Startups that are Ramp-ing up, and startups that are full of sh**

This is our Friday show, and we’re talking about the week’s biggest startup and tech news. Here's what Mary Ann, Alex and Kirsten Korosec got into: Nvidia blew the doors off with its earnings report. We talked through some of the high-level numbers and marveled at the company's growth. TechCrunch has more on the matter here. Ramp raises $300M: In this market, a multi-billion-dollar valuation is a win for a fintech, even if Ramp's new price tag is a bit lower than it was previously. So, while Ramp likely doesn't love that it raised a down-round, it does have fresh capital and is worth $5.8 billion. That's simply not that bad. Lex raised $2.75M: Alex covered AI-powered writing tool's Lex seed round. Kirsten got to give the app a try, and we all had nice things to say about the nascent startup. Northvolt is bringing its volts to North America: The global battery-building boom includes Swedish company Northvolt building a new facility in the United States. The company raised $1.2 billion from BlackRock. Better.com went public: Mary Ann interviewed the company's CEO ahead of its SPAC-led public market listing, which got panned. In the transit world, Cruise got its wings clipped in San Francisco after an accident involving a fire truck. Alex is annoyed. Mary Ann is not. This year's TechCrunch Battlefield 200 companies feature a lot of startups focused on excrement. We're not kidding. That’s all from us this week. We are back Monday morning, chat then! For episode transcripts and more, head to Equity’s Simplecast website. Equity drops at 7 a.m. PT every Monday, Wednesday and Friday, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews foundersand more! Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:10Speaker 00

  Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and the nuance behind the headlines. My name is Alex and I am joined, as always, on this lovely Friday morning by my dear friend, Mary Anne Azaveto. Mary Anne, how are you? I'm great, Alex. How are you? We have childcare again, so my week has gone from bad to good. And I am hanging in there, but oh my gosh, do I respect working parents more than I did in the past because I didn't realize how every day was pure chaos. So yeah, that's how I'm doing. But the good news, everybody, is that it's not just Mary Anne and I today. We've also brought along our dear friend and regular contributor. It's Kirsten Korosec, a senior reporter on the transit beat and a genial, lovely person. Hi Kirsten.

• 0:50Kirsten Korosec?

  Am I genial?

• 0:52Speaker 00

  Well, sometimes.

• 0:54Kirsten Korosec?

  30% of the time, 30% of the time, I'm genial. I'm doing great and I'm just enjoying the end of earnings season, you know, last couple exciting ones in the mix. So it always makes my day.

• 1:06Speaker 00

  Yeah, but the funny thing about earnings season is that it takes two full months out of every quarter. So we really only get one month off and this year we have to throw up. So pretty much it's going to be earnings season again before you know it, Kirsten.

• 1:16Kirsten Korosec?

  Can't wait.

• 1:17Speaker 00

  All right. Today, we have deals of the week from Ramp and Lex and North Volt. Then we're going to talk about better.com, which is now trading as a public company. Then what's going on with Cruz and then finally startups that are full of shit. Trust me, you don't know what I'm talking about and you're going to love it. But first, before we do anything else, we have to talk about Nvidia because many things happened. Kirsten, you and I are probably the two biggest public market dweebs on the TechCrunch team. And I do not think that I've ever seen an earnings report as bonkers good as what Nvidia just turned on.

• 1:52Kirsten Korosec?

  Yeah, they 100% crushed it. And I'm going to also, just as a side note, take your dweebs comment as a compliment and not as an insult.

• 2:01Speaker 00

  I would. I would take it as a compliment. I mean, it's a compliment in that I like us. I'm just not saying that everyone else does too.

• 2:08Kirsten Korosec?

  Well, Nvidia reported revenue of 13.51 billion in the second quarter.

• 2:13Speaker 02

  Wow.

• 2:14Kirsten Korosec?

  Just annihilating Wall Street expectations, double the 6.7 billion it generated in the same period last year. Earnings are also up and the big message here is, guess what? People want AI chips because generative AI boom is happening and a lot of startups are buying them. And also the data center business is just exploding. So that is what is producing insane results for Nvidia.

• 2:41Speaker 02

  Insane is the word. That's crazy.

• 2:43Speaker 00

  It's crazy. And what's even more crazy is they're projecting $16 billion in revenue for the current quarter, plus or minus 2%, which means they know where they're going to land. And I almost want to guess that currently the only reason they're not growing faster is that there's probably a limit to how fast they can make these AI focused chips like the H100. There doesn't seem to be a limit to demand because companies, governments, large cloud providers, everyone wants these chips. So at a minimum, in the hardware world, the AI boom is real. I think we're still kind of figuring out what it looks like in the software world. But Kirsten, I think Nvidia is going to have the best year of any company on the planet.

