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Hello in the City listeners, I'm Francis Lacua and I wanted to give you a heads up. This week's show is a little bit different. Firstly, this episode is hosted by Stephen Carroll, our amazing colleaguen host of Bloomberg Radio's Daybreak Euroup. And Secondly, the podcast episode was recorded in front of an audience at an event held recently in London called gross Summit.
Now.
Gros Summit brings together UK tech scale up entrepreneurs and investors to share ideas and connect, and part of this year's event included a conversation between Stephen and two outstanding voices from the tech scene, Eben Upton, CEO of Raspberry Pie and Cherry Cutu, serial entrepreneur and angel investor. They discussed the success of Raspberry Pie, London as a place to list and whether the UK is leading on AI literacy.
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Pea Welcome to in the City a podcast from Bloomberg where the story is important to the city of London. I'm Stephen Carrol. We're here in front of a live audience at the Grow some of It's Future Horizons of in London. This is a gathering of founders, investors and others focused on the next generation of technologies and how they might change our lives. Today we're talking about a UK success story in this sector. Raspberry Pie is the world's largest single board computer company.
Cambridge.
Firm is also a bright star in the gloomy London listing's landscape, having held its IPO in June last month, the company reported more than sixty percent jump in revenues in the first half of this year, and we have two of its leading lights with us today. Evan Upton is the founder and CEO of Raspberry Pie. Cherry Cootu, a serial entrepreneur investor in her own right, founded Interactive Investor, brought back to IPO as well and as a board member of Raspberry Pie as well. Great to have you
both with us here at the Future Horizon's event. So Evan, let's bring us back a little bit. First, you founded raspberry Pie, or rather the company started in twenty twelve. Did you ever think that twelve years later he'd be where you are now?
Absolutely not, we had I think the interesting thing when you look back on twenty twelve is how how small the dreams were. Right, you know, we were a group of us in Camege concerned about the dearth of young people applying to study commuter science at the university. We were down to a non actionable advice in two thousand
and eight. If you wanted to get your child in to study any quantitative subject of the University of Cambridge, the best way for them to do that was to apply to computer science and then switch once they were there. We were down to something like two applicants for every place,
which is just you know, a terrible ratio. And really the dream for raspberry Pie is, well, suppose we could get build a thousand raspberry pies, get them into the hands of a thousand young people at the right put in their lives, and then if one in ten of them applies to Cambridge, then that's a fifty percent increase in a number of applicants. So this is an organization which is now we're closing in what is that? That's four orders of magnitude, you know, between four and five
orders of magnitude large. We sold over sixty million Raspberry pies and the twelve years they've been on sale. So yeah, it's an organization which is operating in all sorts of ways of the scale vastly beyond what we could have imagined.
A Sarry, tell us about how you got involved in the Raspberry Paie, you've been on board since the early days.
Yes, well, amazingly there is a link to to this summit in that we were having an exhibition of you know, companies in Cambridge and one of the speakers that we had over from Silicon Valley came to me and said, I've just met a really interesting person over there doing something you need to know about. He grabbed me and he walked me over to you know, to Eban and also at that point Jack Lang and you showed me,
well it was, and that's what piqued my interest. So you know, you never know what happens at these summits and these exhibitions, but that that was the memory, and you know, I loved you know, again the network effects. Someone's saying to me, you should be interested in that. It's going to change the world and so far so and.
You've been a director of the Commercial Bit, the trading entity since it was founded at the end of twenty twelve and even and you did six years tour of duty as a trustee of the foundation as well.
Yep, so yeah, joined immediately and then we kept on giving you know, like a huge amount of money to the foundation. It was like, I'd really like to join them as a trustee and find out how they're spending this money and just sort of make sure it's okay. And did that and then timed out after six years and then came back, you know, solely to the Training Foundation.
And then really that was the ride up to what would be brilliant in you know, how can we grow this bigger, faster, better and how big can we actually get it?
