Elon Musk’s Grok goes open-source and Reddit updates its IPO filing | Equity Podcast

This episode is presented by invest Puerto Rico if you believe your business Can go anywhere Puerto Rico is the [Music] Place hello and welcome back to equity The Tech runch podcast about the Business of startups where we unpack the Numbers and the Nuance behind the Headlines this is Alex good morning Welcome to the MonDay show today is March 11th 2024 and you and I are going To take a look back at the weekend and a Look at the week that is to come but Speaking of the weekend if you didn't Know we dropped an awesome interview With Roger Lee of layoffs to FYI over The weekend Maryann chatted with him About why startups are shutting down so Much right now and why so many more Closed last year than we saw in 2022 Lee Of course is an investor in Sunset one Of the two companies we profiled the Other week that helped startups shut Down but on the show this morning we Have stocks and crypto news on reddit's IPO why grock is going open source new Troubles at Tech Stars and then a really Neat new fintech round let's Go let's start with a look at the world Of money and that means the stock market Over in Asia today stocks are down Sharply especially in Japan they are Lower in Europe and stocks are set to Fall in the US at the open now on the

Earnings front I only have a handful of Names for you this week so let's talk Through the list on Monday Oracle and Assuna Wednesday is uip path and then Sentinel one and Thursday will bring us Adobe smart sheet pag your duty and WBO So yes it's a quieter week but one that Should still be very interesting UI Paths report will include a healthy dose Of AI Sentinel one is amongst the Fastest growing public software Companies out there and adobe's earnings In a post figma deal world are very Interesting so not that many names but Hopefully a sheath of Juicy Nuggets and then there was crypto if you Have been living under a rock I have an Update for you crypto prices are up Dramatically in recent weeks including a 10% gain by Bitcoin in the last 7 days And a 15% gain by ethereum's token in The last week elsewhere there are now More than 100 billion tether tokens out There which implies that tether is Holding 100 billion in assets to back The most popular stable coin but it's Not alone in seeing growth usdc is back Over the $3 billion Mark which is good News for the company because the number Two stable coin maker is considering an IPO of its own and of course when the Major cryptos are up so too are the Silly ones Dogecoin and the Sheba Inu Token are worth 25 billion and20 billion

A piece by the somewhat crude crypto Market cap metric but still that's a lot Of money no matter how you slice it Crypto winter is over and that was Determined by Rising token prices so in Other words crypto is back but it seems To be back in roughly the same form as It was the last Time next up big news that matters and The biggest news that matters the most This morning is good news because Reddit Has filed a new S1 document that Indicates that it's making good progress Towards going public and of course Recall that the company is still looking To list on the New York Stock Exchange Under the ticker symbol r d DT now if You want more on reddit's finances we Have an equity shot that you can listen To I will link to it in the show notes Or if you are feeling adventurous you Can scroll back through your Equity feed But we will surf that for you so what is In the new IPO filing well Reddit plans To sell about 15.3 million shares while Existing shareholders are looking to Offload about 6.7 million there's also a 3.3 million share underwriter option but Really guys the biggest news is that Reddit is targeting a per share price Range in its IPO of 31 to $34 per share Now that can change it can go up it can Go down but that first window is super Critical and axios was up before me this

Morning and ran the numbers so if you Trust Dan primx ability to do arithmetic And I do Reddit is looking to raise Between 682 and $748 million in its IPO At a fully diluted valuation between 5.8 And $6.4 billion prior reporting had Indicated that Reddit was considering a Valuation of around the $5 billion Mark However I can defin itely see the Company getting out closer to six or Even 7 billion because Reddit has a Massive new Revenue stream from Licensing its data to AI companies that Fact bakes in growth to the company's Future and I would say most critically Makes Reddit a way for public market Investors to bet on the growth of new AI Technology why is that well in its Filing Reddit reported that it has Racked up quote contract value of$ 203 Million From quote certain data licensing Arrangements that it landed this year in Other words licensing Reddit data to AI Companies is big business so if you Think AI is going to be big well maybe Reddit will Too next up Elon Musk says that X Formerly known as Twitter will open Source grock the llm that it offers Subscribers of its most expensive Subscription tier at some point this Week the move is notable in that it will Bring yet another modern AI model to

