Equity Live: Self-flying helicopters, AI and the battle of the features

We were live at TechCrunch Disrupt 2023! Yes, even though our dear friend and colleague Mary Ann had to handle a family emergency, the larger Equity family rallied to put on a rollicking early-morning show at the venue. From the Builders' stage where Alex had to introduce himself, Kirsten Korosec and Becca Szkutak rounded out our hosting crew and we had a blast. Here's the rundown: Instacart went public! Finally, at last, at long last, Instacart is a public company. It priced at $30, the top-end of its raised range, and then went on to trade higher. More here, but a solid result. Joby is all-in on the Buckeye state: What has batteries and goes straight up? EVTOLs, apparently, even if that acronym is a big of a mouthful. Kirsten reports that a TechCrunch scoop was born out when Joby picked Ohio for its manufacturing hub. A lot of state-derived help did not hurt, either. Eldertech is a growth market: Becca wanted to talk about her latest Deal Dive, which was all about getting senior citizens to move for. Exercise is a pretty massive hack for a healthy body and life. We also had to point out that a graying world means that elder tech is only seeing expanding TAM. Writer brings back nine-figure joy! And to close out, Alex wanted to riff on the latest Writer round, which is building a generative AI service for other companies. With some demonstrated traction, and a model that we think seems well rounded, Writer is one to watch. Whew! The Equity crew is all over Disrupt for the next few days so make sure to say hello! 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.

• 0:11Speaker 00

  Hello and welcome back to Equity Tech Runche's amateur capital focused podcast where we unpack the numbers and the nuance behind the headlines. My name is Alex. I'm the editor in chief of Tech Runche Plus and we are here live at disrupt 2023, which feels, thank you, which feels fantastic. It's fun to be live, but I'm now realizing that I'm going to sweat off all my makeup within the first five minutes of the show.

• 0:32Kirsten Korosec?

  You're looking great so far.

• 0:33Speaker 00

  Thank you.

• 0:34Speaker 02

  That's what's supposed to happen.

• 0:35Speaker 00

  I'm here with Becca Scootack. Becca, say hello.

• 0:37Speaker 02

  Hey guys, happy to be here.

• 0:38Speaker 00

  And Kirsten Korosec.

• 0:39Kirsten Korosec?

  Thank you.

• 0:40Speaker 00

  And the important question is, did either of you check the share price of Instacart before we got on stage?

• 0:46Speaker 02

  We both did, actually.

• 0:47Speaker 00

  And?

• 0:48Kirsten Korosec?

  We did our homework. It hasn't debuted yet.

• 0:51Speaker 00

  Still?

• 0:51Kirsten Korosec?

  Right.

• 0:52Speaker 00

  God.

• 0:52Kirsten Korosec?

  As of 30 seconds ago.

• 0:54Speaker 00

  As of 30 seconds ago.

• 0:54Kirsten Korosec?

  But it does look like they're predicting like 30% potentially 40% pop.

• 1:00Speaker 00

  Really?

• 1:00Kirsten Korosec?

  Which would maybe bring it back up to where it was initially. Remember when it was $39 billion valued company?

• 1:08Speaker 00

  Yeah, I do.

• 1:09Kirsten Korosec?

  Remember those days? And then the last time we checked it was what? Nine billion?

• 1:12Speaker 00

  It's 10 billion, I think, on a fully diluted valuation, Kirsten.

• 1:16Kirsten Korosec?

  Thank you, thank you.

• 1:17Speaker 00

  Too short here. It did raise its range, Becca, and then priced the top end of its range. So looking at Instacart, not really a pure play software company, but certainly one of the best known unicorns. How do you rate its IPO performance so far?

• 1:29Speaker 02

  Well, personally, I thought Instacart has been one of the smartest late stage companies with what they've been doing over the last few years in preparation for a potential IPO like this. I know chatting with some secondary investors as well, they say that IPO bankers aren't interested if there's no upside. So Instacart really started this journey to the current valuation they're going to get now, including if it does pop last year, being very intentional, cutting the valuation down so that there are room for bankers to come in and bring it back up, maybe not to what it was 2021, but somewhere in between. It gave them room to grow. So I think seeing that they were able to price toward the top of their range, which was already such a discount from where they would have gone public, say two years ago, and that people have interest in sort of letting the stock price go higher day one, I'm not super surprised.

