Equity Monday: Welcome to bigtech hardware week

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. This week, the week of October 18, 2021, kicked off with a mixed markets picture. Asian stocks were mixed, down in Europe, and set to fall in the United States. China remains a concern. There are hardware events this week from Apple, Samsung and Google. Along with earnings from Netflix, IBM, and Qualtrics. Amazon is in hot water with American regulators, China may force its tech giants to allow for cross-platform search, and Facebook wants to hire lots of Europeans. From startup-land, Enpal landed a huge dollop of cash for its solar work, while OfficeRnD made bets on a hybrid working future. Notes to come shortly on the Expensify IPO filing. The show is back on Wednesday! Chat then! 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

• 0:11Speaker 00

  Good morning, everybody. This is Alex. You are listening to Equity Monday for October 18th, 2021. This is your Monday wake up. We are here to get off on the right foot as a pair. So let's check the markets, talk through the biggest news in technology from the weekend and this morning, and then check in on startup land to lay the groundwork for the week. Apple has an event, Google has an event, Samsung also has an event. So if you are a hardware person, good news, you're going to get a lot of updates this week. If you wanted to buy some of the stuff, I presume supply chain issues will make that very, very hard. So get excited, and then perhaps get patient. And with that, let's go.

• 0:48Speaker 00

  All right. So taking a look around the markets this morning, we're going to kick off in Asia, where stocks were mixed despite a GDP miss from China. Growth in China is slowing thanks to a number of issues, some of which are, just to list them, a power crunch, a zero COVID policy, supply chain and commodities chaos, regulatory change, among other factors. Kind of pick your poison there about which one to point a finger to. Hell, you could even throw in the real estate market and missed bond payments. Looking over Europe, stocks fell, and here in America, they are set to fall when the markets actually open as well. The financial media of the US is noting a huge load of earnings is possibly driving, you know, investor uncertainty. Eh, maybe. Anyways, we will see earnings from Netflix, IBM, and Qualtrics this week at least, probably a couple more tucked in there. Cryptos are muted this

• 1:30Speaker 00

  morning with Bitcoin largely holding on to recent gains, and as a data point, some $70 million worth of NFTs were traded in the last 24 hours, according to CoinMarketCap. All right, let's go.

• 1:43Speaker 00

  All right, let's talk about some big business news in the world of technology this morning. We're going to kick off with Amazon. The company is in hot water with the American Congress because it may have lied, it appears. A couple of reports came out last week from Reuters and Markup indicated that Amazon uses the data of third-party sellers on its platform to inform and create its private label products, and then also that it then gives its own products that it makes a bonus in its search results. This is kind of what Amazon said that it Didn't do, and now the company could be in quite a lot of trouble. According to techwatch.com, the congressional letter addressed to Amazon chief executive Andy Jassy says the committee is considering whether it would be appropriate to refer the Department of Justice to launch a criminal investigation into the subject.

• 2:24Speaker 00

  You never want to have your CEO be sent a letter from Congress, possibly noting DOJ criminal investigations. It's bad. Now, I've gotten into arguments about this on Twitter, and there are people willing to argue. I've learned that Amazon using marketplace data to make its own product choices and then undercut its competitors is fine. That it's okay, that it's just like grocery stores putting in caps of their own store bought products. I don't know. Maybe, I'm not going to win over any hearts and minds today about that, but I will just say from regulatory perspective, this is bad. Turning the page, let's talk about some more regulatory news from China. I'm going to quote Bloomberg here because they had a really, really great concise summary of what's going on. And it's a little better than I can do this early in the morning. So from Bloomberg, and I quote, China is considering asking media companies from Tencent to ByteDance to let rivals access and display their content in search results.

• 3:08Speaker 00

  Holy crap, this is a big deal. Now, look, here in America, if you do a search on Twitter, you might get them Instagrams. If you search for Instagram links, because consumers brought over Instagram content to Twitter. And you can also see tweets on Instagram when folks bring over their own stuff. But you can't search on Twitter and then get native Instagrams, right? That's not really how it works because there's content walls around the American internet. Private companies run their own show and choose what is available for index by others. China wants to change that, and it could really just strip the walls down between a lot of its major companies. Boosting search so good for Baidu overall, and I would say less good for everyone else. And this Sunday, Facebook announced that it will create 10,000 new jobs in the EU over the next five years for a rate, if we're doing our math correctly, of 2,000 jobs per year. Now, why? Well, as it turns out, the answer is the metaverse.

