Tech Brew Ride Home - Mon. 03/15 – Stripe The Most Successful (Private) SV Startup Ever?

Starting point is 00:00:00 On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech Meme Right Home for Monday, March 15th, 2021. I'm Brian McCullough today. Stripe, by some measures, has become the most successful Silicon Valley startup of all time with their recent raise. Airtable 2 has an impressively interesting raise.

Starting point is 00:00:48 Facebook wants to find you a vaccine appointment. The U.S. is looking to overhaul its cybersecurity missile shield and checking in on the whole Jack Ma situation. Here's what you missed today in the world of tech. Let's start with an interesting raise from over the weekend because, as I said, at the end of last week. This is maybe the startup all of Silicon Valley is the most interested in. Stripe announced that it has raised $600 million from Sequoia Capital and others, including the sovereign investment fund of Ireland, at a valuation of $95 billion. This makes Stripe not only the most valuable private company in Silicon Valley right now,

Starting point is 00:01:30 but by some measures, the most valuable startup from Silicon Valley ever surpassing the $80 billion dollar valuation Facebook had before its initial public offering in 2012. Want to know who's number two on that list? It was Uber, which saw a $72 billion valuation before its IPO in 2019, quoting the Financial Times. Stripe has also leapfrogged Elon Musk's rocket company, SpaceX, which briefly became the largest venture-backed company in the U.S. after investors gave it a $74 billion valuation last month. Globally, it lags behind only ByteDance, the $180 billion Chinese parent of TikTok and Ant Group, the fintech company that was forced to delay its listing last year. Founded in 2010 by Irish Brothers Patrick and John Collison, now aged 32 and 30,

Starting point is 00:02:16 Stripes valuation has almost tripled in less than a year, surpassing those achieved by Facebook and Uber before they went public. The company's rising valuation reflects a boom in e-commerce and digital payments activity that has boosted the values of listed rivals, such as Aden and Square, as well as checkout.com, a London-based payment startup that was valued at $15 billion in January. Stripe has ridden the wave of e-commerce growth with more than 200,000 new companies in Europe signing up to the platform since the start of the pandemic. John Collison said its systems handled almost 5,000 requests a second in 2020, including payments, refunds, customer data checks, and other queries to its application programming interface. Quote,

Starting point is 00:02:57 Stripe itself is now bigger by payment volumes than the entire e-commerce market was when we started working on Stripe, he added, end quote. Yeah, that'll do it. Potentially taking a small slice of every transaction in a growing market that maybe has no ceiling, that can get people excited. Also, there's this. Stripe now counts more than 50 category leaders, companies processing each more than $1 billion annually as customers. Enterprise revenue is now Stripe's largest and its fastest growing segment more than doubling year over year. Also, I want to point out, while that $600 million number seems big, do the math. Stripe only had to give up 0.63% of the company's equity to get that capital.

Starting point is 00:03:42 Free money, basically. As Jason Lemkin tweeted, this is the kind of dilution that you barely notice. But then maybe it's worth giving you a taste of the tweets about this anyway, because, again, it's been a long time since I've seen people this dead certain about a company's success. I've heard multiple times over recent months people muttered to themselves almost in a Gullum in Lord of the Rings-like way that they'd invest in Stripe at any valuation at this point. Quoting Sej Singh, as Elad Gill says, when you look at the fundraised journey of any once-in-a-generation company, every successive round feels cheap in hindsight, end quote.

Starting point is 00:04:21 As at Aiken Dolu tweeted, quote, Stripe is definitely in the league of Google, Facebook, and Amazon. There's no ceiling, end quote. Michael Batnik predicted, quote, Stripe will have a larger market cap at its IPO than Facebook did, to which Derek Pedy tweeted, quote, Stripe will have more of an actual business at IPO than Facebook did too, end quote. Also a very interesting raise.

Starting point is 00:04:52 Low-code database service Airtable has raised a $279 million series E at a $5.77 billion valuation following its Series D last year at a two and a half-billion-dollar valuation, quoting Forbes. Airtable is a slick, cloud-based spreadsheet and robust relational database with a twist. It's no-code product lets you build and customize software without deep programming skills. As I've written before, it feels like a turbocharged Google sheets, but has the computing chops to run companies with thousands of employees. Recently, Airtable opened up its API to allow outside developers to create apps and functions that run on its ecosystem, much like how independent companies build apps for Apple's App Store.

Starting point is 00:05:38 Airtable's software has thrived in the current COVID remote work environment. Its product lets teams create software to collaborate, manage projects, share and catalog critical datasets, content, and information to employees worldwide. More companies are doing just that. Airtable is built on a freemium model, giving away basic functions gratis, and offers more powerful products via subscription and enterprise plans. Today, more than 250,000 companies use Airtable. The number of paying enterprise customers has grown nearly 350% over the last year,

Starting point is 00:06:09 a rate twice as fast as the subscription growth for lower-tiered plans. From the investor lens, the corporate growth signals there's so much more room for us to grow, says CEO Lou, especially as we start aggressively investing into enterprise products, focus on enterprise needs, build out our sales and marketing engine, end quote. Airtable represents a fundamental shift in how software can be used and created, says Neil Mata, the founder of Greenout's capital, who initiated the series E round. Quote, its software can penetrate an infinite number of use cases across the modern workforce, end quote. Meta says he is also impressed by how Airtable quickly spreads throughout companies by word of mouth without spending much effort on money or sales. He says it's typical to have one department, say marketing or accounting, start using Airtable, and soon the entire company will adopt the software, end quote.