• 2:13Speaker 00

  Okay, but this raises the important question, Kirsten. If they're looking at a 30 to 40% pop, we know the iBankers are happy because they had the underwriters option in the IPO, but did the company possibly underprice and therefore not raise as much capital as it might have, given that there's so much interest in shares?

• 2:28Kirsten Korosec?

  Well, I'm kind of with Becca on this. I think that there's something to be said about being a little bit conservative coming into it because in my world, a great example is Rivian. And Rivian's IPO was the biggest IPO of the year. And where are we at today? I haven't checked today, but certainly has lost at least 50% of its value. And I think that there's something to be said about hype, and then there's something to be said about longevity. You want a strong opening, of course, and you don't want to leave money on the table. But if you lose all that money off the table, just six months later, that's not really good either.

• 3:00Speaker 00

  Yeah, you're prioritizing either near-term fundraising or longer-term happy investors. And in this case, we're getting the early data point that Instacart shows the latter. I'm going to be curious to see where Klaviyo prices, I think later today, and I think they trade on Wednesday. So we're going to get another data point. But Instacart, you know, grocery delivery business with ads and a little bit of software, not exactly what most startups are building. So I think Klaviyo is going to be the more interesting debut of the week, Becca, because it's just more like a traditional unicorn.

• 3:29Kirsten Korosec?

  You don't think it'll be Birkenstock in a few weeks?

• 3:31Speaker 00

  You know, does Birkenstock count as a tech company?

• 3:35Kirsten Korosec?

  I mean, there was no mention of generative AI in their IPO. Just so you know, I checked.

• 3:40Speaker 00

  And given that like McDonald's is talking about generative AI, if they're not, they're definitely not a tech company. Are you tracking the Birkenstock IPO?

• 3:46Kirsten Korosec?

  I mean, why not? Great company.

• 3:48Speaker 00

  It's the shoe company, right?

• 3:49Kirsten Korosec?

  Correct. Yes, the Birkenstock. You know, it's been around for a few decades.

• 3:52Speaker 00

  Oh, it's the Allbirds for old people.

• 3:53Kirsten Korosec?

  For old people. Okay. I don't know. I've seen some Gen Z's walking around with some Birkenstocks on it.

• 3:58Speaker 00

  I kid, I kid. My spouse wears Birkenstocks, so don't worry. So that's the IPO market this week. I'm really glad to see stuff going on. I do want some more offerings, but at least we're going to get a couple of data points on the board. We had ARM go out last week. So progress, progress is good.

• 4:11Kirsten Korosec?

  It sort of seems like Certainly rosier than a year ago IPOs were pretty was a quiet area. Right. So what I'm curious to see is what happens between now and the end of the year. How many more do we get momentum or does it sort of fizzle out? And I've certainly heard some growth startups that I know who have been tinkering and thinking about IPO. We just talked about this last week, like Lime's been talking about an IPO forever.

• 4:36Speaker 00

  It has been, yes.

• 4:37Kirsten Korosec?

  Is it going to happen by the end of this year?

• 4:39Speaker 00

  Well, I think Lime definitely needs to put up or shut up, but we should also mention that Turo, which is the P2P car rental service.

• 4:46Kirsten Korosec?

  Sure.

• 4:46Speaker 00

  Has been refiling its own IPO documents for a long time now. They're definitely in the wings, but then the list does get a little short. And so I kind of want some other companies to start calling me up and say, hey, you should talk to our CEO off the record. I can't tell you why, because I know what that means. And I've done that with other companies that have gone public, but those calls are not yet happening. So.

• 5:03Kirsten Korosec?

  Well, I have a question for Becca. So in the world of IPOs, what kind of company do you think would be a good time right now? Cause we have got Instacart, it's sort of like a mixed bag. So what would you like to see between now and the end of the year in terms of the kind or sector company?

• 5:17Speaker 02

  Yeah. I mean, for one, I personally am excited for the Turo IPO. Because one thing I started looking into earlier this year about, oh, when will IPOs come back? What will that look like? If someone was telling me about, well, check the secondary pricing. Are the sellers and the people looking to buy, are they on consensus of price? Because a lot of those secondary buyers are also involved in buying toward the IPO. So Turo, checking when they were rumoring this a couple of months ago, that bid ask spread was tiny. Like they were like, everyone was tight on the price. So I'm excited to see what happens to them because they seem like even in the private market, they're getting quite a lot of consensus on sort of what investors and the company themselves think that they're worth. So it'll be interesting to see kind of like how that goes.

