The Banking Crisis, Crypto, and Amazon's Job Cuts

your tech investing. We go live outside of Suez and talk first Republic stock drop, plus what the banking fallout means for crypto as Bitcoin tops twenty eight thousand for the first time since June amid the turmoil, and we'll bring you the latest on job cuts in the world of technology. Amazon announces it's laying off an additional nine thousand employees. All that so much more coming up Broadly, the focuses on the banking sector, right That's where the

feel good is. In the equity markets. You see underperformance in megacaps. They had a really strong week last week tech scene as a safety play. We're unraveling that this week. Some megacat names down considerably. Amazon down two percent. It actually paired losses on the headline nine thousand additional layoffs Caroline, but now continuing to trade lower. The number that always gets me is nine thousand plus eighteen thousand is twenty

seven thousand layoffs in total. You have to remember at the end of last year they had one point five four million workers globally. Yeah, to drop in the ocean, it is. But remember most of those one and a half million are actually contract based. So if you're looking more at a corporate job, it's what, well, three hundred

thousand or there or thereabouts. What's interesting is, like with Meta, a second key round of layoffs and like with Meta, kind of drawn out, maybe not happening till April till May. What does that mean for the overall job state or what does that mean for the macro picture, not just for technology as well. Yeah, but bloom those Mike McKee says exactly that it won't show up in the day until later in the year. Look at where the cuts

are aws recruitment. Twitch interesting there because some of those are growth areas, some of them are consistent with what Amazon's done already, and once again just very painful here for an HR at any of these technology companies and all of this, Let's set it back into the macro backdrop, because this is what happens when interest rates rise. This isn't a cooling of an economy. This is jobs having

to be sacrificed. This is also a rising interest rate world means for banks, and that is what we've been digesting all week long special coverage here roon Bloomberg and we've got to bring you from a technology context because it's been a frantic weekend. You saw Credit Suez the takeover by rival UBS. What does this mean for the overall investment landscape? Shnani Bassak, who's been working around the clock on Sunday, in fact, outside the company's New York headquarters.

How does it feel, Listen, Caroline, this is really an iconic moment. This is an iconic building. I'm standing in front of Credit Squeeze at eleven Madison Avenue, a building that they've been at since the nineteen nineties, not too long ago, signing a multi decade lease, filled with people and one of the biggest investment banks in the United States, and now their crosstiwn V rival just less than thirty

blocks away. The fate of this building, the people in it, there are a lot of anxieties that are under the surface. Remember the UBS CEO and a memo Jess late yesterday had told his staff that this is not a done deal yet in the sense that it still needs to close, meaning they should not be sharing information yet with their rivals over at Credit sweez Swee is still indeed arrival.

With that said, remember before this deal was ever announced, Caroline Credit Sweezes had a plan to cut about nine thousand jobs over time, and UBS, while they have not given that sense of how deep the headcount reductions could go, there's still a plan to have about an eight billion Swiss frank cost reduction plan annually through twenty twenty seven,

which implies significant job cuts. Now, on one hand, there is some silver lining here that when folks across Wall Street look at what's happening, Credit sweez has been one of the top in banks in the world, it presents an interesting opportunity for UBS to be getting even bigger in the United States. There are some worries as they roll off some of the more difficult assets in that investment bank, but this is really at this moment, in addition to a financial story, a very significant talent one

with deep history here in the United States. Yeah, the repercussions are really being felt as well in the credit markets and the debt markets, which I'm going to get into later in the show. Bloomberctionali Bassett, thank you so much. Outside Credit Swiss in New York. Now, the TERMOI in the banking sector continues, but it sparked that rally in bitcoin and crypto related stocks. Katy Greifeld here with more and Katie, they're talking about high degree of correlation between

basically real rates coming down and liquidity situation. What are you seeing out in the markets when it comes to crypto. Well, when you look at the rally that you're seeing in bitcoin, crypto broadly, but led by bitcoin, it really boils down to two theories. You have the one you were just talking about, which is that macro narrative that you're seeing big tech rebound mightily. Maybe not today, but last week it's best week of the year for the Nasdaq one hundred.

