From Mahart where Innovation, money and power Collie in Silicon Vallet Nbon.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Hyde at Bloomberg's World head quarters in New York and Ourmed Ludlow in San Francisco.
This is Bloomberg Technology.
Coming up from private markets to public.
We have got you covered data Bricks raising funds at are forty three billion dollar valuation, while instacart and of course it's filed for its IPO details ahead.
Class Apple revamping the iPad pro for the first time in half a decade. We'll have more on the iPhone makers plans to spark growth for the tablet market.
And SpaceX's Dragons successfully docks with the International Space Station, marking its seventh human spaceflight mission to the ISS.
But what's next EEno Musk's.
Company will discuss, but first as checking on these public markets and they're here. And then now the volumes are still thin. It's the end of August. We're down about twenty five percent, but remember how far we've actually fallen the Mange benchmarks in fact, and that's that on course for its worst month since well the beginning of the year, we're down about four percent. Today we're just ebbed a
little bit higher, up about four tens percent. But as I say, low volumes at the moment, the two year yields stabilizing. We're just down by about one basis point, but still above that five percentage point level. How fast we have run up in terms of those borrowing costs.
Now, of course, all.
Eyes and what China is trying to do to stoke its economy at the moment, and it managed to fizzle out a little bit in terms of Chinese trading. They put some emphasis in trying to support the economy, and we are seeing that pull over a little bit into some of those Chinese names that are traded here in the United States. But again it has fallen off hard over the last few training days. Today we stabilize and
the now's that golden dragon. I'm seeing up more than two percentage points some of those internet names traded here. Let's move on, look what's happening in the world of crypto, because remember that took a tumble in the last couple of weeks, and I want to shine a light in the fact that we are actually stayed at a new level. It feels like ED and we've come down a lem percent from that thirty twenty nine thousand level.
We're nowvo just in a range bound.
Twenty six thousand seems to be your number at the moment as we have all eyes on the macro policy perspective.
But go into the micro for a moment.
Yeah, no crazy moves for specific names. But there are tech stories from all over the world. So x Pong Chinese EV maker, nice bit of m and A buying DD's smart auto business that seems to be supporting the US listed shares or ADRs for that Chinese EV name. Apple's basically flat now. But later in the program, Mark Gumman's going to bring us his latest power on. He's giving us reporting about the next gen iPad pro coming twenty twenty four, some new specs that we're looking out for.
Two other names moving related largely to analyst calls. But I want to bring you a new name we haven't discussed on the show, which is Nerdy ticker NRD. Why why am I picking out Nerdy? You know why? Because I'm nerdy. But it's an education online platform. Raymond James reinitiated with an outperformed lots of growth, it thinks because it's moving to a subscription model powered by guess what AI in Nvidia has been resumed by another or initiated
sorry with another buyer rating at sealand Securities. The story last week, remember was that had finally shaken off it's our cell rating. We continued to see sales side names bullish on Nvidia as the AI leader in semis. Those are the public sort of stories and movers that we're looking at in.
The private space.
Data Bricks, the closely held software maker widely viewed as a candidate to go public, is in discussions with tiro Price about a new funding round that would value the company at forty three billion dollars. That according to Bloomberg sources. Bloomberg's Katie Roof with us she has that story, Katie, What other details do we have?
Sure?
Yeah, So, as we reported that tiro Prices and talks to potentially lead an investment that would be an up round a forty three billion. We don't see a lot of those these days. It was last valued around thirty eight billion in twenty twenty one. You know, there aren't a lot of free IPO companies that can even raise at all, let alone at an increase valuation. But you know a lot of people are drawing comparisons to Snowflake,
which is almost a fifty billion dollar company. Data Bricks also has been getting more involved in artificial intelligence, which is obviously a hot space. They recently acquired Mosaic and artificial intelligence business that targets enterprises for over a billion dollars.
And so what we understand is they've had a lot of inbound interest with investors trying to invest, trying to get in what could be the last round before they go public, and yeah, it's looking like it could fall at forty three billion.
Well let's take into that a bit deeper. This is interesting timing because a lot of companies that are now in the IPO discussion may have done a down round in the last two years, but they're raising or they're looking to do something at this interesting valuation pre IPO. What do we know about Data bricks near term intentions to go public?