And well, I mean that's where I suppose where we go from here as part of the story. But I do wonder. I mean, the world was arguably a very different place than twenty twelve. You know, we were before Brexit, we were, you know, before all of the changes we've seen in the politics in the US. Arguably a more stable world at that time as well. Do you think that it's possible to have done what you've done with Raspberry Pie in twenty twenty four.
I think the interesting thing is there aren't many places in the world where you could I think you could definitely still do it, but there were not many places in the world where you could have done it. Then obviously you could presumably have done it in Silicon Valley. You could do it in Cambridge or in London. We are very privileged here that we are located in one of the world's pre eminent turk clusters, probably the pre eminent tech cluster outside North America. I don't think things
have got harder. I think they've got different. But you know, certainly we were glad that we did it. We're glad we did it when we did it, because, of course we found a This was one of these kind of blue ocean stories. What did we discover when we launched Rosberry Pie? That there was an enormous pool This happens sometimes, that there is a pool of latent demand for a
particular object that doesn't exist. And then when you we saw one hundred thousand Rosby Pies on our first day, didn't we In the twenty ninth of February, the rather quixotic twenty ninth of Febry Lunge. Dight we have terrible birthday party. We have amazing birthday parties, we just don't have them very I hope every year. We spent a few thousand hounds on fireworks every four years, don't we?
And but you know, there was a huge pool of latent demand just sitting there waiting for rasbary Pie, and it crystallized when we dropped the first little crystal into the solution. I'm not sure we could have relied on that that pool of demand remaining unsatisfied if we'd waited twelve years to try and satisfy.
And from a broader investment landscape as well, I mean, is is the UK still as vibrant a place? Do you still? Can you still attract and find and attract attention of investors in twenty twenty four versus in twenty twelve.
I would argue it's easier because of you know, easier now than before. I mean it used to be very hard to get funding and the talent and also have the capacity in the you know, the sort of the leadership capacity as well. We've gone from you know, in twenty twelve we were thirteenth in the globe in terms of the number of scale ups per thousand, and we're now three. And in AI and some other industries number
were number one. And I think we're focused on, you know, not only starting companies, but the infrastructure for scaling companies so that they can ten x and then ten x again and then ten x again is there. And creating you know, we were earlier, you know, creating decacorns and centercorns rather than just focusing on unicorns.
It's absolutely possible.
Part of the conversation that we've been hearing a lot particularly we're thinking about, and you huge experience in London's capital markets as well, is the journey to scale and how you get beyond a certain level. It feels like a lot of people go to the US after a certain level. Raspberry Priie hasn't. Why do you think that it's that others are choosing the US over you know, a London listing. I'll come back to the London listing choice you made in a moment.
Well, well, I actually think London is a brilliant place to to float a company, and you know, and I think, well, Evan, we'll talk about the great reasons why we choose here rather than elsewhere.
I have been involved in floats.
On the New York and the Nasdaq markets, and in those cases that the talent was over there, the customers were over there, and we felt the liquidity would be there as as well. But that doesn't mean that it's that it's not here. I think it really is company specific on which is the right exchange to go.
To count attach companies. Is London is still a good place to list absolutely? I mean, tell us about White Trovy to lift in London, because I'm sure they were, there was interest.
Yeah, So so I went out to I went. I went out to New York about thirteen fourteen months ago, and I've said I think I got on the plane seventy to thirty in favor of listing in New York. I think there is a slite geist around the idea that there is some at least that there is a squad of liquidity, probably not not super relevant for a company on our scale, but that perhaps there is a
multiples advantage your company would be more highly valued. I think what the London Stock Exchange people will tell you is that that is a that's a kind of a it's a data artifact that what you're really measuring there is you're measuring that there are different sorts of companies listed in New York and listed in London. Once you stratify down and compare apples to apples, you find that there's no real liquidity, no real multiples arbitrage. And of
course you wouldn't expect that. It's a weird idea that there would be some long term, durable arbitrage in valuation between companies in London and New York. Went out to New York, really got the you know, feedback that from
investors there that there wasn't an arbitrage. Maybe, I mean, you could perhaps persuade somebody to suggest US fund managers maybe a little bit more tiggerish, you might get fourteen x rather than thirteen X out of somebody, but you're not talking about twenty x us as ten x. And then said against that, there are a lot of disadvantages for companies at our scale, so they sort of kind
of roughly billion dollar valuation companies. There's a noise flow in New York, and there's a risk that you would fall into this noise flaw. Struggle to get investor attention, struggle to get analyst attention, and so got back on that plane, sort of convinced that we could make it work in London, convinced that we could attract American money.
