From Mahard where Innovation, Money and power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline heih and a Bloomberg's Wilde Quarters in New York, and I'm Ed Ludlow in San Francisco.
This is Bloomberg Technology coming up.
SpaceX targets well one hundred and seventy five billion dollar valuation or more as the most valuable US startup, discussed as a tender offer of its insiders' shares.
We'll bring you the details.
An AMD takes on chip rival when video as the company introduces its long awaited line of AI accelerators. We'll discuss and I'll bring you my conversation with AMD CEO Lisa sou LUs.
After twenty four hours street of talks on AI rules, the EU negotiators remain divided on a plan to adopt the most comprehensive regulation for the technology in the Western world. We're bringing the latest on the situation out of Brussels, but first let scale up to speed with the situation
on these markets. Because AI exuberance is back. We'll dig into the whys why Alphabet's rising on the back of the Gemini launched Why AMD of course is rising on the back of its AIDA and we see the Nasdaq up one and a quarter of a percent, even though we see bonds actually sell off in yields pushing up just about two basis points.
Have we baked in.
Too much of a douvishness around the world when it comes to central banks the BOJ perhaps realigning our viewpoints on that, and indeed that's why we're seeing the dollar falling versus the Japanese YenS. Maybe the BOJ isn't going to be as dovish has have been anticipated. Moving on, what's happening in the world of the US dollar vers
there's some other key currencies or assets. I'm looking at what's happening in the world of crypto and well Bitcoin overall we have seen managing to above that forty two thousand out forty three thousand, six hundred and forty eight versus a US dollar. We're down by some four tens percent.
No big shakes in the world of crypto, even though, of course we're still reading from the Jamie Diamond comments of yesterday ed where he said if he had the control, he'd shut it down, But you've got some big thoughts on some privately held companies.
Yeah, we don't often start with a private market piece of news, but this is a big piece of news. SpaceX doing another tender offer, according to our sources. I reported this last night with Jillian Tan and Katie Ruth based on the volume of shares that are currently on the table, and these are employee shares that are being sold to outside investors. It's not SpaceX raising money or issuing new equity. The valuation jumps from one hundred and
fifty billion to one hundred and seventy five billion. The trajectory of this company is astonishing. I think we have a chart that basically shows how incrementally but rapid the valuation has jumped from twenty twenty to current right. We report on this so frequently. A big rationale, of course, behind the tender offer is to give long serving or suffering staff a chance to make some money for their work. I want to get some more of the details. Bring
in Bloomboth, Katie Ruth. Katie, you and I have been reporting on so many of these rounds, both primary and secondary secondary in this case for a while. What are the numbers behind this latest tender.
Yes, so we're hearing they expect to price this tender at ninety five dollars a share, which would value the company at approximately one hundred and seventy five billion, making it the largest private company in the US. This is up from one hundred and fifty billion earlier this year that we reported, and at the very beginning of the
year it was one hundred and thirty seven billions. So it is defying the odds, defining the market at a time when so many companies there trouble, having trouble maintaining their unicorn status. This is the center cores that keeps growing.
It is well said, and when you put it is a v the rest of the public markets. Well, it's on the same sort of market capitalization as a Nike, for example.
Be get them Boeing.
I'm interested is to ultimately what investors want in on when it comes to SpaceX, is it just its domination within the space in the field? Is it also still wanting a little bit of Well, Mass is a founder, even though he of course has spoked concerns with all the publicly traded companies of his because of his use is X for example.
Sure, he's absolutely controversial, but my understanding is that investors are excited about starlink. That is the internet, high speed Internet that can be available and normally hard to reach places. There are investors that have spoken to me about with such enthusiasm for Starlink that they're dreaming that someday it will be a trillion dollar company. Of course, time we'll see, you know, if it really becomes that, but that is
what such much of the hype is around SpaceX. We've also reported that the company eventually plans to spin off Starlink and do a separate IPO with Starlink, and so investors are trying to get in on that.
We keep our eyes on all of these private market valuations, Katie, alongside, of course Gina Internet.
It was brilliant scop that came.
Out yesterday, and I know we'll still have all eyes on ultimately the business model of SpaceX and indeed a conversational space more broadly, because there's means some great importing coming time and time again from Lauren Grush at Bloomberg, with really the focus being on how SpaceX could just eat everyone's lunch when it comes to the ability on an economic basis to get satellites.
