Pod Insights Equity Podcast The future of M&A and why founders are getting whiplash About this episode This week Mary Ann and Alex covered a host of news events. Here's the rundown:
Fintech + AI = ? News that Ramp and Brex are working to lever AI in the wake of reporting that Brex's growth this year on a sequential-quarterly basis slowed had us thinking. Can AI help fintech startups grow more quickly? The fintech sector could use a boon at this juncture, perhaps this is it.
Help I drink too much: Alex dug up a recent venture round in the sobriety space. This time it was Sunnyside, which just raised $11.5 million for its subscription service that helps folks cut back on their drinking. We've discussed other players in the space before, including Reframe.
What's ahead for the startup M&A market? The Getir-FreshDirect deal had us thinking. Becca Szkutak thinks that it represents the sort of deal that we'll see next year. Even more, we may see more, similar deals next year.
Will AI help startups regain their former value? A recent report from Battery Ventures had Alex thinking about how AI-powered automation could help startups spend less as they grow; Rule of 40, here we come!
Hormonal health will be is big: The Equity team dug into Allara the other week. Now we're adding Inito, which just raised $6 million, to our list of startups that are building in the hormonal health market. Natasha was right.
And that was the show! Next week is a holiday week here in the United States, so expect something special from us next Friday. We'll be on our regular schedule Monday and Wednesday!
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Transcript 0:10 Speaker 00 Hello and welcome back to Equity, a podcast all about the business of startups, where we unpack the numbers and the nuance behind the headlines. Today is November 17th, 2023. My name is Alex and I'm joined, as I am each and every Friday, by my dear friend on the Fintech Beat. It is Senior Tech Reporter, Mary Anne Azaveto. Mary Anne, hello. We are here again and we have survived another week.
0:32 Speaker 01 We have survived. I've been looking forward to this. I have to admit, this is one of the highlights of my week, every week.
0:38 Speaker 00 That's because for one hour, we get to turn off Slack, not answer phone calls, ignore tech messages, not read email, and actually just get to sit and chat. Like, I wonder if we had like actual like lunch breaks with people to talk to them, if we'd enjoy podcasting as much, or if this is just our stand-in for social interaction.
0:55 Speaker 01 Good question. No, I think we still, we still would enjoy it. Come on. This is a blast.
1:00 Speaker 00 Absolutely. And one reason why we enjoy this is because there's always so very much to talk about. And on today's show, we are going to riff on Ramp, tapping into AI. We're also going to talk about Sunny Signs AI-powered coach with a sobriety twist. Then, the 2024 M&A market and what it might bring and what this year lacked. Then, how AI automation could resurrect startup valuations. That one's for me. Hope you like it. And then finally, everyone wants to do hormonal health now, or essentially the revenge of prior host Natasha, and why she was right a couple of years back. But, Mary Anne, we're going to start in the fintech world, but from a kind of a newsy angle. So in the spin management category, there's Ramp, there's Brex, there's a lot of other companies. They're back in the news. What's going on?
1:43 Speaker 01 Yeah, so a few things have been going on lately. Brex and Ramp are two of the higher-profile startups in this space. And earlier this week, The Information reported some news on Brex's annualized net revenue. And what it reported was that it only increased by about 1% in the third quarter to 283 million compared to 279 million in the second quarter. That was after this kind of surge in business after the Silicon Valley Bank meltdown. Well, 1% doesn't feel like a lot, especially for a high-flying startup like Brex that was valued at, I think, $12 billion just last year. So, we reached out to Brex to ask about this. They didn't really want to comment, naturally, but...
2:28 Speaker 01 Did try to point us to their, their profit growth, saying that profits are actually up year over year. I think they said 80% year over year growth. And one of the things that they're betting on, that Ramp is also betting on, and probably almost every other company in this space is betting on, is AI. So part of what's in the news this week is Ramp inked a deal with Microsoft. They've got a new integration with Copilot for Microsoft 365. And Brex, a couple of months back, also unveiled its own assistant that's AI powered. So it's, these companies are really looking to leverage AI. And what we're wondering is, is it going to help them grow their bottom line?
