From the heart where innovation, money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
And Caroline Hein and Bloomberg's multi quarters in New York and Ludlow He's off. This is Bloombog technology coming up as Apple's smart watch ban it looms. The White House is tracking the case for the potential to overall the import Holt decision. Will break down the latest from Washington plus Byte Dance sales reportedly surged this year to more than one hundred and ten billion dollars, potentially overtaking competitor ten Cent. Will break down what it says about the
state of TikTok's e commerce business. And we'll discuss how hot or not the private secretary market is while start up employees and investors they seek to sell shares of their red hot companies. The first let's check on these markets, because still relatively hot. When you're looking at the NASDAK, we're still managing to push up about a quarter of a percentage point. In fact, that's that one hundred and another record high mom markets. They're also manage at rally
that everything rallies back upon us. We're still feeling that some of the economic data is coming in strong, that consumer confidence building, and indeed maybe the macro picture means that we'll be able to tame some of that interest rate hikes and indeed some interest rate cuts coming some twenty twenty four, just think about what's happening over in the UK, great British pound actually sinking as that inflation data shows two there we're seeing caoling in inflation.
Look at what's.
Happening on the individual movers and case by case basis. I'm looking at number one, China didn't see the moon music of buying that we've seen currently here in the United States. And then as that Golden Dragon just on the downside by one point two percent. This is that we see maybe some of the big e commerce players feel the pain coming from one particular bike dance.
We'll dig into that in a little bit later. I'm also look at what's.
Happening with alphabet though of course Google, we're going to be digging into what really the changes at Google play Store are going to be you would see in terms of a business model impact. So the investor base likes that, and I'm also looking at what's happening with Apple, because this is the key story upon us. Will they indeed see a ban being enacted on the import of their watches?
What does that mean? And how much of the moment is the Biden.
Administration currently tracking the impending US band We understand they are of nearly all Apple watch sales.
They're due to, of course, all surrounding.
A pattern dispute with the power to veto the decision wrestling in the US trade representative.
Now, we discussed this with the CEO of Massimo.
Of course, this is the company that is currently feeling that its patterns are being infringed, and the CEO there told us that look, thus far, the administration has been in touch.
Take a listen.
So I don't expect the administration to step in here. And every time Apple contacts them, I guess by a law they have to call us to get our response. So, yes, we've been in contact with them, and we don't think they will intervene. I think there are a recent stunt to pull the products off the market. A few days earlier than that, itc decided it should be pulled off the market. They're trying to get the public to force the Biden administration to do something they don't think they
should do. But I don't think it's going to work.
And pleased to save New Megs.
Linda and who really helps drive the coverage for the team here in New York Technology joins us remind us go back to basics. We're thinking that some sort of import ban will be enacted because Almasimo thinks this pattern's being infringed here.
Well, first, Caroline, thank you for having me.
It's nice to be with you.
So this all stems from this big International Trade Commission case in which the agency ruled that Apple had violated two very important health technology patterns in developing some of its most recent Apple Watch series. And as a part of that ruling, they impose not only a US ban on the equipment that Apple needs to assemble its watches here in the US, but also an injunction that will essentially block Apple from directly selling those series of Apple
Watches here in the US. And as you noted, we're counting down the days to that actual band. I mean we're talking about like right after Christmas that that band takes effect. And you know, as the CEO of Masimo just characterized as a stunt. Apple is deciding to sort of wind down the sales ahead of that end of Christmas Day injunction and.
Of course a key selling time, a key issue when you think about what's over in the UK, A Boxing day sale, the idea everyone goes out and starts purchasing like they do after Thanksgiving here in the US. What therefore, here in the US does it mean when a fix could or could not be enacted, Because most CEO was saying that he didn't think this could be some sort of software update.
Ultimately, yeah, I mean he was saying that it would have to be a hardware change, right.
He was telling us that for days, and.
If a fix cannot be enacted, if there is no deal that has reached between Apple and Massimo, if the White House doesn't step in because it has had almost few months to decide on a veto, then you do see the sales directly from Apple affected. Now, one thing that I wanted to clarify. You said all Apple watches will stop in sales.
That's not necessarily the case.