• 3:54Speaker 00

  Yep, the company was apparently not kidding. Now, the idea, according to Facebook, is that quote, interacting online can become much closer to the experience of interacting in person. That is the seed behind the tree that may become the metaverse, or essentially it's the idea behind the idea. So that's fine, but the company has a long way to go to get the trust it will need to do well in that market. So this sort of PR friendly, please don't regulate us too hard announcement is good. I mean, it's not battle tactics by Facebook to Try to curry favor with the EU while other regulatory bodies around the world punch it in the face, but at the same time, it doesn't really do much for consumer trust. I don't think that consumers really know where Facebook has its staff or that they really care, but they do know that it's harder to trust the company than ever. And if I'm going to give it more of my social life, well, I should probably trust it. And Zillow shares are off sharply this morning on

• 4:38Speaker 00

  reports that the company will limit its buying of houses to later sell. The iBuyer is off some 6.4% in pre-market trading, which in case you're not entirely sure is a lot. That's many dollars. And finally, financial group ProShares is launching a Bitcoin ETF. So if that is your jam and you have been unable, for whatever reason, to open a Coinbase account in the last 15,000 years, here you go. Bitcoin ETF, at last, it's going to trade. Good luck.

• 5:07Speaker 00

  All right, the time has come to talk about startups and we're going to kick off with some good news. The good news is this, Startup Solar is not dead. That is the gist or takeaway from an article by TechCrunch's own Ingrid London, my dear friend, about a company called ENPAL, now ENPAL is a solar startup based out of Berlin over in Germany that uses AI to help provision and install solar panels and then kind of charges consumers for them on a subscription style model. Now, we're all familiar with SaaS, of course, software as a service. Well, here we have what Ingrid calls SaaS, or solar as a service. Rimshot, please. The company has raised 150 million euro, or about 174 million US dollars from none other than the SoftBank Vision Fund 2, because really, if someone was going to pour nine figures into a German solar startup,

• 5:50Speaker 00

  it's going to be SoftBank. Next up, startups are building for a hybrid working future, according to our own Natasha Lomas. There's a company called Office RND, which makes workplace management software. And as it turns out, it's increasingly building software that's geared towards helping businesses provide a hybrid office model. This is the kind of flexible office workspace that staff may want to spend some time in, but not all of their time. This is the middle ground between remote work and in-office work. Some people think it's going to be great. Some people think it's going to be terrible. Some people think it's going to be impossible. Office RND is making a bet that it will not only just be possible, but also quite popular. The company just put together a $10 million Series A. So one to watch if you don't want to go to the office more often than Whenever you want. Don't forget that last Friday, Expensify filed to go public.

• 6:34Speaker 00

  Now, we didn't get a chance to dive into the nervous yet, so I don't actually know what to tell you. I'm going to read that S1 literally the moment I finish this podcast, but we will have notes up on the blog ASAP. So if you want to learn more about Expensify and why it's going public now and what that means for its local startup market and investors and blah, blah, blah, blah, I will have all that for you soon. And finally, as we talk about these funding rounds, just keep in mind that we are at historic highs. This is a hot, hot, hot market. This is probably the hottest market since 2000, frankly, in terms of like enthusiasm, not just dollars, but also dollars. So here's the way that I think about it. Back in 2000, everything went pretty crappy for a lot of folks because there was a lot of hype. A lot of companies went public with very little revenue and then they all kind of went crest flat. And then a lot of consumers lost their shirts. Not great.

• 7:16Speaker 00

  This time around, startups are of a higher quality and mini unicorns have strong revenues. But we are seeing increasing sums of money from private sources going into increasingly young startups that have increasingly minimal revenues. That means there's more and more risk in the startup market today. It doesn't mean that things are going to stop now. That doesn't mean that it's the end of the world. But as we sit here at this kind of local maximum of a 12-year boom in the world of startups, keep in mind that this just won't last forever, even if it is lasting so far in 2021.

• 7:47Speaker 00

  All right, do not forget, you can follow the show over on Twitter where we tweet under the handle EquityPod. You can follow myself where I tweet under the handle @Alex. We use Twitter for a lot of fun things, but the EquityPod account does have our Twitter Spaces. I know they're sort of official things, so if you want to hang out with us, do follow that one. We're back Wednesday morning with a new show, talking all about something that I'm very, very stoked about, the value of the online written word. Okay, that's all we got today. You look amazing. Have a killer week and I'll talk to you soon. Bye.