You know, another piece of feedback we've got is, look, you know, if you've got a if you've got an equity story, if you're prepared to come out and educate American investors about your equity story, that money will come find you regardless of where you And when we came back, picked bankers took a round at it. We had we had a I guess, a conviction there would be a
window this year. There wasn't the window and open. You know the challenge with the window It opens and closes, and if you wait for it to be open, it's going to take you six months to get to it. So if you wait for it to be open, by the time you try and jump through, it's going to slam on your fingers. So we had a conviction there would be a window in the second quarter of this year, and started running and yeah, my fingers, even my toes are intact. So you know, we did we did well.
I'm thinking about people in this room who might be you know, hoping that they're they've got something in their sights they want to be listing, and you know, let's let's be optimistic and say in the next year, congratulations you are what sort of obstacles would you want to would you want to make that path easier for people that come after you.
I think we had I think we had a good run of it. I think we benefited from having we benefited from having I think done the work on the board composition. So we've done the work on on on adding a few people to the board just to just to get public markets ready already. We had some great advisors, Peel Hunt and Jefferies, as are joint global coordinators link Laters for legal you know. So so I think what we've done is we took a run at it. To you, I wouldn't recommend anyone do this, but we took a
run at it. Two years earlier. We'd expect notes in this audience. Yeah, we hoped that this is this is something really something not to do unless you absolutely have to. We took a run at IPO started running at the end of twenty twenty one with a conviction that we'd be able to float in the second quarter of twenty twenty two. Obviously one or two bad things happened. Bad
things happened, geopolitically, bad things happened to our company. We were quite badly affected by the global semiconductory supply chain crisis. So in that case, the window did close on the window slammed on our fingers. What it did mean was that a year ago, when we started the process, we were going in with a very mature set of collateral,
so we were going with an almost complete prospectus. We were going in having gone out and spoken to investors in twenty twenty one, having made some claims about how we were going to evolve our business over the next couple of years. And then when we were going out to investors a year ago, we weren't saying, Hi, where Rasby Pie. You've never heard of us. We're saying hi,
where Rasby Pie. We were told you we would do these three crazy things two years ago, and we've done two and a half of them, and here are here are two new crazy things. We had to finish that half crazy thing, and here are two more crazy things. So that made it easier. As I say, that's not an optimal way to do things, but it did work for us.
You mentioned some of the supply chain issues and thinking about the events in the United States over the past few days, Donald Trump has promised to be more protectionist president. He's looking at trade tariffs. Are you concerned about supply chain disruption semming from that? How are you preparing for what the world might look like next year?
I don't know. I think we talk about this a lot, don't we in board meetings? And I we had a the system. The supply chain crisis was a was a once in a lifetime, once in an industry dislocation. Right, This is nothing like what happened in the last two or three years has ever happened in history of solid state electronics? Right? And what you saw was a negative going transient. Things weren't available. Then you saw a positive
going transient an overstock result of that. And I think that in a lot of people's minds, there's an assumption that the supply gym will do this and then settle down, and almost no differential equations give you that. Right. While I suspect we're going to see irrespective of the political situations, Yeah, what I suspect you you're going to see and this is irrespective of any sort of political situation in the US.
It's you may well next year see sporadic shortages of components resulting from I guess an over eager return to justin time ordering behavior from customers downstream. What have we done about this? Where we raise forty million dollars of new money of primary at the IPO, invested a lot of that in supply chain. So we've invested that in component inventory, in finished goods inventory, just to give us that resilience as we go into twenty twenty five to withstand any any future shocks.