And other options.
Into low orbit. Of how are we seeing them just make strides at the moment, Lauren.
Well, I think the open question is what's going to happen when their really ambitious, colossal Starship rocket comes online, because it can carry more capacity to space than pretty much anyone has the capability to do right now, and if you're looking at the current launch market, it's a
capacity constrained market. Really the only option for satellite operators is SpaceX's other workhorse rocket, the Falcon nine rocket, and just because other rockets have come offline in recent years and others that are trying to be developed right now have suffered from delays, so there really is only an option for satellite operators, and so to compete with the Falcon nine, other companies have pivoted trying to build larger rockets.
But it's just an open question of what's going to happen when Starship starts flying because it has a lot of promise, that's a very low price tag and very high flight rates, So it remains to be seen how that's going to impact everyone.
I love your writing, you know, I love your writing, but the way that you talk about Starship, the next generation launch. Starship's audacious size and scale. It's not just audacious because it's like bigger than anything that's gone before. The technology is also kind of at the cutting edge. Just explain what you outline in today's beautifully written piece, right.
So, there are a few things that make Starship kind of this game chader.
It's supposed to be fully reusable.
You know, the Falcon nine is reusable, but only partially reusable. But with Starship, they really want to bring back every single.
Piece of that rocket.
And then also there's promise of launching it, you know, multiple times a day because it's reusable, and so that would you know, Elon has kind of come up with a price tag of roughly ten million dollars per flight. Obviously, there's a lot of skepticism of whether that can actually be achieved, and in order to achieve it, you really have to get those ambitious flight rates that they're talking about. So there's a lot of promise, a lot that's being advertised.
But if they can bring down the costs like they are promising, then that could be a game changer for satellite operators who maybe just want to get their satellite to space, and so they'll pack it in with maybe hundreds of other satellites on a Starship launch and you know, have maybe space tugs take them where they need to go in orbit.
What's next?
You know, you and I got really excited about Starship Attempt number two came and went to SpaceX's mind, massive success.
That's what happens next?
Well, we they actually need to reach orbital speeds. So while they did make quite a bit of progress on their second flight, you know, they were able to show stage separation, they were able to have all of their engines on Starhip operates as they were supposed to that didn't happen on the first flight. They really do need to get Starships to those near orbital speeds to prove
that it can actually reach orbit. And then there's other you know, there's a very long laundry list of items that they need to achieve to make it the deep space vehicle.
That they want it to be.
For instance, they'll have to show that they can fuel up Starship in orbit so that it can reach deep space destinations like the Moon. But once they reach those orbital speeds, you know, then they could potentially start launching satellites, you know, Starlink satellites and customer satellites. Like they've promised, there's still quite other things to do to make it fully reusable, right, They're going to have to show that they can land it back on Earth in one piece
and then fuel it up and fly again. But just getting to orbit will be a bit of a game changer for Starship, and it'll see how it impacts the industry.
Bloomberg's Lauren Grush.
It's just been great to have a dedicated space Beat reporter Caro, because it's such a massive industry now but only a small heart of Elon Musk Inc. Which is why I think we better talk about GROC. You've seen the news that if you are an ex the company or platform for me known as Twitter Premium subscriber, you now should have access to GROC. I've been trying through the app and like deleting, reinstalling. I don't have it yet. But this is the awaited chatbot.
It is, and of course we know that it's meant to be rebellious, humorous of course, and he's been beefing up a team of well known prestigious scientists and academics to be able to be building this basically take on of open Ai, which he himself co founded.
Is notable that, of.
Course, it comes on the same week that the SEC filing showed that maybe Xai is going to be raising money. Elon himself said, look, we're not doing it in the here and now, but we do know that ultimately they want about a billion dollars because this stuff is expensive if you want to be able to have.
But one billion doesn't even seem like that much money. No, do what everyone else has raised.
I don't get it.
Well, it's going to be what twenty five percent of ultimate xai is going to be held by outside investors. So does that mean that the rest of the money is going be coming from immediate revenue generation? Is it more that Elon Musk himself is going to be financing it and its growth going forward. I mean, initially open Ai, of course was the non profit version, and then he left it, and he's criticized since open ai has become
a profit focused business. But he himself, I'm assuming, is going to be focusing on a profitable Xai and driving subscriptions as x even I wonder if that's really going to be the key aim here.