We could be looking at the last rate hike of the FEDS tightening cycle on Wednesday. There's some talk about quantitative tightening maybe not being long for this world. All of that would be good for bitcoin and that's what you're seeing in the price is the other theory is sort of the original promise of crypto, basically that you want to be your own bank, you want to get away from the banking system. That is what some of

the bitcoin maximalists on Twitter are saying right now. But you look at the performance of this asset class as a whole, some of those crypto stocks as well, it seems like it's leaning towards the macro narrative. Cara, I'm looking at CYP cryptgo on the Bloomberg and you forget. Actually, you look at all the other tokens, they're all lower, they're all in the red. Bitcoin continues to climb higher.

That's where the focus is right now. It's the og perhaps it is well, the safety trade when you're looking at the world of crypto. But Katie, also, what's been so interesting, We're going to dig into it in a moment, is the worry about US crypto builders here in the United States being forced basically to bank outside of the United States, maybe even to move their entire company. It was notable that over the weekend, Signature Bank, which of course had been put up you know, taken over by

regulators was being swooped up by a comment. Well, a region low bank, a community lender here in New York. What are you hearing of, basically resilience of the crypto market in general. Well, Caroline, that's kind of the irony is that along with that maximalist theory that these crypto companies they need to use the banking system. I mean, you saw Silvergate Signature. Those were huge players, huge you know,

instances where crypto companies connected to traditional finance. And it is interesting if you look at some of the stocks associated with the crypto industry. I'm talking about some of the miners, for example, they're actually outperforming bitcoin. It's really striking to me that if you look at Marathon Digital I had to check the numbers a few different times. It's up one hundred thirty six percent this year. Even though bitcoin miners as an industry, they've really been struggling

with higher energy costs, lower bitcoin prices. That's really compress their margins. But you're really seeing risk on across the crypto space. We'll see if it lasts. We're just stepping down by three quarters of a percent at pretty notable that twenty eight thousand level Katie Greifeld again working throughout the weekend. I think she had more source conversations than she does on a daily basis. They thank her. Let's morden this conversation out. Let's bring in Noel Atchison, the

founder of the new Zetta crypto is macro. Now you have been writing on your day off over there in Spain, Noel, what is the sentiment like, why do you think bitcoin's rallying? To start it off? O, Caroline? It is such a complicated cresting at the moment. There is so much going on. Katie totally correctly identify two of the main threads that are driving the Bitcoin performance. One is the macro story.

Bitcoin is a risk asset, has often traded like a macro asset, as we know, and it is even more than that though it is arguably the most sensitive asset two shifts in monetary liquidity. There's also the banking crisis, and Katie did mention how that ties into the crypto thesis. I mean, Caroline, just fourteen years ago, just over Tatoshi Nakamoto, the creator of bitcoin, embedded in the very first bitcoin blog, the link to the headline Chancellor on the brink of

second bailout of banks. So this reminds how the macrocrisis leads into the banking crisis, which leads into the crypto crisis. All these threads are getting very intertwined, all that they are separate, and we also do have the market structure thread going in here. Bitcoin's market structure is quite unusual and that is one of the drivers of the speed of the rally that we've seen such seventy percent so far this year. And we also have the technological evolution

which is still going on. So so many things going on at the moment driving the bitcoin's performance roative two minus piers that you mentioned, and that isn't itself unusual because usually in a market bitcoin underperformance ed. What's interesting is this sort of narrative that's thriving out there that

maybe bitcoin weather's crises chaos at least sent relatively well well. Now, while the logic seems to be, you look at what's happening in the banking sector, right, excuse me, and then we're resetting expectations for rates globally, the FED, the ECB. That seems to be a part of the equation here when it comes to Bitcoin in particular, and The fact that there are so many parts of this equation, and you're totally right, gives bitcoin a support, a floor if