• 3:20Kirsten Korosec?

  Possibly, but yes, they are absolutely crushing it. Like I said before, and there was a little suggestion on the call, like trying to pick at some downsides. And Jensen, the founder and CEO basically was like, listen, this is, we are iterating all the time. And we're constantly putting out new products because of this. And he just struck an incredibly bullish tone.

• 3:41Speaker 00

  Yeah, I think that we can phrase that as, I know what I'm doing. Enjoy the ride.

• 3:45Kirsten Korosec?

  Yeah, exactly.

• 3:46Speaker 02

  I mean, they're just crazy numbers, unlike anything I can think of that I've ever seen before, at least in recent history. But Nvidia is not the only company that reported higher revenue, although at a much, I guess, smaller scale. Fintech startup ramp also this week said that it's surpassed $300 million in annualized revenue. It's up 4X compared to last year. And they shared this when announcing a $300 million raise at a lower valuation, 28% lower valuation, to be exact, of $5.8 billion.

• 4:18Speaker 00

  $5.8 billion to Mary Anne. My first read of that number is, that's still many billions. Certainly it's not where it was before, but for a fintech company in 2023, I almost want to say this is a win.

• 4:29Speaker 02

  I mean, it's funny how our perspectives change, right? There was last year Klarna announced a major, major down round. Or was that this year? I don't even remember anymore, but like their valuation was cut from like 45 billion to like six, right? Stripe's valuation got cut from 91 to about 50. So when we're, when we look at fintech valuations being slashed, this, this doesn't really feel like such a bad drop here.

• 4:57Kirsten Korosec?

  Well, I will though mention that, so their last raise was what? Last March 2022, they raised 200 million in equity funding. And I just want to throw out this number, their valuation at the time was 8.1 billion dollars. So what in your perspective has not just happened to Ramp, there's been other companies, right? That have also seen decreased valuation between, you know, in the last year and four months or so, what's pushing these valuations down?

• 5:23Speaker 02

  I mean, fintech was kind of like where, well, not, maybe not to the degree, but what AI is today fintech was about two years ago, right? Like after the pandemic, everyone was like fintech's the space, it's going to transform the world. Digital payments, online, everything, you know, and everybody was going crazy, throwing money into fintech startups left and right. Valuations went nuts. It was all too much. Most of these companies were overvalued. I wrote about this with Rebecca a couple of months ago. Valuations just went sky high. Most of them are coming back down to earth. It was just too much hype, right? Not to say that these companies aren't doing good things. They are, right? They are Stripe, Ramp, Klarna, all of them, and they're making money, but they were overvalued.

• 6:07Speaker 02

  So I feel like this is just a reset that needed to happen.

• 6:10Speaker 00

  I think that's a really, really solid answer. And I would just want to throw in two little bits of color that have been bouncing around my head. One is the public markets repriced some really big leading fintech companies, your PayPals, your Blocks, et cetera. And that trickled backwards into the private markets. And then the other thing is, I really do feel, and this is slightly rude, but that some people in the startup and venture markets began to value all revenue the same. And fintech revenue does not have the exact same profile as high margin B2B enterprise SaaS revenues. And I think in the ebullience of the prior boom, things kind of got mishmashed definitionally. And so everyone thought that everything was the same.

• 6:50Speaker 00

  Now we are seeing a striation or differentiation of different revenue qualities, which usually break down on a per sector basis and fintech having lower numbers, still very good, but lower than enterprise SaaS is getting put back into the right bucket.

• 7:03Speaker 02

  Yeah, that all makes sense.

• 7:05Kirsten Korosec?

  What you're saying is nuance matters, Alex, when it comes to describing the difference between that not all revenue is created equally.

• 7:13Speaker 00

  I agree with that so much, Kirsten, that you could actually, I think, put together a whole podcast whose touch phrase or catchphrase, touchstone, touchstone, catchphrase, what's the word I'm looking for here, raison d'etre? I don't know how French works. Slogan. Thank you, Teresa. That's what I was looking for. You can tell when I break out the poorly pronounced French, I'm really, really lost. Anyways, the whole point of that podcast could be numbers and nuance behind the headlines, and that's us. So I want to say though, Mary Ann, last question on this, are Brex and other ramp competitors doing well as well, or is ramp the standout winner?

• 7:45Speaker 02

  You know, that's a tough question. I mean, the spend management space is so crowded right now. Brex hasn't raised in about, I think, a year and a half. And so I'm not 100% sure exactly just how Brex is doing, but all I could say is the space is incredibly crowded. They're constantly putting out new features left and right to the point where it's just like not even news anymore. So I don't know, we'll see. I'm curious to see when Brex raises next and hopefully they can share a little bit more about how they're actually doing too.