Yeah, what I'm hearing is there's like a big push to high talent, and talent's expensive and computers expensive, so they need some money.
Meanwhile, look as we talk about Elon Inc. We've got to stick with more of Elon Musk and tending to actually a bit of a more sensitive issue right now.
Ed because of course he is as a CEO, he's the owner of X, and he's actually escalating his public criticism of one Bob Iger, saying that the Disney CEO quote should be fired immediately, saying that on the platform X. Musk also referenced a new Mexico lawsuit alleging content from Facebook and Instagram parent company Meta enabled check child sexual abuse and trafficking, and asked why there was no advertise a boycott on.
That set of apps.
The comments come after Disney along with other companies, of course, Paul spending on X after Musk endorsed anti semitic remarks on the site. From New York, from San Francisco, this is Blue Meg Technology.
AMD is throwing its hat in the ring and going after the AI market with new accelerated chips that says it will be able to run AI software faster than rival products, including in videos. I sat down with amdco Lisa Sue at the launch event yesterday.
Have a listen.
If you look at training performance, we're very very competitive, let's call it. You know, it's a toss up. When you look at inferenced performance, we're one point four to one point six times better.
And you know what that means is, you.
Know, if you're running these models, you can actually run more models, or you can run larger models. You know, with MI I three hundred and right now, you know the key to AI is GPU compute. I mean that is absolutely what everybody says, and so we're here to provide lots of GPU compute.
You've had the confidence to dramatically alter your your forecast for this market for AI accelerators. You're saying a total addressable market of four hundred billion US dollars in twenty twenty seven. In August, just in August, you said it was one hundred and fifty billion.
What has changed.
Yeah, And you know, really, the way we.
Look at these things is we usually look at these things on an annual basis, and so you know, when we were, you know, doing our plan for twenty twenty three and beyond last year. We thought that you know, this year there would be about a thirty billion dollar market and it would grow, you know, fifty percent compound annual growth rates, so be about one hundred and fifty billion in twenty twenty seven, which frankly was very, very large. But what's changed is we can all see what's changed, right.
People need more compute. They're installing more. The numbers for this year are probably closer to forty five billion. And when we talk to customers, when I spend time with our partners, and you know, what they.
Tell us is the technology.
Requires more compute. And so we now believe the total market for this it's upwards of four hundred billion and twenty twenty seven. It's huge. There's no one size fits all. They're going to be multiple solutions. There are lots of good solutions out there today, but we believe the AMD capability is very significant and so we're excited about it.
It was interesting to see on stage how MI I three hundred x manifests itself in the real world, but you'd already guided us that it will likely be the quickest AMD product to one billion dollars. There were sections of the market in the street that said your forecast of two billion dollars of sales for MI I three
hundred x in twenty four was conservative. If you're saying that the total addressable market by twenty twenty seven is now four hundred billion, then is that two billion forecasts for next year specifically form I three hundred.
X conservative as the market thinks it is.
Well, I think you'll have to take a step back and just look at how this technology is evolving. So, you know, we did update in our last conference call to an expectation about two billion in twenty twenty four for our data center GPUs. It's a very early estimate, I would say, you know, we have clear line of sight to that. But you know, what people ask me is like there's much more customer demand, definitely, and there's also significantly more supply because we've had to prepare the
supply chain so that we're ready to ramp. So we'll update as we go along. You know, we are, you know, definitely on this path to rampm I three hundred the fastest is anything's ever ramped at AMD, and you know, I view this as a multi year opportunity for US.
Some breaking news and headlines crossing the Bloomberg terminal. Tesler has how to reshuffle on its Dojo project. The former Dojo chief Ganesh ven Kataramanan has left the company. Sources have told me and Bloomberg's Mark German that he left Tesla last month and has been replaced by Peter Bannon, a former Apple executive. He's been at Tesla for around seven years and now takes over leadership of the Dojo projects. Venkataramanan's interesting. He's set up the AI hardware in Silicon
group at Tesla more than seven years ago. He is the person behind the Dojo supercomputer, but also the D one chip, the proprietary silicon that is powering the training of video based data for autonomous driving software at Tesla. An important change there at that company.
Carac important because it's about AI supercomputer future. The reason many believe that Tesla's market capitalization is any where it should be because.
Of its focus on AI.
