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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Yay.
Speaker 2:It's Wednesday,
Speaker 3:09/10/2025. We are live from the New York Stock Exchange. The fortress
Speaker 4:Of Finance.
Speaker 3:Fortress Of Finance.
Speaker 4:That's right.
Speaker 5:And we
Speaker 3:have a special guest with us opening the show. Introduce yourself Hi.
Speaker 1:My name is Peter Tuchman. I'm known as the Einstein of Wall
Speaker 3:Street. Einstein of Wall Street. And How do get smart. That?
Speaker 1:I just look at Why
Speaker 4:do you who was the first person? Did you give yourself
Speaker 1:Erin Burnett gave me that.
Speaker 4:And I've
Speaker 1:been I've had a show on her show now Yep. On CNN for the last four months ever since the beginning of the sort of mini crash that was sort of self induced by our our the new leader. Yeah. The new the new leader. The new sheriff in town.
Speaker 3:Terrible tantrum.
Speaker 1:Correct. She called me in. So she used to work on the floor with CNBC.
Speaker 6:Sure.
Speaker 1:And she nicknamed it probably twenty years ago and called me Einstein, and that sort of picked up.
Speaker 3:But your latest your latest collaborator is not on TV, but on streaming. Correct?
Speaker 1:Correct. So I had the fortuneality of actually meeting iShow Speed.
Speaker 3:Oh,
Speaker 1:yes. Right? Young 20 year old kid who I got invited. So there's a team that's doing his stream thing. There's a young guy named Adam Faiz.
Speaker 1:We knew he
Speaker 4:came to our event. We were here about a month and a half ago. He came to
Speaker 1:a Adam Adam is something special. Yeah. He found me about four years ago and asked me if I would let him shoot me every day walking out of the stock exchange for thirty days and just do what I do. Sure. And we did this whole TikTok thing called Einstein Elementary.
Speaker 1:It went viral. Yep. Like me and, like, marching bands from Brooklyn and walking around with a 50 pound Hershey's kiss and doing all this crazy stuff. So he called me last week, asked if I could bring Speed to the floor, and it didn't seem appropriate at the time. And he said, well, how can I get you to meet him?
Speaker 1:And I said, come up with an idea. And he's an idea guy. So he called me on Thursday morning. He said,
Speaker 3:we're gonna
Speaker 1:be at the bowl. Yeah.
Speaker 3:Gonna be the
Speaker 1:bowl. Would you come and welcome him to Wall Street? I said, absolutely. So I they gave me a police escort. I went down there and met this young guy and talked about some of the shtick I do.
Speaker 1:Yeah. You know, investing in stocks and not stuff and about, you know, the fact that, you know, that everything that his life is based on is actually a publicly traded company. And then instead of, you know, buying the next iPhone, he could probably buy a couple shares of Apple and then Good point. Maybe, you know, he could invest in his future besides the amazing future Scott said. Receive it?
Speaker 2:He received the
Speaker 1:totally. He talked about it a couple days down the road, so I got the message across. And and I've blown up. I've got literally What's the numbers? 200.
Speaker 1:So I have now I came in at 260,000 followers on Thursday, and now I have 419 and counting. And I've got 40,000,000 views on some of my posts. 7,000 d ms.
Speaker 3:7,000 d ms. Okay.
Speaker 1:I actually just did a video to answer that. Anyway. What
Speaker 4:was the first stock you ever bought?
Speaker 1:Oh, you know what? I very rare I did not ever buy a share of stock until recently. I went through most of my career because I'm a registered trader a broker on the floor.
Speaker 3:Oh,
Speaker 1:sure. And I'm not allowed to be in a for a customer and for myself in a thirty day period.
Speaker 3:Yep.
Speaker 1:And so I built a trading strategy twenty years ago trading the S and P 500 based on information that I have as a broker on the floor, and I trade all 347 names in the S and P every day. So, basically, I made a decision years ago. You know, and also money does a funny thing. If I'm in a stock for myself and I get an order for a customer, it's gonna impact the way I trade.
Speaker 4:Sure.
Speaker 1:And I didn't want that to ever be the case. So I I do well enough here as a commission broker that I said, you know what? I'll invest in my kids. I'll put them through college. And they There you go.
Speaker 1:They both graduated without any debt, and that's where my money went.
Speaker 3:Fantastic. What about some of the first stocks that you were brokering?
Speaker 1:First stocks that I broker so we're here. We're talking about IPOs. Right? And so, you know, I probably have traded more IPOs than anybody on Earth. I've been in the crowd on all of them.
Speaker 1:I mean, the first IPO I think I traded was LinkedIn. Right? It it was priced at 30. It opened at 60, ran up to a 180 Wow. Same day.
Speaker 1:And that was where I got the sense of how Yeah. How amazing the enthusiasm around an IPO because it's based on confidence. Yeah. Totally. And nobody knows it.
Speaker 1:And then and so one of I've I've had so many fun experiences in IPOs. Jack Ma, Alibaba IPO, which was one of the biggest that we've ever had here. Yeah. He and I bonded. We spent so the IPOs here take probably four or five hours.
Speaker 1:We just opened Klarna. Right?
Speaker 3:Yeah.
Speaker 1:And the process behind that, which we do better than anyone in the world, is the price discovery process, then what goes on. It's kind of like building a building. Mhmm. The way you open a stock, the way we open a stock, it takes time because it's a matter of the information going back and forth. It's a public offering.
Speaker 1:So the public has to understand what's going on, and so we go back and forth with our customers. It's kind of like if you put the bricks and the mortar in the right place and you the way a stock opens, if it's built correctly, is going to purport the way it trades forever.
Speaker 7:Sure.
Speaker 1:That doesn't guarantee it's going up, but it will have structure and foundation. And, you know, you go to Nasdaq, nothing against Nasdaq, but if you go to Nasdaq, it's fully electronic. So it it opens when the buyers and sellers meet in an electronic marketplace. Here, it's different. So then you're gonna see what you see in Nasdaq.
Speaker 1:It'll go up. It goes down. There's no there are no guardrails. Right? So here, things are a lot different.
Speaker 1:So Jack Ma and I spent four hours together in the IPO. He and I are very short, so we bonded on the fact that we were the shortest people in the crowd. We were on the same level, not not not financially, because he became a very wealthy guy again on that day.
Speaker 4:Someone on our team actually was here for
Speaker 1:the IPO. IPO as well. Amazing time. And then we've had look. But then, you know, the the the the whole landscape has changed when WeWork completely blew up the whole IPO market, and that affected
Speaker 3:Tell us that story because remember the s one going out, but then did did they get out? What yeah. What happened?
Speaker 6:Well, what
Speaker 1:what ended up happening look. As I said, it's built on confidence. And when, you know, everybody, there was huge money put into WeWork. Mhmm. He was lauded by now he came down to the floor many times.
Speaker 1:Mhmm. And it wasn't until the night before, everyone needs to know this, that on the end of the roadshow is when all the financials are given out Yep. To the public. Yep. And it turned out that it was all smoke and mirrors, and he had spent all the money on on prostitutes and blow, and that the company had nothing no basis behind it.
Speaker 7:Yeah. Yeah.
Speaker 1:Yeah. And so it was aborted. The deal was aborted, and what that did was it chained amazingly enough that one stock could change the landscape of IPOs for years. For years. It literally everyone said
Speaker 3:say, guys, you know, windows closed. That's what closed
Speaker 1:it. That's what closed it. And it was the fact that
Speaker 3:on Mad Money was saying, we don't want this. We don't want this.
Speaker 1:Remember that quote? And so to think that you know something about what's going on and and we didn't know anything Yep. Literally until the night before made such a huge impact on the market. It literally has taken a couple of years Mhmm. To grow out of that.
Speaker 1:The before that, we had had some really wonderful robust years in REMAX and a bunch of stock. They would open a huge premiums. We were trading
Speaker 7:Give us a quick
Speaker 4:history on Klarna. Right? Because Klarna's tried to get out a couple times.
Speaker 1:Okay. So I don't know the history about Klarna.
Speaker 6:All I
Speaker 1:know is that I watched how it opened here. So it did take a little while. It did open at fifty two, I think. Yep. Right?
Speaker 1:And so it's not trading you know what? It's hard to know. So what what's important about it is where the bids are, where the offers are, and how the foundation looks. So where the bodies are buried within the stock when it opens. Right?
Speaker 1:There was enough stock at 52 bid on balance, which is what it's called. So stocks pair off that are priced accordingly. So 4 point something million shares open, that means that they were market orders. They had no limits to them, and that's they that was they paired themselves off. It was a 52 bid for 300,000 on balance meant that there was a stabilizing bid, whether it was by Goldman Sachs, the company, or or the banker or not, but that's what made it open at 52.
Speaker 1:Sure. If there had been more to buy at the market, it would have opened higher or more to sell, it would have opened lower. It opened at 52. It did trade up to $57.20 on a small bit. 70,000 shares traded up, and then it came in.
Speaker 1:It's trading at a couple dollars lower, which is reasonable. It does not have the power and the impact that Figma and and Bullish did.
Speaker 4:Is this
Speaker 1:Figma and Bullish did.
Speaker 4:So so so but but all three of these are relatively like, is there a specific strategy that that these IPOs have had in terms of, like pricing at a at a at a at a at what feels like very reasonable like
Speaker 1:So you know what? They're they they're pricing it based on the reaction to to what what the investment community is going to give. Yeah. It is. So some of the other ones got priced at 30.
Speaker 1:There was a oversupply over demand at 30. They up upped it to 32, 35. That's how it will go. So the night the last night when they go out to the roadshow to give out allocations, they will get a sense of where that valuation should be, and then that's where they will give it up. They left some talk on money on the table as did those other IPOs.
Speaker 1:The other ones opened at 90 and went to a 117. That was that was bullish. And Figma also traded a huge premium. My gut is that the sectors that they were in, there's a lot of pressure on this sector right now. And Totally.
Speaker 1:And so those those sectors were more iCloud and and and and AI based. Mhmm. Right? And so I think that's why there was a little more pop to it.
Speaker 3:Well, we know you have to get out of here.
Speaker 1:Thank you
Speaker 3:so much for stopping We'd by the love to get back
Speaker 1:sometime. Anytime. I'm always
Speaker 3:Call in. Talk for another two
Speaker 1:Let's go.
Speaker 3:So thank you so
Speaker 4:Love it.
Speaker 3:Let's go. Love it. Amazing. In other news, you wanted to talk about about Oracle. Oracle has become the current thing.
Speaker 3:And give us the highlights. It was a miss on top line, miss on bottom line.
Speaker 4:Double earnings miss.