• 5:59Speaker 00

  Also, I think it's the first time anyone has ever said bid ask spread on the show. So thank you for bringing that bit of terminology to the podcast.

• 6:05Speaker 02

  Sorry to put the little jargon.

• 6:06Speaker 00

  No, no, no.

• 6:07Kirsten Korosec?

  No, Alex, are you kidding me? That like made his entire week, I think, just because you said those words.

• 6:12Speaker 00

  I'm now a very happy boy. The last thing I'll throw out there is Databricks just raised another half billion dollars at a $43 billion price tag. I don't think they're going to go out soon, but like when they do go out, I think that's going to be the IPO of the year, whenever that does happen. So, you know, knocking on-

• 6:27Kirsten Korosec?

  But didn't you say that we'll probably all be retired by the time that happens?

• 6:31Speaker 00

  Just because I wanted to be annoying to their comms team. That was strictly just to get a call from them, be like, hi. It didn't work, actually, but no, they have to go out eventually. They can't keep-

• 6:41Kirsten Korosec?

  So in the year 2050, it will be the biggest IPO.

• 6:43Speaker 00

  In the year 20, yes, in the year 3000-

• 6:45Kirsten Korosec?

  And no earlier than that.

• 6:47Speaker 00

  I missed something in the intro, which is that we were going to have our dear friend Mary Ann do the show with us, as she often does. She is not here due to a family emergency. So Becca was very kind and joined us. She's a regular on the show, so thank you, Becca. But we were going to make some jokes about how much Mary Ann hates robo taxis-

• 7:03Kirsten Korosec?

  Yes.

• 7:03Speaker 00

  Because they're amazing. And you've taken one some this week.

• 7:06Kirsten Korosec?

  A couple. So last year when I was here, I took the cruise and Waymo wasn't available yet. And also it was really limited. I had to take the cruise to one stop, get out, then hail an Uber and then go to my final destination. So since then, they've had the permit that is given Waymo and Cruise, basically the entire city 24/7. Of course, Cruise has had some issues and is at 50% right now. So I'm unable to hail a cruise until 9:00 PM. By Waymo, I've taken a few rides and I've taken some tech renters along with me and I really wanted to bring Mary Ann in there.

• 7:40Speaker 00

  Yes.

• 7:40Kirsten Korosec?

  Sort of force her in the vehicle.

• 7:43Speaker 00

  I think we would have had to like bribe her, like, we'll give you $500 to get in this car for five blocks.

• 7:48Kirsten Korosec?

  It was really interesting. One of our reporters, Harry Weber, who covers climate tech and does some transportation stuff for us, she was in the front seat and at one point it was very confidently going up right behind the vehicle and then goes into the turning lane. And she wanted to grab the steering wheel at one point and held back, right?

• 8:05Speaker 00

  So now we know Harry's trying to take over the cars.

• 8:07Kirsten Korosec?

  Yeah, but she, but she held back and we arrived safely at our destination.

• 8:12Speaker 00

  Well, I'm very glad that you're safe because we have another way we might get around in the future, which is apparently going straight up into the sky on the power of batteries. So what's going on with Joby?

• 8:20Kirsten Korosec?

  Oh yeah. So Joby. So this is really interesting. One of our reporters- Aria, who actually covers a lot of space, but she does quite a bit around EV tolls. And she had a scoop a few weeks ago. And I will say that the company was adamant about not confirming anything with us. That Joby was going to be building its factory either in Dayton, Ohio or in North Carolina. And they announced they're going to Dayton, Ohio with quite a big incentives package, actually. Several hundred dollars or $700 million. Thank you. And they say that they're going to add something like 2,000 jobs. But, you know, that's a long road to the 2,000 job mark.

• 8:56Speaker 00

  Yes.

• 8:57Kirsten Korosec?

  Joby is really an interesting company. They've been on our stages before, like at our mobility event and things like that. And they've been working on this for a long time. There's obviously a number of FAA certifications that have to be received first. And they're on their way. So this production facility is the sort of big kickoff to, hey, we're going to be commercially operating.

• 9:18Speaker 00

  EV TOL is electric vehicle, no, electric vehicle vertical takeoff.

• 9:23Kirsten Korosec?