That is Apple's direct sales from its own retail stores. So I just want to point out that you can still go get your Apple watches at Best Buys at Walmarts, not to give them any you know, uh, free marketing, but they have said, these other third party retailers have said, we will continue selling these watches. What remains a question is what happens if the inventories at these third party box retail shops end up drawing down.
Where did they get the rest of it?
Can they still bring in those devices from Asia or other manufacturing centers by Apple and keep those sales going for Apple?
Like, we don't know, and I wonder whether it cake stops some sort of rush.
Yeah, well, I'm just I was saying the other day that I'm glad that I got my Apple watching. Before that, we have been checking said reporters that to Apple stores to see if there has been a rush. No rush yet, but you never know.
Okay, see not that on the ground reporting. And they're also no marketing for Apple here, but just the odd perspective on where on indeed if you can still purchase it.
Let's just continue the anti trust.
Side of all of this and ultimately what it means for patterns in the longer term. Let's bring in Nicholas Matter's principal at McCaul Smith's intellectual property practice, and how often have you seen this sort of tactic being used? Nicholas really with Apple sort of getting ahead of an ultimate potential ban and trying to force consumers perhaps hand here.
They've actually have been very rare in recent years, primarily because injunctions or exclusionary relief like a ban on importation, have been pretty rare in patent litigation since a Supreme Court decision in about two thousand and six, So they just haven't been occasions where a major player like Apple would frequently face this kind of situation.
We were just debating as to whether the US Trade Representative or indeed the administration would in any way step in here. Overall, just give us your perspective on what the pros are doing that and what the cons are of ultimately a government weighed in here.
Well, I mean, the pros are obviously people like Apple watches, and it would be a politically popular decision. The cons are that it doesn't, you know, it doesn't promote innovation in the US because that's why patent rights are important, and a company like Massimo is entitled to either license its patents to Apple on you know, the terms that they think are appropriate or to you know, use their exclusivity from the technology they developed to you know, gain
market share. And if Apple, you know, the if Apple doesn't want to do a deal with them or come up with its own solution to the technical problems Massimo solved, then you know, then the Apple is going to face a bandal like this, or at least have to offer products that don't have this feature.
We were speaking with the CEO of Massimo you this time yesterday, and his points were clear. He felt that his chief technology officer, his chief medical officer had been lured over to Apple. There was nothing he could have done in terms of paying it. Even further, they just had the resources that couldn't be matched by a smaller
companies such as Masimo. And I'm interested as to the other clients that you serve, the conversations you have, how much is this sort of behavior happening if indeed it is exactly what occurred.
So I hear that that kind of story all the time from clients. The large technology company taking you know, their intellectual property via trade secrets or patents and then you know, using their other market advantages to beat the smaller guy. Patents are fundamentally a tool of small companies, and that's and we need them to incentivize small companies to invent the next technology because small companies are where
the groundbreaking innovation tends to occur. And if the bigger guys, they're always going to win if they're allowed to copy, because they have you know, the pre existing you know, market advantages, they've got a well known brand, the consumer based distribution channels, and what the small guys have is their innovative technology. And so that's that's why it's so important for uh, you know, to be able to enforce intellectual property rights the way Masimon is.
To that end, do you anticipate that I mean a fewer to put probabilities on it, some sort of deal will ultimately be reached here. Massive has been spending millions, yes, to ultimately potentially prove a point here and to fight for the smaller companies, but also because it thinks it could win a lucrative deal ultimately.
Well, no, I mean I don't know what Mass and those business objectives are. They have said they're willing to do a license. You know, the question is always at what price? And isn't a price that they're willing to take in Apple's willing to pay, you know, And it also probably turns a lot on what happens on the twenty fifth or the twenty sixth, when the President has to issue its decision. We see vetos are extremely rare. In fact, I think there's only been one in history.
Now Apple was the beneficiary of that one veto, So it may be feeling a little bit of invincibility here because it has such a well known brand and such political cloud. But we'll have to see what happens, and if the President doesn't veto it, that may bring Apple to the table.