you like, that many other risk assets don't have. When it comes to the banking crisis, it is obviously a factor and people paying closer attention to this, But very few of us believe that bitcoin is going to replace the banking. For your banking is convenient, it will recover from the crisis you perhaps in some other format. But what bitcoin represents from many it is it's an insurance asset. It's adjusting case, it's an ability. It represents an ability

to transact even when the banking system isn't working. And I'm not suggesting it's going to stop working, but it is that insurance quality that many people are paying attention to. Now. Now, well, what is the biggest headwind to bitcoin from this point? On? Regulation? Regulation and the deep banking of the crypto industry which

you referred to earlier. The d banking is a big blow to the North American trypto industry the US, I should say more specifically, but it's not a death blow by any means, and it's not really going to hamper much of the innovation much mure, there's somebody going to go elsewhere. There's another thing that's much people looked about bitcoin. It's mobile. It is so mobile. It can work just as well from anywhere in the world as it can

from say San Francisco or New York. The US will lose out on a lot of talent and also investment capital and also innovation potential, but it will eventually realize, you know, the mistake that it's making, and come to its senses and try to scramble to catch up. Meanwhile, the bitcoin will continue to evolve in terms of the technology, in terms of the adoption, and in terms of understanding its role in the world. What about other crypto assets? Are the don bitcoin or any of them in insurance

contract too? Not as simply as bitcoin. It's obviously DeFi has shown that it can weather the mother of all stress tests. It has done so many times over the past few months, over the past year, arguably defy even during the very dramatic weekend we had this past one, but the one before with the depeg of USDC continued to work just fine. USDC repegged as soon as we get access to the banking rails, So defy is definitely something to be looked at, but there is the regulatory overhang.

Ethereum is another interesting situation. We have a big upgrade coming up, but again regulatory uncertainty, which is why Bitcoin's outperformance in an upmarket is unusual right now. Normally it's the as you mentioned, Caroline, it's the safe and big air quotes there the crypto asset, it normally underperforms and others totally outshine it because they are higher bolletied. But not right now because of the regulatory uncertainty. That is

a headwind for the whole crypto market, including Bitcoin. Of what Bitcoin's doing anyway, well, in simple times, it's the regulation where there are still more questions to be answered. No actress, an author of the crypto is macro now news that are coming to us from Madrid. Thank you, Coca Cola. It is the latest big name revealing new AI tools today the soft drink's giant announced Create Real Magic. It's an AI platform that lets you generate original artwork

with pretty iconic Coola visual assets. Having partnered with Open Ai with Baine for this initiative, where therefore Rapley is to welcome the CFO John Murphy into this discussion because you really are the executive that focuses in on innovation thinking about these sorts of ways in which it drives revenue. How does a deal like this drive revenue? John, Well, thanks, nice to be with you. First of all, we're at

the forefront of an incredible new technology and capability. We believe it's part of our ongoing marketing agenda, the transformation of our marketing agenda and annie new exciting engagement with our consumer base is at the core of helping us

create new value. In fact, our own bloombag intelligence analysts wrote that Coca Cola's forecast for generating seven to eight percent organic revenue growth this year hinges in large part on achieving success with the emphasis on innovation and marketing. Just tell us how this particular AI platform is going to drive marketing In particular, what do you think this will bring to the forefront in terms of innovation and

well engagement from your core audience and user base. Well, marketing and innovation is really the engine that allows us to connect with our consumer base. We are on a journey to digitizing a lot of our interactions. We love this new technology as a way to allow us to engage in a very innovative and exciting way. And the program we've just launched today goes through till the end

of March. It's an open invitation for millions of people to co create with us, to get another brand better and ultimately to bring awareness to the to the business and to our portfolio. So we're really really excited with learning and understanding how we can continue to build this new capability into into the work we're doing going forward. On that note, John chat gpt in and of itself is raised concerns around accuracy about some of the responses

it's given. How closely are you looking at sort of deepening the integration of the underlying technology the tool into Coca Cola's business more broadly With those concerns in mind, well, I think any new, potentially disruptive technology is going to generate its first share of controversy, and it's really important