Speaker 3:But a massive spike in the share price due to a large cloud backlog. Is that correct? Yes. Okay. So take us through some of the post.
Speaker 3:Give
Speaker 7:me some
Speaker 4:of You know, just sort of joking around here, but this this reminded me of a company that would like to get a bridge round done
Speaker 3:Mhmm.
Speaker 4:And comes out and says, yeah, we you know, we missed our we missed we missed our forecast. We missed Yeah. But but like just just look out here like look look look at these big numbers and coming down Yep. Their horizon. So they basically reported on their backlog for the next five years Yep.
Speaker 4:Which is
Speaker 3:Which we've been seeing from the other hyperscalers. Yeah. Remember when we went through Microsoft earnings, GCP earnings, we saw really strong backlogs there in the hundreds of billions of dollars Yeah. That they can just chip away at for years. Yeah.
Speaker 3:Unclear how exactly how binding those those contracts are.
Speaker 4:But, yes. From the transcript, we expect Oracle Cloud infrastructure revenue to grow 77% to 18,000,000,000 this fiscal year, then increase to 32, then 73, then a 114 and then a 144,000,000,000 over the subsequent four years. Wow. And they say most of the revenue in this five year forecast is already booked in our reported RPO. Yep.
Speaker 4:So anyways, people the stocks obviously up tremendously. Larry Ellison is currently the richest man in the world.
Speaker 3:Oh, he is. He did Elon today because of the Wow. Stock
Speaker 4:And yeah. Oracle had just been doing buybacks and buybacks and buybacks and so Yep. Larry's ownership Yep. Percentage has just gone up over time. He he's definitely known to to hold.
Speaker 4:And yeah
Speaker 3:bet on Yeah.
Speaker 4:Betting on himself. Absolutely wild. And yeah, mean overall there's been some negativity in the timeline. Yeah. People were bringing up that during the nineties.com era, there were a number of class action lawsuits against Oracle just due to the way in which they were reporting around Revenue.
Speaker 4:Reporting revenue effectively like basically reporting like forecasted revenue.
Speaker 3:This is so funny because didn't we all just go through this with a C ARR in the startup world? Like, contracted ARR? Yeah. Like, we like, two demo days ago, I think we were talking to Gary Tan about, hey.
Speaker 4:No. It was last
Speaker 3:demo day. Yeah. Maybe last demo day. I think we talked to Gary Tan, and we were like, hey. It feels like startups are getting a little loose with the ARR definitions.
Speaker 3:What should we do about that? And Gary said, look, we've given very clear advice to all the YC companies. If it's if it's a contract and it's nonbinding, make that clear. If it's contract and it's binding, make that clear. If it's actually cash in the bank, make that clear.
Speaker 3:But don't just come with some crazy ARR number that isn't actually anything like what people expect. Yeah. And so, it's funny that we went through this. We saw the kind of the correction to understanding metrics in the in the in the startup world and now we're having a reconciliation.
Speaker 4:Yeah. So there's somebody named Steve Burns said this morning, Oracle stock is up 36% on pace for the best day since 1999. And then somebody here is posting a meme of a of a duck
Speaker 3:The goose.
Speaker 4:The goose chasing saying, happened after 1999?
Speaker 3:What happened after 1999? And of course That is it is crazy to see a 30% move in a stock as big as Oracle. It's now over a trillion dollars. Correct?
Speaker 4:Yeah. Zero hedge was posting a trillion dollar company trading like a penny stock. We do need to have the conversation of of expanding the mag seven, right? Broadcom. The elite eight.
Speaker 4:Balancer. Or or
Speaker 3:I think we're going to 12.
Speaker 4:We're going to 12.
Speaker 3:Maybe 50. Who knows? Fascinating.
Speaker 4:Yeah. So so anyways, Marco Kalanovic was saying yesterday, Oracle was looking like a great short. Hopefully
Speaker 3:hopefully Didn't get blown out.
Speaker 4:Hopefully, it didn't get blown out.
Speaker 3:Oh, are people throwing
Speaker 6:Yeah.
Speaker 4:Yeah. Yeah. I mean, the real thing is is if you were I mean, brutal for anybody that was was short Oracle going into earnings because yeah. Yeah. Were right You're right
Speaker 3:on missed the overall narrative.
Speaker 5:Yeah.
Speaker 3:What what I thought was interesting was meta I
Speaker 4:mean people are like people are the the the the the self proclaimed smart money is like really pissed off about this. Okay. Because just come in, miss earnings and then say, oh, don't worry about it. We have a half trillion dollar backlog. And that's like, okay.
Speaker 4:It's a lot of billions. Right? Where where is that? Like there's not that many and it's from a very concentrated group of customers.
Speaker 3:There's only so many customers.
Speaker 4:Even even so so a lot of partners. Yeah. Nvidia sells GPUs to Oracle. Oracle builds a cloud and then is actually renting and then is like providing providing that cloud, sell basically selling that cloud back to Nvidia Yeah. Who's also a buyer.
Speaker 4:Right? So it's it's a little bit it's a little bit circular but
Speaker 3:Yeah. I was thinking about that dinner that Mark Zuckerberg had with Donald Trump where he sort of announced his own internal backlog of what was it? $600,000,000,000. And so if you think about if you think about Meta is both the the the CapEx investor and and a buyer of that capacity. They basically said that they have backlog of $600,000,000,000 of
Speaker 5:Yeah. Of of
Speaker 4:the list of RPOs. Amazon, 195,000,000,000. Microsoft, 315,000,000,000. Google at 106,000,000,000 and Oracle at 455,000,000,000.
Speaker 3:Yeah.
Speaker 4:Lot of revenue. Where is it gonna come from? The the the real the real AI, the real like like if you're incredibly AGI pilled, you're gonna come out this and being like that's that's effectively spend that might have gone to labor that's gonna be like rerouted Yep. To to basically inference. Yep.
Speaker 4:There's also a lot of robotics obviously self driving cars, things like that coming online. Yep. There's a lot of potential demand and we are seeing exponential usage in tokens. But still, yeah, we're we're starting to get into I
Speaker 3:mean, work through those one at a time. It's like Amazon is probably going to be sending that to Anthropic
Speaker 7:Yep.
Speaker 3:Which Clogcode, the revenue numbers are insane. And and Clogd is growing very fast.
Speaker 4:And so you have a Microsoft at 315,000,000,000, probably clippy.
Speaker 3:I mean, but legitimately like up selling Copilot features into their existing enterprise So it gets diffused over a really large revenue base over the next decade. And maybe there's, you know, some sort of a hit while they roll out all that CapEx. But who's not on that RPO, I I feel like is Meta because they don't have this idea of of building the the the AI resources they're gonna resell. Right? Whatever they're building, they're consuming internally.
Speaker 3:But you should think about it in the same in the same logic, in the same way. They're also building servers. Yeah. The question is for Oracle, can you just underwrite that as OpenAI? Like, is that is is OpenAI Yeah.
Speaker 4:And and that's that's another reason for somebody to be a little bit wary of these projections because it's assuming, you know, OpenAI just came out and said, hey, we're gonna burn an extra $80,000,000,000
Speaker 3:burn going? Maybe the Oracle. Yeah. Yeah. Maybe the Oracle.
Speaker 4:Uncle uncle Larry.
Speaker 3:And so if you if you sum up all those losses and you look at them, does that match Oracle's projected growth?
Speaker 4:Well, would be less than 20% of what Oracle's projected backlog is.
Speaker 3:Well, the backlog's over five years and the and and it was like 80,000,000,000 in one year was the loss. Yeah. So the total loss over the next five years for OpenAI might be similar.
Speaker 4:But but if if this backlog is like really real and the demand is there Yeah. It's gonna pan out. It's gonna be contingent on OpenAI continuing to just raise more and more and more capital.
Speaker 3:Right? Yeah. Yeah.
Speaker 4:And and other players
Speaker 3:Haven't had trouble yet. So Yep. Greatest. Continue. I I do I do wonder if you should be looking at like the there is a consumer app sized there's a trillion dollar consumer app sized hole in the data center CapEx world that will be fill filled by someone who's going to serve OpenAI.
Speaker 3:Yeah. And so you can think about Google's investing. Obviously, this is diffused across all the different businesses. But, like, Google's gonna be supporting AI with their with their CapEx. Microsoft, obviously, the same thing.
Speaker 3:Amazon with Anthropic. But OpenAI needs to build out not just a not just a cloud business, but also a Who? Special. Let's bring him in. We have our second guest.
Speaker 3:We have the CEO of Clarna.
Speaker 4:Here he is.
Speaker 6:How are
Speaker 3:you doing?
Speaker 4:How are
Speaker 3:Welcome to the show.
Speaker 4:In person. Yes. Hey.
Speaker 3:Thank you so much for
Speaker 7:taking the lost.
Speaker 6:I was
Speaker 5:avoiding it.
Speaker 3:Yeah. It was later time. Yes. But we appreciate you staying up, we appreciate you coming on the show
Speaker 6:today. Yes.
Speaker 3:Because you
Speaker 4:You seem relaxed. It's just a regular day. You're you're posting you're posting yesterday if you should just document coding.
Speaker 7:I'm glad you Exactly. Yeah.
Speaker 3:I'm glad you put down the vibe coding Yeah. Yeah. The cloud coding.
Speaker 7:Stress when it's not coding and I know it's like sitting and waiting for my input.
Speaker 3:Yeah. Well, hopefully, I don't do too much waiting today. Yeah. What's the process been like? What time did you wake up?
Speaker 3:What take me through the day today.
Speaker 7:Yeah. I woke up at six Okay. Which isn't that bad because I'm a little still jet lagged. So, it's fine. And then, you know, we went I took a shower.
Speaker 3:Nice.
Speaker 7:Get dressed.
Speaker 3:Yeah.
Speaker 7:Was like, should I wear this cap or another cap? Okay.
Speaker 3:It's just
Speaker 4:a box blaster IPO.
Speaker 7:Know. It's a
Speaker 8:good know.
Speaker 7:It's great. Thank you for recognizing it. Yeah. Everyone's like, why are you wearing
Speaker 4:that cap?
Speaker 7:I was like, it's obvious. But anyways, no. And then like, you know, we took took a cab here and Mhmm. Came in here and then they were like, oh, hello hello. And then Yeah.
Speaker 7:Some breakfast and you had to have some speech and you had to say some nice words. Yeah. Had to ring the bell. Ring the bell.
Speaker 3:Ring the bell.
Speaker 7:But I'll tell you actually, honestly, biggest thing today was sir Michael Moritz Mhmm. My chairman Yeah. Who's a legend
Speaker 8:Yeah.
Speaker 7:You know, Google and YouTube and everything that he's been doing. He has never been at an IPO of any of his company.