Nicholas, it's great to get your expertise. Thank you for spending some time with us. Nicholas Massage of McCool smith. TikTok owner byte Dance saw sales surge in twenty twenty three to over one hundred and ten billion dollars, and that's all according to people familiar with the matter, that would put the company ahead of rivals like Tencent. And of course it says byte Dance is seeking to expand,
particularly in the area of e commerce. For more, let's bring in Bloomberg's Henry Wren joining us from London and Henry. When you're looking at what the driving force of this sales pick up, I mean it is phenomenal percentage point growth here is it at the expense of market competition.
So as we our Asian colleagues broke this story. So as you said, so by done, its revenue is on track to exceed one hundred and ten billion US dollars and its growth driver really comes from e commerce. As you mentioned, it's not just overseas but also at home. So at home it's expanding rapidly into areas such as helping people to book restaurant tables, helping people to book restaurant takeouts, but also selling clothes online, but also overseas.
For example, just earlier this month, it bought Indonesia's Toclopedia, which is one of the major e commerce platforms in Indonesia. And remember Indonesia is one of the biggest e commerce markets in Southeast Asia. So as you said, it's expanding rapidly overseas in e commerce offering, but also at home as well, but it can be at the cost of
some other competitors. For example, mayitwe another food delivery platform in China, but also Ali BABA, which is which is under pressure by not only a PDD but also by dance in e commerce offerings front.
Talking about pressure, we're seeing it managing to scale at home despite a weakening economy. We're seeing it particularly showing strength in e commerce now having done that one and a half billion dollar deal in Indonesia. But here in the US there is still some political anxiety. Are we likely to see that continue into twenty twenty.
Four exactly, especially when you think of twenty twenty four it's an election year and the climax was really in March this year, right, So when you remember the TikTok ceo show to appeared in Congress, has testified before Congress when some lawmakers threaten to ban this app completely in the US. And I would want to point out that the regulatory pressure is not just in the US, because when you look at India, which is another big country, and remember this year India surpass China is the most
part this country in the world. The TikTok app is actually banned in India, and there's no promise said to those regulatory pressure want for us in China as well, because what we've been seeing Chinese governments has been cracking down severely on platform companies domestically as well, so as you said, regulatory pressures could be coming, but also on multiple fronts.
For now, it seems as though the growth is still about thirty percent year over year, so revenue really managing to rise up amid some of that pushback here in the US, Henry w Ren. Great to catch up with you as always, Thank you so much. Meanwhile, let's stick with byte Dance and ultimately, how we're seeing brands companies, Will you launch themselves in popularity using the power of influence? Jacob Cooks with us WPIC Marketing Technologies co founder and CEO.
You are staying up late over there in China, and I'm interested, Jacob.
Ultimately, the sort of sales growth that you hear reporting of thirty percent year on year, is that what you are seeing bear out with your own data.
Domestically, we're seeing it in line or actually even a little bit higher with what we were not surprised by that number at all. We would have actually seen it coming in mid thirties, maybe thirty six, thirty seven. It really is, you know, the platform of the younger generation. As we're seeing these consumers. You know, really the gen z really come into their own right now. This is what they're using to shop and it's you know, it's
an interesting transition. It's happened very quickly, and we're pretty excited about it. You know, everything that was in the Bloomberg article and has been released day is right in line, if not low quite frankly, from what we've seen on the ground over here.
And talking of what you see on the ground and do on the ground, you're basically helping perhaps Western companies brands access Asian buyers, whether or not it's in China, Japan.
South Korea.
How much are they leading with being on doing being on these sorts of e commerce and meets content platforms at the moment.
Yeah, the what is that we're dealing with in China? Certainly, you know, this isn't new, This has been going on for a couple of years now. They're definitely better fitting a lot from these growth numbers. And you know, when we talk about you know, you mentioned before about you know, a week in consumer over here, we really look at different categories, right so that you know, large durables and things like that that have shown weakness Dullion's really not
exposed to. So what they're seeing you know, fashion, health and wellness and these other categories that you know, the younger consumers are really engaging with. You know, Byte Dances is really well positioned for that. So these growth numbers that we're seeing coming out today again right in line with what we're expecting. And you know, next year, I think we're going to see this again, if not better.
Well, sort of ROI is a brand getting when they invest in putting content on the platform but also selling via it because well they must have to pay in up front fee to certain influences they work with for example.
