Online Dating and the Texas Social Media Law

market that will be spared. We'll talk to an analyst who says companies like Bumble, Tinder, and Hinge our recession proof. Plus from where the next COVID wave will hit, to just how high inflation will go to the winners of the Grammys. A new predictions market lets you bet on just about anything. We're going to bet a controversial exchange that's actually legal for now. And finally, the Supreme Court just blocked a Texas law that could transform Twitter and Meta.

We'll have a report live from Washington. All of that in a moment, But first, let's get a look at the markets and stocks in particular, Tech ending may almost exactly where they started this month. I want to stick with the markets now and specifically talk tech with Michael Wolfe of Activate. Michael, always good to have you back here with us. So look, what do you think all the fuss was about. We saw the ups, we saw the downs, and then at the end of the month

we're back right where we started. Well, I mean, part of this it reflects that investors are concerned that the growth rates are slowing down. It's not as if these businesses aren't growing quickly. And yes they're concerned about rates, but to a large extent, it's it's all this is. This is a correction. It's not a bubble bursting. And in fact, when you people keep making this comparison to thousand and they're saying, oh, it's it's another wave of this.

But in reality, though that we have companies that have real profits, that have real businesses and um and in the tech bubble in the in the early two thousands, what we had was business plans and not a lot of revenue and certainly not earnings. Here's a question is it overvalued or not? And if so, what is overvalued? I mean, I think we we saw right and left the market caps of these companies being driven up, not almost almost illogically because they were looking at at tremendous

growth rates. So if you look at company like Netflix, which is down over sixty like Netflix has over two fifty million paying subscribers. So it's yes, we've seen a we're seeing a correction in the value, but this is a substantial business and we're going to expect it to see it continue to grow. Michael, you've been around a long time. You've got folks they're comparing this to the dot com bust. Do you think then that is totally overblown. I think it's totally overblown. It. The reality is that

these are substantial companies. They've had substantial growth, they are leading in a lot of case, they're having modes around their business which makes it very difficult to compete against them.

It's a totally different situation. Now. If you look at the two thousand and eight two thousand nine, you see a number of companies that were started in those days, and it gives you a sense there's likely to be So if you looked at Benmo and Square and and others, and Airbnb and Uber, they were started in that period during the last recession. So we should see a lot more innovation and a lot more activity. But but these these companies are substantial and they're going to stay substantial.

What do you think about the M and A market? Obviously we've seen this massive Broadcom vm Ware deal. I wonder if that is in a league of its own on the heels of you know, maybe Twitter, which is also a unique situation. And then of course there was Microsoft in activision. But are we going to see more big time M and A through this tumultuous period. To a large extent, it's going to be different. There's gonna be different buyers. So one of the places where we should see a lot of M and A is in

enterprise software. So if you look at the take private of McAfee, if you look at Salesforce and Slack, those are the kinds of acquisitions that we should continue to see. Now. One of the things that's also different is we're likely to see um more private equity deals. So if you look at we have Nielsen's take private at sixteen billion, we have UM, we have other businesses like Toma, Bravo's

purchase of Proofpoint. We're going to see a lot more because the market is we're seeing some capitulation in terms of pricing, and this is a moment when private equity firms can rush in and they can find businesses that are that we're way over valued versus a year ago. All right, Michael Wolf of Activate, always good to have you on the show. Michael, thank you for giving us uh the silver lining on some of this stuff. Meantime, Taiwan based iPhone maker Han Hi expects supply chain disruptions

to gradually clear up. At Shanghai slowly opens to trade after months of COVID lockdowns, Han high chair Young Lieu told shareholders the company is more upbeat now about it sales outlook than before. On High, of course, is Apple's largest assembly partner, from the outcome of the Grammys to the next COVID wave to future SEC commissioners. You can now bet on all of these things with call sheet, a controversial new type of financial exchange where people can

play wagers tied to outcomes of real world events. Joining me now, Lauana Lopez Laura, Founder and CEO of College Lauana, thank you so much for joining us. So first of all, some some folks have been trying to push forward these kinds of financial markets for years, but it never happened. You know, how did you make this work. Yeah, so we get this question actually, uh fairly often, and the