Speaker 4:What? Ever. What what was he doing? Ever. No.
Speaker 4:He's just like,
Speaker 6:you know
Speaker 3:He's he's West Coast.
Speaker 4:Yeah. He's
Speaker 8:more West
Speaker 4:Coast guy.
Speaker 3:Yeah. Yeah. Okay.
Speaker 7:So, this was actually his first. Wow. His first. My second and his first.
Speaker 4:Yeah. So that's Any thank you
Speaker 7:for for giving we we know we No.
Speaker 6:But I
Speaker 7:was very very happy that he did it because I had to like be little bit persistent like Yeah. Please Michael join.
Speaker 3:What's it like working with him on the board? Fantastic.
Speaker 7:I mean How would
Speaker 3:you characterize him relative to other board members? What's his style?
Speaker 7:What I tell you is, what's amazing about that man is that I I I I say this a little bit laughingly when I say, look, never into the details, always write. It's like most people have to really be into all this is like, you know, to Right? Sure. This guy's intuition and business acumen and just sharp, immediate understanding of anything you put in front of him Mhmm. He is so brilliant.
Speaker 7:It is it is Okay. Fantastic.
Speaker 3:Yeah. Take me through him, you, the rest of the board, board processing the last few years. What were the crucible moments to put in Sequoia's language?
Speaker 7:Just a few.
Speaker 4:Just a few.
Speaker 7:Spin of a roller coaster.
Speaker 3:So people will be familiar with what you're referring to, but I imagine the roller coaster started on day one. It always does.
Speaker 1:Yeah.
Speaker 3:Yeah. What was the first roller coaster moment?
Speaker 7:There were tons, know. Like the funny thing is that obviously since we're a factoring company, meaning that like we first thing we were like, first time we were ever giving people credit, we were just like, let's wait and see if somebody actually pays. Yeah. You know, like we were sitting there, I remember first weeks like, uh-oh. Wonder now now they're supposed to pay.
Speaker 7:Hopefully, some money comes in. Yeah. They're paying.
Speaker 5:It works.
Speaker 7:Yeah. So that was important. Then there was like, you know, Christmas sales came and we're just like, oh my God. We're supposed to pay out so much money.
Speaker 3:And you have and you need to get need to pay for Yeah.
Speaker 4:Exactly. Cash crunch.
Speaker 7:We were in cash crunch and not not all. There was a real cash crunch. And I remember sitting this is twenty years ago.
Speaker 3:But I
Speaker 8:remember sitting there
Speaker 7:and I like, calling some of our employees and like, hey, think something's wrong with the with the bank. So, your salary may come a little bit late. Yeah. A
Speaker 4:bank's problem.
Speaker 8:Yeah. It's a
Speaker 7:bank problem, you know. Like So, those are like early crucible moments, but obviously since then, we've had a good roller coaster anyways.
Speaker 3:Well, speaking of factoring, you have a partnership with Chipotle. We wanted you We wanna celebrate by getting you to sign a Chipotle burrito.
Speaker 1:Oh, yes. We ever Would
Speaker 3:you mind autographing Yeah. Our Chipotle
Speaker 4:burrito? I love it. We're building the museum of business.
Speaker 2:Exactly. And
Speaker 4:then we're gonna we're gonna It's perfect. It's authentic.
Speaker 3:Thank you.
Speaker 4:What yeah. Give it walk us through like the past like few months.
Speaker 7:You know actually, must say I, you know, we obviously been planning them. So so to be a little bit serious, the point was that me and Michael always felt that the Google IPO
Speaker 3:Yeah.
Speaker 7:Was like the IPO. Like Yeah. That's how you're supposed to do it. Yep. You have a a globally successful company that's profitable Yep.
Speaker 7:But at the same time IPOs and has so many years of growth ahead of themselves, so much success and so forth. So we thought like, okay, that's the time you wanna do it.
Speaker 3:Yeah.
Speaker 7:And for us, being from Europe, to be global, you have to be successful in The US. Like, otherwise, you're not global. Yeah. So and then you have to be profitable in The US. And these things were achieved last year.
Speaker 7:Yep. When they were achieved, then we're like, okay, now we're starting to get ready and we think we have decades of growth ahead of ourselves. And then, it's more to the bankers and the timing and the market and, you know, I was very fortunate that your beloved president
Speaker 3:Oh, yes.
Speaker 7:And and a lot of things happened which meant that I was on vacation with my kids in Easter. Sure. Wasn't really the plan back then Yeah. But that happened. My kids were very happy and we and then the IPO happened now.
Speaker 3:That's great.
Speaker 7:It's amazing.
Speaker 3:So So, yeah, walk me through the long term. How does what does the company look like in a decade? I'm I'm I'm wondering how how oligopolistic is this category? Is there a plan to expand into a financial super app? Like, what what does the bar future look like?
Speaker 3:Sure. Because that Google example, they've been building, what, two decades in the public market.
Speaker 7:Yep. Yep. Yep. No. I think that is So it actually started ten years ago
Speaker 3:Mhmm.
Speaker 7:When we pivoted. So we used to be a competitor of Strife and Adyen Mhmm. But we realized they were beating the shit out
Speaker 3:of us Yeah.
Speaker 7:To be honest. So we were like, let's not do that. But let's learn from that Yeah. And realize like, what what could we have done better? And then let's go for the consumer side instead.
Speaker 7:Yep. And in '15, we sat down and we said, the future of financial services is going to be somewhere in the future, you're gonna have like a digital financial system, wakes you up in the morning, say, hi, analyze your mortgage. I realize I could save you $20 on your mortgage Mhmm. And the only thing you need to do is say yes and I'll do all the paperwork for
Speaker 3:you. Yep.
Speaker 7:And so we're like, yeah, that sounds like that's what's gonna happen eventually. So it's a bit like self driving cars. I don't know when Mhmm. But we know that it will happen. Yep.
Speaker 7:And and then, you know, suddenly I'm in San Francisco doing a Waymo and I'm like, wow. It's actually happening. Right? Yeah. Yeah.
Speaker 4:Future's
Speaker 7:here. So so the same will happen here when Chatty Pitish came along. We're like, okay, it's gonna happen faster than we thought. But still, directionally, that's it. So you wanna be a digital financial assistant.
Speaker 7:Save people time, save people money, make sure that they are in control of their finances. And then the next question was, okay, if that seems likely, not unlikely, seems very likely, that's gonna be a very valuable position to be in and it's gonna be a big global company, but like, what why Klarna? Why us? Yeah. Why would we be the ones that accomplish this thing?
Speaker 7:And then we said, there are a few things. One, you have to be global. So we've achieved that. US, Canada, Europe, and so forth. That's critical.
Speaker 7:You have to be scaled. Mhmm. 111,000,000 users we're now. Mhmm. You know, 111,000,000 users.
Speaker 7:So, yeah. Exactly. Thank you. That's important. So those two are critical.
Speaker 7:And and you have to find a way to kind of grow the brand and thanks to our amazing, you know, partners with Macy's and Sephora and Walmart and all, you know, that's growing the Mhmm. The network. And then the next thing is now to offer more financial services. We launched a card here in The US. Sure.
Speaker 7:700,000 people sign up in six weeks. Wow. 5,000,000 people on the waiting list. Yep. So we feel like it's going.
Speaker 7:So that's that's kind of how we're gonna grow into the full retail banking offer. Sure. And I think that's the future to be that.
Speaker 3:Yeah. Can you explain to me how some of those partners you mentioned, they might have their own credit card. It was always powered by Visa. What does the partnership look like with a large retailer over time? Do they have a white labeled product?
Speaker 3:Do they do they never do that? Do they try and Oh. Grow their own and compete with you? Seem super smart but
Speaker 7:They'll I mean, sometimes it happens that, you know, some merchants have done that. Our experience from Europe is that over time, it's a little bit like, you know, there will be co branding stuff
Speaker 3:happening.
Speaker 7:Like our deal with Walmart is very much a co branding deal. Sure. It's not that different than what Amex would do with your local airline. Mhmm. Like, you know, that's also co brand deal.
Speaker 7:Right? So it's gonna be Delta but with Amex and stuff like that. Yep. And that's very similar with Klono with some of the bigger brands. Yep.
Speaker 7:It's more of a co brand.
Speaker 4:Sure.
Speaker 7:While more for the like maybe more smaller merchants just Klono. Mhmm. But yeah, there's gonna be some of that curve.
Speaker 3:That makes a lot of sense.
Speaker 4:What's the number one thing that people misunderstand about the core buy now pay later products?
Speaker 7:Yeah. I think the the the key thing is obviously, you know, there was a lot of like burritos on installments Yeah. And stuff like that going on. We don't necessarily mind, but it is a misunderstanding. It's just because in Europe, Klon is used for all categories.
Speaker 7:Yeah. It's like your PayPal wallet. You use it for everything.
Speaker 3:Sure.
Speaker 7:Yeah. And here in The US, we were so successful with buy now, pay later. So it's a little bit of like a blessing but also a curse. Yeah. So then I talked to like the head of payments at OpenAI and I was like, you should do Klon and he's like, why?
Speaker 7:Buy now, pay later on subscriptions? Why? Yeah. You know, And I'm like, yeah, but we work with Disney plus. We work with Spotify.
Speaker 7:Sure. You know, have tons of solution for subscriptions for virtual. Sure. It's just that people don't know it yet here Yeah. In The US.
Speaker 7:And especially for like Uber and DoorDash, it's not that they wanna installments. What they want us to help them do is think about ways to aggregate payments, to drive down the payments cost. Payments cost is a huge issue when you have an average order value of $20.30 dollars. Yeah. Visa charges a fixed payment fee for every transaction.
Speaker 5:Sure.
Speaker 7:Yep. So they wanna find ways to that's why, you know, somebody like Uber will always ask you, hey, upload a $100. Why are they doing that? Because that lowers their payments cost. Right?
Speaker 3:Yeah. That makes sense.
Speaker 7:So we've helped them build products that help them try to do that. Still very early. Still early, but like there's so there's just Yeah.
Speaker 3:But that's the compounding advantage. Your overtime, you have more and more data on on how to underwrite people and then also more and more ACH integrations
Speaker 4:Hey.
Speaker 3:Exactly. More customers that can pay with lower rates.
Speaker 7:And this came up with a lot of investors because Yeah. The point was on the roadshow because what I was I told them, look, we're coming from Europe Yep. Where payments is regulated. I'm competing with companies that has 20 bips Mhmm. For debit, 40 bips for credit.
Speaker 7:Mhmm. That's the fees that we're seeing. Here in The US, people are paying 202100%. For credit cards. Right?