3:12 Speaker 00 Yeah. So on the, starting with the Brex financial news, a couple of things that we need to make sure we're comparing apples to apples and oranges to oranges. So Brex growing 1% sequential from Q2 2023 to Q3 2023, sounds bad. Because growing 1% quarter to quarter is not what you expect from a high growth company. However, I'm sure on a year over a year basis, they grew a lot more in that quarter. Right? So it's, it's 1%, but not an entirely trailing metric in the way that we often think about it for public companies. Also, we have seen in prior periods with companies of different types, that if they
3:52 Speaker 00 have a demand surge at any particular time, it does make their future growth rates occasionally wonky. And you'll often hear CEOs on public market calls talk about lapping certain revenue moments on a yearly basis and how that impacts their numbers and so forth. So to me, what's more interesting is that Brex is doing, you know, north of a billion net revenue a year than the sequential quarterly growth number, Mary Ann. So I guess what I'd really love to know more of is like, what were they doing two and three and four quarters ago to put that number into better context? Because we only had this narrow snapshot.
4:27 Speaker 01 Well, actually, we do have supposedly some numbers, according to the information. And, and let's be clear that this is, they didn't get this directly from the company. As, as I understand it, they had other sources and Brex wouldn't confirm. But according to the information, in the second, third quarters of last year, Brex's annualized revenue was just under 200 million. That is not. I don't know if they mean in each quarter or collectively, I'm assuming.
4:53 Speaker 00 That would have to be quarterly.
4:55 Speaker 01 I would think so, right?
4:56 Speaker 00 The growth would be insane.
4:57 Speaker 01 Right, right. So I really want to say like to your point, if they did indeed see this big surge after the Silicon Valley Bank meltdown, it does make sense that they would have slower growth in the third quarter because when you have a big bump like that, you're probably not going to, it's not going to continue every quarter when it's, especially when it's related to a big one-time event.
5:19 Speaker 00 Yes. Call it a demand pull forward versus a change in the overall market's appetite for your product over a longer period of time. And I just ran the numbers, 200 to 283 is about 42%. If you want to put that into percentage terms. But Mary Ann, the thing that I want to kind of figure out here is, you know, AI going into everything. Clearly, the spend management space with Airbase and other companies is big and popular. Do you think that these new AI products from Ramp and Brex are indicative of them discovering new and awesome ways to do business? Or are they kind of doing a keeping up with the Joneses thing between one another and trying to make sure that the other company that they compete with can't claim to have more advanced AI capabilities than they do themselves?
6:01 Speaker 01 I think it's a little bit of both. Both companies claim that they've been using AIs since they started in various capacities. So it's not like they're just suddenly jumping on the AI bandwagon. Brex said it's been using it since inception across underwriting fraud, receipt matching, things like that. Ramp too has been using AI for a while. Earlier this year, it acquired an AI-powered customer service tool, Cohere.io, I think was the name of that. So I do think it's a little bit of both. And so they are using it to try to make things easier for their users, make things more streamlined. Like the integration with Microsoft basically means that when, if you're using Microsoft Teams, you can actually tag its bot, you know, within Teams to answer questions for you, things like
6:45 Speaker 01 that. Brex has its own assistant, Navan, which used to be TripAdvisor, has its own assistant called Ava. So like, this is just becoming, it's like, if you don't have your own assistant, are you really a spend management company? I mean, you know, like, they're all doing it. So I think it's a little bit of both.
7:03 Speaker 00 Because one thing I'm trying to sort out a lot is what is going to become AI table stakes? Like just the absolute minimum everyone expects from you? And what is actually a super innovative way to use AI to either enhance or amend a product to make it much better? And I know that I'm sure that every company we've mentioned in the last five minutes will tell us that it's their version of use of AI. That is the most important, the differentiated and the best. But I'm curious to say, or see, I suppose, in a couple of quarters, how their growth might be impacted by this. Do customers flock to it? Does it change their ability to retain customers long term? Or is this just now what people expect? Like when I buy a car now, I expect it to come with airbags.
7:43 Speaker 01 Yeah, and that's a good point. I asked Ramp if, you know, they expected to see more revenue out of this, this new integration with Microsoft. They said it's not an additional paid subscription. It's not a direct revenue driving product. But they, they think that indirectly because Ramp will be more deeply integrated into companies' existing tech stacks, then use of their own tools such as cards or bill payments and software will go up and thus revenue will increase as well. So it's kind of an indirect effect they are saying.