Starting point is 00:06:58 quote. Facebook is debuting tools to promote COVID-19 vaccinations, helping users in the U.S. find vaccination appointment slots, quoting CNET. The data shows the vaccines are safe and they work. There are best hope for getting past this virus and getting back to normal life, said Facebook CEO Mark Zuckerberg in a statement noting he's looking forward to getting the vaccine himself. Facebook users in the U.S. who visit this online information center will also have access to a new feature available in 17 languages that displays a map of nearby places that offer the COVID-19 vaccine when they search for a city. The locations are provided by vaccine finder and contains the place's contact information, hours of operations, and a link to book an appointment.

Starting point is 00:07:46 Facebook teamed up with Boston Children's Hospital to build the new feature. Facebook says it's also partnering with health authorities and governments to get people registered for vaccinations through notifications on its messaging service WhatsApp. The social network said governments, nonprofits, and international organizations have sent three billion messages about COVID-19 to people through WhatsApp's chatbots, end quote. U.S. intelligence agencies, the CIA, NSA, various military intelligence, all missed a slate of recent alleged Chinese and Russian hacks. Why? Well, part of the reason might be that they can't operate internally inside the U.S. But the domestic watchdogs, the FBI and the Department of Homeland Security, missed these hacks too. So the White

Starting point is 00:08:39 House apparently now knows the country is at the very least on the back foot when it comes to hacking from adversaries. So the White House is currently mulling a complete overhaul of U.S. cyber defenses, including a greater embrace of domestic industry partners and greater internal monitoring. Quoting the New York Times. When not one but two cyber hacks have gone undetected by the federal government in such a short period of time, it's hard to say that we don't don't have a problem, said Representative Mike Gallagher, a Republican of Wisconsin, and a co-chairman of a congressionally mandated cyberspace commission. The system is blinking red, he said. America's foremost hacking teams and digital defenders reside in Fort Meade, Maryland,

Starting point is 00:09:19 home to the National Security Agency and its military counterpart, the United States Cyber Command. Over more than a decade, with billions of dollars in new technology, they have littered foreign networks with various forms of beacons that give them access to detect attacks as they are coming together or begin. But like missile defense, that is hardly an impermeable shield, and foreign actors have begun to identify America's blind spot. If hackers can assemble an attack from inside America's borders, the U.S. government's best hunt teams can be blindsided. Quote, the NSA cannot operate in the domestic infrastructure, retired Admiral Michael S. Rogers, the former director of the agency set on Friday at the Kellogg School of Management

Starting point is 00:09:58 at Northwestern University. You can't defend something you can't see, end quote. But the There is no political appetite to reverse decades of limits on intelligence agencies to monitor and defend network traffic inside the United States. Instead, Biden administration officials said they would seek a deeper partnership with the private sector tapping the knowledge of emerging hacking threats gathered by technology companies and cybersecurity firms. The hope, current and former officials say, is to set up a real-time threat-sharing arrangement whereby private companies would send threat data to a central repository, where the government

Starting point is 00:10:31 could pair it with intelligence from the National Security Agency, the CIA, and other spy shops to provide a far earlier warning than is possible today. I don't want the intelligence agency spying on Americans, but that leaves the FBI as the de facto domestic intelligence agency to deal with these kinds of attacks, said Senator Angus King, a main independent member of the Senate Intelligence Committee and co-chairman of the Cyberspace Commission. I'm just not sure they're set up for this, end quote. There are other hurdles as well. The process of getting a search warrant is too cumbersome for tracking nation-state cyber attacks, Mr. Gerstel said, quote, someone's got to be able to take that information from the NSA and instantly go take a look at that

Starting point is 00:11:10 computer, he said. But the FBI needs a warrant to do that, and that takes time, by which point the adversary has escaped, end quote. Another obstacle is the slowness of identifying attackers. While the Director of National Intelligence concluded that the Solar Winds attack carried out last year was likely Russian in origin, a definitive assessment is not expected until this week or next, Only then can the United States respond with sanctions or cyber operations nearly a year after the attack began. The thing that worries me in both of these cases, too, is just how slowly we tend to attribute and respond, Mr. Gallagher said, end quote. Let's circle back to something that we haven't spoken about in a little bit. Remember that canceled ant IPO.