So you know, usually I would say if a company is raising money, they're not on the verge of IPO because you don't want to dilute your ownership right ahead of an IPO. So this to me is a signal that they might be delaying their IPO further. And now Data Bricks obviously is a company at scale. They have the kind of revenue that's necessary to go public, but they also don't have to go public because they're able to keep you know, raising capital in the private markets,
and so they just haven't. They don't have that impression that pressure just yet. But certainly they are a company that we expect to go public at some point someday.
And of course we all wait with bated breath as to the reopening of the IPO market. We've got Arm, of course waiting. We've got the likes of instacar, where we've got the details, the devil in the detail and coming in their latest numbers in the finding of the IPO on Friday.
What did we learn from that overall?
Katie Right, So we've got ARM, Instacart, Quavio, all of them came out with IPO filings last week. It's going to be busy for tech IPOs. Instacart was interesting, you know, I had mentioned the other day on Bloomberg TV, I was hearing that their financials were better than what people were thinking, and it turns out they were profitable. They had you know, revenue growth and managed to make money, which is pretty rare for tech companies and newly public
tech companies, so that surprised the folks. But what we learned is they're getting a strategic investment from Pepsi COO of one hundred and seventy five million, so obviously that's a voto confidence in the industry. But we also learned that they've made a shift in their business model or they've added.
New lines of business.
They've really been focusing on e commerce technology, software that can help with logistics and other analytics, and also focused on advertisers, so they're really expanding beyond just giving you groceries, which they absolutely still do.
Pgcimo already coming into bed when it comes to leadership that company.
We thank you so much.
kJ if they're really detailing some of the news we've got Friday and then throughout the weekend, let's carry it on a little bit in terms of what the IPO market's gearing itself for. Rgi Goring when police to say, joins us, she's been leading the IPO practice over earned some young Americas. You've got twenty years experience and really guiding companies at this pivotal moment in their direction or travel.
I know we won't dwell on individual names and individual business models, but ultimately, when we're seeing a company at instacrat that's had to put off going public, had to take cuts to its market valuation, how important is this moment?
I think it's a really important moment for the broader IPO market and particularly the tech IPO market. It's certainly a predictable way of having a market reopening occur with the anticipated deals that everyone is expecting over the coming weeks. And you know, there's three common theme themes that these companies are sharing that are coming to market right now. One and that you are we're just speaking of this
profitability scale and then name brand recognition. These are all factors that investors are finding important in today's environment and placing a premium on.
Rachel.
Good morning to you from San Francisco. Look from a new cycle perspective, a lot seems to have happened since ARM made its move. If ARM makes the jump and lists, do you think mechanically lots of listings will follow in quick succession. It's kind of like a game of brinkmanship. Who can jump first and see if the others will follow.
I don't know that it's one company that's going to make a massive reopening, but it's certainly a start that we need to have occur. But like I said, what investors are really paying close attention to right now and are rewarding our companies that are profitable or if not yet profitable, a very clear path to profitability. So we're not in that growth at all cost environment we were,
you know, just eighteen twenty four months ago. So it's those companies that are going to really lead the way in paving the way for the next entrance of IPO aspirants.
You know, Caroline, there are two sides of the table in any transaction, and you and I know quite a few venture capitalysts that really want this to happen, really want this window to open.
Yeah, boy, they've been waiting for these exits. It can't all be about M and A.
And there's not much of that either, And Rachel, to that point, we're hearing that there is a lot of stress in the bench capital environment and a lot of them are raised huge funds that they're now juster really
trying to allocate in this environment as well. What did you make of the fact that Data Brooks, a big company in the private market, is also able to raise in the private environment at the moment, where do you think the real rubber meets the road for some of these companies that can still fundraise, perhaps not going for an IPO at this moment.
Yeah, well, I mean a few things that it tells me. One, there is money to be deployed out there. But venture capitalists investors broadly are being very discerning and where they deploy that capital, so investing in companies that they feel have a strong growth story. The merits behind the transaction are being very much reviewed and and so forth. So we're not seeing the volumes of investments that we have seen before, but we're seeing very targeted interests, particularly around
key technologies such as AI and so forth. So there's continues to be a strong investor focus.
In that investors focused on AI. How focused to you on China and the impacts of the Chinese economy on confidence?