• 8:14Kirsten Korosec?

  Last question before we move on. Do you think because the space is so crowded that we're going to see more consolidation, you know, in the next, let's say, six months or so?

• 8:24Speaker 02

  That's interesting. Maybe consolidation of in terms of these companies buying smaller players to help them grow faster and get bigger. They're all just so competitive. I don't see, I don't see yet any of these players joining forces anytime soon.

• 8:39Speaker 00

  Okay, so I know we're supposed to move on, but we all love this topic. So let's stay with it for one more second. I was reading Bill.com's earnings the other day, and as we all recall, they bought Divvy, which was also in the corporate spend management space. The earliest companies out of, I think it was Utah, that really levered the zero cost software, make it all up on interchange model that did so well for so long. And if you look at how bill.com is growing, Divvy is actually a key driver of its continued growth. So if Divvy is doing well at bill.com and Ramp is doing well by itself and Brexit is presumably doing at least fine, and Airbase with Tejo is doing fine, then frankly, why consolidate? And maybe the smaller players get wound up, but we still have like four horses here that are all doing fun.

• 9:23Speaker 02

  Yeah. And like Mesh Payment CEO that I've talked to a couple of times too, keeps pointing out the obvious. I mean, there's plenty of room for all these players, right? This is a, you know, not to sound like cliche, but this is, this really is a massive opportunity. And, you know, we don't, there's, there's room, right? For all these different companies. So I think they'll all possibly have potential to grow.

• 9:43Speaker 00

  All right. So if we started out with Nvidia, which is worth more than a trillion dollars, and have gone down to Ramp, which is now worth 5.8 billion, let's ratchet down to another factor of a thousand and talk about Lex. Lex is a neat little startup that just raised $2.75 million from True Ventures. There are probably some other money in there, but True led the round. And I think this company is cool. It is a writing service that has an AI component to it. And really fun, it was spun out of a media company. If you're familiar with Every, I think the URL is every.to. It's a writers collective that has a kind of single unified subscription for a number of people that write about related topics. I think it's pretty cool. Glad it's still in business. And Nathan from the Every team

• 10:26Speaker 00

  kind of spun out Lex from it. And I love to see, Mary Ann, an actual seed sized seed round.

• 10:31Speaker 02

  Yeah. I mean, it's always fun. I really, like I mentioned before, I've been covering a lot of very early stage rounds lately too, especially when I find what the company's doing is actually interesting and unique. In this case, it does feel different from what else is out there. I unfortunately didn't get a chance to try out Lex before we recorded today though. So help us, like, what does it do exactly? What is it like?

• 10:52Speaker 00

  Well, Kirsten, when you write, are you a Google Doc person or are you a write in the CMS person?

• 10:59Speaker 02

  I am not going to answer that question as advised by.

• 11:03Speaker 00

  My counsel?

• 11:06Kirsten Korosec?

  I like to feel alive, Alex, and I like to feel all the thrills. So what do you think?

• 11:11Speaker 02

  Oh, no, you two are alike.

• 11:13Speaker 00

  This is why I have her on the show.

• 11:14Kirsten Korosec?

  Not, not always, though. Scoops and investigations aren't on anything that is even cloud linked. So earnings and things like that, sure.

• 11:23Speaker 00

  And collaborations, like if two of the three of us write together, we tend to do it in docs. But quite a lot of us like to write in the CMS, which is WordPress at TechCrunch. And one of the cool things about writing in the CMS is that you're not bound to a print world. Like if you fire up Word today, you're still looking at an eight and a half by 11 piece of paper, which feels really archaic because I literally cannot recall the last time I printed something. In fact, I don't know if our printers are plugged in. In fact, I don't know if we still have printers at this house, to be honest. And so Lex is cool because it's a new writing service and it's like divorced from the past in a way. And it has a cool AI component. So it feels modern in terms of how it presents the written word digitally. And then has some neat AI tools that are designed to help you get unstuck and possibly ask it questions like,

• 12:07Speaker 00

  hey, how would you make this smaller or whatever? So it's not trying to replace writers. It's trying to be like a solid writing service, Mary Ann, that has an AI boost to it.

• 12:16Speaker 02

  I'm intrigued because a lot of the AI tools out there are just generating the content. So I am intrigued by something that's really just sort of trying to help you improve your content, I guess.

• 12:28Speaker 00

  Yeah, I think I would say improve and then prompt.

• 12:33Kirsten Korosec?

  Yeah, so I started to play around with it a little bit and the UI of it is laid out kind of nicely because it takes you through these various steps of the type of thing that you're about to write or what you typically write. So are you typically doing presentations? Are you typically doing press releases, short stories? I was tempted to try the short stories one, but didn't. So from there, it, it kind of winnows down as a style. And then you're presented with very specific tools as opposed to just fill in what I should be writing.