8:12 Speaker 00 I know we need to move on, but I do feel like most of the times I've talked to companies about AI related products and services they're bringing to their core offering, it's that. It's that they expect it to help either drive usage and therefore revenue, or to allow them to better retain customers and therefore conserve revenue and not deal with more gross retention issues. Microsoft on the other hand is charging like 40 bucks a month for AI inside of Office. So someone's right, someone's not. And there's definitely going to be a striation of how to charge for AI products long term. And I know I'm making that too simple, but you know what I mean. All right, moving on. Mary Ann, I know that you're a aficionado of all things martini and vodka based beverages. I'm kidding, I have no idea if you drink at all. But there's a new drinking related app out that I want to talk about.
8:57 Speaker 00 It's called Sunnyside and it just raised 11 and a half million dollars and is putting out an AI powered coach to help people who want to cut back on their drinking do that. The company launched back in 2020. It says it's helped over 200,000 people. And I love a non-GAAP stat, so it claims that it's helped people not have 13.5 million drinks, which is quite a lot. And I just love seeing more startups in this space trying to build products that are going to help people take better care of themselves, especially in this area where I have personally struggled. So first thoughts from you, go.
9:30 Speaker 01 I mean, I agree, of course. I think anything out there that can help people who are struggling with any kind of addiction is welcome, especially if it's done responsibly and well. One thing I am curious about, though, is this meant to sort of compliment, say, someone who's attending AA meetings? Or is it intended to replace? Or, you know, where does it fit into a person's actual attempts to kick this addiction?
9:57 Speaker 00 There are many paths to health, is what I'll say. I have friends in and around sobriety communities, let's say, and they all have a very different answer to your question. There are people who think that a 12-step approach is the only way to get sober and stay so from a substance that you need to get away from. There's folks who don't agree with that and also need to abstain entirely. There's also a lot of folks out there who just want to drink less or use less of a particular substance. So I don't think there's a single answer to that. I bet you that Sunnyside, which costs $100 a year for its service, or Reframe, which also costs $100 a year, which we talked about on the show before,
10:41 Speaker 00 are going to help a lot of people reduce drinking via, you know, reminders, little pledges, keeping track of your drinking, helping you just make good decisions, and probably also help complement folks who are having a stiffer problem but could still use that little bit of tailwind to help them easily keep tabs of what they're doing.
11:00 Speaker 01 Okay, so it's not just for people who are trying to quit drinking altogether, but just trying to kind of control the amount of their consumption as well. So I guess a question I have for you, Alex, is when you were attempting to kick this palate, would you have used this sort of app? Like, would it, is it something that you feel like would have been useful for you?
11:17 Speaker 00 So Band-Aids are useful, right? If you have a cut. If you've cut your leg off...
11:25 Speaker 00 A Band-Aid's not going to cut it. And so that's, that's how this feels to me looking backwards. Like, you know, no one wants to hear old alcoholic war stories, but when you're having a whole half pint of vodka for breakfast, you don't need an SMS update. You need to be hospitalized. So for me, it ended up pretty far away. But if I had an app like this earlier on in my drinking career, then maybe it could have steered me away from where I ended up. That's what I'm excited about here because in sober circles, there's a lot of like, kind of waiting for people to have their epiphany of, oh, this doesn't work for me anymore. I have to stop. Reaching bottom is one way it's often phrased. I've always wondered if we had more early intervention and early care for folks, if we can end up with fewer people
12:09 Speaker 00 winding up all the way face down in the dirt. And that's why I'm excited about this, um, this startup. So sunny side, it's an AI sobriety play. We'll see how this works out. I love the people who are working on this. And I just hope that it reduces human misery and helps people live more healthy, full and fun lives.
12:26 Speaker 01 I hope so too. And I have to say, I love the name. I really do. It's very optimistic.
12:30 Speaker 00 Which it's, it's Monty Python song, right? Always look on the sunny side of life. And if you don't get that reference, well, you know, that's okay. We are going to have a very quick break and we're going to come back and talk about getter and what's going on in the M and A market in 2024. But first, listen to this.
12:48 Speaker 00 All right. So Mary Ann, you eat food, I eat food. Sometimes we cook it, sometimes we don't. But one thing I have noticed around different neighborhoods in my life are Fresh Direct trucks. Have you seen these out in the wild?
12:59 Speaker 01 Ah, no.