Starting point is 00:11:56 We mentioned it in the first segment today. And remember the crackdown on Jack Ma and Alibaba by the Chinese authorities. Yeah, well, China's market regulators said just today that it will launch new rules this year to clear up, quote, prominent problems in the online market, end quote, and to track online transactions more closely. This comes as shares of Tencent have been plunging in recent days, wiping out more than $60 billion in market value, as sources say Tencent might be the next company to run a foul of Chinese regulators. What would running a foul of the regulators ultimately mean? while sources are also saying China is considering a record fine exceeding the previous record, Qualcomm's $975 million fine, this time against Alibaba, which may face softer treatment if it were to preemptively distance itself from its founder, Jack Ma. So the regulators can be

Starting point is 00:12:52 appeased if they see heads rolling and also if you pay up billions and fines, quoting the Wall Street Journal. Since late last year, Alibaba has been in Beijing's crosshairs along with its financial affiliate ant group. Regulators have come down hard on ant, which they consider a risk to the financial system, forcing it to make changes that will severely hamper its prospects. Alibaba, though, appears destined for softer treatment. Officials familiar with Beijing's thinking said regulators don't want to crush a technology powerhouse popular with both Chinese households and global investors, as long as it disassociates itself from its flashy and outspoken founder and aligns itself more closely with the Communist Party. Those people said Alibaba also will be

Starting point is 00:13:33 required to end a practice that has been dubbed Erzuan Yeh, sorry for the pronunciation, it translates literally as choose one out of two, under which regulators believe the tech giant push certain merchants who sold goods both on Alibaba and its rival platforms, including J.D.com. The precise remedies Alibaba will have to take, likely will be hammered out only after a decision is announced, according to one of the people. In addition, regulators are weighing whether to require Alibaba to divest itself of some assets unrelated to its main online retail. business. Once final, measures against Alibaba will need to be approved by China's top leadership, end quote. Now, as we said when this all first went down, does this mean startups will have to

Starting point is 00:14:14 think differently about doing business in China? And I mean, specifically Chinese startups inside of China. As Bloomberg notes, the crackdown on Jack Ma risks backfiring on Chinese President Xi's master plan for Chinese tech to take over the world. Quote, the abrupt fall from grace of the Alibaba founder has cast a chill over parts of China's technology sector, according to local entrepreneurs and venture capitalists, even as Xi prepares to pour trillions of dollars into making the country self-sufficient and everything from semiconductors to software. One startup founder in Ma's home province says he no longer aspires to Alibaba's size success, fearing the risk of unwanted government attention. Another says he stops speaking in public and plans to focus on expanding

Starting point is 00:14:59 his robotics business overseas. A venture capitalist who's backed dozens of startups says the Ma Saga will make entrepreneurs less aggressive, especially those who compete against state-owned companies. All three requested anonymity to speak freely about a politically sensitive subject. Quote, the Jack Ma incident could be a turning point for China's tech sector, says Rebecca Fanin, founder of Research Group Silicon Dragon Ventures, end quote. Finally today, one thing that has sort of been in the background, the whole time Clubhouse has been a story was that before Clubhouse let you end to Clubhouse, you had to give them access to your contacts. And people were like, why do you need my contacts? This is why when listeners asked me for

Starting point is 00:15:43 invites to Clubhouse, I was hesitant to do it, because even though I love all you folks, and I'm sure you are all great people, as proven by your good taste and podcast. I'm also not in the habit of giving out my personal cell number to dozens of strangers at a time. Anyway, in Clubhouse's town hall yesterday, it was noted that they won't be requiring access to users' phone contacts anymore, quoting the verge. Founder Paul Davidson also said during the Sunday town hall that Clubhouse is embarking on a world tour, hosting its first town hall in Italy on Monday. It's also added some product features that users have been asking for, including link sharing and language filtering. The app also won't require access to users' phone contacts

Starting point is 00:16:24 anymore. Now users can invite new people to the platform directly by using the person's phone number. Davidson said users can reach out to the company to delete previously uploaded contacts and that a tool to allow users to delete contacts from Clubhouse is coming soon, end quote. By the way, Clubhouse's first birthday is in a couple days, March 17th. Everybody tonight on Twitter, at 9 p.m. Eastern, 6 p.m. Pacific, Chris and I will be doing another tech meme ride home after show experiment, this time on Twitter spaces. So in theory, if you follow Chris and or I on Twitter, you should be able to come into the space and join us in real time. Remember that I am at Brian MCC on Twitter and Chris is at Chris Messina. I assume they won't let all

Starting point is 00:17:23 50,000 of you in at once or even at the same time. They'll probably throttle the space at some point. So, you know, maybe get there early. Actually, that's one of the things that we kind of want to experiment with. Let us know if you can't get in. Also, if anyone wants to help us out by maybe screen recording the audio, get in touch with me, and I'll send you a link that should help you learn how to help us save this for posterity, or at least for listeners who can't make the space. If you're able to help with that, much appreciated.

Starting point is 00:17:54 Join us tonight. Talk to you tomorrow.

Tech Brew Ride Home - Mon. 03/15 – Stripe The Most Successful (Private) SV Startup Ever?

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