  You're adding a couple of extra words in there, Alex. Electric vertical takeoff. You can put and, but we argued about this earlier. You felt like the and shouldn't be in there, so we took it out for you.

• 9:32Speaker 00

  Okay, but essentially you're going straight up. And these are, are these like urban transportation?

• 9:35Kirsten Korosec?

  So there are a few different business models out there. And when I say business models, I'm going to put them in quotes because they don't exist quite yet.

• 9:42Speaker 00

  Right.

• 9:42Kirsten Korosec?

  But for Joby, it's meant to be in urban environments, places like LA, where it would vertically take off and then shuttle you to, you know, your other skyscraper tower where you work.

• 9:53Speaker 00

  So this is not really transport for the masses. Becca's not going to jump on this to like go across Manhattan.

• 9:58Kirsten Korosec?

  Well, they say it's transportation for the masses. Whether it actually becomes that and it's, you know, I think that's the big debate. Is this something for the very wealthy or something actually what they promised, which is something that Uber and Lyft promised too. It's going to reduce traffic and, and people are going to share rides. And we, what happened there? There's Uber and Lyft, I use all the time. Did it eliminate traffic? Not so much.

• 10:22Speaker 02

  Yeah, I saw that they had some partnerships with some airlines, but I'm like, if anyone who's flown at all this year knows airlines aren't really getting stuff moving around at a good pace. Everything's delayed and stuff. So they're working with them. It's kind of like, ooh, well, let's see how that goes.

• 10:37Speaker 00

  But at the same time, though, you know, these planes, are they planes? What do we call them? Cars?

• 10:42Kirsten Korosec?

  Well, I mean, if you want to strip all the lingo out, the electric vertical and takeoff, I mean, think of it as, I mean, some people say, think of it as like a smaller, quieter helicopter. That company might get a little scared about that term because helicopters are quite loud. And that's the big thing that they claim is, and I've, and I've heard it, it's quite quiet. Some people like to call them flying cars, which, you know, you picture something else. So it's trying to be its own category, but basically something that doesn't need a runway, that quietly lifts and then brings you over the, all the traffic.

• 11:12Speaker 00

  Yeah.

• 11:13Kirsten Korosec?

  So you can peer down at them and...

• 11:14Speaker 00

  It sounds amazing.

• 11:16Kirsten Korosec?

  Yeah, it does sound amazing, right?

• 11:17Speaker 00

  I have to fly from Providence to Newark all the time to get anywhere else in the country. And if I could take one of these as opposed to getting on an airplane the size of like a sardine can, it'd be amazing. It sounds much better than doing what I have to do on Friday when I go back home.

• 11:28Kirsten Korosec?

  Well, I don't know what the distance is for that. So that initially, it might be more short distances. Think of what you would do in an Uber. So there are other companies out there that are looking at that, I guess, middle mile or shorter distances. And then there are companies out there that are looking at, hey, you should buy one of these and you should own an EV toll. And that's kind of out there, too.

• 11:48Speaker 00

  I don't know about that, but they're only planning to deliver about 500 of these per year, according to what we know about this Ohio factory. So certainly not going to be something that we're going to be able to buy.

• 11:57Kirsten Korosec?

  We're not going to be buying them, but I do predict that they're going to go to LA first. I feel pretty strongly based on all the indicators I'm getting. I could be wrong, but this would be potentially a fleet size. You can't have too many of these operating in a city you can imagine. I think there's going to be a lot of pushback from people who live there. So I can see, let's say, how many would you operate during the day? And what time period during the day would you operate? And how many do you need? 100? I don't think you need 500 in LA.

• 12:24Speaker 02

  Yeah, I also think it's kind of a sign, a good signal to see, I mean, just after what we've seen the last few years, this company being like, we're making 500. We're not telling you these huge lofty goals. We're not telling you these things we probably won't be able to hit, but being like, we're opening this factory. This is so much we're going to produce. This is what we think we're going to do. It's similar to the Instacart thing. Sure, maybe they could go more, but if they say they're going to do more and they can't, that's much better than doing less and exceeding it.

• 12:48Speaker 00

  Yeah.

• 12:49Speaker 02

  So that's a good signal.

• 12:50Speaker 00

  More under promise, over deliver now versus promise the world and then hope like mad you're going to pull it off.

• 12:56Speaker 02

  Yeah, because I know unlike two years ago, any company now that seems like more in that camp, I'm more interested in like the realistic predictions, the stuff that seems a little bit more better to follow.