13:00 Speaker 00 Oh, okay. Fair enough. So Fresh Direct, I've always seen as a kind of old school grocery delivery service, been around for a while. I've seen it out and about, and to me, it predates the, the Instacart moment, if you will. And so I was pretty excited to see news that Getier, or getter, if you're pronouncing it with an American accent, bought Fresh Direct for an undisclosed amount relatively recently. I forget the exact day, but Fresh Direct was recently valued at 300 million. That's back in 2020. And of course, Getier is one of those quick delivery grocery services that's very popular around the world and has struggled, I think as a category recently. So what do you think of this tie up between kind of the OG Instacart, if you will, and a Turkish quick delivery service that's worth billions of dollars?
13:42 Speaker 01 I thought it was interesting that a Turkish delivery service would buy one that's based in New York. It's not. Something we typically hear about, honestly, I don't hear a lot about businesses coming out of Turkey in general. So that's kind of intriguing. I think from what I understand that they made the acquisition to expand their own presence here in the US.
14:02 Speaker 00 Yes.
14:03 Speaker 01 So that's pretty, it sounds like a pretty strategic move on their part.
14:06 Speaker 00 Yeah. And for the amount of money, it's not, doesn't seem to be that expensive for a company of that size, especially if you can use stock to some degree to finance the purchase. And then you get a lot of footprint and you get a lot of expertise in the US market and relationships and so forth. And I can totally see it. But, you know, if they're going to buy that company for, I don't know, let's just guess 150, 200, 300, somewhere in there. I mean, there's not that much that you're buying that's super valued by the market. And so I'm curious if it's actually going to change the trajectory of Gattir, or if the company will continue to essentially struggle to make its economics work out. I mean, grocery delivery is not famously a high margin business.
14:43 Speaker 01 Yeah, there's a lot of competition here in the US. So I feel like it was a pretty bold move. I mean, you have Instacart, you have a lot of players delivering grocery, including the likes of DoorDash. So either it's going to go really well, or it's, it's not.
14:58 Speaker 00 Well, it's not the first time we've seen Gattir actually make deals. So don't forget, they bought Gorillas back in December of 2022, which is coming up on a year ago. So certainly not a company that is afraid of doing acquisitions. And, you know, it was valued at more than $10 billion back in March of '22. That's come down, I think, inside the deal for Gorillas itself, Gattir was revalued at, I think, about 10 billion. And there's talk that it's going to raise more at even lower valuation. But we are seeing deals in a big, in a big and active space. So I love to see it. But it just doesn't seem like we're seeing a super strong company buy another strong company. It feels more like Gattir, after its peak hype cycle, is now buying a company that never quite stood up to its full height.
15:41 Speaker 01 Yeah. And I think that there's probably more of that happening than we even realize. And speaking of just general M and A, I feel like 2023 did not pan out. To be the year of M and A like so many of us were predicting. Would you agree with that?
15:55 Speaker 00 Oh, absolutely. I mean, Becca Szkutak for TechCrunch Plus wrote a great piece about how she had thought this was going to be the year of M and A. And instead, a lot of companies that, you know, came into this year cash rich did not snap up a lot of smaller companies as we expected that they might. Now, Mary Ann, next year is a new year. But I think you're right that a lot of us thought this was going to be the year of a lot of aqua hires and smaller transactions. And at least as far as we can tell, not really.
16:22 Speaker 01 No, not really. It started out strong, especially in the fintech space. I was looking back and in January, I wrote my newsletter, the interchange fintech newsletter.
16:31 Speaker 00 It's really good. You should subscribe to it. And if you don't, you hate Mary Ann. Just saying.
16:36 Speaker 01 Thank you. But the headline on that was so much fintech M and A. And I wrote about at least, I think, four or five deals that had taken place that week, including, let's see, Deal acquired a fintech called Capbase, BlackRock took a stake in Human Interest. And, you know, I thought, oh, gosh, this is going to be a crazy year. This has all happened just in one week. And then later that month, I wrote about Marketta acquiring this startup called Power for $200 million. So that was in January.
17:06 Speaker 00 Oh, that's right.
17:07 Speaker 01 Right. So I really thought the, you know, the way the year started was going to be an indicator of what the whole year would be like, at least in the fintech space. But it really did not pan out that way at all. I mean, we did see Visa acquire Pismo or announced that it was going to acquire Pismo, the Brazilian fintech infrastructure startup. And that was over the summer. But other than like, that, I can't think of any other very significant deals.