to scale it within an enterprise like ours. It's really important to of good governance, good protocols, and the ability to collaborate with the various stakeholders we have involved with us, both internally and externally. So we're looking at this as a bold move versus a reckless one, and we think we have in place those protocols that will allow us

to incorporate it and advance of that scale across the company. Johnny, is this relationship with open AI a marketing exercise in and of itself or is it actually needle moving when it comes to what Cooda is doing with technology. This is a much broader relationship than just a marketing campaign. We look at this has been an opportunity to really take any complex business challenge and compress it into a set of solutions that normally would take a lot longer

and a lot more energy and time to deliver. Clearly, it's in the early stages. We have a test, learn and scale mindset, but we see it as being pivotal to the ongoing evolution of how we do business. Oles CFO and President John Murphy, thank you so much for your time, Caroline. Really interesting how we talk about innovation in big business. Let's talk tech a little bit more. Now see the largest Southeast Asia's internet firm and at one point the world's best performing stock. It's emerging from

a pretty painful twenty twenty two. In a memoate of staff, billionaire founder for US. Lee says that after months of steep job cuts, the Asian Internet child has made changes it needs to deliver profits over the long haul, marking a turning point for the company. But the CEO also warns the company it still needs to prove that it can sustain a profit, writing quote, a job is not

done yet. Similarly, Indonesian right hailing, an e commerce provider, go to Group, just reported a narrower adjusted loss for the fourth quarter after extensive cost cuts. The adjust had lost before interest, tax, depreciation and amaturization. That's a bit dark shrank, while revenue actually tripled, highlighting resilient demand even

amid the cost of living squeeze in Southeast Asia. The company has cut six hundred rolls from its workforce this month, adding the one thousand, three hundred jobs it acts last year. There is a theme here, folks. Meanwhile, let's talk chips. Taiwan's exports of integrated circuit chips to China and Hong Kong falling from a fourth month in a row. That's February. As Washington Beijing tensions, they just simmer and demand for

electronics continues to drop off. Exports in fact fell thirty one percent from a year earlier, the worst declined since two thousand and nine. China's market share of Taiwanese i SEE exports plunged to the lowest level since February twenty nineteen. All according to Balloomberg Data. Read First Republic resume trading extended its declines to forty six percent in the session. Has been halted again, of course, a number of ratings agencies cutting the rating on the bonds in decent hours.

This is bloom bag. We're talking a lot about layoffs, those that are doing them, Amazon, those that are trying everything to avoid them. Just take Apple, for example, pulling every lever that it can to cut costs so it doesn't have to lay off full time employees. Let's bring in Mark German, who has just been writing time after time about some of the areas that Apple is able to compress costs on. Yeah, thank you so much both for having me. Apple is unique amongst the biggest tech companies.

I mean, as we saw today Amazon cutting another several thousand jobs. We've seen Meta do multiple rounds of layoffs, Microsoft, Google. So Apple stands out, you know from that perspective. So how are they avoiding it? Well, first of all, you look at their cash balance. They have so much cash, right, they have so much momentum Right now with the stock price, sales are beginning to normalize. So from an outside perspective plus an internal perspective, it would be truly horrific. Right.

It's horrible when other companies do layoffs, but for Apples specifically, would be horrific given their momentum, given the strategies they have in place, given the history they have in place for them to do layoffs. So what are they doing? Cutting back on travel, requiring senior vice president approval for many budget items. They're not backfilling, so as people are

leaving in certain positions, they're not replacing them. They're not allowing cross department transfers on the corporate side in some cases, they're not allowing cross store transfers on the retail side. In some cases, firings are up on the retail side, not for layoff purposes, but your standard reasons about attendance and maybe lying about your hours and such. Right, So they're basically thinking of everywhere they can save money, and

they're doing it. A part of the story as well, Mark, we just had thirty seconds is that actually throughout the Panamic era they hired judiciously compared to their peers. Right. They didn't do anything different during the pandemic in terms of hiring and spending as they did before. Right, whereas all these other tech companies they may be doubled or tripled or hiring or r and d spending in some cases, and now things are normalizing, they have to pull back.