And let's get back to the AI conversation for a moment, because we just were listening to your great interview with Lissa Sewer of AMD and we want to get onto that a little bit. With Mande saying from Bloomberg Intelligence and your read of ultimately the competitive space here and an enormous market opportunity for her red billion. We're just hearing from Lisa su and how are they going to get enough of that market share?
Yeah, and I think one of the key distinctions that Lisa who highlighted was they're focus on inferencing as opposed to training. So we know right now all the GPU capacity was being used for training these large sangreage models. The fact that she's betting that inferencing will really pick up from this point on is a sign that you're probably going to see more copilots, more chat pots being deployed.
We haven't seen that yet. I mean, look at the monthly active users for you know, GitHub Copilot or the bard chatbot and all these things. So really it's a big bed on inferencing taking off, but right now the market is concentrated on training and that's where Nvidia still has the upper hand.
And look, the exuberance is there of these things being deployed and enterprise, we just look at Gemini and impact that's having on alphabet shaf price today. Unfortunately, all this breaking news, we can't dig into that a bit more with you, but mandeps saying always on the money when it comes to analysis from Bloomberg Intelligence.
Okay, time for talking tech and first Up. Montenegro plans to extradite disgrace crypto tycoon Do Qwon to the US to face criminal charges that according to a Wall Street Journal report citing sources, the terraformer Labs co founder has been jailed in the Balkan country since March and has been denied committing fraud and has denied committing fraud following the crash of that stable coin terror usd In, Apple's senior executive overseeing touchscreen technology, health censors and the company's
face ID interface, is leaving the company, according to Bloomberg's sources. And finally, November was another banner month for online marketplace Timu, following this year's Black Friday sales sales and the Chinese platform jumped twenty nine percent from a month ago to a new record almost triple shanes observed sales in the country. That all, according to Bloomberg Data, Caroline, We've got.
To stick on the resilience of the consumer right now, particularly when it comes not just retail and fashion, her makeup as well, and Glossy Aco k Leahy is with us and peace are saying more than one year into the job and a brand that isn't just perhaps makeup as we might think it, it's fragrances too.
I'm seeing candles.
You're broadening, but you've also not just gone direct to consumer anymore. You're now in Sephora one hundred million run right for that first year.
Is that still where it stands?
Yeah, so it's been well. First of all, thank you for having me. Nice to be here, and you know, Glassie is such an incredible brand to your point, beyond transcendent of just beauty for multi category makeup, skincare, fragrance, body, merch and we really do connect with a multi generational consumer that has a deep emotional connection and I think is very very powerful.
And we've been.
Really building over the last two years the foundation and scale to match build a business that really matches the
power of this brand. We have fifty one percent brand awareness and yet less one percent market share, so incredible opportunity to connect the size and scale of our business with the size and scale of our brand, and we are now seeing that come to life at record revenue levels for Glossier and two years of consecutive growth, and to your point, our launch at Sephora has been hugely successful for us, on track to pass one hundred million in sales, and yet still.
Is the smaller piece of our business.
We do more of our business in our owned channels, so it really is a powerful omni channel strategy.
How do you think about that in terms of any cannibalization whatsoever? Or really have you just seen sales wise across the board no matter which particular point of Selle you're doing it?
A yeah?
I mean our strategy at its heart is how do we take this amazing brand that connects emotionally with consumers through our products and our experiences and then bringing it to life across an omnichannel strategy which is really about bringing more Glossier to more people, and that is about putting a customer at the center and celebrating to your point, the ecosystem.
Or of where she can shop.
So for us, it was really leaning into DTC, which is our founding. We are very much a pioneer of bringing D two C beauty online in the D two C model ten years ago, and d t C continues to be an important part of our business, but the customers evolved and the marketplace has evolved, and our strategy needed to evolve and brands endure. But as strategies evolved, our channel strategy could evolve. So we replatformed and redesigned our site onto Shopify to continue to make sure we
could lead with direct to consumer and social commerce. We've also opened up our own stores. We now have eleven stores, ten in the US and one in London that our experience centers for us, but also four wall profitable. And then we launched in Sephora as kind of the third leg of that stool, largely because our customers told us
they wanted us there. We were the number one brand searched on sephora dot com before we joined them as a strategic partner and now have been able to launch into six hundred and fifty locations across North America and seeing really exciting.
Success across categories.
Fragrance our perfume is the number one fragrance at Sephora, but skincare and makeup, and really the power of this brand from a really multi category standpoint.