• 13:07Kirsten Korosec?

  Well, and particularly because it is still frontier tech. So when frontier tech goes, we're going to make 10,000 of these a year, it is very easy to dismiss both the technology and their business model and plans. So by bringing it down, and also I think these are fairly complex. My understanding is it's not like the easiest. They still have to manufacturing, building things is hard. Someone who writes a lot about Tesla and other EV companies, building cars is hard, building flying cars is hard. So 500 seems more reasonable.

• 13:38Speaker 00

  Yeah. The last thing I want to say about this is Toyota is the largest external shareholder of Joby, which is great news because Toyota knows manufacturing, supply chains, regulatory issues across different continents, like a super competent company. So definitely some good backing from them. Hopefully good advice, more capital and supply chain help. And they claim they're going to have these delivered by 2025, which is not that long from now. It's five quarters.

• 13:59Kirsten Korosec?

  Yeah.

• 14:00Speaker 00

  So.

• 14:00Kirsten Korosec?

  We break our lives down in quarters.

• 14:02Speaker 00

  We absolutely break our lives down in quarters.

• 14:04Kirsten Korosec?

  You know, Toyota is a reflection of what's also happening out in the automotive world. They are not the only automaker that is invested or is interested in EV tolls. Hyundai and GM are two others. So we'll see what comes of this.

• 14:19Speaker 00

  I just cannot, whenever you say EV toll, it sounds like a toll road for electric vehicles. And it does not bring to mind this futuristic helicopter thing that I'm going to use to fly across LA, do a lot of traffic. They've really got to rebrand.

• 14:31Kirsten Korosec?

  Okay. Well, think of that in next episode. You can bring your rebranding and we'll share it with Joby and all the others.

• 14:39Speaker 00

  I'm a critic. I'm not competent. I'm not going to be able to come up with my own idea. Come on. That's not what we do here.

• 14:45Speaker 02

  That's your homework. That's your homework.

• 14:46Speaker 00

  You can't, you can't give me homework. I'm not in school anymore. Anyways, let's move on. Becca, Deal Dive, we've talked a lot about elder care on the show. We know it's a pretty big sector, but there's a company that really caught your eye. So tell us who it is and why.

• 14:58Speaker 02

  Yeah. So I think it was about a week and a half ago, a company named Bold raised a 17 million Series A. And what stood out to me is that Bold is a elder tech company, but it is personalized exercise routines, fully subsidized by Medicare, so fully free to all their users. Exercise routines that help prevent complications from things like arthritis or balance and stuff like that, help prevent older people from falling or sort of having some of those health issues that come later in life that can be mitigated with exercise and some of these more preventative measures. I just thought that was so interesting because I have one grandparent still living and we always attribute that to the fact that he's been active his whole life. Still walks like a mile a day and gardens, mows lawn. And we've

• 15:41Speaker 02

  always said that's why he seems to have made it this far without heavy health complications and some of that other stuff that gets pretty common when you get older. And so this company stood out to me for that because I was like, yes, I've seen a living example of that. That's such a good idea. And it also, from the elder tech side, just that sector's grown so much over the last few years. But something I've noticed is there's been a lot of reactive solutions, which are good. Obviously, those, you need to have those kinds of solutions when problems do arise. But Bold stood out to me as a proactive solution. Start doing this in your 50s, your 60s, prevent some of those healthcare issues and some of those things that could come up down the line, which I'm hoping this is a sign the category's moving more toward that because it's great to have solutions to the problems, but it's much better to prevent them from happening.

• 16:26Kirsten Korosec?

  Okay. So I have a few questions. We have known about preventative healthcare for a long time, and this isn't necessarily a new idea in terms of, hey, exercise is good and mobility is good and balance and that can prevent falls. So what is the tech piece? Is it hardware? Is there a device that they're wearing? Is it a software subscription? What does this company actually do?

• 16:47Speaker 02

  Yeah, so it's a subscription. You'd sign up as a user and they would make yourself a personalized health plan. So you would get different videos. They keep adding to the library and they've been taking direct user feedback, they told me. So they're hoping to launch more categories for things that's preventative for other conditions too. Arthritis and balance are just the first two. But I think also the piece of it being free for all users. They specifically partner with organizations that help them subsidize it with Medicare. So all the users can get it for free. But I mean, a lot of people don't exercise to begin with. So I know that's definitely, I'm not saying it's going to be totally up into the right. You still have to get users behavior change and that stuff is hard. But I mean, making it free and that easy to access definitely helps.

