See? Fintech isn’t doomed, it just needs more time

Here's what we got into: Stocks are down around the world to start a week that only features a single key earnings report, TSMC this Thursday. Next week really starts the tech reporting deluge, so get ready. In crypto, bitcoin's price failed to pump after its ETF products launched, which surprised some. Also surprising was the value jump that the Ethereum blockchain offers. Buy the rumor, sell the news? (Elsewhere, a crypto exchange raised around $100 million. In 2024! Who would have expected that!) Uber is killing Drizly: You can still get booze delivered to your house, but Axios notes that the $1.1 billion acquisition by Uber has run its course. Pour one out. On the deal front, Spot Technologies raised $2 million, while TechCrunch reports that Kuda raised $20 million last year at a flat valuation. That's pretty solid a result for a fintech startup that last raised in 2021. To close out, Apple is the world's smartphone king and has found a way to sell its Watch product sans legal issues, while Microsoft is very busy with AI. 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 about the business of startups, where we unpack the numbers and the nuance behind the headlines. This is Alex. Good morning. It's January 16th, 2024, and from where I'm sitting, it's still snowing. So if you're in a warmer part of the world, congratulations, I'm jealous. Anyways, the show today shall be hot because we are going to start with stocks and crypto. Then we have startup news, including a shutdown, a $2 million seed raise, and a little bit about fintech. Then there's a new king of smartphone sales and a shrinking market, and then AI hardware, it turns out, is a big hit. Let's go.

• 0:49Speaker 00

  Let's start with the world of money, and that means the stock market. If you spin the globe, shares are lower over in Asia today, and they are also lower in Europe this morning. The red ink persists to the United States, where stocks are set to fall in pre-market trading. Again, it's a short week. Keep that in mind, but still, we can do a lot of damage in four trading days. Now, on the earnings front, there's only one company you need to know of this week, and that is the Taiwan Semiconductor Manufacturing Company, better known as TSMC. It will drop its Q4 numbers this Thursday. Now, we already got its partial December results, so I doubt that there's going to be big shocks in these earnings, but guidance could be pretty interesting if

• 1:30Speaker 00

  chips are your thing. Elsewhere, there is a lot of financial earnings this week, so if you see banking headlines, that's why. Don't worry about it. Next week, we'll start to bring us the big tech earnings. So if you don't like numbers of that sort, this is your last week of freedom, because the tech deluge begins next week.

• 1:50Speaker 00

  And then there was crypto, where I have for you a puzzler. After the launch of a host of Bitcoin spot ETFs last week, the value of Bitcoin itself is off about 8% in the last week. One Bitcoin will cost you about $43,000 this morning. And if you want more on all the spot Bitcoin ETFs, Stuff. Well, over on Chain Reaction, our sister show, Jackie Melanick did a great interview with the CEO of Grayscale that I wholly recommend to you. Meanwhile, Ethereum's token Ether, which in contrast did not get a spot ETF last week, is up nearly 11% in the last seven days. So what gives? Well, we could be seeing a classic case of buy the rumor, sell the news.

• 2:34Speaker 00

  But I think just more realistically, we need more time to see what impact the new Bitcoin investing vehicles will have on the price of Bitcoin before we come to any firm conclusions. Elsewhere in crypto, Tether, a stablecoin pegged to the US dollar, is creeping closer to $100 billion worth of circulating supply, which, according to my math, is a lot. USDC, a rival stablecoin built by Circle, a company that filed privately to go public last week, has about $25 billion worth of circulating supply to its name for reference.

• 3:09Speaker 00

  Next up, it's time for the heart of the show, what I call big news that matters. And the news that I think matters the most this morning is some startup news involving a former startup called Drizly, and Uber is killing it. Let me summarize. Sometimes the startup with a silly name becomes a meme and then dies. Sometimes the startup with a silly name sells to Uber for 1.1 billion and then later dies. And of course, sometimes the startup with a silly name eventually becomes Alphabet. Anyways, alcohol delivery business Drizly is getting the hammer, according to Axios, just three years after it sold to the ride-hailing giant. Now Uber will instead focus on Uber Eats instead, which has a different product than what Drizly itself offered.

