Equity Monday: What's an Angry Bird worth?

Today we are talking about space, birds and startups! Here’s what Alex got into: Earnings season is coming back! That means Netflix and Tesla this week, and a huge number of big tech companies next week. Data cometh. We were very excited about the launch of SpaceX's massive rocket. It got scrubbed after we recorded, but you can still enjoy our hype about the potential event. We'll have more on the matter when the rocket actually does go up. Rovio is selling to Sega. Yeah, we had to digest that one as well. The sale price shows just how tough it is to be a games company. There's a lot of regulation going on out there in the world. And we wrapped with notes on Loopin and Fleet! See you at Early Stage later this week! 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, Spotifyand all the casts. TechCrunch also has a great show on crypto, a show that interviews founders, one that details how our stories come together and 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

• 0:10Speaker 00

  Hello and welcome back to Equity, the TechCrunch podcast where we unpack the numbers and the nuance behind the headlines. It is April 17th, 2023. This is Alex and this is our Monday show where we unpack the weekend and then package it all up and look ahead to the week that's to come. Now, to give you a preview of this show, we're going to talk about stocks and crypto. We're going to riff on SpaceX's big launch. We're going to answer the question, what is an angry bird worth? Then a couple of regulatory updates for both crypto and the social media world. And then we wrap with some very cool startup news. Let's go.

• 0:47Speaker 00

  Kicking off with the stock market, what's going on around the world? Well, in Asia, shares are up across the board. They're not actually much in certain countries. Turning the globe to Europe, shares are flat to up as I took my notes. And here in the US, in pre-market trading, stocks are largely flat thus far. So not a very big Monday for shares trading hands. But don't worry, that's going to change because we are getting into earnings season. Yes. Netflix will report earnings tomorrow. Tesla is on Wednesday. And then next week, we're going to hear from all the major American tech companies. So gear up for a busy next couple of weeks of data. And speaking of data, speaking of Q1 results, over at techcrunch.com, we are doing a lot of reporting

• 1:29Speaker 00

  on all things venture capital from the first three months of the year. So if you want to know about crypto venture and what's going on in Europe and Africa and Latin America and really everywhere else, well, we are parsing the data day by day. So come check it out. Okay, let's talk about crypto. So the bad news is that Bitcoin is back under the $30,000 mark. But the good news is that Bitcoin is still up 4.3% in the last seven days, while Ethereum's token is actually up an even sharper 11.5%. Now, recall as context for that second number that the Ethereum blockchain recently went through a hard fork as part of its Chappelle upgrade set. And I'm not going to tell you what that means in technical terms because it would take Take too long, but it does show continued technological progress over on the Ethereum blockchain.

• 2:15Speaker 00

  Other things to note, well, here's what caught my eye this morning. Tethers circulating supply, it's a stablecoin worth $1, is nearly back to all time highs. And this actually contrasts with USDC, a rival stablecoin also pegged to the dollar, which continues to lose total supply. So as crypto kind of figures out its new winter period, Tethers on the way up and USDC is on the way down.

• 2:39Speaker 00

  Now let's talk about my favorite thing in the world, space. After I wrote my notes for this morning's show, but probably before you actually hear this, SpaceX took a shot at launching its Starship rocket. Now, there's a launch window in the morning, but we were anticipating a launch of around 9:00 AM ET. And if all goes according to plan, you know, this is rocketry, so it might not, we'll see about a 90 minute flight for the monster launch machine. Now, why does this matter? Well, according to Aria over on the TechCrunch Transit Desk, while SpaceX has conducted a number of suborbital tests of the Starship upper stage from its base in Texas, this will be the first time that a fully integrated Starship and super heavy booster will fly together.

• 3:21Speaker 00

  The reusable launch system, which is the most powerful rocket ever built, is designed to carry an enormous amount of mass to orbit the moon or even to Mars. Now, we are not anticipating the recovery of either stage in this particular test, but it will be fun to watch the Starship do what it does. I mean, this thing is 394 feet tall. It has 33 engines and generates an amazing 16.7 million pounds of thrust at liftoff. It's gonna be big, it's gonna be loud, and hopefully it's gonna be a good day for humanity's spacefaring dreams. And if you're sitting there going, wait a minute, Equities being nice about one of Elon's companies? Yes, and I'll tell you why, it's because space is cool.

• 4:05Speaker 00

  Not to date myself, but pulling on my suspenders, I actually do recall when Angry Birds first took off back in the day. That was in 2009, believe it or not. The iPhone back then was still a little baby of a franchise. And if I recall correctly, Microsoft hadn't even yet given up on its Windows Phone dreams. Anyways, the app, not Rovio's first product, became a smash hit and racked up billions and billions and billions of downloads over time. And then Rovio actually went public back in 2017, which I forgot about, sorry. And now it turns out this morning that Sega is buying it. TechCrunch reports that Japanese gaming giant Sega has confirmed that it is buying Finland's Rovio in an all cash deal worth $775 million.