Speaker 7:And a hundred bips for debits because even if it's officially regulated, all the banks have circumvented it. So to me, I'm coming from like low cost low cost structure. We know how run this at, you know, at scale yeah. We're coming into this rich market called The US where like the margins are just, you know, gigantic.
Speaker 3:Yeah. Yeah.
Speaker 8:It's me.
Speaker 3:I I wanna hit the size going, how much did you raise today? This is a fundraising event for you.
Speaker 7:Right? Yeah. Not that big, actually. We did only $200,000,000.
Speaker 3:200,000,000? That's pretty big.
Speaker 4:That's big.
Speaker 7:The full round was, like, I think 1.6 or something billion. Yeah.
Speaker 3:Wait. So what yeah. What is the structure of that? That how do you think
Speaker 7:the the company didn't need to raise much money. I mean, we're we're very efficient with our capital and, you know, we've been close to profitability for a while. Yep. So this was more a a secondary event.
Speaker 3:Okay.
Speaker 7:Sure. But we wanted to make sure there's enough liquidity the stock. So we were very happy. Some shareholders sold some pair of the stock, and that ended up, I think, total, it was, like, 1,600,000,000.0 or something like that. Sure.
Speaker 7:Sorry if I'm saying the wrong numbers.
Speaker 3:Yeah. No.
Speaker 7:Yeah. But it's around that number. It's evolving.
Speaker 3:Got it.
Speaker 7:But the the primer itself was quite limited, actually.
Speaker 3:Yeah. Yeah.
Speaker 7:And I didn't sell a single sock.
Speaker 3:Oh, there we go.
Speaker 4:There we go.
Speaker 3:Amazing. Bet on yourself. Yeah. So, yeah, what what what do you think you'll be investing in? Do you think there's gonna be anything that might dip into, hey, we wanna go harder.
Speaker 3:We're gonna dip. We're gonna start burning again or we're just gonna be investing more. Is there because I imagine that there's there's a lot of opportunity to save with AI, but then there's also some you could throw some really diesel inference at things and Yeah. Throw a reasoning model at every single transaction and all of a sudden you're like, my cloud bill is really expensive.
Speaker 7:Yeah. Yeah. Yeah. Well, the truth is if you look at it, I I sometimes joke that at the end there was only gonna be a bill from Amazon and one from, you know, Claude.
Speaker 3:Sure. Yeah.
Speaker 7:That's the only thing the whole company will be two bills.
Speaker 3:And they
Speaker 5:might be
Speaker 3:the same company then.
Speaker 7:Yeah. Exactly.
Speaker 3:Running on the same servers.
Speaker 7:But I think I mean, you looked Oracle today. It was insane.
Speaker 3:Right?
Speaker 7:Yeah. I think that the no. I think look. We I think we've maybe in the last two years slightly over indexed on AI and efficiency. We were Sure.
Speaker 7:So like, oh, Look. We can get rid of all the SaaS. We can get rid Salesforce.
Speaker 4:Yep. You built your own CX tool Yep. Just directly with OpenAI. Right?
Speaker 7:Yep. Yep. Yep. So we've took out 1,200 SaaS software it's pretty be honest, like, Salesforce, $2,000,000 in license fees. It's nice, but on a p and l of $3,000,000,000
Speaker 3:Yeah. It's not
Speaker 4:like yeah.
Speaker 7:So it was much more about how do you consolidate all the data? How do you standardize it? Spread it out in all these systems, so you get this mess. Yeah. Because the less of a mess, the easier it is both for human and for AI Yep.
Speaker 7:To use it to something productive. Right? Yep. And so that's been kind of the key thing. But I would say we over index slightly on
Speaker 2:Sure.
Speaker 7:And now we are indisting more on growth. Yep. And unfortunately for human labor, which I find unfortunate, it's like we don't feel we need more people.
Speaker 3:Sure.
Speaker 7:Like we are already gone from 7,400 to 3,000. Yeah. I think one of the most shocking things people saw, the investors were like, how come you're growing your revenue so much and your OpEx just coming down? It's like the opposite to what you're supposed to Yeah. Be talking about.
Speaker 7:But in our case, we haven't laid off people. We have just relied on attrition. So 20% of the workforce leaves every year Yeah. Naturally because they go on for other adventures. Yep.
Speaker 7:And we just rely on that and then we become fewer and fewer and we get more and more done which is Yeah. Amazing. Yeah. So the only thing we could ever consider where I would say makes sense potentially to spend more money is marketing. But right now Sure.
Speaker 7:We're very happy to do within the budgets we have.
Speaker 3:Yeah. We talked about That's
Speaker 4:a yeah. You were saying the exact same thing.
Speaker 3:Very similar thing. Yeah. What about I I'm I'm interested to hear so I I understand the the over indexing on productivity then maybe pulling back, but it feels like two years ago, every company was kind of seeing AI as a hammer. I mean, all you got is a hammer. Everything looks like a nail.
Speaker 3:And so every single business process, every single thing is like, can we throw AI? Can we throw AI? And a lot of consultants made a lot of money selling slide decks, doing that. I feel like we are now in the scalpel era. Mhmm.
Speaker 3:And there are incredible use cases for LLMs maybe within software that you're already paying for and you're not even implement it. Maybe to, you know, glue two systems together. Are there any standout examples of, like, AI as a scalpel that you're seeing these days that you that you think, like, yeah, it's a little bit narrower than just, like, do everything. No. But it's something that you're that that that you're excited about the early glimpse of what's possible there.
Speaker 7:I think more recently, I've gotten all the senior managers at Klono to start using Cursor.
Speaker 3:Sure.
Speaker 7:Regularly. Yeah. And I still think that there's like there I I am still unfortunately quite negative on SaaS because the point is that all these tools, internal tools that were built, today, we can go to cursor and like write me stuff, fix me things. Good stuff. It's almost becoming your internal terminal for interacting with your data, for interacting with, you know, stuff like that.
Speaker 7:Especially since you're not putting it in production, you're not externalizing it. Yep. You don't need to be as nervous about the same aspects that you do when you think put things in production. So I am as hyped as ever on AI from that perspective.
Speaker 4:Well, in in your position of of getting all the benefits of AI but not having not being threatened in the same way that other, you know, you guys make software but you're a payments company. Right? Financial services key tool. Somebody can't go in a cursor and be like, build me Klarna. Don't make mistakes.
Speaker 4:Right? Like
Speaker 7:It's Yeah. I I There's
Speaker 3:like We're getting a bunch of data on whether or not we should underwrite this person's risk profile.
Speaker 4:How how have you been seeing there's historically, you know, anytime people are borrowing money, they get a bunch of loan documentation and it and it ultimately is like a lot of it's a lot of legal legal mumbo jumbo. It's confusing. People that have more resources might go to a lawyer and say, can you help me understand this? Now people can drop those into ChatGPT. That ends up being good for simple financial products like Klarna where people can easily understand.
Speaker 4:I'm getting this product today and I'm gonna pay it in these parts. Do you think that lending broadly is in for a reckoning as as everyday consumers get start to get access to again, Chatchipiti is not advertising itself as a legal tool but you can get a lot of insight from from from
Speaker 7:it comes back to what I said about, you know, that vision we had ten years ago about Over exactly. Which we're still on, which is just like digital financial system. So what what I believe is that if you look at a lot of industries, they are making excess profits Mhmm. Because of the switching costs. Yeah.
Speaker 7:So we customers are just not Yeah. That keen of switching, especially when it comes to banking, but also electricity, carriers, all these things. They're not like it's not like I really love my carrier phone carrier that much. Sure. It's just that I don't bother to switch.
Speaker 7:Right? Yep. And that allows them to charge more. Allows them to pay, you know, to have lower quality services at higher cost.
Speaker 3:Yeah.
Speaker 7:So, when you imagine a world where you have a digital financial system, it's like, let me do that for you. And you start trusting them. Like, let me go and fix your carrier bill. Let me go and fix your electricity. Sure.
Speaker 7:Let me renegotiate that thing for you. That it must lead to better functioning economy with less success profits, especially in this. It doesn't matter for product or sorry, shouldn't say this is product. For whatever it might For man of taste. Yeah.
Speaker 7:Thank you. For for for product of your image Yeah. Doesn't matter. Right? Yeah.
Speaker 7:Irrelevant. For the brands, for Nike, irrelevant. Mhmm. For utilities. And so, what is banking then?
Speaker 7:I would say it's a mix. It's a little bit of a mix. It has Yeah. Both some aspects of trust and customer preference and so forth, but Yeah. There is also a utility aspect to it.
Speaker 7:Totally. So so we I believe that all of the excess profits we've seen in banking are gonna come down. And I've been very clear with our investors that if you're investing in Klarna, you're investing in the fact that we will be one of the forces that drive that change Mhmm. And hopefully, as a consequence of that, get a bigger piece of what will be a smaller part. Yeah.
Speaker 3:What's next for you? Are you gonna stay running the company for
Speaker 4:the hope
Speaker 7:so. I mean, I
Speaker 3:I mean
Speaker 7:I've only been doing this for two decades. Come on, guys.
Speaker 4:Just like, just getting started. I mean, just
Speaker 7:getting started.
Speaker 4:At this point incredibly calm and
Speaker 3:It does feel
Speaker 4:like this
Speaker 3:is just another day for you.
Speaker 7:It is. It is crazy. Partially another day
Speaker 5:for me.
Speaker 7:But I I think special day.
Speaker 3:Yeah. Congratulations. But also it's good that yeah. It's good to be in that mode.
Speaker 7:Look, as I said, like I I I tell you, emotionally, going to Bentonville, Arkansas
Speaker 3:Yeah.
Speaker 7:Standing at the grave of Sam Walton
Speaker 8:Yeah.
Speaker 7:And being at the cusp of working with what to me was like the company that I was most excited about when I was a kid. I was reading about it like the entrepreneurial
Speaker 4:retailers of all time.
Speaker 7:Yeah. It is fantastic. That to me was I I I'm sorry like I love this but was very special. Just reading that air. Yeah.
Speaker 7:You know, it's it's also very like Scandinavian type of in the Midwest a lot of similarities, you know. So so I think this is cool,
Speaker 4:but that was special. Was there anyone twenty years ago that believed that you'd take it all
Speaker 7:the way here? That could Apart from myself?
Speaker 3:Yeah. Yeah. Yeah. Apart from myself.
Speaker 7:Apart from myself. Look, I I
Speaker 4:because because by the time Sequoia's investing, then everyone's like, okay, they'll be at the they'll be at Ni C soon enough. Right? Yeah. It's gonna it's
Speaker 7:it's It's funny. I I found this old email I wrote like five, six months into it Mhmm. Where I wrote to my co founders and the email goes something like, I'm sitting here alone in the middle of the night and I started thinking like, what if we would like expand this beyond Sweden into more markets and start going after the banks Global. Become global, you know.