• 13:05Speaker 00

  Yeah. Although I will say one thing I've learned by talking to people who are not writers by trade is that the blank sheet problem is huge.

• 13:13Speaker 02

  Yeah.

• 13:13Speaker 00

  Like, people don't know what to write. They don't know where to start. I think the three of us living in our, frankly, writing first bubble can underestimate how useful it is to have a generative AI tool. So like, I feel like that makes Lex even cooler because it's not that. And so it's almost like someone made something slightly outside of the current mainstream use of a technology for me, if that makes sense. So I dig it, even though I'm going to keep writing the CMS because I'm fundamentally lazy.

• 13:39Speaker 02

  Well, I would say another thing I liked about this raise, Alex, is the philosophy of the founder who's like, you know, first of all, he started out with a YouTube video. And that's how this gained traction. So kind of that old school way of like getting picked up, which is always fun, in my opinion. And it's like, that's how it should be because you know, if something's really cool, it's going to get gained traction in such a way. So like, he started with a YouTube video, signed up around 25,000 users in the first 24 hours. And now even with this $2.75 million, he says he wants to keep the team really, really small and hire when it hurts.

• 14:16Kirsten Korosec?

  So to clarify, how big, quote unquote, big is, is the team at Lex? Do we know?

• 14:23Speaker 00

  It might be a one man band right now. He's hired

• 14:26Speaker 02

  Yeah, I thought so too.

• 14:27Speaker 00

  founding engineers. But okay, while we're doing this really briefly, this was a nights and weekends type project for Nathan while working at Everi after he got back from parental leave. And so he kind of built it on the side and then, you know, they put it out in its early form, got a lot of interest. And then the market kind of pulled him into this. So it's not like he was like sitting around thinking up like, what can I build because I'm a software developer. It was more like had an idea, worked on it, showed it off, got attention, worked on it more, raised a little money. It feels so like 2004 in like the best possible way.

• 14:59Speaker 02

  I love it though. I really, really love it because it's like, it's, it's just what you want to see in a founder. Someone who, who started on the side, seems to really have like a passion for what he's doing. It's just refreshing.

• 15:10Kirsten Korosec?

  It's wholesome.

• 15:11Speaker 00

  Wholesome is the word, yes. If you want to take a look at it, it's lex page, but we need to move along because we're spinning the globe to the home country of the critical and critically acclaimed Gothenburg melodic death metal sound. It's Sweden.

• 15:24Kirsten Korosec?

  But back actually really to North America. So what we're talking about is the Swedish EV battery maker Northvolt securing $1.2 billion in a convertible note round led by Blackrock. And it's all about building factories in North America and Europe. And this matters because there is a battery factory boom happening right now in North America.

• 15:45Speaker 00

  So the question is, how big of a boom? Because I'm hearing about giga factories in different places. I've seen the map because I've put together. I mean, compared to Chinese production, how much can we make here in the next five years? Like, are we going to get to like real scale? Or is this like a piddling amount compared to real leading countries?

• 16:02Kirsten Korosec?

  Well, I would need to like really look hard at the numbers before I just like threw out an opinion. But I will say this, in 2019, there were two factories making battery cells in the United States and two that were under construction. Today, we are now, I guess with this, at around 31 that are either planned under construction or operating in in North America. So that's certainly in a span of four years, a big jump. And each of these are large scale facilities. These are not small, you know, boutique, if you will, battery cell factories.

• 16:39Speaker 00

  Right. And so that kind of puts the $1.2 billion convertible node from Blackrock into context. Because on one hand, Kirsten, it's a lot of money. You know, it's 1,200 million dollars. But if you're building at that scale, I mean, you're talking about massive infrastructure, huge, you know, training costs and opening costs and distribution costs. Like, how far does that 1.2 billion really get Northvolt?

• 17:04Kirsten Korosec?

  Well, it'll be interesting to see what the actual final design and size is going to be. However, what I would say is there are other ways of getting money for these battery factories now that might come later. For instance, the Department of Energy loan program is back and running, and a number of companies, Ford, Redwood Materials, have received multi-billion dollar loans to finance the construction of their facilities. And that might happen in this case as well.

• 17:37Speaker 00

  I like that we're putting our capital there.

• 17:39Speaker 02

  Yeah, and I was surprised to read that this company has secured over $55 billion in orders from BMW, Volvo, Volkswagen, among others. I mean, $55 billion in orders feels like a lot. That's a lot of demand.

• 17:55Kirsten Korosec?