Well, the geopolitical tensions are continuing to be there still. I can speak more to the US market, and the US market is very dominant, continue to be you know, the place that most companies want to to lift, and companies are going to still continue to navigate the broader geopolitical environment as well as many other factors that have been impacting companies for the past twenty four months.
Rachel Garing, IPO leader Ernst and Young America's great insight and finally bit of activity in this space. Good to have you on the program. Fox con founder Terry Goer has joined a crowded race to become Taiwan's next president, in the process up ending an election that will have wide ranging implications for security in the Western Pacific. The tech billionaire denied Beijing could pressure him through his extensive operations in the country, which include much of Apple's supply chain.
Speaking of Apple, the company working on a revamped iPad pro for next year. It's first major overhaul of that product in half a decade. From all, let's bring in Bloomberg's Mark Gunman. You brought us those details in the latest power on the keyp It for me is M three chip.
Right. Every time they have a new generation of chip.
They have more CPU, cause more graphics, cause more memory. But this is a major hardware overhaul.
This is a major hardware overhaul. I mean, as you know, the iPad market, or more generally, the tablet market has been in a bit of a funk lately. Right Shipments for the overall tablet market were down thirty percent you overy year in the second quarter. iPad revenue has been down several quarters in a row. Actually, in the third quarter, iPad revenue was its lowest since the cusps of the
pandemic in the beginning of twenty twenty. Apple is really hoping that this new iPad Pro, which will come out in the first half of next year twenty twenty four, will sort of rejuvenate sales with a new design.
They're going to be moving.
This is the most significant thing, I think, to OLED displays for the first time in an iPad. If you remember the move from LCD to OLED in the iPhone ten in twenty seventeen, it's a really significant change. So now the iPhone of the iPad will use the same screen technology. That's going to be a really robust upgrade of that M three chip you mentioned, but also more laptop like capabilities. There's going to be a new magic
keyboard attachment. They'll probably price it anywhere between three hundred and four hundred dollars, But it'll essentially turn your iPad into a laptop. This new version will likely have a function row at the top like a Mac, and it'll also have a.
Bigger track pad.
So this is clearly going to be aimed at iPad power users, and I'm excited to get my hands on one as well.
Mark, how many other people are excited to get their hands on iPads at the moment because it has been an area that just hasn't been firing on all cylinders for Apple.
Yeah, that's a good question.
Well, anyone who's a big iPad pro user and has had an iPad since twenty eighteen, that was the last time they redesigned the iPad Pro, We're coming up on five years, right, They introduced that in October of twenty eighteen, So we'll get this big revamp within five years of that window. So I think anyone on a twenty eighteen model or even a twenty twenty model like myself could
be looking to upgrade to this next generation. So I think they're going to get a pretty significant upgrade cycle, at least for an iPad for this new range.
If you go on Apple's website and you click on the iPad section and you put compare. There is just infinite possibilities. Mark, there are so many iPads, they all are quite similar and very different, and you write and power on that. That's been a bit of a tricky situation for Apple.
Well, when you're a customer, right, and you're not ingrained in this ecosystem like I maybe or you twoe might be, you really don't know what to buy. And a lot of these iPads are very similar or they're very differentiated by a couple hundred dollars, but with very minor tweaks
in between. So it's unclear if you should buy the base ten generation iPad, should you buy the eleven inch iPad Pro, should you buy the iPad air right, And so I'm not sure that this new iPad pro will doom much to fix that problem with perhaps too many iPads, too many choices, and lack of clarity between the many options. But what it will do is it'll help differentiate the iPad Pro and make that more of a halo product
at the top of the line. It maybe push more people to the high end, which of course would raise overall Apple asps and overall Apple revenue.
At a time, while we question maybe some costs going up for Apple as it has to rejigger mark it's entire supply chain. You did a really great deep dive Bloomberg did and its big take about how much this is really changing the environment for making this equipment across the whole evasion, not just China.
Yeah.
The interesting thing about what we've discovered based on the data is something we've been talking about or I've been talking about.
For a long time.