• 17:29Speaker 00

  So how digitally savvy are people in your grandparents' age range? Because I presume they're going to have to be interactive with this to make it work, to pull it up, to use it. And I just don't know if that's an actual impediment to use for people in their 90s, or if that's actually now part of life and not going to be a hurdle for them.

• 17:47Speaker 02

  You know, I think the pandemic showed us that we did not give older individuals enough credit for a lot of that kind of stuff. And of course, sure, I mean, sometimes I feel like I can't figure normal tech stuff out and like, I'm not that old. But there are definitely some ways where I think companies take that into mind. I don't think it's going to be like crazily overly complicated to have them figure it out. But there's been some, definitely some signals that have proved that 2020 and on, we maybe did not give that group enough credit.

• 18:15Speaker 00

  That makes a lot of sense. Also, we have a grain population here in the US. There's aging populations around the world. So we talk about TAM quite a lot in the startup world. And the TAM is probably like several billion people in theory across the planet. So a huge market if it works. And we could all use more exercise. I think the nation's not too healthy right now.

• 18:35Speaker 02

  No, and the personalized aspect of it is fun because I mean, I don't have access to a free personalized exercise plan. Like, I'm like, that sounds pretty good. It's gonna prevent some future issues. Like, I don't know, maybe they make those for the young people too.

• 18:48Kirsten Korosec?

  I'm curious how they're marketing it because I think of a captured audience, you could go and do large contracts with, you know, big, established assisted living places where people are living somewhat independently. And so it's like a contractual thing with that development group or that companies and they're pretty large. Or is it a very one-on-one consumer-based pitch? And is it global? Are they going after just North America right now or sort of a global market?

• 19:15Speaker 02

  I'm definitely not sure what market they're going after, but I did ask them about how they get this in front of potential customers. And they're saying that it's largely word of mouth through doctors.

• 19:24Speaker 00

  Really?

• 19:24Speaker 02

  If you're in that age demographic and you happen to work with someone who's recommending Bold to that doctor's office practice, they're recommending it to their patients because they're like, well, I don't want to have to see you for a fall in two years. Why don't you use this free app? I can help you. Like they'll be checking in with them kind of thing. So they're getting a lot of the word out through doctors themselves telling their patients to try it.

• 19:46Speaker 00

  Well, doctors are probably tired of fixing the same problems that come from inactivity and a lack of just strength. So get your core on essentially.

• 19:53Speaker 02

  Yeah.

• 19:54Speaker 00

  Yeah. There's also been a couple of other venture firms that have been put together on the market since 2020 that are working on the elder care space. So it does seem to be a burgeoning category of both startup interest and venture capital interest, which is pretty cool. And we did have Sarah Moskoff from Winnie on the podcast to talk about Papa, which was another company in the elder tech space that didn't go quite as well. So we're already seeing some kind of issues with that, but certainly applying the startup model to any new market will have some, you know, issues as you kind of figure it out.

• 20:22Speaker 02

  No, that's what I was going to say. It seems like there's signals that the category is expanding and there's also been some players that have gotten big and like Papa had some setbacks, had some issues. And that honestly just shows that the market is seeing that expansion because it wasn't going to grow without any pushback, any hurdles, anything like that. So even the Papa thing, not great for the company, obviously, and sort of the people who are working with them, but not necessarily a bad sign for the sector as a whole.

• 20:46Speaker 00

  No, not at all. And speaking of things that are getting big without any pushback or any controversy whatsoever, have you guys heard about AI? I hear it's a big deal.

• 20:54Speaker 02

  Never heard of it.

• 20:55Speaker 00

  Yeah.

• 20:55Kirsten Korosec?

  I haven't heard about it at all. In fact, I'm surprised. We don't want to have anything here at all about generative AI at Disrep.

• 21:01Speaker 00

  No, not even, not even slightly, but just because I know no one else is going to talk about it for the next three days. I thought I would bring a generative AI round to the pond today. And there's a company called Writer that just raised a $100 million round. And Becca, you and I know nine-figure venture capital rounds are pretty thin on the ground. So seeing one for a series B, no less, kind of blew my socks off. I'm curious what you thought.