  Yes, because every automaker is shifting to EVs. And a funny thing happened that we all might remember, but in 2020, a lot of automakers had already been publicly talking about, and maybe not all of them had upped their portfolio plans yet, but it all were committing to electrifying their fleets or going all electric or mostly electric. And then the pandemic happened, and then the chip shortage happened, and that really sucked. It really sucked for automakers who were ready, who had the demand to sell these brand new vehicles, both EVs and internal combustion, and couldn't because of chip shortage. A lot of automakers do not want to repeat

• 18:35Kirsten Korosec?

  the horror that happened in 2020 through, actually even kind of still persisting now, but really has worked out. So many of them have spent a lot of time and effort locking up supply chains specifically around battery cells, battery raw materials. So you're seeing a flurry of deals that have occurred since 2021 or so. And Northvolt is capturing Much of that, although not all of it. There are, there are certainly other players out there.

• 19:03Speaker 00

  Can we just talk about how good of a name North Volt is? I just figured it out because Sweden's pretty far north and they do things with power and Volt is, I don't know, I was not good at physics. It's something to do with power and movement and resistance and shit. It's a great name. It's like if TechCrunch was called like, you know, California words or something.

• 19:21Kirsten Korosec?

  It is a good name. No, I think TechCrunch is the good name.

• 19:24Speaker 00

  What, what does crunch mean?

• 19:26Kirsten Korosec?

  We're crunching all the tech, Alex.

• 19:28Speaker 00

  Oh, that is.

• 19:29Kirsten Korosec?

  But can, but can I tell you one funny, very small, short story? You know how like your parents don't really understand what you do for a living? At least mine don't totally.

• 19:38Speaker 00

  Yeah.

• 19:38Kirsten Korosec?

  And so I told my dad that I would give him $20 if he could name the company I worked for. This is the first year and he came back with text click.

• 19:49Speaker 00

  Oh, I mean, you know.

• 19:52Kirsten Korosec?

  So close.

• 19:53Speaker 00

  I do this with, with my poor spouse because I can never remember any bit of medical terminology, period. And so I'm just like, I just kind of guess at words. I'm like, it's the thing with the sepsis, you know, and the whatevers. And she just looks at me like I'm some sort of dumb alien. It's a lot of fun. Okay. To wrap this up, sounds like concerns about supply chains has led to near shoring. There were some big issues. Throw in the IRA. We're seeing a massive investment boom. I'm excited about this, but before we go, the material side of what goes into batteries has become a bit of a battleground in a geopolitical context. How confident are you, Kirsten, that all these companies that are building plants in the U.S. are going to be able to secure the stuff that goes into the factories? They can turn it into what comes out of the factory?

• 20:33Kirsten Korosec?

  Well, that's a major focus. And if you look at the language in the IRA, which was signed about a year ago, parts of the incentives are tied to not just, oh, the vehicles are assembled in North America, or that the battery cells are produced here, but the raw materials and materials are sourced from North America. And so there's a lot of work being done on that, but it's still a big question mark. One thing that may help is a movement away from batteries that use rarer materials such as cobalt and nickel. And there is a movement in that direction, but we'll have to just wait and see how it evolves.

• 21:09Speaker 00

  I'm still hoping that ceramics will one day come good on the battery game, but ladies and gentlemen, we have much to get through. We are going to come back with better.com's SPAC debut right after this break.

• 21:22Speaker 00

  All right, Mary Ann, we can finally send this company away from the startup lands and into the public markets. How happy are you right now?

• 21:29Speaker 02

  Well, I mean, honestly, a part of me thought this would never actually come to fruition. I'm a little bit surprised that this company has gone public. I've written so many stories over the past two years that, you know, had negative headlines, to say the least. We're talking multiple layoffs, poor treatment of employees, major executive departures, all sorts of allegations. I mean, on and on, the list goes on and on. But Better.com did actually go public today, not unexpectedly, the stock tanked.

• 22:03Speaker 00

  Wait, wait, pause there. Why not unexpectedly?

• 22:07Speaker 02

  Well, just all the things I just said, Alex. I mean, first of all, a mortgage tech company right now, it's a tough space to be in. Interest rates are high, housing market's tight, not a lot of people are buying homes. And Better.com, when it was making a lot of money in 2020, it was doing a lot of refinancing because mortgage interest rates were at record lows of like 2.5%. It couldn't, couldn't keep up with the demand. And now we're in an opposite situation.

• 22:34Speaker 00

  Not everyone pays attention to interest rates. So can I take a stab at putting what you just said into like, normal person speak?

• 22:41Speaker 02

  Yeah, of course.