17:32 Speaker 00 No, it started off so strong. So for context, the Mary Ann piece, so much fintech M and A, came out on January 15. And apparently, that was the high water mark for M and A activity in the startup space for 2023. And this is why you should not trust what happens in the first two weeks to tell you what will happen in Q4, which we are now. So I wonder what would cause more deals to happen? That's kind of the thing that I'm trying to figure out. Because if we were wrong about the timing this year, what's going to change? Do you think Becca's point about companies trying to join forces who are struggling has a lot of merit? And if you want to put this into kind of like American historical political terms, go back in time to when Senator Ted Cruz was running for president, not doing so well, decided that he would announce that if he did win,
18:16 Speaker 00 he'd have Carly Fiorina as his VP. And then the combined ticket immediately collapsed like a failed souffle and dropped out of the race. So we might see more of those transactions as almost like points of desperation, I feel than than anything else.
18:31 Speaker 01 I mean, I think it's it's getting to a point where a lot of startups that have have had difficulty raising more capital, but still have something there are realizing, okay, either either we're going to have to join forces with another company and try to make something better combined or fold. I feel like there's really not going to be a lot of options for some companies.
18:53 Speaker 00 Yeah, if you have two companies, startups that are in a similar space, if you can bring them together, you can reduce overall staffing. You don't need to replicate certain business operations and you have a higher amount of revenue, larger amount of revenue versus a hopefully smaller combined cost base. And then maybe you're more profitable and maybe you can do better. It can work sometimes, but don't forget that selling your company or merging is always a lot harder than you think it's going to be. Even though you know it's going to be hard, it's always worse. So there's a lot there, but enough doom and gloom, enough sadness, enough of us being bummer's and just kind of overall depressive folks. I have some good news, Mary Ann, which is that AI might be the saving grace for startup valuations. And I'm very excited about that.
19:37 Speaker 01 Yeah, you wrote a great, very interesting article on the topic and
19:40 Speaker 00 I paid her $5 to say that, by the way.
19:43 Speaker 01 No, I do think I do think there's truth to that. And, you know, tying back quickly to our earlier conversation, I think both Ramp and Brex are also using AI internally to try to improve their efficiencies as an organization so that they can save money and reduce cash burn. So I think that a lot of companies are trying to do this and the The whole premise is that if companies can use AI to do things more efficiently and then reduce cash burn, maybe not spend as much on on staff, which I know is a controversial topic, that maybe they will be able to show not just more revenue, but become more profitable. So I think if we if we look at it from the context of not, okay, AI is going to replace
20:24 Speaker 01 jobs and thus startups will become more valuable, but AI is going to come in and and help organizations just run their businesses better, then yeah, there's a lot of hopefully truth to this because come on, we don't want to see valuations decline. I mean, this doom and gloom is not fun for us as reporters. I'll be honest with you. It's much more fun covering the startup world when companies are doing well. So we want to see this happen. I want to see companies doing better. I want to see people keeping their jobs.
20:53 Speaker 00 Well, speak for yourself.
20:53 Speaker 01 I want to see them growing. Well, some of them, right?
20:57 Speaker 00 I'm kidding, I'm kidding.
20:57 Speaker 01 Most of them.
20:58 Speaker 00 No, you make a really good point.
21:00 Speaker 01 I mean, who doesn't want to see companies becoming more successful? So if AI can help it happen without eliminating a bunch of jobs, then I'm all for it.
21:10 Speaker 00 Yeah. And this all kicked off because Battery Ventures put together a report on the, I think they said it was the Open Cloud. And I was just going through it. And Mary Ann, you know, my favorite way to spend my lunch break is reading through a new, fresh report because I'm serious. There's nothing to do.
21:25 Speaker 01 Oh, I know.