• 3:52Speaker 00

  So yes, you can still get booze shipped to your house if that is your jam. 10 points, though, to the Drizly team for selling when the market was hot and getting top dollar. I guess, sorry to Uber shareholders, but we care more about the small companies here than the big ones. And speaking of dollars, Spot Technologies just raised 2 million of them. What does the El Salvador-based artificial intelligence startup do? Well, TechCrunch writes that the company is, and I quote, "Developing cloud technology that turns cameras in retail and logistics locations into an intelligent system tracking consumer behavior and security." I mean, look, I'm never going to get up and cheer too loudly for more surveillance tech,

• 4:34Speaker 00

  but I am sure that what Spot Technologies is building has a market, and it's cool to see startups that are built in countries that we don't hear often enough do well and raise capital. Elsewhere in venture capital news, TechCrunch's own Tej Kané Okofor broke the news this morning that Kuda, K-U-D-A, a Nigerian online challenger bank, raised $20 million in the middle of 2023 at a flat valuation to the $500 million price tag it raised $55 million at back in 2021. It's always good to defend a 2021 valuation, no matter the circumstances. But don't think that Kuda hasn't been busy.

• 5:14Speaker 00

  TechCrunch reports that the company, quote, "managed to grow its user base fivefold since 2021 by servicing Nigerians both at home and abroad, having expanded to the UK in late 2022." Of course, the UK market is very fierce for neobanks, but there are good things happening at Kuda. The neobank concluded 2022 with nearly $20 million in annualized revenues. According to our reporting, that number, nothing to sniff at, is dated, so we can presume that Kuda is a lot larger today than it was then. How much bigger? Well, Kuda projected $40 million in revenue for 2023, but declined to comment to TechCrunch on how close to or how far it busted that figure. See? Fintech isn't doomed.

• 5:58Speaker 00

  Sometimes it just needs more time.

• 6:03Speaker 00

  Back to crypto being a puzzler, a crypto exchange is raising money in 2024. Who would have thought? In this case, it's Hong Kong-based HashKey, which raised, quote, "nearly $100 million" at a $1.2 billion valuation. Now, the company crowed about its regulatory posture in a release, which we think is critical for any crypto company operating in China, but what blew our mind is that a crypto exchange is raising in 2024. After the Binance and FTX messes of last year, you gotta love how bold some people are, and frankly, maybe the market really does need what HashKey has on offer. This is just not the way we thought we were going to start the year.

• 6:49Speaker 00

  All right, let's talk about hardware, because for the first time since 2010, IDC reports that Apple sold more smartphones last year than any other company. Samsung was the firm that Apple knocked off the top slot, so if you are a Samsung diehard, well, I'm sorry. However, the good news for Apple fans kind of stops there. IDC also reports that global smartphone shipments fell by a modest 3.2% last year to 1.17 billion units. Now, is that number good or bad? Well, it was the lowest sales figure for a full calendar year, quote, "in a decade", according to IDC. The bright lining here is that Q4 smartphone sales rose more than expected, so perhaps

• 7:31Speaker 00

  2024 won't be a repeat of 2023 when it comes to handset sales. But let's be honest, at more than 1 billion units yearly, how much bigger can the smartphone market get without more total humans using the devices on a daily basis? So, as we've said on the show before, perhaps we have reached and passed peak smartphone. In related news, my iPhone 11 is trucking along quite happily, and I see no real reason to replace it. Perhaps that's part of the problem. Sticking to Apple, sticking to hardware, good news to all the runners out there because Apple Watch sales in the US are not going to stay in their legal sales limbo due to what TechCrunch's Daryl Etherington

• 8:14Speaker 00

  calls a "software fix" that will disable "the pulse oximetry features on models of the devices going forward." Now, Apple had run into patent trouble over the feature, which it will be able to kill off via a mere software update. So, sorry if you use that feature, but surely Apple will be happy to know that it can keep selling its popular gadget, just sans one feature. Elsewhere in hardware land, Rabbit, an AI hardware startup, announced that it sold out of its fourth batch of hardware. That means it has sold 40,000 of its $199 devices. Very, very cool, and adds up to just under about $8 million in revenue if my math holds

• 8:56Speaker 00

  up. And, closing, two small notes. One, Microsoft is rolling out its productivity helping copilot service to consumers and not just enterprise customers of its Microsoft 365 product, which makes us ask the following question: Where does OpenAI end and Microsoft start? Or the other way around? And, finally for the day, Microsoft just landed a huge $1.5 billion deal with Vodafone to use its AI and cloud tools. Again, OpenAI, Microsoft, what is the difference?

• 9:32Speaker 00

  That's a wrap, friends. We are out of here, but don't forget, we are back on Wednesday, which is tomorrow this week, because this week is only four days long. If you need even more of us, though, we are EquityPod over on X and Threads, and if you want more of me, well, I'm Alex over on X. As I mentioned before, we do have some sister shows: Chain Reaction, All Things Crypto, Found All Things Founders. We'll talk to you soon. Hugs, we're out of here.

• 9:58Speaker 00

  Equity is hosted by myself, editor-in-chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azevedo. We are produced by Teresa Locan Solo with editing by Kell. 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.