So Apple stayed the course. Not much has to change now. Bloomberg's Mark German, writing in power on check it out dot com and on the terminal, Welcome back to Bloomberg Technology. I met Ludlow in San Francisco. It's nine thirty am here on the West coast, but four thirty pm in London, says, take a look at where European markets closed. In the equity space, the stocks Europe six hundred up one percent, volatility and meet concerns. In the banking sector, we see

a pullback modestly in the bond market. The German ten year burned off by a single basis point two point one percent. The concern all around credit Swiss ubs has come in to buy credit Swiss. It's Swiss traded shares down fifty seven percent fifty six and a half percent in Monday session, UBS Group up one and a half percent after doing that deal with backstop on liquidity from central banks. The concern really is in the additional Tier one bonds, the riskiest bank bonds where we saw a

real write down risk. This is Credit Swiss is eighty ones. This is where the action's been throughout Monday's session. The concern is that similar effects will creep into eighty ones of other banks. We're seeing that play out as well. But Caroline, we have some sort of solution in the banking sector in Europe. The permanency of it is still in question, and we still looked at what's happening here

in the US with First Republic Bank. We still think about what it all means for interest rates setting of course the FED coming on Wednesday, and we think about what higher interest rates means for jobs too. That clear and evident in the world of technology today, Amazon laying off an additional nine thousand employees, adding to cuts that were already the largest round of layoffs in the company's history.

I Spending, Bloomberg Intelligences, and Ragrana just what was interesting about Andy Jase's own communication in the memo that Bloomberg seemed to get just ahead of the curve was the fact that they're focusing in on areas that really are growth drivers aws advertising. Yeah, I think that was the big thing. You don't want your day looking at non retail units where the major job cuts are, you know.

For Thus this indicates that, you know, there is probably still a downward pressure on growth rates in Amazon's cloud unit. That has been the you know, the key story for Amazon for some time. It is the biggest profit driver. In fact, last year it was the only profit driver for the company. And I think it, you know, just shows that the cloud consumption still remains under pressure and

a ragin. In his statement, Andy Jase was talking about uncertainty in the economy, the need to be lean the rest of the years nine thousand additional LAYOFS twenty seven thousand in total. What Caroline and I have been discussing is that there at the end of last year one point five four million work is globally three hundred thousand corporate jobs. It seems like a drop in the ocean. Do you think that they would need to cut deeper

later on? So the four The number you want to focus on is that three hundred and fifty thousand that we read at you know, Matt's piece in January. Those are the high paying jobs. Those are the ones that's more focused. I don't look at the other ones, the retail jobs, as much. But but you know, these numbers do matter because if you were to take per head costs for this, it's pretty high. Margins for awers have been declining over the past two to three quarters because

of age inflation, because of higher energy costs. I think this is just one way for them to get those costs back in order. Limberg Intelligence is Anna Igrana. Thank you for your analysis. Let's stick with the story and bring in Kara Brennan, Chief people Officer over Latise. Kara, it's a big headline and it's a week after meta. What is your assessment at the level of layoffs that

we're seeing right now in this technology industry? You know, as mentioned, we all know the rational thought here is that this is similar to what happened a few years ago. Technically it should be perceived as a drop in the bucket compared to the total employment that we have here in Silicon Valley and in our tech companies overall. But man, it sure doesn't feel that way. After the weeks that we've had recently with Silicon Valley Bank now First Republic Bank.