Apple is not necessarily moving out of China, but it's augmenting its operation outside of China. So you're not seeing many new product lines being developed in China. You're seeing a lot of status quo in China. So the number of supply in China for Apple, the number of production sites, it has stayed stagnant, right, It hasn't really gone down. But in terms of Apple's growth, all that growth that's happening in Vietnam, that's happening in India, the new lower
en iPhone models. You're seeing a lot of production in India as they need additional units for those regions. You're seeing production in India. You're seeing Apple Watch production in places like Vietnam, you're seeing new types of macs being produced in Malaysia. So you're seeing China sort of stays stagnant for apple but not growing. Right, So the future of apple production and supply chain is in China. It's the places around China. It's the Indias of the world, Malaysia, Vietnam, Thailand.
To a lesser extent, there's some work being done in Japan. Right, So that's really the story here China, Apple, China that's staying the same, but all that growth that's happening elsewhere really interesting.
Mark, thank you so much.
It's going to have you back, Mark gam And on all things Apple and its supply chain now just focusing in on supply chain. Of course, all of this amitted geopolitical tension of US and China. And we know the earlier US Common Secretary Ginia Romando was meeting with her Chinese counterpart. It's all part of the Biden administration's effort to or try and reduce some of the tensions between
the world's two largest economies China. It says it was a frank meeting, a constructive meeting, talking about tariffs, talking about chip policy. Rondo, of course, had been looking to stabilize the relations.
Just take a listen to what she said before.
We agree to establish a new Commercial Issues Working Group, a formal working group which will involve US and Chinese government officials and very importantly US and Chinese commercial private sector representatives as we seek solutions on trade and investment issues and to advance US commercial interests in China.
Understand, megan to be meeting at least once a year. Now, coming up, let's talk bitcoin. So like a teenager in need of its sugar high. According to Bloomberg Intelligence, how all the details next, there's a room technology.
Time now for talking tech.
First up, soft Bang, Well, it's going to take a group of its Indian startup founders to Silicon Balley.
That's next month for an AI tour.
Now, this is all as the Japanese investor is stepping up its efforts to really infuse its portfolio companies with the technology. Meanwhile, x Pun shares they sword after it agreed to buy DD's smart car development art Now. The deal both eliminates a potential competitor in the crowded EV market and gives US a tech savvy partner a new venture.
Plus more on evs.
Now Japan's advanced electric battery technology company Noko is now training on the Nasdaq.
It plans to enter the demestic leasing business with evs that use.
As battery separated technology to help improve longevity and hate resistance.
And I know that's all of.
Your focus point in evs, but now we're going to some of my focus point, right yeah, And.
Let me take you back to twenty seventeen. That's when Bitcoin first reached its current level relative to the Nasdaq one hundred stock index. The question can crypto now outperform? A Bloomberg Intelligence note out today says it's unlikely. Federal funds futures in one year hovering around five percent and deflating producer prices are very different from that past easy money day that Bitcoin grew up in. Let's bring in Mike mcgloan from BI who wrote this peek and Mike,
you write your latest note. Bitcoin's a teenager and may miss its sugar high.
What are you talking about?
Well, Hello, I think I guess you can appreciate. I've raised a few teenagers there.
Are not adults.
But the bottom line in our marketers is never forget from where you're from and what got you there. So I look over at that tun your note every day and I see it's a giant sucking sound for risk assets and bitcoins. When the risky assessets in bitcoins whole premise, it's whole lifetime. It's been under a zero or very low interest rate environment. Now interest rates are very high and attractive. So then I look at performance far. How much has bitcoin performed? Well, okay, the best in history.
If you look at the first time it traded a dour that was around twenty eleven, it's up twenty six thousands times that. So to me, the risk is greater that Bitcoin continues to ververt lower and all indications are showing that it's showing divergent weakness versus the stock market, particularly in Q three, and then you point it out
versus the nasdick. It's still at the same level since twenty seventeen in the nasdick, and I look at it's a much higher vole till the acid and it's showing divergent it's showing lack of performance to really take it out, it's higher. So I look at it as okay, risks are tilt the lower, particularly if we look it at
what the fed's doing. You don't see any liquidity to coming from the FED, and if they keep tightening, what stops them from tightening potentially the stock market going down, which means most risk asses.
Another mike that I was speaking to this weekend.
All about that sucking sound was my Novegrats, of course, of Galaxy Digital, and he's been getting more concerned about some of the headwinds, even though he himself is in line to be getting one of these spottytfs. So too was Kathy Wood, and I was on stage with her as well. I'm interested as to what, if any tailwinds could make you change your.