• 4:49Speaker 00

  Now, news first emerged back in January that Israeli mobile gaming company PlayTika had tabled a $810 million bid for Rovio. Those talks collapsed last month with no reasons provided by either company as to why. However, at the time, Rovio confirmed that it was still in talks with other parties, with rumors emerging over the weekend that Sonic the Hedgehog maker Sega was in the mix. Well, now the deal is official with Rovio noting that it expects the deal to close in the second quarter of its current fiscal year. And that means sometime in the next couple of months. Now the math, Sega's offer represents a roughly 63% premium on Rovio's closing price on January 19th, the last trading date of this year before reports first emerged that it might be sold.

• 5:34Speaker 00

  And the price is roughly 19% premium on Rovio's final closing price as of Friday, April 14th. Okay, so we know the dollar amount, we know the companies, we know a lot of stuff, but how big is Rovio? Well, I looked it up this morning and the company did 318 million euro in revenue in 2022 and has consistently generated adjusted EBITDA in recent years. So why, after posting roughly 11% growth last year, is Rovio selling? Well, it's because investors had valued it at less than 2x revenue before acquisition talks kicked off. And that's just brutal.

• 6:13Speaker 00

  Now, since we need to conserve time for a couple of pieces of important startup news at the end of the show, I'm going to give you a very quick, very summarized, very condensed regulatory update. I could do a whole show about this, but here's the brass tacks. India's government is taking further steps against social media services to control what their users can and cannot post. According to TechCrunch's reporting, India recently updated its IT rules barring social media platforms such as Facebook and Twitter, you may have heard of them, from publishing, sharing, or hosting false or misleading information about the government's business affairs. Now, under the new regulations, these firms must rely on New Delhi's own fact-checking unit to verify claims. And if you can't tell

• 6:56Speaker 00

  from my voice already, this is a very bad idea and is a clear power grab by the current administration in the country. This is really very bad for the internet generally and also for Indian citizens who are going to get a very sanitized and therefore very false view of their government. Moving along, the US House Financial Services Committee dropped a draft bill recently which could limit some stablecoin activity dealing with how they're backed and what you have to have to actually back up a stablecoin and potentially create a central bank digital currency. And late last week, the US Securities and Exchange Commission, aka the SEC, made some moves to scoot more crypto-related business under its purview. Now, if you like the SEC,

• 7:40Speaker 00

  this is good news. If you like Doge, it's probably not.

• 7:46Speaker 00

  All right, now let's talk about some startups. And the first one is a company called Lupin. And I'm paraphrasing TechCrunch here a little bit, but roll with me. Employing a combination of OpenAI's ChatGPT combined with its own proprietary coaching platform for, quote, "staff well-being," Lupin hopes to make waves in the workplace measurement space. And to get there, it plans to use the rocket fuel of generative AI. Now, Lupin is based in Bristol, over in the UK, and just raised a $1.9 million seed funding round from a number of angel investors. For a company of its size, you don't really expect much, so we were surprised to learn that Lupin... Loopin has already 40 paying customers. Now, I think we are far from done seeing startups use new AI tools to build services.

• 8:30Speaker 00

  And if you watched anything from YC's Demo Day, you know what I'm talking about. But how fun is it to see an actually seed-sized seed round in such a hot space? I didn't think we still did that. Now, next, we have a startup that is so popular already. It's the only startup we've ever covered that has its own week in San Francisco. And yes, I am talking about Fleet, a French startup that rents laptops to corporate customers and claims to have deployed around 10,000 of the devices with long-term leasing contracts, according to our own reporting, and the company is expanding. So what's the news? Well, in addition to Mac and Windows laptops, Fleet has added other things that you can rent on its platform, and I list here: smartphones, tablets, accessories, and even phone booths and furniture. Pretty cool.

• 9:16Speaker 00

  So why not do hardware as a service, right? We already do software as a service. And in fact, the physical stuff as a service model isn't new either. Don't forget that Court also does furniture leasing and Berkshire Hathaway owns that. Now, what's especially neat about Fleet is that it's not venture-backed. Instead, it's relying on its own revenues to fund its operations. So how often do we see that on TechCrunch? Very cool. 10 points to friends.

• 9:43Speaker 00

  All right, and that is all the show we have for you this week. But before you hit that button, hang out with me for one second. Early Stage is this week. It's a big event that TechCrunch is hosting up in Boston. I am going to be up there. Natasha's going to be up there. We're going to record Equities somewhere on the show floor. So if you see us while you're there and we are recording, don't come say aye. But the moment we're done, we'd love to hang out, high five, all that good stuff. So we'll see you at Early Stage in just a couple of days. Don't forget, you can follow Equity on Twitter, where we tweet under the handle EquityPod, or you can follow me. My name is Alex, and that is also my Twitter handle. We will talk to you soon. Equity is back Wednesday and back Friday. We have a lot planned for you this week, so we'll talk to you then. Bye.

• 10:24Speaker 00

  Equity Mondays are hosted by myself, editor in chief of TechCrunch Plus, Alex Wilhelm. We're produced by Teresa Locan Solo with editing by Kel Keller. Bryce Durbin is our illustrator. Alyssa Stringer leads audience development, and Henry Pickavet manages TechCrunch Audio Products. Thanks so much for listening, and we'll be back next week.