We at Lattis and our five thousand customers are having a lot of conversations about how to keep employees engaged, how to keep morale at a functional level. While everyone's facing these challenges, Caroline, we should point out that these layoffs, this latest round, won't happen until mid April, and if there will be separation packages of course, but morale right now, what I'm hearing, at least within Meta, I'm sure in Amazon as well, is low. Yeah, a meta I'm sure

now at Amazon. The feeling that it's not going to be happening overnight. You are a people driven business at Lattice CAA. What could be being done differently? Do you

think in terms of communication? So much of this is about proactive communication as much as it is about reactive And you saw in Jesse's memo that he's talking about trying to contain this conversation within the conversation the context of the larger planning for the organization, trying to double down on the thoughtfulness that came with these decisions around

the job cuts. What we know from being on the ground is that we have a number of organizations where people don't understand why the cuts were made where they were. We know on the HR side that it makes sense to during these times to cut recruiters, to cut some other administrative functions. We're hearing now we're learning more about what's happening on the cloud side of the businesses within Amazon. But that's the real question. People want to understand, why

are these decisions made? Why was I affected? Why was my coworker affected? And that's what our companies are asking asking for information about. How do we proactively communicate so we don't create more noise than necessary? And when you're a chief people officer of a company like Lattice, is it reality that then there's a lot of talent that you could hire up if you were in that stage. I know a lot of companies aren't, or are people when they're not being made off till April till May.

When does that actually become a reality? This talent that suddenly people can get for perhaps a little bit cheaper than previously. On the chief people officers side, there's lots of there's definitely conversations within our networks about what will

the impact of this be in the broader marketplace. And we are starting to see the impact of the of the layoffs that were happening in the fall, and it's probably going to be at least a quarter post layoff before we'll see these people ready to turn back into the market and look for their next jobs. We are challenged with really wonderful exit packages from a lot of these companies when you're trying to rehire these folks quickly.

But I'll tell you, as a chieve people's officer and someone who really cares about that side of the business, I'll take that any day. Kara Lattice is a people management platform, right. It also includes an element of performance review. What are you seeing in the data? What are you learning about how companies are going about drawing up these lists?

Because they have to draw up lists, right. You know, in some cases I've reported in Meta for example, there had been some kind of more widespread layoffs that were done with a sledgehammer rather than a scalpel. But how do you make the decision? Well, each company is different. The best way to make the decision is to be extremely thoughtful and as you mentioned, use a scalpel and yeah,

people are coming to our platform. We're seeing usage numbers increase because the organizations that really care about driving the right outcomes for the business, or organizations that are turning back into what we know are really good practices performance management, talent reviews, engagement measurement from a surveying perspective, those are

all things that we provide through the platform. That being said, those are the companies that are going to weather this storm, that are going to make the right decisions if in the worst case scenario they have to make a decision about exits, and they're going to be on the other side having made really strategic, thoughtful choices. Layoffs are never pleasant to talk about, but we are learning about how these are going about. Car Brennan of Lattice, thank you

for your time. Now, coming up, we'll unpack the ongoing banking crisis and the impact on the VC landscape of specially when it comes to tech with Kyle York, CEO of your Kaie. Caroline and what has been the banking crisis impact on crypto It is had if ahenomenal run up twenty five of the course of a week or so. Today we pull back slightly, maybe some relief after credits we's being brought by ubs. We're seeing the bank stocks rise, micro strategy down. Of course, a key cups are related

stock Bitcoin of by eight tenths percent. Still now that twenty eight thousand level, this is grimmer. I believe in a few months, three to six months, business will be back to normal. We of course encouraged our founders to leave everything by three months of money. Yeah, in Silicon Valley bank have three months worth of cash outside, so we didn't want to cause a bank run. At this point, FDIC money is safe. We encouraging our founders to put

money back in SBB. That was venowed Coast, the founder of Coast of Measures, on his predictions about how long we can expect the banking crisis to impact startups, Caroline one view, But I would say an informed and experienced view, which is that it's going to take a few months to unravel. We asked our audience what they thought. The answer is kind of consistent with that. Yeah, it feels

that hope is there that months. Coast is right forty percent, but it's pretty evenly split and still to have almost a quarter saying it's going to take years. This is a major impact, and this is still playing out. Look, there are many still wandering about their banking relationships or First Republic, even though we've got thirty billion coming to

them in terms of deposits from their own rivals. We reported on this program how quickly founders were able to diversify their banking and in some cases, like Rippling Right, raise money in just three days. On the other hand, there is nervous this there about how psychologically this is ult momentum in the private markets. Yeah, and we can talk about that sort of sentiment. And at the moment,

we're seeing financial conditions basically Titan get worse. We're worried about access to finance, and certainly there's going to be a lot of war founders out there who just don't know where the next check is coming. Then when do we see their force and the big tech companies doing layoffs like we do today. Yeah, Well, let's keep it going. Kyle York's CEO, co founder and managing partner of york Ie the investment firm, was out with this tweet last Friday.