Opinion on this.
Yes, we need some kind of change.
At first, I think I have better hair than mister Novo. The significance the first sign of tailwinds is I need to see Listen, let's say, at least see some signs of strength. So right now, all the big picture moving averages are tilting lower, like one hundred week moving average. The market's bumped up to there and it's heading lower, and it's doing for a good reason. It sees that FED fun future still tighten in the future. I need
to see some divergent strength. Maybe versus stock market weakness, that would be a good sign. We're not seeing that now.
I'm a glad BlueBag Intelligence. Welcome back to Room Meg Technology.
I'm Caroline Hyde in New York and Imed Ludlow in San Francisco.
Quit check in on the market.
So I think it's important to think about this on a weekly basis, right son, as that one hundred is, it's a little bit higher two tens to one percent. We're coming off a strong week last week where then as that one hundred posted a gain of around one and a half percent, but it snapped three straight weeks of losses and it was the first time this year
we'd seen that. This week on the weekly basis, we just have a flood of economic data from around the world here in the US hard data and sort of more soft data that we're tracking everything from PCEE, the Fed's preferred gauge of inflation, through to other gauges of manufacturing confidence and activity, and economic check data out of China, and increasingly when we worry about tech, we are worried about China as kind of the engine room of the
global economy. Here's an interesting one for you as well. We talked about door Dash and it's AI efforts. A new one out this Monday morning, an AI powered voice assistant. Now it's really interesting because in the statement door Dash is nap right, but saying that so many people still phone in their food orders, but the restaurant's too busy to answer the phone. Here's their solution, get AI to do it. They're saying that fifty percent of all calls
are missed. So now they're trying in multiple languages in AI power syst and you phone up, the AI interacts with you. It's just in trial phase right now. It had boosted the stock earlier in the session, but was software by three tenths a one percent.
More AI, More AI.
More on door Dash for a little bit as well.
Then let's talk about a competitor that's about to go public.
I'm talking a course of Instacart. We want to get back to.
The conversation all around this year's IPOs. We're all bracing for them. Greg Martin and Polas a Say, co founder and managing director of rain Maker Securities, which specializes in pre IPO investing.
You're also, of course still an active v C.
Greg and much experience in prior history of working with these sort of companies to build them up for this moment. I'm interested in door Dash, of course what five to six times overall focus on on in terms of active user base compared to instacar. That's what the Bloue meg and tell WHI not is telling us today. How are you looking at the perspective? How are you looking at the filings and thinking, oh, but it's profitable.
You know, and sahart will most certainly always be compared to DoorDash and thank you for having me this morning, but it is it is different in a few important ways, you know.
It's it has.
A pretty significant advertising business, which is very profitable, very high margin. In fact, actually even larger than Uber's advertising business. So I think that's a big distinguishing factor. They obviously they don't have the same kind of order order growths as door dash has, which I think is one potential,
you know, low light of the business. But they've been able to increase transaction fees per user and per order, which which has enabled them despite flat order growth in the first half of twenty twenty three, it's enabled them to actually grow their transaction revenues by thirty one percent you know, if you look at their revenues, they probably project to be around three billion in twenty twenty three, with better margins than way better margins than door Dash.
You know, if you look at door Dashes, you know, revenue multiple, it's in the three and a half times range. So it probably portends an IPO offering for Instacart, assuming they're able to make it to the finish line in the ten to you know, twelve billion valuation range, which I think would you be an appropriate level relative to where door dash sits.
Of course, what Instacart did, unlike some currently private companies, is they took that bitter pill. They decided to slash their overall valuation in the private market and then some has that been important? How much a pentop demand is there from public investors now for this sort of a name.
What are you seeing on your platform?
Well, it was a necessary reduction in evaluation. Their last private round was in the thirty nine billion range. You know, they kind of slash their slash their internal evaluation to to around ten billion, which which frankly gives their employees who were you know, issued options, any recent investors and most likely any public market investors upside, so they you know, I think it was important for them to level set,
and frankly, they didn't have a choice. The market spoke to them and that's where the valuation is more appropriate.
I do.