answer isn't what most people expect. It's really about we just had I guess, more patience and more resilience and we just push through longer. It's a it's a regulatory process. It takes a long time innovation, especially in the derivative space. It's it's there's a lot of new things, new risks that we need to look to and the regulators are looking for um and we were diligent through work with

all of them. For the CFTC, you can think about surveillance, customer protection, the contracts themselves, rules, a lot of different things that we had to work through and iterate through two years. And we really worked hard for two years and didn't give up to get to get it for the finish line, uh and launch the exchange last year. So, for example, the FED has another decision coming up, and via cal she you can make a bet on what you think the Fed will do. What are your markets

showing about the fed next move? Yeah, I guess to back track and just explain a little bit how the markets work, so you can buy yes or no positions on whether the market will have something will happen or not, and the price goes from zero to one uh selling to one if the if the market is correct, if your position is correct, um and because the price is from zero to one, the price so so like for example, sixty cents means there's a six and something will happen,

So you can really directly translate the price to the probability of wou say that price is truth. With the FED markets, we have um different markets for every f o MC meeting. So for fifty or seventy five basis points hikes UM, our markets are saying that for the June fo m C meeting we will be seeing fifty basis point hyke with chance. The markets are also saying that the July meeting will see another fifty basis point

hype with ninety percentians UM. And across the whole year, the markets are expecting ten UM FED FED hikes versus I think a couple of months ago it was predicting around seven UM, so so definitely a lot of hikes coming. So President Biden just you know, unveiled this whole plan to keep inflation down. What are your markets say inflation

is actually gonna do? Right? We also have markets on inflation from zero percent to one point two and every month of the year, the markets are saying that the next inflation print coming out next week will be around zero point sixty five percent month over month or over the whole year eight point two percent inflation um our. Actual markets have have predicted seven out of the eight

pass inflation prints correctly. Uh so, our our traders have not been surprised at all to see the high high inflation numbers, um But it's import to say that for the rest of the year um SO annualize. For the rest of the year, the markets are expecting of around four percent annualized in December around three which really is around um normal levels, so really expecting inflation to go back to normal. Now regulators initially said no to an

exchange like this, but but recently changed course. Isn't this gambling? Why should this be legal? That is a great question, um our. We're in exchange the same way that the CIME or the New York Stock Exchange are exchanges, and you trade events on our exchange the same way you trade stocks or futures on CIMME or the New York Stock Exchange. We are basically just a trade matching engine

that matches different people trying to take different positions. So if you take our FED markets for example, right, um, our markets are a way to trade hedge or get exposure to feed events the same way interest rate swaps are defined are designed to do, but hours are made in an exchange in an accessible and simple way. Um

we really think that that bringing it to two. People have actual risk associated to this, Like if you have a student loan tied to the ten year treasury, or if you're trying to refinance your home, you have real risk associated to the FED raising rates and you should have access to the same types of benefits that Wall Street does. This isn't gambling. This is finance at it's best. It's about hedging risk and getting exposure to to what

you you have your face risk in your everyday life. Now, I'd love to learn a little more about your personal story. I know you're from Brazil and you studied bullshoy ballet, which I assume was hours a day. How do you go from you know, potentially becoming a professional ballerina to going to M I T and launching a market startup? Well, that is a great question. I definitely have an unconventional uh path. Um. Yeah. So I used to be a

professional ballerina. I used to train, as you said, eight hours a day uh in at the Bolshoi Ballet and I worked professionally in Austria for a bid and I think that really changed and mark how I am as a person. I think a lot of discipline and a lot of you know, sacrifice and looking two more longer term UM payouts versus very short term payouts. I think definitely helped with with starting chol ship. But I was

always fascinated by math and science. Uh So I went to m I teach studies CS and math and at the very beginning of fascinated by the finest world history of markets market structure um. And from then it was worked out a couple of hedge funds, but I really wanted to make a mark of my own. So UM encounter the cow sheet the couchip problem, which for us video is people should have the same access people everyday business and should have the same access that institutions have

to hedge risk they have associated to events. Most trading is based on events you think rates are going to have, like go up. You do this in the stock market. We want to bring this to everyday people and let them do the same and have the same benefits. UM So, yeah, definitely a convoluted story, but but I think it all adds up in the end. Last quick question, what's your position on crypto? Then? You know, isn't that you know a market that's already pretty well established, where you've got