And the power of the brand was already built through social How do you navigate as a lead to some of the politicalization within the social world as well.
We've got you have a presence on X. Are you advertising on X?
Do you think about the way in which you allocate your add dollars to social media companies that are getting more and more concerns built around them.
We are, at our heart a community driven brand, and I think Glassier really was a pioneer at bringing the integration of social community, commerce online and really foray into
how we think about brands integrating socially. And we did remain very connected to our community through social listening on platforms like Instagram and on TikTok where we see incredible resonance, and then we do things like Glassier Labs, or we bring our customers in and have a lot of deep connection with focus groups around how we can stay really connected to our customer and their insights and be fueled by our community and stay really customer focused and customer empathetic,
and how we're thinking about driving our brand go forward.
So you remain advertising on a platform like X or no, we do not advertise on X. Okay, That's what I think what's fascinating is to learn about the growth story and indeed continuing to grow internationally as well.
Glossi A CEO Carle We wish we had more time.
Welcome back to Bluemog Technology and Caroline Hei in New.
York and I Meed Lovelow in San Francisco. There is so much breaking news happening this morning that's driving markets.
AI is a big part of that.
One earning that we haven't discussed yet is C three n AI missing on revenue estimates. The outlook not what the market wanted to hear. That stockdown almost eleven percent is a consequence we heard from AMD's Lisa Sue earlier in the show about their new AI accelerated the I three hundred x. What's so weird is Wednesday, during the event, the stock was actually lower.
So is Nvidia today.
AMD up eight point four percent, and you know the fighting talk is there. The bit the analysts like is during that presentation, AMD told us who their customers are going to use.
Three hundred x.
Meta is going to use three hundred x in its data centers. That's what a lot of the cell side is saying driving the stock today. But in Vidia also higher because Caro AMD said this market is going to absolutely balloon to four hundred billion dollars in twenty twenty seven, just for AI accelerators. For context, the entire global semi industry last year was five hundred billion. So AI is going to be just as big in just a few years time.
And mooy is AI going to disrupt the world of work and the way in which we work.
Let's just talk about that for a moment.
In terms of whether you're doing hybrid work or not, let's talk about workspaces provided IWG might think of we work as one brand. While IWG has readiers, it has spaces, and it's just been holding its invested ate this week here in America, company announcing it plans to resume regular dividends for more. We welcome to the show, IWG CEO
Mark Dixon. And what is it like at the moment demand for hybrid work for those sorts of office spaces that you have at the moment, Well, a few companies kind of want their people back in person world.
Look for us, the demands very high, and that's because we're providing workplaces not just in large cities in metropolis is around the world, but in lots of smaller towns. So about eighty five percent about growth these days, and we're growing, for example, in the US at about a fifty percent growth rate. It's all in the province, it's all in rural locations. That's where workers are migrating to. So the world of work is changing.
It's changing very rapidly as all investor base gravitating.
To America as well.
How do you see if you've got such a growth rate here in America, what's that compared to in the UK, where you come from, and what does the investor base end up breaking.
Down at well.
US investors are about fifteen percent of our shareholder base at the moment, but we expect it to grow much more significantly. We've talked to investors this week about changing to dollars that will happen in January, and we're also reviewing a move to US game that we think will clarify in numbers, and we're focusing much more on investor days and road shows here in the US. Sixty five percent of our business profits are coming from the United States today and the most growth, So it makes sense.
To be here.
Mark, there is an AI story here and I know because I've seen it in San Francisco in particular shared office space and kind of hybrid working has seen lots of little startups, two or three founders take some space, one room, a meeting room to try and get their company off the ground. I wondered, if it's happening outside of San Francisco, if there's a tangible impact on your business from AI around the world.
Well, there absolutely there's a tangible impact on a business from really two directions. So first of all, the sort of change in workplace is being driven by technology, basic technology, the Internet, teams, Zoom, etc. But also increasingly by AI supplemented and driven platforms that allow companies to much better
manage productivity in their workforce. So we're seeing that come into the workplace now, and we're also seeing large numbers of startups, and alongside layoffs and redundancies around the world and in some parts of America, you're seeing a lot more startups. And we're seeing those come through not necessarily in downtown San Francisco, but all across the Bay and in the suburbs all over California.
And I just want to explain to our audience it was a rejiss space that I visited recently as part of the documentary that I'm making where I witnessed this phenomenon, so you know I've seen it. What is the biggest driver technologically speaking of people not to take off office space? In other words, are you still seeing people kind of rely on Zoom technology for example, to work at home and how much does that worry you still?