I do think it bodes well for public offering. I mean, the company is demonstrating solid growth, solid profitability. You know, they've talked about ways in which AI is going to help them. And if you look at our platform at rain Maker, we handle a very large volume of private secondary transactions. We're starting to see orders come in, which is reflecting you know, strong demand for you know, a potentially.
I PO that you know in several weeks.
People often like to get in now because they think there's going to be upside, you know, from the IPO price and beyond.
And of course we wait road shows and I mean it's going to be a busy stot to set ten anythink of all these sand companies having to hit the road to explain their stories because it's not the only IPO.
You know.
What's astonishing to me is on this program we've been talking about how dead, frozen, inactive the market is, and all of the news flows happened in just seven days.
Greg On filed August.
Twenty First, how much was that starting gun for you to kick start the rest of the of the window.
It was a big starting gun, you know, if you look at if you take a little bit of a step back, I think one of the sort of you know, starting guns started with Kava. I think Kava was an eye opener for a lot of people. It was a sort of a quiet company that traded up significantly on its IPO and has actually held up pretty well, close to one hundred percent since at priced. You know, then you had odity technology, and then you had obviously Benpaths, which has been on a huge, a huge soar incline
this last week. So I think people see that there is receptivity in the IPO markets, and I think what started as a trickle could end.
Up turning into a fly.
Obviously, last week we had ARM, we had Instacart, we had Clavio. Those are much bigger IPOs. I think there'll be a bigger test of where the market really is. You know, ARM is more of a flat company, but it's also telling you know, an AI story. You know, as you see you know, kind of riding the coattails of Nvidia. So you know, I think arm will be interesting. Instacart will also be a large IPO. I mean we're talking probably built you know, several billion plus of proceeds
between the two companies. So I think these will be real tests for the market. But I think they're both strong companies with good stories, and you know, I expect if if they if they succeed, and I do think bankers will probably still try and be conservative in pricing because they want to show that there's an uptick for buyers who take the risk of buying an IPO, that
we might actually start seeing the floodgates open again. Yeah, and we have several other companies that are ready to go if they see that happen.
I had a cup of tv O day with a tech banker and we talked about Carver and I said, that's not a tech company, and the banker made the point that it is a growth company though, And so you can see how investors treat a growth name interesting signal. Caroline made a really excellent point owner in the show Data Bricks is raise money, right an interesting valuation? Is that a signal that they won't IPO? Why raise and negotiate up with your investors?
Ahead of a listing.
You know, it's not necessarily an indication you know, they have They're one of the few companies that has been continually investing even through the downturn.
They have such a huge market in front of them.
You know, they are a significant AI company, a significant data company similar to Snowflake. They compete with Snowflake. They have massive scale, massive growth potential. So I view them as a company that, you know, could go public whenever. It may portend more likely a direct listing when they go public, because they may not need to raise capital, but they may just want to create liquidity for their investors and shareholders. So I wouldn't necessarily say it means
they're not going public. I think, you know, they will always take the position that we will go public when the market is right for us. And if I think if they see a really buoyant IPO market with some of these IPOs that we've discussed.
I actually think they might go sooner than later.
Greg, I'm interested as to the hunger for this and who it's from. Who is coming to your platform to get ahead of the listing, Who is going to be there to take down this listing, Which kind of investors are interested at this moment.
You know, we're starting to see all manners. I mean, for you know, for eighteen months, everybody kind of retreated other than other than the investors that had a pure mandate to only do late stage private secondaries. We're now starting to see the big IPO buyers and obviously we're we're hearing of the data bricks investment. You know, we're starting to see them big institutions. We're starting to see family offices, We're starting to see frankly high net worth individuals.
We're starting to see a big.
Flow of people that are are are just there to say, hey, I don't want to miss the next KAVA, I don't want to miss the next bind pass, I don't want to miss the next podity. So I think as investors search free yield, and you know, remember the bar is high. The risk free yield now is five to six percent versus zero. Yes, so it has to be a quality IPO to entice investors to come in at this point.
And Greg, I'm going to go to a sensitive sort of topic in the VC space right now, and you are still one.
You've got Archer Venture Capital. Of course, you are at red point before.
There is this really interesting dynamic that's happened is that all these VC companies have raised a.
Ton of money. They need to put that to work.
They don't want to particularly have to give money back to LPs. I'm just interested as to what tensions are being felt in the venture community in this space right now as they are looking to have these liquidity moments and then also try and find where to put money to work. We saw two price interested in of course data breaks, but that's a crossover my name.
