the network and his stations. It's all according to sources familiar with the matter, let's get more familiar with it, because Disney is saying in a statement that the company still has made no decision with respect to the divestshire of ABC or any other property. Next TI meanwhile declined to comment. Let's bring in Chris Palmery, who's been really managing to cut through what feels like sometimes noise in
the media industry. But the noise had always been for a little while that maybe this would be an asset for Disney to dispose of.
Right well, if you remember, this started in July when Bob Iger said that, you know, maybe these traditional channels were no longer core to the business, and that's set off a frenzy of people looking at the assets who might be interested. And I think that the fact that there hadn't been any progress really since then got people thinking, well,
maybe we can start a fire here. If you read the public comments that next our executives have given, they said, hey, you know, we're interest, did Disney, But you know, what's the real terms here? Because there are a lot of complications with buying a network like ABC, for example, you know, how do you handle the sports that ESPN sometimes simulcasts on ABC, or all the shows that presumably Disney would still.
Own that air on the networks. So there's a lot of questions.
But I think we're starting to see people starting to raise their hand and say, yes, I might be interested in this, and it puts a little pressure on Bob Iger.
To do something.
What about at this moment when he's also trying to navigate strikes, right to strikes, Act to strikes? How is that sort of conversation progressing?
Well?
Again, it's part of this all you know situation in media today where everyone knows it's shifting towards streaming, but the streaming business isn't profitable and there are issues with labor, there's issues with how do you produce the content, and the traditional TV networks are losing viewers and so that's that's a long term drag on the business. So do you keep them because they're making money now and you can sort of run shows across the different platforms, or
do you sell and cash out? And that's uh, that's what the Disney management and lots of other managements are wrestling in the media in business with right now.
We'll see how those conversations progress next week. Chris Palm, Mary we thank you. Meanwhile, that does it for this edition of Bloomberg Technology. Don't forget about our podcast. This is Bloomberg Technology.
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