high risk, high reward. You know, why not put your money in crypto instead? That is a great question. I think crypto has wiped out a lot of people in the past couple of months. You can take the lunar example. I think that it needs more regulation. I think a very small portion of crypto markets are regulated nowadays, and you see a lot of scams just going around of like easy twenty yield or something like that, and in the end they just use your money and it's really

people savings. There's like actual victims to this. So I really think it needs more regulation and it needs to to be brought up, brought into the regulatory oversight in the US. UM. I guess that with US, As you said, it's like you can also make money and lose money, but the difference that we regulated that this won't be a systemic risk that older is to explained to people, and and regulation brings this fantastic thing which is customer protection.

All right, I want to love as Laura founder and Cello of Calci will keep watching. Thank you well. The U. S. Supreme Court has blocked a Texas law that critics say would fundamentally transform Twitter and Meta's business by requiring them to allow hate speech and extremism. Greg Storm, who covers the Supreme Court for Bloomberg, joins us. Now, so, Greg, first of all, give us the context on this Texas law, which has been moving through the courts, went into effect

in Texas earlier this month. It did, and the social media industry had been very worried about it. The appeals court didn't give any explanation for letting the law take effect in The social media company said the impact and them would be tremendous. They would have to radically change their operations uh to remove the ability or to make it such that they could no longer essentially moderate content.

The Supreme Court let that ruling that lower court orders stay in effect for a couple of weeks, and now finally the Court has intervened and said yes, we're going to block that law again. Is there reasoning as to why they're blocking a law and what does it mean? Not from the full court, we did get a dissenting opinion from free conservative justices and interestingly one of the liberal justices the second without getting any explanation at all.

Those three dissenters said they saw this as an affront of state sovereignty blocking the law, they would let it stay in effect. But from the court as a whole, no, we didn't get any explanation. Is this the end of the road for this law or does it still have you know, an opportunity for for another life. Now it still has an opportunity. This just blocks the law while the litigation goes forward, and that litigation will go forward before that federal appeals court that said the law could

take effect. So there may be still be some some serious fights on the hands of the social media companies and their trade groups, which were the ones that that suit to challenge into this law. Um. One other thing to note here is that there's another law a lot like this in Florida. That one was also blocked by a federal appeals court last week. So give us some examples if this law is upheld, give us some examples of what Twitter and Facebook would not be able to

do that they do. Now, Well, the law says you can't engage in what's known as viewpoint discrimination. And what that means is you can't say, oh, that's hate speech, and because it's hate speech, we're gonna we're gonna take that down, We're going to block it. Uh. So the social media companies say, we would have to allow neo Nazis screeds, we would have to allow anti gay screeds. Uh and UM really would not have that ability to

serve as kind of the traffic cop on their platforms. Okay, Greg Store, Bloomberg News, thank you, will continue to follow that law. Um, and the Supreme Court's next take all right, well by now pay later is a popular option for the youngest generation, but as the economy takes a tumble, many are struggling to repay all these small loans. Joining us now. The CFO of a firm, Michael Linford take

a listen to him earlier with Blue Maction. Ally, Boss, I think it's really important that investors, uh the media that uses of our product to understand just how different firm is We're different from both the traditional financial institutions who offer revolving credit products, and we're different than the B N p L competitors that I think are being

poked out in that particular analysis. Mission go ahead. Yeah, a lot of those competitors they've never seen a down cycle and we're about to experience something of the sort now. So do you think that they're going to experience something of a wash out there? I think you're already seeing

pressure on a lot of these players. Um that you have people like a firm who takes our mission and our mission has created a business model that makes it so that we don't charge ladies, we don't allow consumers to revolve on dad, we do not allow to fur interest, and these kind of consumer oriented positions in our business has made it so that we don't have a choice but to underwrite very carefully. We have no way in our business model to support consumers who don't pay us back.

And our most recent quarter we posted unit economics of four point seven percent of GMB seventy basis points ahead of our long term guidance. We stand out amongst all the other players. You have some players who are doing headcount reductions to try to save costs in order to afford these credit losses, and we're in the opposite position.