Yeah.
I mean the biggest tension if you look at you know, the pandemic and twenty twenty one, there was a real grow grow growth, spend spend spend mentality and so a lot of their winners created huge burn rates and we're consuming cash at an alarming rate. And so the first order of business for venture capitalists is to make sure that your big, you know, scaling businesses that are also
spending a lot of money are well capitalized. And because they went through massive burn you're seeing a ton of reserve and frankly, you know, a retrenchment on new investments for venture capitalists to make sure they're supporting these companies.
So there's not a lot of.
New investments into new companies, but there's a lot of using this capital to make sure that your big scale businesses have the cash, and of course they're also making sure they're not spending money at the same rate. But obviously there was an expectation that there would be a lot of liquidity by now. There is an expectation of these companies we the public, and now they're seeing, hey,
the IPO bar is raised. We need two or three more years to get the companies to an exit, and we need to make sure we have the capital in these businesses to sustain those businesses so they can grow frankly into the crazy evaluations that they are raised at.
In twenty twenty one.
Greg, you mentioned the attractiveness of the yield on benchmark notes impacting IPOs. What's the biggest quickly economic factor that you take into account right now?
Interest rates are always number one when you think about growth business and tech businesses are mostly valued as growth businesses. So when the tenure goes from one hundred and fifty to four hundred and thirty basis points, you know, that's really significant that crushes multiples, and we obviously saw it in twenty twenty two in terms of the NASTAQ, even though it's up a little bit since then.
So interest rates sensitivity is.
Very high, and you know, we're at a high point on the tenure. So I think people are are really focused on are we going to have a declining interest rate environment and when? Or you know, we're all obviously all paying close attention to the September FED meeting, where a lot of us are expecting things are still going up.
I mean, inflation is.
Still out there and we're not hearing you know that the FAT is ready to start lowering rates.
And boy if we've got a big week in terms of economic data even though we've got thin volumes out there still now. Greg Martin Brilliant from macro to Micro, the co founder managing director of rain Maker Securities, of course, still very active in the venture space with Archiventure Capital too. Coming up, Look, we'll talk tech investing for the fastest growing demographic in the world, the older generation. I mean Meller Levy of Primetime Partners joining us. Next, there's a bluebog technology.
I think you have to like healthcare just because of the generational tree that's going on, the world is getting.
Sarah hunt Alpine words there and really the focus on generational shifts at the moment, it's going to be the focus for our VC spotlight today. We're focusing on investing in the technology that's driving innovation for that fastest growing demographic in the country and in the world, it's the aging population. I'm really pleased to welcome to the show.
Abbi min Alevi, co founder and managing partner of Primetime Partners, an early stage bench capital fund that invests in people and companies that transferm quality of life for older adults. And at this moment, when clearly the need is there, when clearly big companies are thinking of the benefits to support those that are supporting the older generation as well, is it okay what are valuations like in that space right now to be allocating to Well, I'm so glad you.
Guys are spending time on this tabic. We do proceed to Series A investing and one of the best things about being an early stage investor is that valuations have stayed sane through the crazy bubble, if you will, of
twenty twenty one. What we're seeing at the later stage is that the valuations really are sticking somewhat formulaically to what healthcare services and healthcare it typically are, which is anywhere from four to ten times, and so within that there's quite a wide range, but the valuations haven't yet become so astronomical, largely because most of what we do is invest in healthcare related businesses and there still is usually a human component to a lot of what we do,
because when you're working with an older population with healthcare delivery, we're not talking about robots here, We're talking about human to human and so a lot of those valuations stay within the four to ten times because of that.
What's interesting though, is that there are a number of you put photio companies. I'm sure that a colony trying to understand how all social intelligence can make them a little less dependent on the human or indeed you've already invested in companies that mo is AI is not becoming a theme, even more.
Absolutely becoming a theme. It's not at the point where AI is replacing medical professionals and clinical decisions, but it's
absolutely an enablement tool. For example, one of our portfolio companies called Duos, they work with health plans to engage their members to understand what benefits they have both within the plan as well as the thirty billion dollars of unused federal government benefits, and they're using AI really from a personalization perspective to make sure they're delivering the right recommendations.