Yeah, it's definitely a different model for Bye Dance. Bite Dance has a really easy platform and a back end to engage with influencers. Now you know there's a lot of them out there, but they can be charging you know, thirty forty fifty percent commissions, which isn't unheard of.
We go back to.
Sort of what you know, the big influencers were doing on Team Mall a couple of years ago as well, or Tabel Live. It was about the same rates. Now Byte Dance is getting a much larger percentage of that, which you know leads us to believe they're in a
much better financial shape. But you know, brands are willing to pay that because again you can put your product or service and again restaurants, dental cleaning, you name it, in front of millions of people, very very quickly, and you've got to have a little bit of faith in your product too that you know that second or third purchase they're going to come back to the brand directly.
We're not going to have to pay that fee. So again it doesn't work for large durables which are one off, but it does work for cosmetics, nutraceuticals, ath leisure and things that can be repeated again and again and again. So we're seeing, you know, brands do very very well that are engaging in that model. Here.
Always great, Jacob, to stay up with you, for you to give us your time when it's late. I'm ready to get your on the ground expertise as well. Jacob Cook of WPIC stay well. Meanwhile, coming up, we've got some breaking news for you.
This is as the FTC.
We understand, of course, the Federal Trade Commission. It's proposing changes to children's online privacy protection rules. They're saying that they're going to place new restrictions on the use and disclosure thereof of children's personal information. This according to a statement coming from the FTC. Of course, this is as we see ongoing concern about well the access of data and children's interpretation and use of some of these social
media companies and will use more broadly the Internet. Let's talk a little bit about well where else we're seeing some changes. Alphabet's agreement, for example, to end abuse of market power on its Google Play store.
May come with a catch.
We're going to delve more into that in a moment. Meanwhile, let's just check in on the shares of Zoom today. That Wells Fargo's securities analyst, Michael Truran. He's out with a recommendation to cut ultimately the price target on Zoo is also saying go underweight from equal weight. We're seeing a price target now with seventy dollars currently training at seventy one forty eight. We're off by one point three percent. This is BLOEMBG technology time now for talking tech first up.
While the FTC has been busy through Federal Trade Commission on this part, is also saying that right Aid must stop using facial recognition for surveillance. According to the FTC, right Aid system generated thousands of false matches off an involving race and without notifying customers. Right Aid can't use the system for the next five years, which was to
be allegedly spotting shoplifters. Meanwhile, Chinese internet company Alibibura is in the midst of an executive shake up, replacing commerce chief Truly Die after a roughly twenty year stint.
Now I will instead help set up a.
Holding firm for managing some of Vali Baba's global assets. Claims on bankrupt crypto exchange FTX are soaring training at fifty sevent to seventy three cents on the dollar depending on the size, and this is according to data from Cheroki acquisition. Still unclear whethern distributions will actually be made
or how much customers and creditors will ultimately received. Meanwhile, let's talk about well, rather a little amount the customers are going to be receiving from the Alphabet case with seven hundred million deal, of course, was agreed to alter it's Google Play app store, and many are now pointing
out some of the loopholes around developers' service fees. Let's get more context Fremeline News reporter Multi Nayaks here and before we get into the fact that a consumer in this case would get about two dollars potentially back from Google from the seven hundred million dollars settlement. But ultimately what people are nippicking here is the fact that they're probably not going to have to change their business model or that much the amount that they charge a developer.
That's right. So Google has made a concession here with this deal where they are going to allow developers to give users access to alternate payment options, like they could use paper or anything else, have their own billing system instead of going through the Google Pay billing Google Play billing system. But you know, they should previously charge thirty percent. Now they're offering a discount a four percent to you know,
twenty six percent. A developer is still paying a hefty service fee, and I'm not sure whether you know the four percent discount will actually sort of go down to a consumer where they'll actually benefit a consumer. So there have been some folks who have been sort of watching what Google has been doing over the years with its Google Plate policies, and it seems like they are concerned that this settlement doesn't go far enough to benefit developers and consumers.
For example, Epic, which actually just won against Alphabet last week in court. In particular, Corey Wright, the VP of Public Policy, is saying, ultimately this doesn't in any way help consumers in terms of overpaying. So will we see any change to the business model if it's not forced by the courts.