We're very front footed. We're adding to our team because our unit economics are an exceptionally strong UH position right now because of our world class underwriting, and that's not an accident. We had to build that based upon how our business model was built from the first day and how we treat consumers. You know. The other thing you had mentioned too is that you're in a position to

grow from here, even in a tough environment. What kind of hiring plans could you have ahead, especially as you're seeing that some of your rivals are cutting their workforce. Yeah, we really like our position in the market. You saw earlier this month we hired a bunch of engineers from a payments company that was having a hard time and they were winding up operations. We do this as one of the better markets for labor right now, where we have a strong need to build great products. We're not

constrained in terms of our opportunity. We help enable the world's fastest growing payment method and we're in the very early innings of what our category will become, so we need a big team of engineers to go tackle that opportunity, and so we're very excited to be able to impressively grow our business again responsibly a firm CFO, they're much more ahead. This is Bloomberg. Welcome back to Bloomber Technology, Emily check in San Francisco. Is another day, another delay

for Elon Musk SpaceX. The Federal Aviation Administration says it now expects to complete and environmental review of the rocket maker's Texas facility in mid June. Another pushback, which potentially doesn't delays the timeline for Starship Musk's Mars Moonshot. This is the fifth time in fact, that the f A has postponed the release of this report. From what all means are ed Ludlow here with me. So is the f A a buying time here? What's going on? It's

impossible to know. You know, today's May thirty one. I was waiting for this because it was the day they were due to make a decision, and I wrote it down on a piece of paper because I'm not embarrassed about that. M They have delayed it five times, and the last time we were waiting for this was on nine. So I sat here waiting, and they delayed it till May thirty one. But it's important because spaces cannot make any progress on this. Starship planned the testing phase at

least until they get clearance from the fair. Now, you were on the ground in Boca Chica in February, remember that vividly and Elon Musk made it sound like Starship was just around the corner, right, And at that time he basically expected that the regulatory side of things, this environmental review would be done in a couple of months, a test flight, the hardware would be ready in a couple of months, and he had an even bolder prediction for what would happen. Take a listen. It might be

a few bumps along the road, a bit at all work. Um. I feel at this point highly confident that we will get to orbit this year classic mask orbital test flight by the end of this year. But we don't know where we stand now because this key beast keeps getting delayed. Well, so that was my next question, what do we know

about where we stand with Starship? So you've seen the video, I think if the Mr Director will play it again, the explosions, the kind of successful test they've only really done hops off the ground, and what Starship needs to do is an orbital test flight. That's kind of the big milestone moment where it breaches as atmosphere, comes back down and lands again. That's we're waiting for Gwin shot. Well, who's the president CEO said it could happen in June.

Doesn't seem like that if the f A decisions not Dune now until June. Meantime, of course, you've got SpaceX generally going from straight to strength, pulling off you know, a lot of successes. So as of Friday, Starlink there space satellite constellation based internet service is available in all seven continents. He expanded to Africa as of Friday. That's quite an achievement. And today this may first really important date ten years ago, first unmanned Dragon missions I s S,

two years ago, first man one. They're dominating you know, this industry. But we really care about Starship because it's like you said, it's the Mars shot of the moon shot all right, at Law, thank you, well, keep watchally, you'll keep us posted. Well. Today mark the first day on the job for the new CEO of match Coupernard Kimp. He is leaving Zinger, where he's been president. Since he's taking over for Shardubi, who has been at the company

for the last sixteen years. It is a pivotal time for dating apps, especially as we are heard from the pandemic and much of the world faces inflation. I am joined now by Sea Kajuria and analyst at Evercres, who just published a deep dive on not only Match but also Bumble. So, so what do you make of this new leadership and also coming from the gaming space to online dating. Is that a good thing? Well, we'll have to see. I Uh, he's done a good job at Zinga.