Open-source circles and because in the Background there's musk's suit against Open AI itself which competes with grock With its own well-known chat GPT service That lawsuit kicked off a lot of debate In the technosphere with open AI backer Venod kosa calling the suit a massive Distraction from the goals of getting to AGI now musk has a lot of backers in the Tech world of his own and some of them Were critical of kosta's own arguing That open source AI Dev is the way to go And that open ai's more recent more Closed model is perhaps less salubrious For Global Technology now kosa of course Wants open AI to be worth as much as Possible period because he owns a piece Of it but I do think that the open- Source versus closed Source AI debate is Good for Tech in general because Competing methods of building new Technology means more competition period Which will lead to better products at a Lower price Now by open sourcing grock Musk is adding a little bit more weight To one side of the debate and making it Seem a little bit more likely that there Are principles and not just pettiness Behind his own suit against open AI what's next in Tech that's not the Right question it's where Puerto Rico More than just a Tropical Paradise it's An Innovations Paradise where startups And Global players coexist in a vast and

Vibrant ecosystem where Talent runs deep Highly skilled and by Plus the island offers the most Competitive tax incentives in the US if You believe your business can go Anywhere Puerto Rico is the place find Out more at invest pr.org Tunch next up let's talk about Tik Tok And we have to because there's a bill Advancing in Congress to force its Parent company bite dance to divest it Or suffer a ban of the short form video App in the United States now this bill Passed the house Energy and Commerce Committee by a vote of 50 to Z which The Wall Street Journal reports took Tik Tock by surprise when's the last time Anything passed in Congress by a vote of 50 to zero that's crazy well there's Even more at play the journal writes That quote Bobby cotic the former chief Executive of video game publisher Activision has expressed interest to Bite dance co-founder Jean ging According to a person familiar with the Situation now he's thinking about taking Over Tik Tok with a big deal and that Would require a whole lot of money Tik Tok is worth more than 100 billion Everyone thinks if it's 100 or 200 Billion I don't know but Bobby kic's Idea here would be a potentially massive Transaction here we are watching history Actually being written so keep an eye on

Congress to understand what might happen But if Tik Tok does have to be sold by Bite dance a lot of people are going to Want to make a chunk of money on that Deal and perhaps even become it's brand New shiny American CEO scooting along Tech run reports that Tech star's $80 million advancing cities Fund which was raised through JP Morgan's Private Bank platform may not Make it to a second fund techstars has Been investing from the vehicle since 2022 with a goal to back more than 400 Companies founded by under represented Founders and that led to the creation of Techar programs in at least eight cities Including cluding Oakland Atlanta and Miami but by late 2023 JP Morgan was a Little bit less engaged than before why Is that well Tech reports that the Diversity focused investing effort Didn't hit its Target investing goals at Least according to one definition of Diversity the background to all of this Is that Capital raised by black Founders Is incredibly small compared to larger Investing flows that startups tap so if The advancing City's fund fails to make It to its sophomore investing vehicle That could limit those Capital flows Even more Tech Stars of course has been Rebuilding its org in recent months After missing its Revenue goals last Year leading to

Layoffs moving on across the pond Uk-based Griffin bank and apid driven Banking as a service or Bass platform Just obtained a banking license roughly One year after starting the application Process which is pretty quick now the Goal here is not to open accounts for Individuals but instead to let Griffin Customers offer their own users that Ability essentially making Griffin Bank's overall service more featur Rich The good news on the banking license Front led to Griffin closing a $24 Million series a extension which is good News for fintech which has seen its own Luster dim in the eyes of investors in Recent Years and over on the site my dear Friend Ron Miller interviewed viwed Denise dresser Slack's new CEO about What she plans to do as the head of the Well-known corporate chat product that Sold to Salesforce years ago Tech Reports that Slack's growth has slowed In recent quarters giving dresser a Double challenge one running a big Business inside of a far larger Corporate Home and two getting growth Back on track in a more challenging Software as sales Market than slack Enjoyed back in its early Days And that is our show for this fine Monday morning of course we are Equity

Pod over on X and threads and if you Want even more from me well I'm Alex Over on X Equity has two sister shows Chain reaction on all things crypto and Found talking to Founders about how they Built what they did we'll talk to you Soon no later than Wednesday morning Bye Equity is hosted by myself Alex Wilhelm and Tech rench senior reporter Mary an aeto we are produced by Teresa Loans solo with editing by Kell Bryce Durban is our illustrator and a big Thank you to the audience development Team and Henry pette who manages Tech Wrench audio products thank you so much For listening and we'll talk to you next Time