So I think it'll be interesting to see what will happened in court because Epic won a case against Google Place policies, which they challenged on anaturst grounds, and next year the judge is going to actually think about how Google Play policy should be revamped. You know, should there be this standard you know, thirty percent commission fee or you know at a even at a four percent discount, you know, should developers have.
To pay Google this service fee?
And Google in its defense is, you know, we have to keep our Android system going. We've got best in it, so we've got to change the fee. So we'd love to see what happens in court next year.
Thank you so much.
Maltinak has been all over these court rulings. Coming up, we'll get a read on liquidity in the private markets with oceanic stick with us. It's a bally Boy technology. Welcome back to Bluemotechnology. I'm Karen Hide in New York. Let's get a quick check on these markets because we're managing to power on higher. Maybe it's still this optimism that we'll start to see rate cuts as soon as March.
Of next year.
Federal Reserve Bank, Philadelphia president, that's Patrick Harker actually making some headlines, says we currently speak this all on the back of whether or not we will indeed see a need to pull back in terms.
Of the rate hiking cycle.
Arkas saying, you don't need to raise rates anymore, you should hold steady. We're currently up three tens percent on the NASDA. We're seeing bonds managing to rally on the back of hopes that we'll see consumer optimism as it currently hits a high today also be fed into the fact that we can get some sort of soft landing here in the US. Remember there's a twenty year auction. A little bit later, Bitcoin actually getting a bit of a bid as well. We're up three point three percent,
having been sold off a little bit of late. It's getting crazy out there, and of course it's not just Bitcoin doing well.
The old coins are back.
Doc who with hat as it's called yet a dog pictured we're wearing a hat seems to be doing particularly well at the moment, But so too is the NASDAD more broadly, at fifty four percent. Let's call it here today in a rally and today we'll once again and a new record high for the big tech benchmark. But what does the public market feed into the private market at the moment?
How much are we.
Seeing valuations still under pressure or indeed rallying on higher. Let's focus in on that secondary market now and whether it's a good time to buy into some of the hottest startups such as open Ai, SpaceX mid those tender offers from employees joining us now is an expert Tim Sullivan, Oceanic Partner's ceo Oceanic, your venture capital company, your levisory firm, and you really focus on ensuring liquidity is there within
the investments that you make in the private markets. And ultimately, Tim, are we seeing decent liquidity for some of these hottest names.
We definitely are seeing liquidity coming back, I would say in some of the names like open ai and Ai in general, those cap tables are pretty small, and so there is not a lot of liquidity. But in most of the other big names that are transferable, we are seeing liquidity coming back, and we are seeing pricing at much lower levels, and we've seen it over the past two years.
And so is that why there's now this anticipation of rates coming down, risk tolerance coming back and wanting to buy in at these cheaper prices. Who are the sort of people putting in those bets at the moment, tim.
Yeah, I think to some degree, you know, risk is coming back on. And at the same time, a lot of the shareholders that have been waiting for liquity for the past two years, waiting for the markets to rebound, are somewhat running out of air. You know, they need liquidity without companies going public, individuals literally you know, they need capitals to survive for renovations, for taxes, for mortgage
rates going up, for emergencies, et cetera. And so at some point they are going to start looking for liquidity. And the reality is that the buyers who have been primarily institutional for the past couple of years, they have not moved their bids. They have remained low based on fundamentals and sellers are now coming down to bridge that gap.
Those sellers primarily being employee. Are we seeing any early investors wanting to liquid data as well, needing to perhaps satisfy some LP demands.
Absolutely, there are plenty of early investors that are looking for liquidity. You know, no one knows how long this current situation is going to last. You know, is it a rational exuberance that we're experiencing right now. Will we see the rate cuts next year and will that have a material difference in the markets. It's hard to say, and some people can wait for another two to five years and other people can't.
I don't want to ask you to pick a favorite child, but are their names you're seeing time and time again being analyzed being brought up, and are they the ones that we're still talking about ipoing in the near future?
Oh?
Absolutely, I think you know, there's there's rumors movement around right now that open dot ai may do a raise or an IPO in first quarter next year just to beat out XAI. You know, there's companies like Data Bricks and SpaceX that have been pretty resilient throughout this meltdown, and they you know, who knows. I think you know, if the market conditions are appropriate, we'll move their IPOs up.