• 22:42Speaker 00

  Okay, so interest rates go up and down. And when they were incredibly low, everyone was like, oh, my gosh, what I'm gonna do is refinance my mortgage to a lower rate, and that way I'll save money and everyone's happy. So suddenly Better.com's just printing cash, doing hella business. And then the Fed rolls in, essentially in like a golf cart just runs over the entire industry by jacking up rates by like 50 to 75 bips per meeting. And then no one wants to refinance anymore because you're not going to refinance to a higher rate. That would be silly. And then also, everyone's like, oh crap, now we're getting a mortgage cost way more. And then people didn't want to sell their houses either because they couldn't really move up. So suddenly, supply got locked, demand got hosed, and Better.com got whacked.

• 23:20Speaker 02

  Yeah, I mean, went from, from profits of, they claim of profits of like 500 million in 2020 to like losing money, lots of money every quarter. So at the time of recording, the stock was trading at about a dollar and nine cents from 1745. And I actually, this, this was really interesting for me as a journalist. I interviewed CEO of Shaw Garg last week or the week before. I hadn't talked to him directly in about three years. I interviewed him. At a virtual, some virtual event three years ago. And, you know, he was charismatic, just like everybody says, really convincing of, of how great that his company was.

• 24:02Speaker 02

  And so, you know, it's, it's very, it was very interesting for me to interview him after writing all these stories about his, his leadership style and what a tyrant he could be to employees and berating them and, you know, just so much. And it was really, it just goes to show you like the way that some of these executives present themselves can be so different from what employees see internally. It's, it's impressive, like, wow.

• 24:29Kirsten Korosec?

  I do recommend everyone read your story. It's great. So it's interesting to me, and maybe you can comment on that, is this charm and charisma has helped the company maybe not retain employees, but raise money. And there has been some investment from SoftBank, but also Better.com went public via a SPAC merger, right? Are people keeping their money in, in the SPAC or did they, they pulled on out?

• 24:56Speaker 00

  Yeah, it's the latter. I don't have the, the exact number in front of me, but like we've seen, Kirsten, with a lot of these SPAC combinations, by the time the deal actually reaches the point of people having to commit their capital to it, everyone scatters like you dropped a stink bomb in a mosh pit, you know, no one's into it. So I, I, I think that this deal, as far as I can tell, is predicated around unlocking a certain amount of SoftBank money, which was also mentioned in Mary Anne's interview with Vishal. And so to me, this was almost like we had to go public to get this capital because we needed the capital, so we had to go public, so we went public. I don't think anyone thought that this SPAC combination was going to do well, but, you know, it hasn't done worse than I expected.

• 25:33Speaker 02

  Yeah, I mean, basically, I think that the alternative was really is just to shut down. So it was like either go public or keep running out of money till we shut down. And so, you know, there seems to be this, this hope on Vishal's part, the company's part, that things turn around, that mortgage interest rates will drop. They honestly, you know, For all the bad headlines, better.com is known to have some pretty cool technology, underlying technology powering mortgages and supposedly their goal is to make them happen faster and cheaper. So Vishal's holding out on this hope that next year, interest rates will will decline. And now that they've pivoted from being focused on refinances to purchases, they're hoping that they can somehow turn the company around. I don't know

• 26:15Speaker 02

  what's going to happen in the future. We'll see. But you know, it was certainly, it's been a ride watching the company get to this point.

• 26:22Speaker 00

  Absolutely. But it's not the only company that's gone through some ups and downs, Kirsten. We've also heard about Cruise, famous for going to the hilly city of San Francisco with more cars, has been forced to reduce them by half. What's going on?

• 26:34Kirsten Korosec?

  All right. So Cruise is the self-driving vehicle technology arm of GM. It was acquired back in 2016, if you recall, and they're headquartered in San Francisco. So San Francisco is was always going to be their first market, testing their Chevy Bolt EVs, which are, you know, have self-driving system in them. And they recently got a very important final permit. Waymo and Cruise both received it from the California Public Utilities Commission. And essentially, this gave them the ability to give driverless rides 24/7 throughout the city and charge for them. So before it was very limited, and there was an unlimited number of vehicles that they could put add to the fleet. So essentially, go for it.

• 27:18Kirsten Korosec?

  This was the go-for-it permit. And within days, Cruise racked up an embarrassing number of snafus, let's call it, a car driving into the wet cement, a construction site. Forgot about that one. 10 or so driverless vehicles, all just stopping and blocking traffic for more than 20 minutes. And of course, everyone has phones and they're videoing this and it's all going out on social media and Reddit. But their last week, Cruise entered into an intersection. It had the green signal, but didn't see or hear.

• 27:55Kirsten Korosec?

  An emergency vehicle, a fire truck, coming through the intersection responding to an emergency and they collided.

• 28:02Speaker 02

  Oh, my gosh.

• 28:03Speaker 00

  So I read the Cruise blog post that came out recently about this thing. And you can tell when a piece of writing has gone through like

• 28:12Kirsten Korosec?