So we see a.
Lot of AI around personalization. We see AI a ton on diagnostics. One of our portfolio companies, Kinsugi can diagnose depression in older adults using their voice, not natural language processing, but actually voice vibrations, and so AI is helping them there within dementia care and diagnostics there as you know that population is about to blossom, we're seeing a lot
of AI on the diagnostics side. We do not invest in healthcare discovery drug discovery, but that is huge piece of innovation in drug discovery, and the speed of drug discovery is AI. So we're seeing really AI as an enablement of the ability to scale healthcare to this population that, as the you mentioned before, is doubling in size.
So the population in the US of people way over sixty five is about sixteen percent of our US population, and we expect it to jump to twenty two percent by twenty forty.
According to the US Department of Health.
And Human Services, you're a VC with a long time horizon to invest.
How do you ride along the trend?
How do you make sure that you're invested in parts that follow it.
So there's one piece of it, which is you've got this doubling of the older population on a global scale, and that absolutely creates huge infrastructure challenges for healthcare, for financial services, for housing, and so you've got these very big issues, almost like climate change, where the data's always been there. People are finally waking up to this seismic shift in the demography.
But what's happening is.
Really the urgent needs of large fortune one hundred healthcare companies, which is they need to take costs out of the system. US healthcare spend is eighteen percent of our GDP. We have the most expensive healthcare system in the entire world.
So what we're.
Investing in are businesses that help take costs out today. So for example, fall prevention number one reason why older adults go to the hospital. One and four older Americans will fall, and that creates fifty billion dollars of cost in our healthcare system. You prevent one fall, that's a tremendous value. So businesses we invest in like Bold or rosarium from home improvement. These are businesses that really help take costs out of the system today.
Are there any areas you stay away from you just say, don't do that, don't invest.
This might be a contrarian point of view, but we think when people talk about the tech enabled home, while ninety percent of Americans want to age in place, the answer isn't necessarily to make everything kind of like the Jetsons. I guess I'm displaying my age here. Everything is robots and technology and answered by the cloud that we believe that that is an area where remote patient monitoring and home care in the home is a great place to invest.
But fully digitize robotic solutions, We're just not there yet, and that's not really the type of care that humans want for themselves and older adult children want for their parents.
We love what I'm tiring you Abby. Thank you very much. Adena, it's been enjoy having you in.
All right, Let's head to space.
The crew Dragon spacecraft launched by SpaceX, successfully docked with the International Space Station over the weekend. The docking took place while the two spacecrafts were orbiting above Australia as its crew of four astronauts began their six month mission. Bloomberg News space reporter Lauren Grush here with more. Lauren, it's getting routine, But tell us about this mission.
Yes, speaking of routine, it was the seventh operational CREWD flight for SpaceX through NASA's Commercial Crew program. They hold an ongoing contract to send astronauts to the International Space Station for the Space Agency, and this crew was a very international crew. There was a NASA astronaut, a European astronaut,
a Japanese astronaut, and a Russian cosmonaut. So it really just kind of encapsulates what NASA is trying to do with these launches by sitting up partner astronauts and NASA astronauts.
Well, space is going to be doing with all of this activity as well, Lauren.
Well, now that they've launched their latest crew, it's time for the recent crew that they launched up roughly six months ago to come home. So and it will be Crew six will be returning to Earth in their own crew Dragon capsule after they greet and make the new incoming crew feel right at home.
Yeah, Lauren, you broke some news Friday. The Starship. The explosion in April had big environmental impact. Quickly summarize your reporting.
Yeah, so there's quite a lot going in space, but plenty going on down here on Earth as well. So a lot of people might remember the SpaceX Starship test
launch in April. Well, we did a Freedom of Information Act requests looking at, you know, information that we could gather between SpaceX officials and the Fish and Wildlife Service in the aftermath of that launch, because it was quite explosive and it was quite destructive, and we got eleven hundred pages of emails and photos giving us a really candid look at how those officials with the Fish and Wildlife Service, you know, were kind of dog at what happened after that flight.
Almost four ac is a state park burned, Lauren, amazing piece of reporting, the long Grash.
We thank you that is. Have this edition of Really Big Technology Ed.
Yeah, huge week ahead recap on the podcast wherever you get your podcast, This is Bloomberg