Not sure about SpaceX, They're probably a few years out, but companies like Data, Bricks and Stripe and some others may maybe sooner than you think.
And there's always been this hope for democratization, Tim the idea we saw Kathy Wood with Arc offering up a sort of vc ETF allowing normal people be able to have access to some of these pre IPO names. Are we seeing syndicates come in? Are you seeing sort of angel teams coming in to buy in on this stock and allow still allowed investors, but perhaps not people with billions under management?
We are, and I have mixed feelings about that. I think without legitimate information, without ques and k's being filed, regular normal people as you call them, are not equipped to do the diligence necessarily to necessarily to invest in in these names. There is a lot of risk and a lot of downside, so it's not for the faint of heart. If you have access to information, either directly or indirectly, I think, do your work and make the
most educated decision that you can. But if you don't have access, it may be best to stay away.
Tim can I ask, therefore, some of the institutions that you say have stood firm still standing wanting to take a bid but wanting it to be a lower valuation.
Are they all US institutions? Largely? Are we getting foreign buyers coming in?
We are definitely getting more and more foreign buyers in, but by and large it's still a US market.
And I'm interested is to ultimately whether you do think the IPO market's going to pick up. You were just talking about whether there's rumors, indeed swirling of an early initial public offering even from an open AI. But there has been this drum beat that will start to see more names come in twenty twenty four.
Is that likely to happen with the exits be there?
I look at it from two different perspectives. Number one, think if the market does come back and irrational exuberance wins the day, then absolutely we'll see IPOs in twenty twenty four, you know, maybe as soon as late key one. However, I see things like inflation and unemployment CPI and real macro factors that have not changed as much as maybe they need to to support that ongoing next phase of the market. And if you know, the irrational exuberance phades.
I think we're out into late twenty twenty four orarly twenty twenty five.
We have, of course had open AI SpaceX tender offers and boosting their valuations.
How rare has that been?
That has been extremely rare, And I think I hate to say it, but a lot of the valuation talk around those specific companies is driven in the media. You know, I don't know that the numbers still support those valuations. Those are a couple of companies where the valuations are now based on fundamentals, and at some point I'm sure they can grow into those valuations. But most of the companies out there today are trading more along the lines
of fundamentals. And when I say that, they're trading at discounts of fifty to seventy plus percent of where they were trading in late twenty twenty one.
Wow. And is there any sort of well great themes we can see as to whether it's the fintech space that's taken the most hit, whether it's the companies exposed to a consumer, or really isn't Just across the board, you've generally seen a clip or lower of fifty to seventy percent.
It's absolutely across the board, with as I mentioned, a couple exceptions.
Tim, it's great to catch up with you. Thank you so much.
Thank you, Caroline.
My Navanceanic partner CEO is going to be busy in twenty twenty four.
While coming up.
Look, Telephonica shares over in Spain surging after the government announced plans to take ten percent steak. We'll have the details next. Meanwhile, let's just take a look at Tesla. We're seeing actually well of maybe managers being told that some salaried employees aren't going to be being offered merit based equity awards this year. The company didn't give a reason for the change, but four employees from different departments told Bloomberg that they believe the mover is pretty widespread.
Workers that they still get a modest cost of living increase, they get adjustments to their base salaries, but perhaps some of those stock options just being dialed back a little bit. We're off by six tens of percent. This is BLUEBG Technology, Sony's Insomniac Games division. It's just seen a massive leak as hackers released from one point three million files detailing footage road maps for upcoming games tied particularly with Marvel.
For more, let's bring in Bloomerg's Margie Murphy who joins US now and for many go go back to twenty fourteen and Sony Pictures. This is a games division of Sony And what sort of details are being leaked here, Margie?
Yeah, so as you say, one went three million files, it was a really big leak.
We can see employees' personal details, which is pretty bad. So lots of passports, social security numbers, addresses, and lots of HR documents, financial documents about budgets, banking details, wire transfers, and then kind of the more sensational stuff, which is the footage from games that are slated to be released in the coming years.
So Wolverine you had, you can see.
All the.
Material for all the Marvel scenes.
That are coming up, upcoming missions, trainings. So really a huge leak for this development studio.