21:26 Speaker 00 Because you always get to learn so much stuff. And I was leafing through the presentation and I kind of figured out the logic behind what they're thinking. So there's a lot of information from this battery report and I'll put a link to it in the the show notes if you want to go look it up. That'll be on techwatch.com somewhere by the top when you hear this. There's a valuation premium for companies that meet the rule of 40 versus those that don't. And I know that that is obvious. The point that they were trying to make is there's an enormous premium for companies that are providing a good balance between growth and profitability. And the battery view, as far as I can tell, is that growth will be pretty consistent in the future. And so if companies want to have a better score against the rule of 40, which combines growth rates and profitability rates, well,
22:09 Speaker 00 then they need to actually just burn less. So how do you go about doing that without reducing growth? Efficiency. And that's where AI-based automation comes into play in their view. And they think that essentially AI-focused automation could drive 20% cost savings in both R and D and G and A budgets, which in turn makes the company a lot more efficient and therefore more valuable. And I love this, but I'm going to be super curious to see how well this thesis plays out in the market because AI is cool. And I think we all have a lot of ideas how we might use it, but to actually reduce headcount spend to allow for AI software to step in and make things faster and easier.
22:51 Speaker 00 That should be measurable, probably by like headcount per startup stage over time. So we should be able to vet this down the road, but I just loved the optimistic take. It was about time that someone said, hey, here's a glimmer of light.
23:04 Speaker 01 Yeah, of course. I mean, I agree. I love an optimistic take and I, I do think it's a little, I don't know if ironic is the word, but like, you know, the, the VCs are the one that we're pushing for growth, growth, growth at all costs, growth at all costs. And then, you know, everything exploded and then it became, where are the profits? Where are the profits? So like, you know, there's this, this kind of manic turn of like priority, right? Okay. We want you to do this. Okay. You did it. You did it. But that was wrong. No, no, you should be doing this. And so founders are like having whiplash. So.
23:37 Speaker 00 I, I agree. Do I think, I mean, far be it for me to stand here and, and, you know, defend the investing class, you know, hire everybody. But I, I think that investors would say, we're playing the game that's on the field and in a low interest rate environment, when there's a lot of capital bouncing around, you end up having to respond to a very different market and therefore the incentives are different. So the outcomes are different. Fair enough, but I also agree with you, Mary Ann. It does feel slightly sclerotic from where we sit to watch things change so rapidly from an expectations perspective.
24:09 Speaker 01 Yeah, it's kind of frustrating, I think, a little bit because I think founders were, you know, I'm not trying to say all founders are like victims or anything like that, but they did get caught up in this hype cycle and there was a lot of pressure all around. And VCs investing like crazy because of FOMO. And then all of a sudden it was like, oh, but you know, your priorities should be this. It should have been profit all along, right? Like, it should have been balanced responsibly all along, but that's a whole other topic. Let's get back to AI automation. So, yeah, I think to your other point too, Alex, is I think a lot of companies would love to see this happen, right? Within their own business, using AI automation to be able to reduce cash burn. Will they all be able to do it? Not necessarily. I think it depends on the type of business,
24:51 Speaker 01 you know, what they do, how they do it. I don't think it can necessarily work for every company, but for those that can, hey, good for them.
24:58 Speaker 00 Oh, absolutely. And like, just to put it into perspective, I'm not going to actually run you through the exact examples, everybody, what they were talking about. But one thing that they did discuss was having a different ratio of SDRs to AEs instead of sales organizations, essentially allowing AI to take some of that work off of the hands of folks who are doing stuff probably a bit too manually. And if you have a different ratio, you can have different amounts of staffing and that can save you money. And you can have the same amount of kind of like, sales work done. So that's kind of the thought there. On the cost-saving point, though, something else that surprised me, and I want to tell people this because I've been thinking a lot about it. There was another venture capital report, sorry to sound so on-brand today, but Menlo Ventures was talking about the state of generative
25:41 Speaker 00 AI in the enterprise. And essentially, they just talked to a lot of folks who are executives at big software companies and were like, what do you care about? And the number one thing people wanted to do with AI was cost savings. And I was kind of like, well, shit, isn't that boring? Like, imagine, I invent you a supersonic airplane, you're like, great, what does this save us on fuel? Like, open your mind, people!
26:04 Speaker 01 Well, it's practical, right? It's practical. How can we, a lot, I think that speaks to the market, though, right? A lot of companies, I mean, come on, a lot of companies are probably struggling just to stay afloat. So, that kind of makes sense.
26:19 Speaker 00 Okay, fine, but when do I get my hoverbike and space trips and other cool things like like I love that AI is going to be helpful to help companies have better operating margins. But if that's what we get out of AI in this cycle, I'm going to be really disappointed if that ends up being the thing.
26:36 Speaker 01 I'm sure that's not the only thing. That's just part of it.