  100 lawyers.

• 28:13Speaker 00

  Yeah, exactly. And so it's very hard to tell what it actually says because it's been so rounded off on the edges. But they're like, we, we know how to see these emergency vehicles. We saw, we heard the siren, but we didn't, we couldn't stop fast enough because some occlusion in the intersection. And like, I just want to say that humans aren't good at this either. And so I just want to speak on behalf of the self-driving computer cars because they're not competing with a faultless record. And I know Mary Ann's going to jump on me and, and, and slip my earlobe.

• 28:42Kirsten Korosec?

  She is like bouncing around. I mean, she is ready to jump in on this one.

• 28:46Speaker 02

  Alex, you know how much I love you, but I love that we have such wildly opposing views on this. I mean, I just got really pissed off when I read this story. I was mad. I was like, here's this car getting in the way of an emergency vehicle. What, what happened at the place this, this was a fire truck was trying to get to because of this accident, right? I mean, it just kind of really pissed me off. So yes, I realize this is a bit irrational. I have a bit of irrational rage because you're right. There are a lot of people who drive who suck and don't get out of the way of emergency vehicles too. But it does raise that question. I mean, Kirsten, you probably know this. Do they really have technology to be able to detect emergency vehicles? I mean,

• 29:25Kirsten Korosec?

  They do.

• 29:26Speaker 02

  Okay.

• 29:26Kirsten Korosec?

  So Waymo and Cruise, I don't know the specifics exactly, but they basically like Waymo, for instance, has this whole microphone array. Cruise has a similar sort of technology. So they have sensors all around them. So LiDAR radar, ultrasonic sensors, and they can see theoretically speaking, can see further than a human and are never distracted. But obviously in this case, that didn't happen. So here's where I Remind people you can have two truths. You can have the truth that there are a lot of bad drivers out there. You can also have the truth that clearly in this situation, something went awry. So where do they go from here? And at least right now, where they go from here is they had to cut their fleet by 50%.

• 30:09Kirsten Korosec?

  As the DMV, which is the regulating agency in the state of California investigates the matter. So we'll see what happens after that. And then the big question mark is, does this just hurt crews temporarily? Does this hurt all of, you know, the robotaxi industry? I mean, Waymo got the permit at the same time and they're kind of inadvertently connected to this. The other thing I'll bring up just briefly is that, Mary Ann, your, what you said is like rage, is actually something that people have expected. Toyota's chief scientist, Dr. Gil Pratt, had said this many years ago. He said, there's like, what, 45,000 people who die every year in the United States as a result of being hit by a car.

• 30:50Kirsten Korosec?

  And if you told them robotaxis would save 44,000 of those vehicles, I'm not quoting him directly, but this was his point, people would not accept 1,000 deaths from a robot. That is our human psyche. We accept deaths from other humans. We accept, it's why people have, don't think about getting in a car and driving, but they get scared about getting on an airplane, even though probability wise, it's far riskier to be in a vehicle. Human psyche is kind of a weird place to be. And that is something that all companies are going to be fighting against, really, even if presented with facts like 45,000 people die every year.

• 31:31Speaker 00

  Free crews, let's go Waymo. I hate that this issue is making me simp for large corporations. I'm like over here going like, go GM, go Alphabet.

• 31:39Kirsten Korosec?

  You don't need to cheer for them. You can just do what I do, which is, you know, obviously track the issues and then say, hey, they might be working on something really incredibly important, but that doesn't mean that they, you know, didn't fuck up.

• 31:52Speaker 00

  Nope, nope, I don't buy it. This time I'm going full unalloyed fanboy. Anyways, startups are full of shit, Mary Ann. What's going on there?

• 31:59Kirsten Korosec?

  What a transition, Alex. Yeah. So last week, our wonderful editor in chief, Matthew Panzerino teamed up with Nisha, who's in charge of Startup Battlefield at Disrupt, who's absolutely incredible, by the way.

• 32:11Speaker 00

  The best.

• 32:12Kirsten Korosec?

  Yeah. And they wrote this story and the headline, of course, I mean, how could it not attract your attention? I've never seen so many crap startups. Okay. My first thought was, wow, what a negative pessimistic headline. I mean, they're just saying that all the startups out there suck or what? So I read the story and no, they were being very literal. And wading through all the applications for Startup Battlefield, they saw a huge amount of waste recycling startups.

• 32:40Speaker 00

  And the post was amazing. I'm just going to read because I can't improve on the wordplay. So startups are so full of shit right now. The pipes are jammed and there are so many companies that are full to bursting with the desire to unpack them. It just goes on and on and on and on. It's very funny, but.

• 32:53Kirsten Korosec?