• 21:23Speaker 02

  Yeah, no, I think the generative AI, specifically the big rounds, has been so funny because there's now headlines coming out where it's like, oh, well, it's not just as easy to raise if you're a generative AI company anymore. And it'll always be the same day where we get at least a six-figure generative AI round. And it's like, well, okay, I'm sure not every company can raise, but every company shouldn't be able to raise necessarily. So it's good to see late-stage funding. I know Crunchbase had some numbers on it from August that said late-stage funding had ticked up month over month for like the first time in at least a year.

• 21:54Speaker 00

  Oh, that's actually very important.

• 21:56Speaker 02

  Very good. And I think a lot of that is tech to generative AI.

• 21:59Speaker 00

  Well, I mean, I'm not shocked. I mean, iconic growth led this round, so that's a big capital pool getting to work. And the thing I liked about Writer more than just kind of your standard gen AI startup is that they talked about revenue growth in their kind of like in-house announcement. And they said their revenue has grown 10x in the last two years.

• 22:17Kirsten Korosec?

  I'm sorry, did you say revenue growth, like actual revenue?

• 22:20Speaker 00

  I know you cover EV SPACs where there's never any revenue whatsoever.

• 22:25Kirsten Korosec?

  Such a new word for me, revenue and growth coupled together. Sorry to interrupt, but I just had to pause for a moment, take that in.

• 22:31Speaker 00

  No, even amongst the generative AI companies that are pretty nascent, this is only a series B company. To talk about a multi-year revenue growth story, very interesting. And they also said they had 150% net revenue retention, which implies that existing customers are expanding their spend and they should have a lot of growth to come. So it seems like a very reasonable round. What's funny is we reported that the valuation was between 500 and 700 million post-money off a nine-figure round. In 2021, this would have been worth like a $2 billion valuation, I feel.

• 22:59Speaker 02

  Definitely.

• 23:00Speaker 00

  Like it's even in generative AI, things do seem to be more conservative and reasonable is a value judgment, but like reasonable compared Where we were a little while ago, even in the hottest part of tech. So that seems encouraging. Pearson.

• 23:13Kirsten Korosec?

  So I have a question, though, for both of you is, you know, as someone who has ridden the hype cycle when it comes to autonomous vehicles, which, by the way, you know, does use AI. But in this new generative AI world that we're sort of riding down, where do you see it in the hype cycle? Based on these recent raises are you seeing? Because as you mentioned, you're still seeing pretty large raises. And yet valuations that seem to be maybe a little bit more in the world, you know, reality based. So are we riding that? Have we hit the peak of the hype or are we now settling down?

• 23:48Speaker 02

  I think AI specifically is so complicated because as you mentioned with autonomous vehicles, there's a lot of industries that have been using AI for years, building AI for years. So it is so different from some of those hype cycles that it's kind of like, no one talked about this. No one was using this total brand new technology. Now we're all interested. So I think for these kind of companies, for me, I'm always looking to see when was the company founded? If the company was founded 2022, 2023 and is getting this kind of around or that kind of evaluation, I'm like, whoa, whoa, whoa, whoa. But if it's like this is a couple of years older, definitely been building the whole time, that situation, it's so different, which makes it so hard to peg the hype cycle because you see a big round like this and you want to be like, oh, generative AI. But it's like, maybe you look and the company's been doing this for seven years.

• 24:28Speaker 00

  Yeah.

• 24:29Speaker 02

  And like you said, they have revenue. So it's like, it's so hard. I have a hard time kind of pegging where we're at.

• 24:34Kirsten Korosec?

  You almost don't want to paint it with a broad brush, but at least in, you know, what I've seen, you know, with AVs and things, it's like you go really through this trough of disillusionment. You see a lot of consolidation and this settling down, but doesn't disappear. You know, we, as proven yesterday, when I took a driverless ride, it didn't disappear. But all the really hypey startups that were managing to get, you know, maybe a hundred million dollars raised or a little bit less. And only being founded for a year, those disappeared.

• 25:01Speaker 00

  Yeah.

• 25:01Kirsten Korosec?

  So I'll be interested to see if the same thing happens in the generative AI space. If it goes through that sort of down cycle.