Matches slightly different but also similar in a lot of ways. Uh. There are two things that are good I think are one that there are some similarities between what he did at Zinga and at Match portfolio of assets and a global business, both in favor of what matches strategy is. The other thing that's good is that shar is not really leaving. She is going to be part of the board and she will be working UM as an advisor to UM to Bernard. And also it's not the CEO

change is not uh a turnaround story. It's not like Peloton where you have to rework everything. This is a functioning business. It's a strong leader in online dating and its category of global business. And he's going to come in and it's going to be business for usual at least for the near term. And then as he settled in, he will throw in his own strategy as he gets comfortable. So I don't think there will be huge turbulence in

the in the business as he comes on board. So let's talk about your new report, because you're basically saying that you think online dating and as we go through all of this market folatility using online dating is recession proof. Why, well, largely recession proof. The the beauty of UH or the challenge of being in consumer internet, is that none of our names are recession proof. Really, so they're they're certainly impacted by inflation, but when it compared to the rest

of our coverage, yes, they're largely resilient. Um And our survey shows that almost eighty percent of those who are actively looking for a relate reationship are going to use the online dating apps just as much or even more over the next call it six months to twelve months. And so that tells me that usage is not going

to change um. The second read through was that if there is inflationary pressure and there is a recession in the next six months, most of them, of our survey respondents, so that they would be willing to pay about seventeen dollars a month on average for an online dating app, and that's where we are today, So it's not that they would pay any less. Now, the question is, well, Bumble is slightly more expensive, so would that come from Bumble?

And I don't think so. I don't think that may be the case either, because Bumble has several different tail ones. So when you look at the online dating landscape and the options out there, is you know, Bumble, our Tinder, hinge Match, Are they all more or less equal in your view? Or do some stand out over others? I think some stand out over others. What our survey also

showed is that Bumble is really gaining market share. And the one of the biggest investor questions into the key one print was what where's where's the market share shift? Is it is Bumble gaining share from Tinder? Is it

something else? Our survey shows that really Tinder continues to be the leader in the market, but Bumble is gaining share from plenty of fisient e harmony, so other apps that have been around but may not be as powerful as a bumble and so in the United States, our survey shows it's Tinder as number one, Bumble as a clear number two, and Hinge is also gaining ground to

now number four, back from number seven last year. So not all apps are created equal, even though the target target market may be slightly different depending on your background or one's background. But more Match and Bumble are doing with the product is certainly superior to some of the other apps out there. Well, engagement is one thing, but

getting people to pay for it is the other. You know, which of these do you think is the best at at generating that that revenue and getting users to pay up for something that that that many of the big should be free. Yeah, the great question. All of Almost all of these are freemium models at different prices at different price points, but our survey shows that most users are willing to pay for Tender, e Harmony, Match, Bumble, and Hinge. These are the top five paid four apps.

And some of the reasons for e Harmony and matches also because of the demographics their older uh older age folks who may have greater savings and are more serious about relationship and that's where the fair conversion is slightly

greater in those apps. Um. But at the same time, on average, our survey shows it's about conversion, which maybe is a little skewed because I know that Bumble's conversion rate is slightly lower, But there's the point still holds that there's long runway for growth in terms of how many users they are that used for free and then how many the potential there is that they can convert.

And the other thing I'll add is it's not only subscription there now also adding all our card services, you get buy a feature, uh instead of just paying for a monthly subscription, and you can just pay as you go as you use more features. And that's also gaining share. So what are the the risks to the online dating sector. Well, the risk is that the reopening across geographies is not

the same. So for example, Japan is number two market for Match and that has been very slow in terms of seeing the reopening and people actually meeting in person, and that has been a drag on their growth rate. Because uh, Bumble pairs and pump Pairs and Tender are both really big in Japan. So one of the biggest risk is is the is the reopening curve across different geographies.

The second risk is that not all demographics are the same, and so if there is inflationary pressure, it is possible that some apps may lose share over others um and that will be the question of which once people decide a compete versus let's go Alright Cajuria, analyst at ever Core, thanks so much. What to time now for our crypto report and Bitcoin higher for a fourth day, the big bouncing back above thirty dollars and then some as it recovers from a sharp decline in the past three weeks.