Speaker 3:Was like,
Speaker 7:wouldn't that be awesome? Like, it's kinda funny and I found this by coincidence Yeah. A few months ago when I was just going through some old stuff and I was like, wow. It's kind of crazy. I'm sitting
Speaker 3:screenshot it
Speaker 7:and exactly. That's like, you know, I actually predict it. But but I think it's a little bit like, you know, if you ask a soccer player or a football player or something like, do you wanna play Champions League? Do you wanna play the NFL? Do you wanna play the finals?
Speaker 7:You know? Yeah. Like, of course you do.
Speaker 4:Yeah. Of course,
Speaker 7:as a founder, I was dreaming of being here. In the league. Yeah. Yeah. Course.
Speaker 7:Of course. Like, does that mean that I knew? No. Of course, I didn't know. But I hoped and I knew I was gonna do everything that I could and, you know, all the energy and all the hours spent and all the sacrifices.
Speaker 7:Right? So
Speaker 4:Feels like the biggest misunderstanding of of of of of company broadly is is just like your intentionality around building this. Right? Of of of like actually trying to build fair transparent products that that that that are going after those excess profits like you
Speaker 7:I'm happy to hear that. Yeah. But I think I think actually, we had one slide on the road show that shows a study from 2015 by McKinsey actually. I love McKinsey. Sometimes I hate McKinsey.
Speaker 7:But let's
Speaker 4:give it up for Yeah. Don't get enough up.
Speaker 7:Yeah. McKinsey. And they did a study here in '15 where they they basically and they were trying to sell it to credit card companies. They're like, guys, there's an untapped market
Speaker 3:Mhmm.
Speaker 7:And this is not people without money. They actually have quite good money.
Speaker 4:Mhmm.
Speaker 7:But these are people they called self aware avoiders. They were people that saw their parents getting stuck in credit card debt o seven. They tried a credit card themselves because they were supposed to get a good scoring and then suddenly, they find themselves with $4,000 worth of debt paying 25 interest, you know, percent interest on it or whatever. And they're like, what is this? This is the product of the devil.
Speaker 7:Like, get me rid of this. And they pay down the debt. And they're like, I don't wanna use that. And that group, they don't want the AirPart launches. They don't want the loyalty points or the cash back.
Speaker 7:That's not them. Those are the prosperous and content, the Amex users, the chess, sci fi, card. That's a different group. This group wants fixed installments, 0% interest, budgeting tools, clarity, honesty, no overdraft fees, no negative surprises. Just give me like a robust solid product that I can use for my purchases.
Speaker 7:Debit, and then occasionally when I need it, credit, but with zero fees. Right? But it turned out in that study, 20% of the American population falls into that self aware avoider group. 20% of the households. All the people creating credit card programs to sit here in Manhattan, they do program for themselves.
Speaker 7:They want the loyalty points. Want They the, you know, the cashback programs. They're doing them for themselves. You have to ask your customer, what does my customer want? And not everyone wants that.
Speaker 7:Right? Like and it's fine. The other people want it and that's okay. But for this group, it's something different. Right?
Speaker 7:And that's what we're trying to do.
Speaker 3:Okay. Last question. You're wearing the last blockbuster hat. What's your favorite movie?
Speaker 7:That's a good move. Like, I have to tell you, recently, my son who loves Star Wars Yeah. Said, you gotta watch Mandalorian.
Speaker 4:And I
Speaker 7:was like, okay, but how good can it be? It was awesome. Yeah.
Speaker 3:It's great.
Speaker 7:It was awesome. So so that is probably But did family you bring today? No. I did not. I have to It's just another this
Speaker 4:is just another business trip. This was Like did a road trip. To I'm gonna Wall Street. I'll be back
Speaker 1:in a few days.
Speaker 3:We made a
Speaker 7:road trip with the kids from Boise, Idaho Yeah. To San Francisco. We stopped in Bend, Oregon
Speaker 3:Yeah. To go
Speaker 7:and visit the last blockbuster. I really recommend for everyone going
Speaker 3:So this is from the store, not from the movie
Speaker 7:from store. This is from the store. You should go there. 50% of the revenue is still DVD rentals. Wow.
Speaker 7:So and it's fantastic experience.
Speaker 3:Here, we have a new hat
Speaker 1:for you.
Speaker 7:I'm not gonna have this this one now,
Speaker 3:so that's good.
Speaker 8:You have
Speaker 3:to put it on. Yeah. Thank you so much.
Speaker 4:Last last question. Last question. Yeah. Last last final final question. Is your profile picture AI or is it real?
Speaker 3:Oh, yeah. Are you that Photoshop.
Speaker 4:It's Photoshop.
Speaker 3:So we're
Speaker 4:a handmade. Sorry. Handmade. Sorry. Your stock chart looks like that.
Speaker 3:Yeah. Your stock chart today is like like
Speaker 4:the one. Hey.
Speaker 3:Anyway, thank you so much for coming. Thank you
Speaker 4:so much. Thank you guys to the whole team.
Speaker 3:See you around.
Speaker 5:You're the man.
Speaker 3:We'll see you later. Have a good one.
Speaker 4:What a legend. Just another another day. Just another day. Yeah.
Speaker 3:I just I I just gotta gotta take my company
Speaker 7:to It's the
Speaker 4:trip. A I'll be right back. Yeah. Just raising I'm not even selling shares.
Speaker 3:Yeah. I'm not selling shares.
Speaker 1:I mean,
Speaker 4:yeah. I I I do think people have this Yeah. Massive miss come on the
Speaker 3:show. Welcome. How are you doing?
Speaker 2:I'm pretty good. Hi. I'm David.
Speaker 3:Nice to meet you. Just pretty good.
Speaker 2:It's No. I'm good.
Speaker 3:I'm I'm Should be fantastic.
Speaker 2:I am fired up. How are you doing?
Speaker 4:We got lots of lots of sound effects here.
Speaker 7:Oh, I
Speaker 4:love it.
Speaker 3:Yourself for the stream.
Speaker 2:I am David Sandstrom. I'm the CMO at Klarna.
Speaker 3:How did you get introduced to Klarna? How did you meet Sebastian?
Speaker 2:I used to run one of the biggest ad agencies in The Nordics in Europe. And we actually started to do the Klarna transformation from this blue, boring b to b company into this consumer franchise. Yeah. I started out agency side, and after a couple of months, Sebastian was like, why don't you do that here?
Speaker 3:What were you what what was your bread and butter when you were in the ad world prior to Klarna? Were you doing big brand marketing projects, or were you doing because there's so many different niches. You could be video. You could be billboards. You could be you know, there's a whole bunch of things you could do.
Speaker 2:Now, we I did all of the above.
Speaker 3:You did everything.
Speaker 2:No. But I'm I'm the strategy is probably my thing.
Speaker 3:Right? I'm
Speaker 2:super interested in consumer behavior Yeah. Like why do people pick a Coke over a Pepsi? Why do people walk into a McDonald's versus a Burger King? Like science. Yeah.
Speaker 2:The science behind something that cannot be science. Right? Yeah. The thing that that really intrigues me,
Speaker 1:like Yeah.
Speaker 2:The psychology part of like the La boo boo thing now.
Speaker 3:Yep. Right?
Speaker 2:Yeah. How does that how does that happen? Yeah. How do people fall in love with ugly plastic dolls
Speaker 1:and like
Speaker 4:We've been asking
Speaker 3:We were asking the same question on the show two weeks ago. We and
Speaker 2:and those things intrigued me. And I do think marketing done well and done correctly isn't that, you know Yep. Is is in that vicinity of being Yeah.
Speaker 5:You know
Speaker 2:Whose idea is you make money from.
Speaker 4:Whose idea was pink?
Speaker 2:That that was actually my idea.
Speaker 4:I knew it. I knew it. I knew it. Well, the thing so the thing about the the thing about ideas guys, you know, market you know, marketers is like you can sometimes you just have a great idea and it's incredibly simple Yep. And and that that one idea ends up paying just massive massive dividends which I feel like Klarna is just consistently so recognizable and really owns owns the color.
Speaker 2:Yep. Yeah. We do. But but I think looking back at what we've done Mhmm. Everything the strategy, everything has been fairly easy and simple.
Speaker 2:Right? There's nothing complex about it. PINK is just a it's a result of us understanding that banks and the financial industry is one of the most distrusted and hated industries
Speaker 4:blue. Mhmm.
Speaker 2:Everyone is blue. Everyone is blue. Just put the logos up. Everyone is blue. Someone sprinkled some black on top, but is blue.
Speaker 2:And we knew that, you know, only politicians and social media were more disliked than financial institutions.
Speaker 1:So it's at the
Speaker 2:absolute bottom of of trust. Yeah. So I just said, like, what's not blue? Like, what's the what's the opposite of blue?
Speaker 4:Very And
Speaker 3:and where
Speaker 2:do we
Speaker 1:have it?
Speaker 3:Yeah. Fantastic. Yeah. What where was the Klarna brand before you came in? Who was it catering to?
Speaker 3:We did what what was the key oversight that it was more
Speaker 4:fully b to b?
Speaker 3:Fully b to b. Is that is that the
Speaker 2:it wasn't, but it wasn't a brand. Okay. It was a fantastic product.
Speaker 3:Yep.
Speaker 2:Guess the color?
Speaker 3:Blue. Blue, of course.
Speaker 5:Blue logo.
Speaker 3:Of course.
Speaker 6:Of course.
Speaker 2:Very you know, as a lot of tech companies start out, very, like, square, very broish Yep. Very male biased
Speaker 3:Sure. Sure. Sure.
Speaker 2:Fairly boring, bureaucratic, nothing you wanna engage with Sure. No emotional component to it, nothing you transact. Right? Yeah. It's a transaction.
Speaker 2:And that is what we try to change, like, in everything and what we did with Snoop and Paris and ASAP Rocky Yeah. Pink and how we show up and, you know
Speaker 4:Talk about the talk about the cultural differences between the European market and and then coming to America because I feel like they
Speaker 2:I mean, from my perspective and and from the financial perspective, the big big difference is that US is a credit heavy market. Mhmm. Everyone spend money.
Speaker 3:But the problem is love the credit cards.
Speaker 2:Love credit cards, but also understand credits.
Speaker 3:Yes.
Speaker 2:Like, if you ask a random European, like, what is APR? Like interesting. And and and Europe is a debit market. Right? And understanding those dynamics, how that works, the power of credit cards in The US and and the the stronghold they have versus Europe that is a debit market different different what we see now also the digitalization, like, haven't seen cash or a card, like a physical card in Mhmm.
