Equity Monday: Stocks up, cryptos up, regulation up

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. I also tweet. Today's show was good fun to put together. Here's what we got to: Global stocks are up to kick off the week. It's a great way to start Monday, frankly. Thinking broadly, the latest regulatory news from China regarding ByteDance is not super bullish for the nation's tech industry. And what the Indian government is doing to its own technology industry is not encouraging. But all of that and tension between the two countries, is not stopping deals. You can't stop deals! Facebook bowed to pressure, and released a content report that it had previously shelved. Zetwerk raised a $150 million Series E. The Indian startup scene is trucking right along, perhaps acting a bit as-if its government wasn't increasingly authoritarian. Shelf.io raised a $52.5 million Series B in what we're somewhat considering a classic Tiger-led deal. And the SPAC boom is not over yet, with yet another Virgin space company headed for the public markets. Woo! And that's the start to the week. Hugs from here, and we'll chat you on 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

  Good morning. It is Monday, August 23rd, 2021. This is Alex and of course you are listening to Equity, the show where we unpack all the numbers and enjoy all those headlines. Kicking off this morning, if you have any saved funds invested in stocks, you are probably a little bit richer today than you were at the end of last week. Why is that? Well, stocks rose in Asia this morning, they rose in Europe and they're expected to rise in North America at the open as well. But if you're not into stocks and you're much more into the world of cryptos, we have good news for you there as well. Bitcoin is back over the $50,000 mark this morning, for example, and other major chains like Ethereum and Cardano are seeing price increases. Solana is off 5% in the last 24 hours, but mostly speaking, things are up. So that's your Monday good news. You're welcome.

• 0:55Speaker 00

  Now, there are a couple of things I want to talk about this morning, including technology, regulation, a huge SPAC deal that involves satellites and horizontal rockets, Facebook, and also a couple of funding rounds. So let's get busy. Over the past couple of months, we've spent a good amount of time discussing regulatory changes in China and some fighting between the Indian government and its own burgeoning technology industry. Most recently, just to pick a data point, the Chinese Communist Party took a 1% stake in the domestic entity of ByteDance. Don't forget that ByteDance owns, well, it's kind of the parent company of the American company that owns TikTok or whatever. You know what I'm talking about. According to our reporting, the state-owned investor will be able to appoint a director to the three-member board of its Chinese entity and veto certain matters related to

• 1:37Speaker 00

  content and future financing over at ByteDance. So this 1% stake is giving the Chinese Communist Party a little bit more heft in how the company operates than you tend to see from such a small stake. The party is also taking a stake in Weibo, notably. Now, instituting party control over major internet companies is a pretty good sign that China's tech industry is entering a new era of regulatory drag. Sure, the ByteDance news is leading to some domestic headlines about why TikTok should be banned in the US, but I think the trend matters a lot more. Notably, when TechCrunch dug into early Chinese venture capital results for the third Quarter, you know, late into this regulatory push, deals were still getting done at a rapid clip. So it's going to be interesting to see what happens to the Chinese startup and venture capital world as the state takes more and more control over the industry.

• 2:22Speaker 00

  Now, this brings us to India, which is undergoing its own regulatory shakeup. BuzzFeed News put together an excellent dive into the country's changing technology regulatory market with the headline, quote, "Big tech thought it had a billion users in the bag. Now it might be forced to make hard choices to get them." In that headline, you see the optimism of Western companies going into the Indian market and then the reality of what's happening on the ground. In sum, we're seeing two very, very large internet markets have two different governments that are taking, I don't know, sharp-ended approaches to tech regulation. All of this leads us into news this morning that Tencent, a Chinese company, is in the advanced stages of talks to lead an investment round in India-based Pocket FM, according to TechCrunch reporting. So while we're paying attention to the macro stories like China's authoritarian government taking more control of its technology industry

• 3:07Speaker 00

  and India's government working to bully its own tech industry into censorship through fear, deals are still getting done. Call it the optimism of greed, if you will, or if you're in a better mood than I am this morning, the engine of capitalism. Your call. Pocket FM, in case you weren't aware, operates an eponymous app that offers users podcasts and audiobooks in English and several Indian languages, according to our own Manish Singh.

• 3:32Speaker 00

  All right, now turn back the clock to the weekend for just a moment and Facebook bowed to external pressure and released a Q1 content report that it had previously shelved. As last week closed and after the company released its Q2 reports to a blizzard of criticism, The New York Times reported that Facebook had put together a similar data dump for the first quarter of the year, but had decided not to share it. After the Times report came out, Facebook released the previously shelved report. Now, what did the report detail? Well, the post has the best headline here, writing that, quote, "Facebook says post that cast doubt on COVID-19 vaccine was most popular on the platform from January through March." Yep. Just remember that anytime Facebook releases data that it wasn't forced to, it is only offering up the stuff that makes it look good, or at least, you know, less bad.

• 4:20Speaker 00

  And now let's talk about some startup activity. First up, we have ZETWORK, that's Z E T W E R K, a Bangalore-based technology startup, said today that it has raised a $150 million Series E. Now, New York-based D1 Capital Partners led the round, which did, of course, include a host of prior investors. But what matters more is that the B2B marketplace is now a unicorn valued at $1.33 billion, give or take, roughly double its prior valuation. And by the time this podcast comes out, I'll have a post up on the site about shelf.io, or just shelf, really, which just closed a $52.5 million Series B led by Tiger and Insight. The company's tech ingests a customer company's knowledge, allowing it to suggest answers and more to staff as they answer external queries.

• 5:05Speaker 00

  What matters even a little bit more than that is that it posted 4X ARR growth in the last year, which helps explain its huge Series B. And the SPAC boom is not over yet. Sure, many companies that went public via a SPAC have seen their valuations decline once their combinations were complete and the hype wore off, but that's not stopping the market from getting busy with even more deals. This time around, it is Virgin Orbit. Recall, of course, that Virgin Galactic went public via a SPAC as well. Now, what is Virgin Orbit? Well, it's a company that puts satellites into low Earth orbit. Now, why does it share the Virgin name? Well, the two companies share a general technology philosophy that flying rockets up on the bellies of planes and then shooting them into orbit from a higher starting point is smarter than starting from a candlestick position on the ground.

• 5:50Speaker 00

  According to TechRench, the company's SPAC deal will value the company at about $3.2 billion. And as a data point for you, Virgin Galactic is worth more than $6 billion today, according to Yahoo Finance.

• 6:03Speaker 00

  And that is what we have this morning, guys. Listen, over here in the Northeast, we survived the hurricane-ish, and I think we're going to be okay. But wherever you are, please stay safe and know that the Equity team sends all of our love and affection your way. And you can follow the show on Twitter at EquityPod or myself, where I tweet under the handle at Alex. Have a good Monday, everybody. Hugs, talk soon. Bye.