But it is still down in May. Our crypto contributor Snale bossi here with more so Shanale. When you look at the broader equities picture, we're kind of back where we started here at the end of May, but with Bitcoin still significantly down. Yes, what goes around keeps going around, Emily,

it goes around and around. So when we talk about bitcoin here, yeah, it's I mean the price movements here on On one hand, you have a lot of people saying, okay, it's time to build this, time to put our heads down in a down market and and really, you know, make projects that will last for long term. So what where are we? Bitcoin has really risen in the last week. It has not risen past thirty two thousand, but it

is above that thirty thousand level. We are down meaningfully on the month, as you said, about sixteen percent, while the SMP has not moved much at all. The questions moving forward will be about correlations. I also want to draw attention Emily here to Ethereum. Why because Ethereum is also down not just on the month, but on the week as well. So you have seen a divergence in

the last week between the two large cryptocurrencies. The questions moving forward here, well, how will they react in relation to each other and react to the rest of the crypto universe and in reaction to a lot of the macro environment that we've been watching so closely this month. And you know we've been talking about those venture funds. How will they deploy money in this continuously down market?

All right, Shanali, thanks much. We're gonna hear more on this from Alice Kaleen, founder managing partner at the bitcoin focused venture firm still Mark, who talked about all of this and more with my colleagues Matt Miller and Kaylee Lines. Take a listen. Bitcoin companies historically have really thrived in crypto winters. It's the time to build, it's the time to be focused on sound tech and bitcoin. Is that so? I mean, we've seen Bitcoin moving back towards the lion

share of market cap. It's so fascinating that bitcoin can be. I think right now forty five percent of the market cap of all crypto and we're talking about twenty thousand um some coins. Is this not an existential crisis for crypto, for bitcoins, for bitcoin, for bitcoin. So I think that bitcoint so Bitcoin's masscot is the honey badger. And what that represents to the community is that bitcoin as a sound tech sort of hasn't cared about what's happening around it.

It operates very independently, and in fact, that's the purpose of the protocol. Bitcoin was invented. It was emergent of two decades of work on how to build an open and fair financial system that served the underbanked and the unbanked in the same way that it served the wealthy and privileged. And so bitcoin and bitcoin builders are generally

really heads down. Now. I think something interesting that's happening today that you see reflected in the markets, in the crypto markets and in the bitcoin market as well as in the Broado macro environment, is that there's a collision

of two things. Bitcoin is cyclical, It's cycles have been historically driven by having se affect miners, and so we see about a three to four year cycle for bitcoin, which has an impact on the rest of crypto of course, But now we've also seen a macro economic downturn and bitcoin trades as a risk on asset currently. I think that over the long term that will change, but today that's the case, and so these forces are at play and how we see um what we see happening with

bitcoin's volatility. However, if we look back historically to two thousand and eight and another example of acrow a challenging macro environment, what we saw then was that new paradigms introduced by cloud and mobile were really powerful tail winds for fledgling company. Are we going to see, by the way, at least um any new way of is proof of work going to be a thing of the past, or is it still the only trustworthy way to maintain the blockchain.

Proof of work is a thing of the future, so it's it's the only trustworthy way to maintain a decentralized and fair payments and financial system. And that's that's bitcoin. But the economics of mining, economics of proof of work incentivized investment major investment in sustainable energy. We know that today the sustainable energy represents about fifty eight percent of all energy used for mining. And that's the sixty year

of your growth, So increase from Q one. Now. The fact a bitcoin mining has been able to so quickly transition to a sustainable energy source as the dominant source, I hope will be an example for other sectors to follow. At last, Colleen their founder and managing partner at still Mark, coming up the future of a cloud growth. Going to talk about how market volatility is impacting the cloud and the next big trends in cloud and software ahead with

Greylock partner Jerry Chen. This is Bloomberg. We're seeing that the market is entering valat has some volatility in different parts of the world, but technology is seen as helping organizations no address supply chain shortages of customers better get online digitally and so demand for cloud remains very strong. For US, Google Cloud chief Thomas carrying their forecasting clouds growth in the midst of chopp eat market conditions. Was certainly a banner year for cloud investing, with total VC

funding hitting fifty point three billion dollars. Our next guest has a forecast on where all that funding will go. In this week's Teconomics, I want to bring in Jerry chen Now from Graylock Partners, So Jerry share your forecast with us. Hey, I'm like, thanks for having me back. Look,

I think Tom's is right. In a volatile market and a commuracy right now, cloud actually is going to see increased boat in a market revenue rights two hundred billion run rate through all the big three or four cloud providers, but also from startups. We're seeing fifty billion plus last year in cloud investment by vcs Graylock included. But think the emphasises see going forward is a lot around two areas. Security continues to be a big deal in the cloud.