Speaker 2:I don't know, five, ten years. I just haven't seen it.
Speaker 3:Yeah. Yeah.
Speaker 2:That's the only thing I own I always forget when coming to The US, my physical card. So I show up hotel and they're like, you need a card.
Speaker 4:File. Yeah. You're like, what what that's true.
Speaker 2:So that that's the biggest difference. But then, I mean, I love The US. I love the spirit in The US. I like the the
Speaker 4:American consumer is underfeit.
Speaker 2:Everything is bigger. Nothing is impossible. Like, there's just this
Speaker 3:Yeah. You don't
Speaker 2:I I think greatness to think that that that is the that's the soundtrack of The US. Streaming. And also like one big difference on from my perspective is in The US, people appreciate marketing Mhmm. And they appreciate people making money.
Speaker 3:Mhmm.
Speaker 2:Right? So in in Europe, when we do a partnership with a celebrity, they're like, you're a sell out.
Speaker 3:Really? I was like,
Speaker 2:the celebrity. Exactly. You're a sell out. Why do you do this? You only wanna make money.
Speaker 3:Yeah. Yeah. Yeah.
Speaker 2:In The US when someone does something where they're like, you're the best. Yeah. Make as much money as
Speaker 9:you can.
Speaker 2:This is awesome. So there's a huge difference in that as well.
Speaker 3:Yeah. No. I feel like Shaquille O'Neal in particular has built a whole brand around like being just everywhere in every ad possible. And some of the folks that you've worked with have done the same thing. I've seen Snoop all over
Speaker 2:the place. Love that. It is like if you pay me, I'm down.
Speaker 3:Yeah. And it becomes their it becomes, like, another piece of their content strategy almost. And you're like, oh, have you seen the latest, you know, Paris Hilton promotion? Because it's like part of her brand world.
Speaker 2:Yeah. And you can't even guess the What about in
Speaker 3:terms of actual, like, the distribution of marketing materials? Is there any difference? In America, you know, there's this power law in TV advertising around the Super Bowl. Yeah. There's obviously a ton of stuff going on social media, podcasts, live streams.
Speaker 3:We have a bunch of advertisers. Where where where does where where is there a difference between where the actual ad impressions are coming from? Is there any difference or is it I
Speaker 2:think the interesting thing with The US is that you still have these tentpole moments. Yeah. Like the Super Bowl, have that everyone gathers and you these like, not millions of viewers, but tens and hundreds of In Europe, everything is so distributed. Is very strong. So there there it's hard to build a brand Yeah.
Speaker 2:When you don't have these tentpole moments because a brand is very much about like you and I have seen the same thing
Speaker 3:Yep.
Speaker 2:And we think it's cool. Yep. When every ad is personalized, I don't know, like, you seen the clown ad? I saw it. But that was that was only on my TikTok algorithm.
Speaker 3:Always be a bad signal if everyone saw the same
Speaker 6:ad because
Speaker 3:then you know why it's going viral
Speaker 2:That was power of TV once upon a time. Yeah. Knew that everyone had seen that or missed it or whatever it is. Kardashians, like I I saw the last episode like I'm in, you know, I'm Part of the culture. Exactly.
Speaker 2:Part of the culture and you don't have that in Europe.
Speaker 4:Yep. How involved did you get on the roadshow side? Kronos is interesting in an interesting place where the the consumer brand I feel like is almost different than the the brand within tech for example. Right? Yeah.
Speaker 4:Because like in our world, a lot of our audience are high high earner founders, investors, executives at technology companies. They maybe aren't using Klarna nearly as much as the average American, let's say. How what what's the what's kind of like the disconnect between those those
Speaker 2:I mean kind
Speaker 5:of the two brands?
Speaker 2:Sometimes that's that's a difficult bridge to gap. Right? A lot of our investors don't use the product on a daily basis. Right?
Speaker 3:If you
Speaker 2:look at a Spotify, for example, from Stockholm as well, like, the investors might might use that on a daily basis. It's hard understand. Totally. Even that was a thing with Figma. Right?
Speaker 2:Yeah. Figma, fantastic company. 100%. Investors don't know how to design. Right?
Speaker 2:They they haven't used that.
Speaker 4:Yeah. But but even different the only thing different there is an investor knows that every one of their portfolio companies uses Figma every day.
Speaker 3:Right?
Speaker 2:Exactly. So it's and and it's But but has been the story to tell. Right? Be because, like, Clarna does a lot of amazing things, but you could boil it down to it's just a better alternative to credit cards. Right?
Speaker 2:Yep. And Yeah. Everyone understands credit cards, how that works, with points, how and and that's the story to tell. Right? And and I usually talk about, like, I do think this is a seismic shift where we've gone from gold to cash, from cash to credit cards, and now from credit cards to the next generation of things Mhmm.
Speaker 2:Where Clarin is the lead. Some of our competitors as well, of course, but I do think that's the story to tell. Right? And Yeah. We're seeing that shift amongst consumer as well.
Speaker 2:Like, they're sick and tired of being screwed over by their credit card Yeah. Like companies, high fees, you know, predatory APRs, all of that. So I think we're seeing that seismic shift and that has been a very important piece for us to tell that story from a consumer perspective. Working a lot with testimonials, our own customers, but but you're completely right.
Speaker 4:What about going going more multi product? You guys have ambitions. You have multiple products already. Sebastian was telling us about the card product and the incredible wait list. But how are you thinking about going multi product in The US market specifically?
Speaker 2:I mean, the the strategy is basically growing with our consumer engagement. Right? So we have a 111,000,000 consumers. I think we have north of 30,000,000 consumer. Boom.
Speaker 2:And north of What? 30
Speaker 5:No. I just Oh, you're
Speaker 2:gonna north of 30,000,000 consumers Yeah. In The US Yeah. They love Klarna. Yeah. So they keep telling us, hey.
Speaker 2:I use Klarna online all the time. Why can't I use Klarna in store? Sure. Okay. That's the the idea of the credit card.
Speaker 3:Credit card. Yep.
Speaker 2:Hey. I love Klarna, but I wanna pay, you know, with debit from time to time. Well, okay. That's the start of the balance, and that is how we grow. Right?
Speaker 2:I presume
Speaker 3:mean I wanna make thirty years of monthly payments. I mean There you go. Let's say I
Speaker 2:mean, Amazon started out as a bookstore and now it's the everything store and we started out with payments and now we're the everything company.
Speaker 3:We're excited to keep following the journey. Thank you so much for coming Thank
Speaker 2:you so much for having
Speaker 3:Congratulations. Really before our next guest, let's tell you about some of our sponsors. This stream, of course, is made possible by ramp.com, Figma, which Jordy just mentioned, Vanta, Linear, and Eight Sleep. We will tell you more about our sponsors after our next guest. We just wanted to shout out to some
Speaker 6:of them.
Speaker 4:If you're just tuning in for the first time, I just wanted to share we have a
Speaker 3:It's actually not just any burrito.
Speaker 4:It's a Chipotle burrito.
Speaker 3:And Klarna does have a partnership.
Speaker 4:This will be going in the, business hall of fame that we're putting together. Let's bring in
Speaker 3:our next let's bring in our next guest. Oh, I I it has been it has been too long.
Speaker 1:Too Too long.
Speaker 4:Great to see you.
Speaker 3:And bringing you some sweets. I do.
Speaker 4:No way.
Speaker 3:I I I feel like when you came There
Speaker 5:you go.
Speaker 3:It was Monday. I told you don't be a
Speaker 4:They own they And
Speaker 3:then I don't hear from you for
Speaker 4:Karna owns pink.
Speaker 3:And here you are.
Speaker 4:Karna owns pink. No one No other
Speaker 3:brands. To be here.
Speaker 6:Got see you guys again.
Speaker 3:This is nice too. Thank you. Yeah. Pink pink
Speaker 6:That's are we're taking the the whole trading floor.
Speaker 3:Yeah. How did you how did you become a board member? How did you meet Sebastian? I
Speaker 6:joined the board recently. I joined earlier earlier this year. Yeah. Of course, Klarna is investing heavily into AI and figuring out how to combine the best experience with a lot of AI innovation. Mhmm.
Speaker 6:And and that's how Sebastian and I met. And now over over a year back Yeah. Started speaking about AI, how we can innovate Yeah. To build the financial assistant of the future. Was the actual intro through, like, Sequoia
Speaker 3:folks or something? Like It
Speaker 6:was initially, we met on the event of of Sequoia's event. Sure. Yeah. I was on one of the panels. Sebastian asked the question.
Speaker 6:This is AISN? It was the Europe hundred.
Speaker 3:Oh, okay. Previous.
Speaker 6:Which is another, of course, amazing thing about about kind of the connection where is one of the the few European companies that started in Europe and built a global brand that everybody recognizes. Yep. Even today, earlier, working for the trading floor, the May the best feeling was a lot of the people coming by, it's like, I'm a Clarna user. Yeah. It's like 110,000,000 active active customers, which is of course as as as another founder that started a company in Europe and is trying to build global business, Sebastian and I got along well
Speaker 4:Good role model.
Speaker 6:And started speaking about us.
Speaker 3:Yeah. How did you explain your business to him at the time? Was there was it in the context of a partnership or just kind of life lessons learned and and understanding of your understanding of AI could potentially get him up to speed on what was coming?
Speaker 6:It's a it's a good combination of both. I think there's one piece which, you know, Sebastian is just such a trailblazer and quick to a lot of adoption.
Speaker 7:He was
Speaker 6:one of the first to jump into the AI, start figuring out how you can deploy agents in customer service. Yeah. Few 100 people work could be elevated through the AI work and eventually optimized on the on the on the bottom as well. And we started speaking about a lot of other ideas of what could could happen, what is possible. Working in voice, of course, there's an an interesting angle of how you can combine the part of voice experience across the customer service Yep.
Speaker 6:Where people can call in, whether it's a claim, it's to understand a little bit more. Sure. And that's where
Speaker 3:we What about on the b to b side? Clarna is unique because they have a brand with consumers, but then they also sell to customers and or to enterprises and businesses. Have you thought or have you seen any glimmers of we've heard some sort of maybe it's a little bit too early to have AI in charge of the outbound sales. They're not robots buying steak dinners for folks just yet, But there's a lot of companies where they need a phone number, where if somebody wants to get more information, they currently put in a form, and then maybe there's a phone line where some sales reps can pick up internal sales. But that could be AI in the mix, voice agents in the mix.
Speaker 3:Have you seen that in other companies? Are you optimistic about that?