Well, it's sort of.
It's quite good for us.
We have about seven hundred thousand customers today individuals that are working from home, so it's quite a big part of our business. And all of these people working from home using Zoom or teams or whatever are all dropping into and office some of the time, so that is become an increasingly significant part of the business. So hybrid working is becoming the norm. It's going to be a
very very significant business in the future. We've said this week to investors about a two trillion TAM and it's growing every day as a result of technology and as a result of companies like ours that put a technology platform together with a real estate platform and make it available with simple and easy to buy products. That's what's driving growth.
You're going to list here.
Maybe at some point, but at the moment, it's really we're so focused on growth. We put out a medium term target of a billion dollars of EBITDAR and our cash flow is very close to EBITDAR, so we're focused on that. The movement of the listing from London to another market is it's a consideration and we're always focused on what's best for our investors. So a larger investor base here in in the United States it may be expedient to actually move the listing.
Fascinating Mark Dixon, come back when you talk to your American investors, love having you here, of course, very well known entrepreneur in the UK and talking much more here across the Atlantic.
Ed.
Yeah, well, a top story over in Europe. And meanwhile in Brussels in particular, you know, EU negotiators remain divided on a plan to adopt the most comprehensive regulation for AI technology in the Western world. They debated it for nearly twenty four hours, sitting through it, Bloombergs, Gulianduys.
She joined us now from Brussels. The stakes are high here.
And they've really not made any progress on a codified EU wide AI position.
No, it's been interesting.
I mean last night I was talking to us in Caroline that it was going to be Elite one, but I had no idea it would be negotiations that spend over nearly twenty four hours and we still don't have a final deal. By the time talks wrapped up today around one pm, we had some officials even falling asleep at their desks, so we had, you know, people said, okay, it's time to take a break, time to get some sleep on their pre grouping.
Come back tomorrow at NINEI and Brussels time.
Let's just talk about the stumbling blocks here, because what I was interested to see in your reporting was that actually generative AI and the regulation of that seems to have perhaps been an area that they can agree on. It seems to be other areas that they're still stumbling over.
Absolutely.
So they cleared one major hurdle around two am this morning, and that was really done in this generally that generative A controls question, and there they basically decided, okay, there'll be some basic transparency requirements for the developers of these AI systems, and then those are posed a systemic risk, they'll have to send under codes of conduct. But once they cleared that kind of controversial debate, they moved on to one.
That's even more contentious here.
In Brussels because before the Journal of AIA debate really kicked off here there was this big debate over how governments and how police use AI in law enforcement in national security.
We forget sometimes that the EU is four hundred and fifty million people, A big chunk of our Bloomberg technology audience is there, and that's why we frame it is this is a critical piece of global regulation.
What's the procedure though?
Who are the people that actually decide the fate of those four hundred and fifty million in terms of how AI is regulated on their behalf?
So it's a quite complicated system.
But you do have European parliaments where you've got at least two lead authors and many shadow uppert tours from different parties.
You also have Spaniards.
Were leading all U twenty seven member seats, and then you have European Commission, and I want to want to remind everyone that everyone has very different views on this topic. You know the Parliament in the spring they voted to completely ban the live facial scanning technology, so you couldn't have governments or police using CTV cameras to scan crowds to find possible criminals. That is absolutely a red line
for you countries. But what's going to be very interesting to see tomorrow when they regroup is that even members within the same parliament group they had to always agree on this topic either. So it's going to be I'd be very surprised if you walk in tomorrow and these negotiators come in and they's agreed to this new compromise.
At nine am, Jillian, it's been a long old week for you, but we really appreciate you setting up late over there, and Russells frows most Jillian Deutsch with just some great expertise across the readia to showing spectrum.
They're coming up.
We've got a great conversation with Initialized Capital.
It's got a new partner.
We're going to be discussing just what Jennie Ferly springs to the company. Of course, serial entrepreneur in our own right from here.
In New York.
This is putting their technology well.
Known VC Initialized Capital.
It's got a new team member, Jenny Flyes, co founder of course and rent the runway Walmart subsidiary Jet Black. She's joining Initialized as a partner as with us now for more on well as a New Yorker making the move into seed investing to really like startup investing. What was it that was so attractive about Initialized in particular.