Number two cost savers. So as we see kind of this next market, governance, developer tools, data tools will all continue to grow, but really focus on how to save our customers money. So how do you think this market volatility will impact the broader cloud landscape. Obviously we heard Google Cloud CEO Thomas carry in there, but it's hard not to believe that, you know, this isn't going to

impact how big customers are spending their money. I would say big customers the music cloud grows about twenty year a year in terms of compound at a growth rate, and the big customers will continue to sped. And like I said earlier, the two or three errors are seeing around our security for sure. For example, I think we saw over seven billion dollars in VC funding go into

security startups. The big cloud customers will, can you span on security companies for example, Abnormal Security, one of the Grellic Protfoya companies, just raised a ton of money last year for email and a security number two. I think cloud customers will can you spend money on things like data? So we saw like Snowflake continues to do well in the public market, data breaks continues to do well in

the private market. But increasingly startups in the data bricks and snowplate ecosystem will be focused on how to save customers money around data costs. So I think the big three continue to grow. I think security and data and AI continue to grow, but increasingly a focus on customer spending and enterprise spending and how to reduce costs for the next two or three years would be a big focus. So how would you characterize VC sentiment? I mean we've

been hearing from vcs. You know, turl back, batten down the hatches. You know, you might have to take evaluation, haircut, you might not be able to raise your next round when you thought you would. How would you characterize your sentiment broadly? And then that sentiment when it comes to cloud. Sure, if you look at the data from I think Carter and pitch Book and the other data sets out there,

Series A valuation, you're down from the year ago. I think Series C, Serie D financing valuation, you're down from a year ago. And for sure, we're seeing a tightening

of the venture market towards a bunch of ideas. But I would say my personal sentiment, graylock sentiment, and the center of our companies here is Look, if you have a distinct value add like a hard return on investment for a cloud company, and that is emily either securing the company through like security products, firewall products, UM, improving the digital business of the business of the company like AI or a machine learning to help transform transform the business,

or three saving your customers money. So if you can reduce cloud spend, reduced storage spend, reduce data spend as a startup, you can have a hard or a I and you're actually gonna pop to the top of a CIOs wish list. So it's saying, in the past two or three years, we've seen a lot of great ideas thrown out there, but in the next two years, we're gonna see a fewer. Your company's really focus on UM,

saving money, improving the digital economy. Because if you're doing wellness market show really hard r o I, Emily, you're gonna get more budget and more awareness from your customers. So I think you're seeing a separation the market. The great companies will get more of the customer said, and the tier two tier three companies will struggle to raise because they don't have a real hard r o I

for the customers. So we're saying, look, would you say that trend also extends to hiring and and and layoffs to me, because we've seen hiring freezes and and layoffs kind of across the board. Yeah, I think a lot of companies are looking at their burn rates and realizing that their economics were just upside down, right, So hey, the burn rage not sustainable. Uh. Where the capital markets are right now aren't guaranteed they're gonna raise either up

valuation or even flat valuation. So we're seeing a lot of companies say, hey, I'd rather be uh slightly conservative, save my money from the next not one year runway, but two years of runway until the capital markets and vendroom markets get a little bit more predictable, because I think just like public stock market hates anscertainty, the private

markets around vendroom companies and startups also hate anserdity. So until we have a lot more aberdainity of what like the Series B, Serious C, Series D Financis look like, you know, a lot of startups are gonna be a little more conservative. But that said, if there's a good r o I on their spend on sales and market emily, they're gonna continue. Higher sales, reps, continue higher engineers, the good comes to do well. But I think we just

need a little more clarity where the markets going. Jerry Chen, Great Luck Partners, Great to have you back with us. Jerry, thanks for giving us a view on the cloud ahead. And that does it for this edition of Bloomberg Technology will be right back here tomorrow. I'll be joined by Resta Show, Johnny founder of Girls Who Code, and David Kirkpatrick to talk about that new Supreme Court ruling on the Texas social media law. That's tomorrow. This is Bloomerk. Keep the sat N