• 25:07Speaker 00

  Well, a lot of the work that's been done on generative AI tooling and the kind of tech stack for it is being done by companies that won't disappear full stop. Like, I mean, if you talk to Databricks now, they're like, we're a data and AI company. They're going nowhere. Microsoft, of course, is doing quite a lot with OpenAI and so forth. So when it comes to like the hype cycle going down, all the big tech stuff may become less important or talked about less, but it won't go away to your point. It's the startups that I worry about the most because they're not only going up against one another and model companies that are just building the kind of core LLM tech, but also big tech. And so I'm just more concerned about like the incumbents capturing the market and not leaving enough room for startups to build cool new things than I am about precisely where we are in kind of the hype curve, because I want to see the smaller companies straight up kill the big ones.

• 25:52Speaker 00

  I don't want to see the big ones kill the little ones.

• 25:54Kirsten Korosec?

  No, it's definitely going to be one of those categories where it's like a battle of the futures. Some startups will build something that will last. People will want to adopt it. Other startups are going to build something that Microsoft is going to release as a feature.

• 26:04Speaker 00

  But the thing about Rider that I think is more defensible is they have their own models. They have their own way of adjusting user data. They call it a knowledge graph. And then they also have some guardrails built in so your AI doesn't do insane things. So they've kind of done a soup to nuts thing as a smaller company, which is pretty encouraging because before this, they'd only raised 20, 25 or something, which is not nothing. But compared to what we were seeing a little bit ago, not too crazy. So they got a lot done with not much. Now they have more money. How far can they scale it? And then can they get to that, you know, mythical now rare again valuation mark before we get to harass them about going public hopefully soon. So I'm stoked.

• 26:40Kirsten Korosec?

  Well, and also I think that it'll come down to, one thing we didn't bring up too much is you talked a lot about you worry about startups being able to raise. So investor interest matters. So right now I don't see any boredom around generative AI. I still see a lot of interest around it. So as long as it continues to be the most exciting tech in the room, I think that we're going to continue to see fundraising. But I do think that it'll, it won't just be money tossed out everywhere.

• 27:11Speaker 00

  No, I think those days are behind us because everyone's realized that if they hold on to their money, they get 5% in a checking account. So. You know, don't light it on fire.

• 27:19Speaker 02

  A much safer option.

• 27:20Speaker 00

  Much safer option. All right, we need to let the first panel come on stage. But before we bounce, Kirsten, what is your day like? And then Becca, what did you do today?

• 27:28Kirsten Korosec?

  Well, I'll be over at the sustainability stage. So I hope to see all of your faces there. I'm going to be doing a climate investing panel. We have a bunch of really interesting people. Rick Fox is going to be there, which is going to be very cool. If you're not familiar with the basketball star, but also has a startup, a concrete startup that's going to be there. We're going to be talking about ag tech, lab grown meats, you know, all the tasty, tasty bites of climate tech. And then tomorrow, can I, can I?

• 27:53Speaker 00

  Please.

• 27:54Kirsten Korosec?

  Pitch my tomorrow. Tomorrow I have two really big main stage interviews that I'm really looking forward to. We're going to have Cruises CEO, CTO and co-founder Kyle Voight, our vote, and then we're going to have JB Strabell, who a lot of people know, but Tesla co-founder, CTO, long time left, started Redwood Materials. They actually just made a big acquisition today and we're going to have them both.

• 28:18Speaker 00

  That's awesome.

• 28:18Kirsten Korosec?

  It's going to be awesome.

• 28:19Speaker 00

  I'm going to be in the audience for hopefully both of those. If I can sneak away, I'm really excited about it. Becca, you're going to be here most of the day.

• 28:24Speaker 02

  I will be here. You can see me two more times today on this stage. If you're interested, we've got a panel coming up just in about an hour, looking at how to build an equitable cap table, big important subject. And then later in the day, we're looking at employee stock options, employee liquidity and using those kinds of things for retention. But another shout out for later this week, Thursday morning, 9:00 AM, kicking off the security stage, we'll have Found Live. We have Windows Snyder is going to be with us on stage, and that is something you do not want to miss.

• 28:52Speaker 00

  Yes, Becca is the only one hosting two different podcasts this week because she's just that cool. For everyone at home listening to this, we hope you're at Disrupt. We missed you. For everyone that's here, thank you for showing up and we're going to go ahead and get started now. So welcome to Disrupt.

• 29:10Speaker 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 Loconsolo with editing by Kel. Bryce Durbin is our illustrator and a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening and we'll talk to you next time.