Well, Initialized really sets the standard for seed and this is an exciting time to be a seed I mean, you have so much evolving in the world with AI just accelerating the pace of innovation, and to work hand in hand collaboratively. The way that Initialized does with founders is just so true to my operational and entrepreneurial nature.
Let's talk about some of the background you've already had in terms of helping mentor but also putting money into startups.
How much of that is occurring in New York? How much of it is it covering across the US?
Where do you think your speaks what will lie when it comes to I'm sure e commerce, but more broadly your bucks to put to work.
Yeah, it's a really exciting time in New York. And I'm thrilled that Initialized has an office and part of its team here. That was a really big plus for me.
But when I think back to when we co founded Rent the Runway fourteen years ago, there were very few startups in New York and today, if I think of my roster of Angel investments and I look at Initialized portfolios, like there is a great group here so organically that's driving innovation in New York, and I am really glad to complement that with the YC sanfran ecosystem that Initialized has.
So I think our two networks pulled together, as well as the diverse backgrounds of the existing investing team and my background, We'll just let us work with so many great founders and companies.
Jenny, good morning from San Francisco.
I'm obsessed to this idea that not all vcs are the same.
You get different types.
Some have been founders, some have not, Some have come from sort of legacy financial institutions, some have been engineers software companies. You're a founder, and I wonder how that helps you make investment decisions.
Yeah, well, it's a really important important part of how I make investment decisions. My lens as an entrepreneur really let me see how to work with investors in a way that felt helpful and organic. And I was lucky to have a team of former entrepreneurs and operators myself, and it gave me a sense of how I could relate to the aspects of entrepreneurship and a founder that
I think are game changing for picking winning investments. And very unique to Initialized is the whole investment team is former founders, operators, builders from lots of different industries and that is so special and unique and it's really what made me feel at home when I got to know the team. I have met hundreds of vcs over the course of my career, and their approach to Initialize is very unique. And when you look at adventure, not much has actually changed in how venture is done, and yet
the world around us has changed so much. And for Initialize, it's like there isn't a playbook. It's like they're creating their own playbook of what works based on their experience as entrepreneurs, founders, and operators. And that's exciting to me. That's fast paced and entrepreneurial and feels comfortable to me.
Right, Like, even with the playbook, there's a lot of choice though, Right, So you're doing seed, but you're doing seed across such a broad range of categories. Is there one particular area that you're really excited about thematically that you think you'll write a lot of checks too.
Yeah, I'm excited about a lot of areas, which is why I love that initialized as a generalist fund and I'll have a lot of room to play. But to call out a couple of things that are really exciting right now.
AI accessibility.
So obviously AI has already transformed our world and is still evolving so quickly each day, but we're getting to a place where it's starting to become more accessible to consumers and also to larger companies as we think of b towam be plugins and solutions that combine AI and agents and hit that sweet spot of efficacy, efficiency, and also trust. I'm also really excited about ways that personalization are evolving, one to one personalization with the help of AI.
And I continue to be such a fan of just asset utilization, so you know, Rent the Runway being one example, but so many businesses that are finding more creative ways to use their assets and service customers in a smarter way. Is I think, changing consumer behavior. It's what it's all about at the core of what gets me excited.
What's so interesting, Well, the story of Rent the Runway, I think for me, was the day that the bell was rung and just all the leadership being women. What stood out in the Initialized announcement was just how much diversity there is at.
A VC like that.
What would eighty percent of partners basically being women. I'm interested as to whether that has to be something that's organic, because the choosing the best talent, whether it's really driven and motivating fools, is something that you'll look to when you're allocating tools, maybe douve as founders.
Yeah, I'm so proud and thrilled that I am with a company that has eighty percent of our investment team female. It wasn't a requirement of mine, nor do I believe it was a requirement for Initialized. You know, they optimize for the best talent, for founders and for the right
fit to complement their team. But naturally that is what organically came about and for me at the course of my career likewise, it's really been that way for rent the runway at Jet Black and Walmart, the teams I worked with were always largely women, and I think the perspective that you can bring an advantage point when you connect to different groups of consumers is so powerful and Initialized.
There's diversity in so many ways, like age, male, female, different ethnicities, and all of that I think makes us best equipped to think of industry disruption and ways to connect with different types of founders.