26:39 Speaker 00 When the cool stuff comes, Mary Ann, we'll talk about it. But in the meantime, everyone's excited about cost savings in the enterprise and that will impact startups. And that is your good news for founders for the week. And that means we can talk about our last thing, which I think is essentially a billboard to why we missed Natasha, who was on the show with us for a really long time. Back in 2021, she wrote a piece entitled hormonal health is a massive opportunity. Where are the unicorns? And then the other week, we talked about a company called Alara. Mary Ann, it was your deal of the week back in, was it October?
27:10 Speaker 01 I think so. Yeah.
27:11 Speaker 00 And then there was another company called Anito that is also working on hormonal health, this time based out of Bengaluru and just raised a $6 million Series A. And again, focusing on hormonal health. So I think we have enough stuff now to say that this is actually a category. And then Natasha was, if not early, at least dead on in her prediction.
27:30 Speaker 01 Absolutely, she was. And I think this comes into where we, when we talk about startups solving real world problems, this falls squarely into that category. And really, I mean, this is fertility or infertility, rather, is a problem worldwide. And it's something that is not often talked about a lot because there's some sort of, I don't know if stigma is the word, but like, like, it's just one of those topics where people aren't necessarily comfortable sharing experiences. I think that's changing a little bit, especially, you know, younger generations. But it's hard. And if you've ever been through struggling with fertility problems, you can attest to how, how traumatic it can be. And as an individual, on your relationship and, you know, the heartbreak that comes with it and
28:15 Speaker 01 all of the stress associated with infertility. So startups that are really actively trying to do things to help people, to me, are super welcome. This one, Anito, it sounds like it's a little bit different because it really drills deeper into what it tracks. It's not just a, hey, you're ovulating now, you know, go for it. It really like.
28:39 Speaker 01 Yeah, it's more than that. Apparently, track cycle history provides numerical values for fertility hormones. So it goes a little bit deeper. I think that's sounds super cool.
28:50 Speaker 00 Yeah. And if you go back in time to what Alara was doing, they were focused on things that were hormonal, but not always directly only focused on reproduction. So like PCOS, endometriosis, other things that are often not well diagnosed for women, but are very, very important and do impact their health. And, you know, my slightly unlettered question here is, all of this is really great. I'm so glad people are working on this. I'm so glad the technology is getting better, more accessible, easier to get. But don't men have hormones too? Probably? Just guessing?
29:22 Speaker 01 I don't know if there's anything out there for men in this category. Good question.
29:28 Speaker 00 Bonkers. But yeah, I love seeing companies work on this. I think it's very exciting. And, you know, at the time Natasha wrote that piece back in 21, people were talking about how, you know, by 2025, women's health could be a $50 billion industry. I mean, pick a number, women are half the people out there. So it's an enormous TAM. And so it's great to see more companies working on this. And here's to seeing some more. So if you are working on hormonal health for women or men, equitypod at techrunch.com. We'd love to hear from you and dig in more into what you're working on.
29:54 Speaker 01 Absolutely.
29:55 Speaker 00 And Mary Ann, with that, I believe we need to hang up the spurs, put the horses back in the stable because we are done for today. But Mary Ann, we are not going to leave our dear friends in the lurch next week. We have a lot of cool things planned, including a double interview power show, All About Sustainability. It's going to be coming out next Friday. So if you're in a tryptophan induced coma, don't worry, Equity will be here to teach you some new stuff and make sure that you have a good time and have an excuse to avoid your family once you're tired of them. Because that's what holidays are for, I believe.
30:23 Speaker 01 That's right. We're here to help.
30:24 Speaker 00 We are indeed here to help. But Equity will be back on Monday with our weekly kickoff. So I will talk to you all then. In the meantime, Equity Pod on both Twitter and threads if you want to hang out with us. And of course, you can use the code EQUITY, all caps, to save money on TechCrunch Plus. And with that, goodbye. Talk to you soon.
30:40 Speaker 01 Bye.
30:44 Speaker 00 Equity is hosted by myself, Editor-in-Chief of TechCrunch Plus Alex Wilhelm, and TechCrunch Senior Reporter, Mary Ann Azvedo. We are produced by Teresa Locan Solo with editing by Kel. Bryce Durbin is our illustrator, and a big thank you to the audience development team, and Henry Picavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.
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