The business is built to help companies grow, are actually failing them. That was the York take, Kyle, What did you mean by that? Listen? I think fundamentally the venture capital industry that's been around for forty years has gotten kind of almost too big to fail and others sulf Right.

If you think about the mantra of nine of ten startups fail, how is that good for the entrepreneur or the founder or the economy if the client or venture capital firm is their limited partners and their investors and not necessarily the companies and the people that they're back in Carrow on the last seven days of programs, every venture capitalist that's been on the show had a different strategy. Right.

In Vinokosa's case, he went into his own pockets and made loans to portfolio company out of his own funds, not the firm's funds. Everyone did it differently. Yeah, we had, of course have founders fund joined us last week after many had said, well, maybe they had antagonized some of the concerns, particularly in social media, by the media finding out that they were advising their port photo companies to

pull money. Kyle, what did you do in this situation for those port photo companies that had money in SPV, Well, listen, if you're an operator, every single day is hard. And if you have lived through the last few years of COVID, in the global pandemic, and now the banking crisis that we're dealing with in technology and startups, you really just need a warm blanket around you, and you need a helping hand, and you need to triage. You can go

in the triage mode. This is wartime for startups. They need to know that they have investors and they have advisors, and they have people around them that can help them figure out what to do during these times. Thankfully, a lot of our companies that are very very early stage, a lot of them have multiple banking relationships so ended up either local or regional banks married with a Silicon Valley bank or a First Republic or a Chase Bank. Had some diversity, so it enabled them to move funds

thoughtfully and collaboratively during the process. And you know, we just kind of warned our founders. You know, even though it's real nice ending to a movie in the Titanic, when the gentlemen are playing the violin on the end of the ship, there really was no reward necessarily to be that musician on that ship. So I would just be very thoughtful and pragmatic. I think it's going to fundamentally shift how companies manage money moving forward. What about

managing business? Did you call have to think, Okay, who are winners here? Who do we choose to back to offer support to or could you do it for all? Well? I think at the end of the day, the way our model works, we invest in B to B software, so recurring revenue subscription businesses. Again, we're really really early stage, and we're always, unfortunately needing to bucket companies into different categories. You have your high flyers, you have your stable growers,

you have the ones that are struggling. You know, but at this point in time, to be honest with you, you know, it was such the throes of war and you need to just react and sort of support everyone on the backside of it. Though, Carolina and Ed were definitely focused on, you know, what to do now? Right the funding markets. Over the last couple of years, you've seen valuations constrain. You've seen later stage markets of course,

the IPO market, public tech market come down. This is only good for B to B software because there's no denying that more and more applications are using a cloud, and more automation and AI is needed, but you know how long is it going to take for it to settle? The market needed a correction though, right, I mean the multiples were far too great. Companies doing a million of revenue or being valued over one hundred million dollars that was just not sustainable and you can't play power law

that long or if you start out founders. Well, I mean, the only area that people seem to feel that they do want to write checks at the moment, maybe rippling aside is artificial intelligence, right, and I wonder if the checks get smaller or larger and as we could think

about that. Yeah, I think you're just going to see valuations that are more sane, right, I mean, I think we all know what a good company should be valued out, whether in the public markets to the private markets, and there's just been so much, so many tailwinds in the last several years that have made those valuations skyrocket. Companies Investors want to invest in good, sustainable, long term businesses

has always been the fundamental approach of your KYE. I think you're just going to see a lot more pragmatism come to the market, which, in the end, I actually think it's going to be a good thing for entrepreneurs everywhere. Kyle, there were big themes and ideas for twenty twenty three that we were discussing even as recently as the night

before SBBs collapse. Right about the idea of probably fewer checks being written, the sizes of checks at the start of this year being different to what they were in twenty twenty two and twenty twenty one. You're doing twelve to twenty deals a year, seed stage up, What is business slight for you this year? What kind of transactions will you be doing in at what cadence? It's honestly never been better for us. Again, we are very early stage.