When we think of disruption, we think actually, sort of the pressure that rent in the runway is still on the when it look at a market capitalization perspective, when you think of just E commace more broadly, I've talked to many vcs, So just saying I'm not touching consumer stuff with a bodge pole at the moment, is that something you agree with or actually, do you need to still see the opportunity in a consumer that still is pretty resilient in the US right now.
I think it's an exciting moment to be contrarian in that category. So I'm still really excited about innovation in the consumer landscape. You know, valuations for a while or very exaggerated, and I think that's come back to a place that's much more healthy.
And then there's been a.
Lot of macro factors that have made it easier for various companies to launch consumer businesses and brands. So it's meant that there's a lot more clutter and breaking through the noise was harder, and cost of customer acquisition went up. But now I think you are able to start to see some companies that can break through that, and so, of course consumers still want exciting new brands to engage with.
I'd say, in particular, what gets me excited is brands that spark experiential components of that pull on our heartstrings and touch different experiences we have in our life. Because the Internet has made things so commoditized, we can buy things cheap, we can get it quickly, we can find almost anything, and so injecting that a sense of personalization and that essence of experiential thoughtfulness like that, to me, is where it's at as I think of this next generation of consumer brands.
Jenny, one mistake that you made or lesson you learned through the rent the Wrong Way experience, and you're still on the board.
But what's a piece of advice that you give based on that?
Gosh, well, I feel lucky to have made lots of mistakes over the course of my career because that's how we learn, right, especially as entrepreneurs. You Know, something that always sticks in my mind is when we were first starting the business, we didn't have a fashion background or a technology background. And I'd say, with regards to fashion,
we quickly scaled that learning curve. We had a lot of conversations and got to meet people in all parts of the industry, but related to technology, we were much more intimidated by the fact that we weren't engineers ourselves, and we thought we could outsource that part of the business.
And the reality is that anything mission critical of the company, you really can't outsource, right, and you need to find ways to at least probe and ask the questions or have eyes on whatever is happening, you know, day to day. And so we learned that lesson, luckily, like pretty quickly. And I don't think it, you know, took us, it
took us too far off course. But it's also part of what made me really excited to be INITIALIZED, because there's former engineers that are investors at this company, and so their ability to connect with founders and different companies that are so far afield from what my natural skill set and comfort zone is really lets me build this nice complementary skill set and base of companies to connect with.
Jenny flies Initialized Capital partner as of today.
Thank you for your time. This, thank you, It's Bloomberg Technology.
After congressional hearing on anti Semitism. Social media has been talking at NonStop about the presidents of Harvard University, University of Pennsylvania MIT, and now many of those presidents, well, they're having to issue statements clarifying their responses here to provide more context bloombds Janet Lauren and ultimately this is a backlash about the way in which they answered certain questions.
My question is what happens next, because there's a lot of echo chambers going on on the internet saying they're going to have to hand in their resignations.
What do you make to that.
Well, as we know, universities don't move as lightning fast as a public company. For example, if that happened to a public company CEO, you would have had an immediate indication in stock price. So the question is what are the boards talking about right now? They're definitely hearing from alumni, they're hearing from politicians, including Pennsylvania's governor also weighed in as well as congressmen in Massachusetts, both Harvard alums and Democrats.
So it is both sides that were not thrilled with what happened at this hearing. But what is the support of the facult We're not sure what is going to happen going forward. We know there's a regularly scheduled pen luncheon going on right now. Maybe we'll hear something afterwards. It may be presidents, it may be boards members or the boards of trustees, but we'll have to see what happens. But we do know in hearing from the students, it also worth in Washington, they don't feel safe, they don't
feel like there's a safe environment going on. Classes are being disrupted, there's marches going on, So there's an impetus for leadership to address these issues. Is it acceptable for campus classrooms to be disrupted? And the word entifata, what does that mean? Well, if it were used in other context, the definition, what happens to those students.
It's a question that is being asked loudly by many an alum who happens to work in the technology field. So it's one that we want to address with you, and we'll invite you back as well to continue as the story unfolds. Thank you so much done at Lauren, of course, some amazing report and going on the ramifications of that congressional hearing. Aid Meanwhile, that does it for this edition of Bloombog Technology.
Yep, another jam pack Thursday, so much recap on our podcast. Big thanks to everyone that is checking out the podcast. We're on Apple, Spotify, iHeart, and of course on the Bloomberg platforms. From San Francisco and over in New York City. This is Bloomberg Technology.