And actually the video game industry has been pretty prevalent since twenty twenty two, some of the big hacks occurring. I just think what's happened with Grand Theft Auto six as well, getting leaked ahead of its official launch. I'm interested in who's behind this particular attack. And what we know about them.
Yeah, so this group is called Rysia and we've known about them since about May of this year.
They are a ransomware as a furthest group, So they will people will come to them, they will give them a target and they provide the malware that is used to attack their target, and.
Then they share out the ransom demandands with their affiliates. So we understand that probably around twenty fifth of November, the group was able to infiltrate Insomniac and then Risiter would have basically be told them, we've stolen all your files, we've encrypted them all, and if you don't give us two million worth of bitcoin, we're going to release them. And we know that subsequently they sold some of the files on the criminal market and leaked to the rest this week.
Predominantly, who does right sort of tend to give malware to hack? I mean, is it the gaming industry more broadly or is it a cross industry.
So they seem to be targeting.
I'll call it lower hanging fruits. So they've been going after smaller companies and organizations that maybe their security isn't as tight, so they went for they've hacked Sony essentially, but through a kind of subdivision of Sony.
The last.
Their most recent by profile hack was the British Library, and they target manufacturing and they've been targeting healthcare and schools as well. So these smaller organizations are normally forgotten by the big time hacking ransomware groups, but they've been They've been going after these smaller groups and having some success with them, but it means that their extortion demands are normally lower, and it normally hates that the hackers
themselves aren't that sophisticated. So the malware is it can infiltrate lesser secured systems as well.
Still, the need for cybersecurity ever present. Margi Murphy, thank you so much for bringing us that news on Sony. Meanwhile, let's just shift gears a little bit and go to Europe. With the Spanish government planning to buy a stake in Telefonica worth as much as two point two billion dollars. Look, this isn't a bit to safeguard one of the nation's most strategic assets.
Massa, Saudi Arabia builds up its own.
Position in the company who most commas Seal joins US now from London, and it is interesting that this has been a company that for years is trying to distance itself from the government and now well it has to go to them a little bit closer.
Yeah, it's fascinating. As the government moved out, Middle Eastern governments have moved in on European telecoms and this isn't the first example. Vodaphone, one of the biggest telecom groups in Europe, had a UAE backed company buy up almost fifteen percent of its shares in the last couple of years. So this is somewhat of a trend.
It's a trend.
Ultimately, how much are they concerned about foreign ownership? More broadly, is it particular Middle Eastern names that they seem to be pushing back against and ultimately what's their vindication, what's their reasoning for it?
Well, certainly on the second question, telecom firms, you know, they're a bit dry but dull sometimes, but they underpin everything we do, and COVID showed that. Obviously we were all dependent on them to do everything. But beyond that, defense, government cables, big business, banking, transactions, these are all reliant on a handful of often in the case of Telefonica in the case of in the UK BT these formerly state backed companies and now you know the state is
stepping in once again. It's also interesting, I mean other rivals Telephonica still have government stakes, so it is sort of a return to that status quo. Deutsche Telecom has a big government stake, and or in France formerly France Telecom has a government stake as well.
What's interesting though, of course, is that Telephonica isn't just all about Spain. It's also about Latin America part of its business there.
So what does it mean for well building businesses abroad.
Well, I don't know if the Saudi Telecom company backed by the Saudi government has explicitly gone through its plans if they have them for for Telefonica, but there's a lot of pressure on the telecom's industry generally to maximize the value of assets. It's been a terrible sector for share prices, one of the worst globally, and so there's been lots of carve outs of infrastructure and lots of
sales of local units. So possibly the Spanish government is stepping in to make sure it has a voice in those discussions.
Telephonica big player with market capitalization twenty one billion. Over there in Spain, we thank you for bring us the latest common seal on all things Telephonica. UK based tech firm Revolute let's on track to generate more than one point nine billion dollars in revenue for the year. It's actually Europe's most valuable startup and it's benefiting from rising interest rates across the continent. Of course, Revolute is now adding as many as three hundred thousand users a week,
qulling to people familiar with the matter. However, the startup, which was most recently valued at thirty three billion dollars back in twenty twenty one funding round, still has yet to receive its banking license from UK regulators. Meanwhile, we're sticking with fintech. We're talking about perhaps the holiday season.