Speaker 6:I'm optimistic for like a scenario where you you have, like Clarna, a lot of inbound, lot of partners that want to work with you. Yep. Now a lot of the the the requests, you need to figure out the smarter way to handle those Sure. So instead of waiting for a longer time to to speak with a human, could you validate the workflow within voice agent and go through that quicker? Yep.
Speaker 6:We've actually seen and deployed that for for our ourselves where
Speaker 3:Oh, sure.
Speaker 6:If you if you want to accelerate a pipeline, you can speak with the voice agent and tell a little more about use case. And actually what happened is that a lot of people are more keen to tell you a lot more Yeah. Than they would otherwise. But then there's, you know, so many other areas where that's relevant. Good example is training people internally.
Speaker 6:Sure. So whether you are on the on the talent team, and I think that's how a lot of people in Clariant are thinking about on the talent team, whether it's you're actually on the sales team, how can I get better? Yeah. And then whether it's the the agent on the tech side, whether it's voice agent, you can actually learn and do that better. Yep.
Speaker 6:And then there's of course the last angle which which is the the easiest one, but only easy if everybody adopts it, is how you can use AI in the internal process Yep. In internal tooling. We actually just spoke with one of the execs at the at the across the C suite at Clarna, who is now deploying herself some of the AI tooling to improve the switch from to do into the actual project management flow Sure. With the right metadata, with who is the specific tasks for. So it autofills a lot of the information that otherwise would be manual and take a long time.
Speaker 6:Yeah. So that's kind of those all three domains, whether it's delivering better customer experience with AI Yeah. Whether it's improving how you actually get customers through the flow and how you train the staff internally or optimize process internally, I think all are still relevant with that work.
Speaker 3:Yeah. It feels like it's part of this, like, narrative that we're seeing where for a lot of companies, AI was just kind of like, okay. Get a big deck from a consulting firm and it's gonna do everything. It's gonna replace everyone. But now we're in kind of more the AI as a scalpel era.
Speaker 3:And plugging in of, you know, a frontier voice model into something that might be generated. I don't even know what technology was used to generate voices before transformer based models, but it was rough. And you you hear it all
Speaker 5:the time.
Speaker 6:You were like a stitch up of effectively That's phonemes
Speaker 3:to, like,
Speaker 6:make a voice work. Yeah. But I think is the other thing that that is is clearly seen across the companies is that the best mix is you have AI to automate the easier manual tasks, but then you supplement with the highest experts you can in the field, and that's what Clarna did even outside of voice. As you think about text, just people that can handle the the the really tricky cases, specialists are there, Clarna is actively hiring on that side, but then the easy 80% of the task, whether it's just getting information, getting more product delivery for that first steps in the flow are are happening all with AI.
Speaker 3:Is there some sort of parallel to draw between the fact that I feel like both Klarna and eleven Labs are are not the, like, do everything all at once. It's like do one thing really, really well, grow, own that, and then maybe expand. Is is is that am I am I jumping to conclusions there? Does that feel like something that you you and Sebastian can like kind of bond over?
Speaker 6:And and we we we spoke of course briefly about before before the show as well where I think it's very important to go deep and understand the customer Yeah. Understand domain and work backwards from there. I think Yeah. Clarna did it incredibly well Mhmm. Being so early in the ecommerce, then digital payments now with so many of the AI innovations.
Speaker 6:Yeah. And and I think understanding the customer, working backwards, and then expanding is the right move. At Eleven Labs, are of course trying to do the same with going deep in in media space now with with a lot of the telco space and then working on how we can build the platform out of that. So so I think there is a parallel and I think the the kind of the common theme, like, you need to really deliver the best experience for a Yeah. Specific specific segment.
Speaker 4:Very cool. What's coming down the pipeline in Europe? Are there exciting companies that I'm sure you guys when when a company starts showing promise, I'm sure you and Sebastian get hit
Speaker 3:up with the what
Speaker 2:should we expect? Yeah. Yeah.
Speaker 4:Yeah. The god the godfathers.
Speaker 6:What we are seeing the Sweden is booming. Of Klarna now, Spotify in the past, so many other amazing moments with Lovable Yeah. Ligora and others.
Speaker 3:So
Speaker 6:Yeah. There's definitely an ecosystem there. Sebastian has also a little bit of of of Polish roots as well where I'm from. Poland is also very excited for Sebastian, for for Klarna, as I think this is another ecosystem to watch out for and see how that stretches. And these are like two good hubs.
Speaker 6:Of course, London is is also trying to get there. We've seen a little bit in France. So I think these four regions are are really are really going to to go for it. Lots more to do, I think, to to bring it to the level to The US innovation, but but the energy is there. Like, that's that's that's very clear.
Speaker 6:The founders are realizing that, you know That's a
Speaker 7:real path.
Speaker 6:Real path and you should even if you start from Europe, you can build a global company. And I think that realization wasn't there five, ten years back. Totally. And now it's like, you should start thinking about the global space from the start and and it's possible. Examples like Sebastian are a great example, been at this for twenty years and is just now kind of going once again as we think about reinventing Klarna for the next twenty years and expanding all of the work.
Speaker 6:So I think that's a good inspiration for all the founders there too.
Speaker 3:Yeah. It is it is a different story. I mean, I I feel like NewBank has not expanded into The US in any meaningful way and they build a fantastic business company, obviously.
Speaker 6:Are amazing in Europe. In Poland, it's
Speaker 3:it's But there's something special that, yeah, you and Klarna, like, starting not in America, but actually being able to get a strong foothold. Where you haven't seen that from, like well, it is the Indian company Flipkart and like fantastically successful business, but not coming to The United States in a meaningful way.
Speaker 6:100%. I think you need to from the start think think think globally. And I I especially now, like, if you are if you are starting a company
Speaker 3:I mean, practically, tactically advice for, like, you know, small founder with some product market fit in Europe. What does that look like? Like, would you recommend, okay, San Francisco office at 50 employees or 200 employees
Speaker 4:or Five.
Speaker 3:Or or quarterly trips or make sure you have someone on your cap table in Sand Hill. Like, how can you concretize, I mean, making too many generalizations?
Speaker 6:I think the first piece would be you even without the physical presence, you should be reaching out to people writing the newsletters. Sure. A lot of the AI people that are are are active on social media. Yep. And you don't try to pitch them on the work.
Speaker 6:Show them the samples, show them the product, let If them test they like it Yeah. You that's your cracked
Speaker 3:live player in the community
Speaker 6:Exactly. Online. And you need to you need to be you need to go direct, you need to show them the work. Sure. You don't want to you don't want to go the fluff way of of of of the promise of the future.
Speaker 6:Sure. So I think this is like the very concrete spake thing that's that's worked really well for us and I think for a lot of other companies we see we see currently. Yeah. And second to your other point, you do want people on the ground in US sooner rather than later. The ecosystem is thriving there.
Speaker 6:You want at least few people that that can be in Silicon Valley or they can be in New York and and spend time with other with other companies and make sure that that they are building with that technology or you understand their
Speaker 3:needs Mhmm.
Speaker 6:Before before
Speaker 4:you don't want your competitor competitor going through YC demo day and signing up, you know, half the batch before
Speaker 6:Exactly. You need to be with the YC companies before before any other player. 100%.
Speaker 3:What's the fundraising environment out like in Europe like?
Speaker 6:I think the you know, you can get capital now. I think in Europe and US, if you are building for that scale, you can you can you can really do it. Their capital is plenty. It's more about the the usual, get the smart capital, get the smart investors Yep. That will help you scale to US, that will help you get the talent Yep.
Speaker 6:That that are in there for with you for the highs but are also there when you are when you are low. That would be like on the practical side, one of the key things to check across any of the investors. But I think 100%, there is a lot of a lot of capital, a lot of money that that everybody can can can get. And I think surely you're seeing a lot of European companies are going with
Speaker 3:Sounds
Speaker 6:good. With pretty pretty great founding grounds as well, especially in the recent in the recent months.
Speaker 3:Yeah. And I I mean, we we Deleon Espero from Founders Fund on the show, and he he invested in was it Endurosat, the satellite the satellite bus company? And and and it's just like a crazy crazy company out in in Eastern Europe that's just building a phenomenal business in hard tech, which is like total narrative violation. And, yeah, there there's definitely stuff all over the place.
Speaker 6:And then you might have seen N8N, which is which is another of the agentic workflow builders, which Mhmm. Everybody uses across the engineers to go to market teams
Speaker 3:Yeah. Yeah. Which which
Speaker 6:is another great example. Yeah. And, of course, loveable. We spoke about it.
Speaker 3:So we I mean, we have to ask. You came on the show on Monday. You announced some fundraising. It sounded like you weren't in a position where you needed a ton of primary capital. Are we gonna see you out here soon?
Speaker 6:That's the hope. We are we are building too, you know, to create a generational company that that that tender offers exactly for that to get people liquidity so they can focus on that long term. Yep. So so that's the hub. We'd love to, of course, be be here and follow Clarinus stuff one day.
Speaker 6:Well, hopefully, we'll be there. And thank you.
Speaker 3:We we we love to ask that so we can get a sheepish denial and then play the clip when it happens in a couple of years.
Speaker 4:Yeah. A year two year or two from now.
Speaker 3:Thank so much for coming.
Speaker 5:Thank you
Speaker 4:so much. See you
Speaker 6:guys again. Yeah. We'll see
Speaker 3:you after the
Speaker 4:show. Cheers. Legend.
Speaker 3:Guest coming in the studio. About some more advertisements.
Speaker 4:Careful with that burrito. That is a piece of business history.
Speaker 3:TBBN is made possible by Wander. Find your happy place. Also, AdQuick. We mentioned billboards earlier. I didn't get an ad quick ad read in, but there's a lot of billboards over here.
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Speaker 3:Customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. And lastly, before we bring in our next guest, we have fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on g two. We heard, Mati talking about how Claro has been using AI in their customer service organization. If you want to bring AI to bear in your customer service organization, go to fin.ai.
Speaker 3:And we will bring in our next
Speaker 4:Who we got?
Speaker 3:Believe we have the next person. We we have two minutes. Fantastic.
Speaker 4:Two minutes. We get to
Speaker 3:hang out. We get to hang out. Let's play some
Speaker 4:soundboard. Let's amp it up. Easy. Easy, Josh. Easy.
Speaker 4:First time on the soundboard ever.
Speaker 3:Yeah. If you put this thing within within striking distance of me, I'm gonna have some fun. Anyway
Speaker 4:It is one of the most beautiful views in the world.
Speaker 3:It really is the fortress of finance, the East Coast edition. Also,
Speaker 4:I They out trust us too.
Speaker 3:We got a big trust The trust is Yeah. Really, really good.
Speaker 4:This thing is just a real monument.