  The unpack them line got me. I was just like, oh, was that too much? Maybe not.

• 32:59Speaker 00

  I, I also love that in paragraph three, they mention SBF, which they mean as Startup Battlefield.

• 33:05Kirsten Korosec?

  Right.

• 33:05Speaker 00

  But I hear as Sam Bankman-Fried. I was like, why is Sam Bankman-Fried?

• 33:09Kirsten Korosec?

  Yes.

• 33:09Speaker 00

  I know he's full of shit. I know his company was made of shit, like bricks of it. But what, what, what gives there? But the other part of the story, and this happened on Thursday afternoon, is that we have announced the Battlefield 200 companies. If you're familiar with Startup Battlefield in the TechCrunch context, we used to have like 20 companies. We still have kind of like a top cohort, but we invited a lot more companies to come out this year, also last year. So we're kind of making it into a bigger program, which is a lot of fun.

• 33:34Kirsten Korosec?

  The interesting thing about Startup Battlefield 200 is that every company that is on the floor had to apply. So it's not as if we're just taking startups money to exhibit. They have to go through an application process. It's pretty competitive. It is fully vetted. Nisha is the one leading all of this, but other people are involved. And so when you come to disrupt and you'll likely read a lot of stories about these battlefield companies in the weeks to come, they are hopefully not literally full of shit, that they have got interesting tech, even if it has to do with waste recycling poop and urine.

• 34:10Speaker 02

  One of the best things about this show, besides getting to hang out with you two, is it really pushes me out of just my, like, the stuff that I write about, right? Because sometimes it's really hard to see everything and we have a lot of great content on our site, not to just push how awesome our content is, but like, it really helps me realize just how much great stuff we put out. And so, you know, this story included crap startups. I was fascinated, I have to mention this before we stop, that smart toilets could become a thing.

• 34:38Speaker 00

  They're already a thing in Japan, right?

• 34:40Speaker 02

  My question, though, is what is a smart toilet?

• 34:43Speaker 00

  Oh, you don't just mean like a Bluetooth-enabled toilet?

• 34:47Speaker 02

  Yeah, what do they mean?

• 34:48Kirsten Korosec?

  I know that at least taking like diagnostics for health considerations is something that researchers do, like in the field of epidemiology, and I'm wondering if that could be applied to your home toilet.

• 35:03Speaker 02

  Fascinating.

• 35:03Kirsten Korosec?

  Like, there is that cat litter that like changes color and tells you if your cat is like, okay, maybe that's what they're talking about.

• 35:11Speaker 00

  And if that does come to be, I hope it is better than Ubiome, which was the company that wanted to do at-home poop testing and then got busted for like massive fraud or whatever. But in Battlefield, if you are not into waste recycling startups or waste vetting startups, there's other things coming on. We're seeing a lot of clean tech. We've seen a lot of tech focused on senior citizens, AKA SilverTech, kind of like that title. That works for me. And then also military-related technologies.

• 35:35Speaker 02

  What about AI? Are there any AI startups, Alex?

• 35:38Speaker 00

  You know, I haven't, I haven't looked, but I'm going to go ahead and guess there's probably out of the 200, maybe three or four, you know, somewhere in there.

• 35:45Speaker 02

  That, yeah, that's a thousand, that's all.

• 35:47Speaker 00

  Million, 30, 40%. But it is a good segue to remind you that for everyone at Disrupt, this team, this Equity crew will be onstage to start the entire event. Yes, on the first day, the first thing that happens is, I think actually I go onstage and go, hi, and then I go back onstage, and then I come back onstage with you two, and then we start the show. And it's going to be a real fun time. Frankly, I'm really excited about it. I'm already shoe shopping. It's going to be a real treat. And our usual other notes go as follows. If you want to follow us on social media, we are EquityPod on Twitter and Threads. You can use the code EQUITY to save money on Disrupt tickets. And as always, we're very thankful for Kirsten Korzek and all the work that she does, and for coming on the show and spending time with us. Thank you.

• 36:26Speaker 02

  Thank you, Kirsten.

• 36:27Kirsten Korosec?

  Thank you.

• 36:28Speaker 00

  All right, everybody, we are back on Monday. We have a big week planned for you next week, so strap in. But in the meantime, have a lovely weekend, take some time off, and we'll talk to you soon.

• 36:35Speaker 02

  Bye. Bye.

• 36:37Kirsten Korosec?

  Ciao, ciao.

• 36:40Speaker 00

  Equity is hosted by myself, editor in chief of TechCrunch Plus Alex Wilhelm, and TechCrunch senior reporter Mary Ann Azvedo. We are produced by Teresa Locan Solo with editing by Kel. Bryce Durbin is our illustrator, and a big thank you to the audience development team and Henry Picavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.