Equity Monday: Apple's privacy flap continues as crypto regulation looms

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and me here. It's going to be a busy week, with a Samsung event and a host of earnings reports that we'll have to pay attention to. But more important there are a few stories still dominating the news cycle: Apple's privacy choices: The American hardware company's plans to scan iPhones for some illegal material is once again raising the issue of privacy versus safety. China's tech crackdown: The continued clampdown by regulators continued this weekend with Tencent once again under the spotlight. The American crypto regulatory push: This is still causing waves this morning as Congress works to pass a major bill that could include crypto regulations that are opposed by industry leaders. All that and we also riffed on the Siemens-Sqills deal, Cornerstone OnDemand going private, and Delivery Hero buying a piece of Deliveroo. And, for added flavor and fun, Canopy Servicing just raised a $15 million Series A, while Siga OT Solutions raised a $8.1 million Series B. All that, and we got to talk stocks! Hugs and love from the Equity crew — chat Wednesday! 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

• 0:09Speaker 00

  Hello, it's Equity Monday and this is Alex awake with you on this fine Monday morning. It is August the 9th and we are fired up for what is going to be a very, very busy week. And good news, Equity is back. Yes, we took a little breather last week to recharge and chat about the rest of the year. Thank you for being patient. Regardless, the next five days will bring a major Samsung hardware event on the 11th and we'll see earnings from Unity, DoorDash, Airbnb, Palantir and Baidu, among others. Now, several large deals were announced over the weekend that we need to chat about and there are a few macro tech stories from last week still brewing as Monday kicks off. So let's peek at the markets and get into the news.

• 0:49Speaker 00

  All right, so markets starting out with the numbers. Today, Asian stocks largely rose a little bit. European stocks gave up ground and the American markets are mixed in pre-market trading. American tech stocks appear set to rise while more traditional industries are set to lose ground. In the last 24 hours, major cryptos have largely risen. Bitcoin is up to around $46,000 while Ether has passed the $3,100 mark. Solana and Uniswap are also up modestly in the last 24 hours, it is worth noting. Now, the major news that has been under discussion all weekend long.

• 1:22Speaker 00

  All right, number one, the Apple privacy story is not going away. Last week's news that Apple planned to build iPhone software that would "allow the company to detect and report known child sexual abuse material to law enforcement in a way it says will preserve user privacy," as our own Zach Whitaker put it, continued to attract criticism over the weekend. Former Facebook CTO Alex Stamos was somewhat critical of Apple's plans, saying on Twitter that the company "both moved the ball forward technically while hurting the overall effort to find policy balance." Some Apple watchers have digested the news from the company and found it to be not too scary in its current iteration. John Gruber wrote that, quote, "If these features work as described and only as described, there's almost no cause for concern." However, Gruber says that "if" is the whole ballgame, end quote.

• 2:05Speaker 00

  A lot of folks expect Apple to come under pressure to use its tech to find more stuff than just child sexual abuse material over time. You can imagine how law enforcement agencies from governments around the world could pounce on the tech as a way to find other sorts of images. Given the lengths we've seen autocratic and other authoritarian governments go to abuse technology to subvert and crush dissent, these are not idle concerns. The Apple story is going to continue this week, so keep tabs on it. Moving on, China is still cracking down on its technology industry. The latest news here is that China is suing Tencent for what is described as a lack of protections for minors in media reports amongst its kind of gaming products. All right. The news comes, however, after several publications in China criticized its domestic video game industry, worrying some investors that a wider clampdown on gaming and thus gaming

• 2:50Speaker 00

  revenues could be in the offing. In short, if you hoped that the larger crackdown by the Chinese government on the non-hard tech pieces of its larger technology industry was over, you were being far too optimistic. Expect this story to continue for a long time. And then finally, the American crypto brouhaha. Look, it's hard to summarize what's going on in the American Capitol, even for American readers well-plugged into the daily ins and outs of Washington. So it's honestly very, very hard to summarize what's going on for our global equity audience. Hi, everybody. Thank you for being here. We'll try, however. In short, there's a major piece of legislation snaking its way through Congress that includes language regarding the regulation of cryptocurrencies and certain actors in the crypto economy. Some of the proposed regulations have been criticized heavily by American crypto companies.

• 3:33Speaker 00

  Coinbase CEO Brian Armstrong, for example, did a long Twitter thread on the matter. But instead of the domestic crypto industry rolling over or fighting a losing battle, it has done a reasonable job fighting back. Now proposed cryptocurrency regulatory language, included as a way to boost government revenue by working towards stronger required crypto transaction reporting, is a major issue in Congress. That's a real change. Again, this is a story to watch because, well, it's going to keep going. And also, listen, this could have an outsized impact on the American crypto industry itself and also set precedent for other markets at the same time. All right, now, with all of that aside, let's get back to startups and money.

• 4:11Speaker 00

  Mega deals in brief. We're going to be really quick here, everybody, but there are three deals to talk about and you need to know about them. So first up, German conglomerate Simmons is buying Dutch rail software company Skills for $650 million. We care about this for a couple of reasons. One, it's an enormous amount of money. Two, it's emanating inside of Europe, a market that we watch. And three, Skills is spelled with a Q, which is awesome. Next up, cornerstone on-demand, a cloud-based company building HR tech software is going private in a deal that values it at $5.2 billion. This private equity transaction caught our eye not only due to its huge size, but also that we've mostly seen companies going public in recent weeks. To see such a large deal go the other direction made us sit up and kind of take note. Finally, the third mega deal, German company Delivery Hero announced

• 4:56Speaker 00

  that it has taken a just over 5% stake in British delivery company Deliveroo. Both companies work in the on-demand market, as you know. Shares of Deliveroo rose following the news. Now, it's only a 5% deal, so why do we care? Well, Deliveroo went public and its stock went down, and that was bad. And now Deliveroo's stock is going up quite a lot, and that's good. And this is good news for the broader London Stock Exchange and going public in the UK and Europe more broadly.

• 5:23Speaker 00

  All right, now, to wrap us up, some funding rounds for your entertainment. This morning, a startup called Canopy Servicing raised a $15 million Series A. The company builds software that allows other companies to offer loans and service the products that they create. The company's CEO, Matt Bivins, thinks that the future of fintech is best of breezy services offered via API instead of single-company fintech software stacks. Canon led the round. And this morning, Israeli cybersecurity startup Ciga OT Solutions announced that it has closed an $8.1 million Series B. Now, this is not the biggest round we've ever seen, but Ciga wants to protect critical infra from attack, so we really do care about its news. Thanks to a spate of ransomware and other cyber attacks, it feels like the world is much more aware these days of just how vulnerable so much of modern life is

• 6:06Speaker 00

  to disruption from state actors, state-approved actors, and general assholes with internet connections.

• 6:14Speaker 00

  All right, we have to stop there. We are over our word count this morning. Don't forget, you can follow the show on Twitter at EquityPod or myself, where I tweet under the handle at Alex. Have an amazing Monday. Equity is back Wednesday with a show that I'm very, very excited about. You look tremendous this morning. Stay cool.