It's one nice thing to be a newer fund where we have actual capital constraints to how much capital we can deploy per year. Think about how large the largest funds in the world have gotten. Think about how large the funding rounds for those companies that they're investing in ore and how big their checks need to be to

deploy a billion dollars two billion dollars. That's kind of played its way into into this market problem where so much capital needed to be deployed, and that the valuation sensitivity and the pragmatism around the business fundamentals mattered a little less for us. We're kind of staying the course

at this early stage, seed stage. There's more and more industries now right for disruption, including banking that we're going to look at a lot of vertical applications and different things that we think have a lot of momentum out in the backs of COVID, the pandemic digital health thanking I said, management of a sex of Thanks Kyle, great to have some time with you. Thank you, Kyl york seemingly picking the right end of the spectrum to be

on at the moment. The CEO and founder a managing partner of york I E. Meanwhile, coming up, we've got to talk TikTok. The CEO is about to get grilled on the hill later this week. This is the app is on the increasing pressure politically speaking, here's what Coasla found of an old Coosler also had to say about that. I think in general TikTok has been used for spying on US citizens. So if that's true, and I don't have as much information as the administration does, then we

clearly should penalize that kind of behavior. Let's get to TikTok. The company CEO, Show Chew will have to testify before the House Energy and Commerce Committee this week, bringing in Bloombo's k lines out of DC. This is a pretty highly anticipated appearance, isn't it. It is because it's the first time he will testify in front of a congressional

committee here in the US. This hearing is on Thursday at ten am, and according to the statement from the committee, it is going to be testimony centered around TikTok's consumer privacy and data security practices, the impact on kids, as

well as the relationship with the Chinese Communist Party. We know at in Caroline that this has long been the concern of US lawmakers and authorities, the idea that TikTok is owned by byte Dance, a Chinese company, and that the data that it collects on tens of millions of active users here in the US could be inappropriately shared with the Chinese government. Now, of course, TikTok has repeatedly set it operates independently and protects US data through an

alliance with Oracle. I would imagine we are going to hear that line multiple times in the hearings on Thursday. But we could get a great deal of pushback from US lawmakers in that regard. And who are the lawmakers listening to this instance, We were speaking to then Koslo, who we understand is going to be having a dinner in Washington ahead of this, but also are they listening to well, the young pod of that constituency who really

light the app. Well, yeah, there's political difficulty here right when younger voters who you need in order to get seek and win reelection, are heavily the ones that are using this app. That does make this difficult, But it does seem by and large the narrative is that national security concerns top that. And I would note that this isn't just on the part of Congress. The Biden administration

is looking at this as well. Bloomberger's supporting last week that the administration is pushing Byte Dance to sell TikTok or risk being banned here in the US, and TikTok has come back and staid a divestiture would not actually solve those national security issues. That simply changing ownership doesn't change the rules under which data is collected and used. So This is an ongoing conversation, but yes, one that does bring great political difficulty when it comes to gen

Z and young voters. Katie Nine's keeping us on us them all things happening on the hill, of course, as we built towards that Thursday meeting. Now does it? Meanwhile, for this edition of Bloomberg Technology, you do not want to miss tomorrow ed We've got Kathy Wood of our convest joining the show. It's going to be a key conversation across AI, a coross crypto, across markets, a bank crisis. Yeah, and I know that she's keen to get back to

the discussion around technology. Don't forget recap this show on our podcast. You can find it wherever you get your podcast apples, Spotify, iHeart And of course on Bloomberg, Day one of a busy week, Caroline, lots more to come. This is Bloomberg