I want to think about some of the broader challenges identified in the UK business environment as well. We had a conversation at this event last year with Michaelane Fox. The British Chambers of Commerce have said the number one problem facing UK businesses that are growing is talent. You can't get the people they want with the skills that they want. Shar I know this is maybe you're very
invested in as well. I'm keen to understand how you view the situation now from the point of view of technology and also how you can have the right people with the right skills.
Great thank you.
Well, just on on on talent, thinking about some of the people that you know work at work at Pie.
Pretty amazing.
But you talked about the secondary, which is allowing you to secure the chain to make sure that we don't have backlogs of orders for customers. But you know, just importantly that there was also a secondary for the owner of Raspberry Pie, which netted them one hundred and eighty million pounds to put into training talent and computing talent, which is you know, a pretty a pretty good gift for anyone to give to a charity and thinking about how they're going to deploy it on AI and education.
And we were speaking earlier about Salcan and you know his book and you know, creating Tutors. There is an organization you know again the foundation behind behind Pie that is been given a really great legacy to deploy and I'm excited about that. I think that I'd be interested to hear what others thought. I think, you know, mass underlies a lot of what we need. But every day you guys are solving problems. You think about what does
a CEO know? You're solving problems every single day you use those skills which aren't necessarily taught in class, but equipping the world so that we can run companies and work for companies and organizations is super important. And I think some of the things that raspberry Pi are doing great. There are some you know, other other organizations you know working away at that.
But I know that you want to canvass the audience opinion, and I think we're a bit tight in time to be able to do that. But I want to kind of just briefly discuss how we should be thinking about this education point of view. What are the kind of key skills that we need to train the people that everyone in this room is going to be hiring.
Yeah, we need to train the people that everyone's going to hire. And we also need to enable teachers to get the people that are you know, the you know, people that are sort of working need and if you think about the reskilling of five hundred thousand teachers, that
is not simple. And to enable our children to imagine what we actually do every day, or what all of the asach engineers do at raspberry Pie, or what you might do if you wanted to study campsig a computer you know at Cambridge University.
That's a real hard thing.
And you know, I would call everyone in the audience to make sure that they volunteered their time. And if you're running the organization, encourage your employees to volunteer their time in schools to help the teachers, because otherwise, you know, things are moving too rapidly for them to be able to help. But it's already a talent crisis. But there are things that every single person in this room and every single person on your audience can and please should do.
And then a final thought from you as well about what's next for Raspberry Pie. Everyone I speak to in my day to day job, I talked to them about AI. I was AI coming into Raspberry Pye story.
So from our perspective, Rospberry Pie is now that we have all our roots and education. From a commercial perspective, we are overwhelmingly now and the emb better than industrial business. So we sell products to people who want to perform computing at the edge of them, generally at the edge of the network, and for us, AI workloads are just another consumer of compute at the edge of the networks.
We design our we design our products to be able to run many, many inference workloads, even quite heavyweight inference workloads themselves unaccelerated. We put a lot of CPU performance into our devices these days. I think what you're seeing what you've seen from us this year, and I think you'll see a little bit more of this as we
go into twenty twenty five. Is us working with partners, particularly our friends at Halo in Israel, to add accelerator options, to give people whose influence workloads are beyond the native capability of the platform, to give those people a series of tiered price performance options, to add external inference capability into the platform. Very very popular with our hobbist customers at the moment. Starting to see some really interesting industrial uptake of that.
As well, and that could of move into the sort of the enterprise and the industrial side of the business. How much of that is a focus for for Asbury Pass.
And it's an enormous focus for us. As I say, it's the vast majority of our business today. I think what you're seeing, particularly with AI is what you see with really many many of our products is an initial adoption in the what we would call the enthusiastic community hobbyists people are me geeks, and then many of those people then take our products with them into their professional lives and that's definitely some of us seeing with the AI.
Okay having Upton, founder and CEO of Asbury Pie and Cherryku to investor, entrepreneur and a board member as well. Thank you very much for joining us at the Grow Summers Future Horizons event. Thank you all for your time and your attention. Today you can download this episode of In the City available wherever you get Your podcast will be out next week. Thank you very much.