Within it, we're in full swing. While many of you and clearing me shop online, you're also going to be seeing bricks and more to come into their own and a New York based fintech startup is focused on that traditional part of retail.
Bondside is a company that's looking to.
Offer passive income to investors willing to bet on traditional bricks and water and pleased to say that Nehar Govindrad is with us one side founder CEO, and the passive income play here is come on board, help lend to a company that's growing, and you will get a nice return. Mean while the company what doesn't have to sell equity is that's kind of the win for them.
That's exactly right.
So our intention is to provide a passive income opportunity to investors and they provide their capital in exchange for a percentage of sales rather than a percentage of the business, and so as a result, they start seeing their repayments from the business in month one versus waiting for a year seven to ten outcome before they see the returns from their investment.
And all of this, I'm sure, is to give more options and optionality to a retail investor who's looking for yield. How much have you had to focus in on ultimately education here? There is a lot of concern about the democratization of finance. Meaning basically, we got showered with confetti every time we brought a stock.
How have you thought about educating a consumer on this?
Education has been incredibly important in what we do. So we actually we went to market coining our agreement as the repeatable revenue agreement, and the intention behind that was we wanted to shape the investor's perspective of what we do versus relying on their existing understanding, and so it gave us a new opportunity to actually educate the investor base and say, hey, this is how we do things, and here's every piece of the fundamental that you need
to understand about our agreement before you get involved. As a result, we've kept the product just for accredited investors, but we think about that as we expand how we can broaden the base.
And it's coming an expansion at a time when maybe the moon music around the consumer and the economy gets a little bit better. How have you managed to see companies perform and show resilience? I mean you're lending to really well known restaurant groups, but then some individual names that might be a yoga studio for example, than a store which have done well. Has anyone had problems servicing?
So we exclusively focus on brick and mortar services businesses, and we define that as food and beverage as you referenced. Then the second category is wellness, So think medical spas, gyms, salons, and then the third category is more traditional care, either provided in clinics or something like.
A car wash.
And our belie especially coming out of the pandemic, is that brick and mortar services is very much here to stay, and if anything, is on the rise, because we all lived in a world where we weren't experiencing services and we all decided that's not the world that we want to live in. And so we've seen consistently across our portfolio really strong performance, and of course that's aided by the rise in consumer spending that we're seeing as well.
I'm looking at sort of JS Andres Group, Why did they need to access money from you? Why not go to a normal bank compartner when you're that big a name, that bigger player.
It's a great question.
So we really think about our source of financing, not necessarily for those that are in need of financing. When we look at the brick and mortar services sector, we believe that the capital stack and the options in their capital stack haven't actually innovated in the way that multi unit retail has really innovated in the last decade. And so when we look at that, we think about what we're providing here at Bondside with our repeatable revenue agreement
as expanding their capital stack. And so it's not necessary really meant to replace the equity on your cap table or replace traditional debt that you have in place, but to just give you one more tool in your belt that you can leverage as you think about growth and scale. And so we see businesses as large as Hose andres Group adopting us, as well as the younger players that are being a lot more sensitive to dilution than they were maybe three to five years ago.
What about your cap table?
You're going out pitching yourself as a fintech business with a technology evaluation.
How have you raised funds? Has been hard? Easy to tell your story?
Yeah, So, you know, I really came at building bond Side out of a personal need. I prior to building Bondside, built a brick and mortar business and felt that we were really underserved in the capital options that existed. Nothing quite fit what I was looking for. And so it was very easy to then translate that into a story and really sort of paint the picture for the need there. And so as we think about our cap table at Bondside,
when we think about our roadmap ahead. Our first product is the repeatable revenue agreement, which you're right, is a financial vehicle. But when we think about the future, there's a lot of opportunity to start of brick and orders beyond that.
Nah, it's great to have you in the show. Thank you, Thanks Carol, Nea Govrindaje. There once I founder CEO talking fintech. To end what is of course this edition of bloombag Technology. Do not forget to check out our podcast though, get up to speed wherever you listen of course on Apple, Spotify.
iHeart Bloomberg dot com too. This is Blombo Technology.