Speaker 3:It's fantastic.
Speaker 4:And I see Andrew Reid down there.
Speaker 3:Incredibly active. Look.
Speaker 4:There he is. There he is.
Speaker 3:Hey. There he is. Come on up. Come on up.
Speaker 4:He's he's working on it.
Speaker 2:He's working on it.
Speaker 3:You're good. He's on
Speaker 4:the schedule.
Speaker 3:Andrew Reid. Yeah. We'll bring him in
Speaker 4:to joining us.
Speaker 3:I think we
Speaker 4:have him on at three. But, yeah, it's great. Can we see Kramer? Is Kramer around?
Speaker 3:I don't know. I do believe we're gonna be
Speaker 4:able to see I do see CNBC Yeah. Over there.
Speaker 3:But, yeah, what what what I was I mean, the the whole floor is buzzing, and it's obviously, Clarna IPO is a big deal. But just seeing all the different pods, everything is really cooking today. The IPO market's fully There's something like
Speaker 4:seven IPOs over.
Speaker 3:Yeah. I mean, we were we were talking about, like, there were other companies that were like, is that gonna go out the same day? And, like, should we try and have that CEO on? There is a lot going on. Yeah.
Speaker 4:There's Figure in the works. StubHub is in the works.
Speaker 3:It's not Figure the robotics company. It's Figure the blockchain company. Is that correct?
Speaker 4:Blockchain lending company.
Speaker 3:Yes. Blockchain lending. Okay. We will have to get sharp on on Figure at some point.
Speaker 4:Yep. We're working on What else the is going founder on
Speaker 8:the timeline?
Speaker 4:I don't have WiFi. So I am guessing, but you can pull up the timeline. Pull up the timeline. Daniel Daniel Prank says skepticism is gone from the market. Oracle is saying it will basically build listen to this.
Speaker 4:Oracle is saying it will basically build AWS in five years and no one seems to be stopping to ask how? Amazon, Microsoft, Google, Meta are all struggling to build enough infrastructure. How does Oracle plan to do so? So he is a little skeptical of of Larry.
Speaker 3:Yeah. It's a big it's a big backlog.
Speaker 4:It's a
Speaker 3:big backlog. It better be heavy open AI if it's it's gonna
Speaker 4:Well well, this question is just asking what like, how do you plan to physically build? Like, assume the demand is there. Yeah. How do you how are you physically gonna build You're gonna
Speaker 3:need a bigger tent. It's gonna be a of tents. Yeah. It's gonna be a lot of tents. I mean, how much is how much are they spending on I mean, Stargate, 500,000,000,000 supposedly, and, like, Zuck is penciling out $10,000,000,000 clusters, the trillion dollar cluster.
Speaker 3:I mean, like, if you talk to the folks at situational awareness and, like, these numbers line up with straight lines on log on log graphs. Yeah. So that you know? It it is it is sort of like somewhat unexpected from
Speaker 4:from Oracle specifically. Here How
Speaker 3:you doing?
Speaker 4:Man of
Speaker 3:the hour. Extreme.
Speaker 4:Boom. Throwing on the hat. Fourth fifth time.
Speaker 3:Second IPO. Great to see you. How are you doing? How are feeling?
Speaker 4:Thank you. You you they really treat you like the mayor.
Speaker 5:Sorry for being late. I was picking up some market color.
Speaker 3:Okay. What's that?
Speaker 5:The the one of four traders. You know, feel like I needed to a little bit more.
Speaker 3:Okay.
Speaker 5:Yeah. I need to know where rates are headed. Okay.
Speaker 3:Yeah. I need
Speaker 5:to know where interest rates are going.
Speaker 3:What'd you get for us? What what's the what's the market color? What are people saying?
Speaker 5:Everyone's talking about Klarna. Okay. Yeah. Yeah. I'm just very excited.
Speaker 3:What what about interest rates? Anyone?
Speaker 5:Not as good as proprietary.
Speaker 3:Proprietary. Okay.
Speaker 4:Proprietary alpha. Yeah. Yeah. It really is it's great seeing you back here. We I love hanging out in the stock exchange.
Speaker 3:That's fantastic.
Speaker 5:I also love hanging out in the stock exchange.
Speaker 3:Tell us the initial story. How did you initially wind up investing in Clariant?
Speaker 5:Well, when the story first invested in Klarna, was a sophomore at Amherst College. I think I probably could have pointed roughly where Sweden one was on a map, but I'd certainly never been there. Yeah. And Mike Moritz, who had, you know, famously invested in PayPal Mhmm. And Google and a bunch of other great companies.
Speaker 5:And it got in Chris Olsen, who's now at a firm called Drive Capital Yeah. Worked together. And Pat Grady, by the way, also did some of the initial modeling when he was a Legend. Yeah. Senior you know, we invested in 2010.
Speaker 5:Right? In 2010 in a company that was a Swedish alternative
Speaker 3:Jump scare. Woah.
Speaker 5:Was, you know, Swedish slash maybe pan Nordic
Speaker 3:Yeah.
Speaker 5:Alternative payment company for e commerce where, you know, you wouldn't pay until the thing arrived. Yep. So knew you you're gonna get what you were getting.
Speaker 1:I mean,
Speaker 3:a lot of Europe at that point was ecommerce, but and the Internet was there, but they didn't have the payment rails. So it was like, you pay cash to the delivery driver. Exactly. And Karna was like some it was like part powering that Yeah. And building on top of that, those rails.
Speaker 5:Yeah.
Speaker 3:But not even I don't even know you can call them rails. Hands.
Speaker 5:And you go into the, you know, you go into the memos from back in the day Yeah.
Speaker 3:It was,
Speaker 5:you know, how might Klarna find success in making this next hop? Yeah. So it was Germany and The Netherlands. And we had this incredible detail and like Yep. Might they succeed in Germany and demographics in Germany and competitive landscape and in Netherlands seemed like, you know, if they do that, we're, you know, we're money good.
Speaker 5:Yes. You know? And one thing sort of led to another and Sebastian just put his head down and fifteen years later Right. With all of the ups and downs and twists and turns Ready? Has
Speaker 3:Found her nose.
Speaker 5:Yeah. Sebastian Sebastian, he has that dog in him.
Speaker 3:He does. Truly. It's crazy.
Speaker 4:Yeah. I could see that. Mean, he come he comes through incredibly incredibly relaxed. But it says a lot it says a lot that he's here. He's like, he has he said today, didn't sell a single share.
Speaker 4:No. Like, he's all in.
Speaker 5:He is all in. No. He's in and he And
Speaker 4:the other thing that stood out to me, I just thought this was hilarious. He said he didn't bring his family here. It's just like a work trip. He just came to Wall Street to IPO. It's just another another week.
Speaker 4:Yeah. He is
Speaker 5:very eager. He's he's very eager to get back back to to work. Yeah. He's That's great. But Nicholas is CFO.
Speaker 3:I don't
Speaker 5:know if have you has anyone shout out Nicholas? No. Legend. Mhmm. Nicholas Naglian, CFO.
Speaker 3:Probably incredibly for this business. He
Speaker 5:has been yeah. For for all the reasons you might and
Speaker 3:pay some salaries. Exactly. A whole you can get into cash crunch. And He was describing that in the early days. Christmas came, and they had a ton of cash that needed
Speaker 8:to go out the door.
Speaker 5:Yeah. Nicholas is, I'm pretty sure taking a nap right now. Yeah. I think he is in fact, I can guarantee you that he's taking a nap right now before dinner
Speaker 4:an app on the trading floor.
Speaker 8:Take his hat off
Speaker 5:a little tight.
Speaker 3:Yeah. You're good.
Speaker 5:Okay. Yeah. I'll put it back on when I leave. Yeah.
Speaker 4:Where I I guess, like, walk through by the time they were gonna enter The US market, you were you were on Team Sequoia. Right? Yes. You're able to witness that. Yeah.
Speaker 4:I guess, like, give us give us a backstory there because I think that the level of of traction they have in The US market was I don't I don't even know if you could have underwrote that as they were starting starting
Speaker 5:Yeah. In fact, so I when I joined Sequoia in 2014, Klarna was still blue Klarna. They had not yet made the transition to the the pink Klarna. And the logo did feel a lot like PayPal or Affirm or JPMorgan Chase, know, sort of felt like that sort of a company. But coming from Northern Europe.
Speaker 5:And in the mid twenty tens, you know, the whole brand of the company was repositioning much more consumer first, different, know, we're gonna go after the retail banks Mhmm. And not just try to build like a nice profitable compounding, you know, pan European business. And one of the things one of the reasons to do that was to expand to The US. Yeah. And it was around this time that the term BNPL know, BNPL wasn't a term No.
Speaker 5:Until probably 2017. You know, Sebastian had been doing this since 02/2005. Right? Yeah. It became a big thing and Afterpay started taking a lot of share and the firm obviously was doing tremendously well.
Speaker 5:The thing with like, Clarna's business obviously is, you know, each country is different. Right? Like right now, a huge portion of the Swedish population uses Klarna every month. Mhmm. And you know, for for those customers, you know, Klarna has seen them a zillion times by now.
Speaker 5:Right? Like Yeah. When they're underwriting a Yeah. Transaction, it's the, you know, resilient transaction for that customer. Going to a new market, right, you're having a lot more first time customers, so the business model is very different country by country by country.
Speaker 7:It's high risk.
Speaker 4:And just culture yeah. Cultural differences between The US merchants and exactly. Frequency Yeah. American consumers don't have the same like loyalty to Klarna. Right?
Speaker 4:It's not like a national
Speaker 5:heard of us. Yeah. Exactly. Yeah. Then, you know, Klarna got into The US in the '20 I think, probably sometime 2017, 2018.
Speaker 5:And then really during COVID, when e commerce obviously was, you know, booming, that's when they really, you know, got their foot in the door with the big US merchants. Yeah. But amazingly, if you look at the the momentum now, like, in the f one, I hope we get these numbers right. You know, q one year over year growth in The US was 33%, q two is 38%. Mhmm.
Speaker 5:Right? So, like, the actual, like, forward looking momentum or Yeah. Not forward looking statements. The Real time. The real time momentum for q two is very, very impressive.
Speaker 3:Yeah. How do you think about the long term structure of the fintech market broadly? It feels like there's a ton of companies that I can think of that are, like, big scale deck of corns or almost a 100,000,000,000. You're investing many of them. Founder led big, you know, big markets already, but going into super apps and everything apps.
Speaker 3:But at the same time throughout history, going back to, like, Goldman and JPMorgan and Morgan Stanley, we've always lived in this world of oligopolies. Should we be thinking about long term fintech? Like, it's like hyperscaler clouds. Like, it'll be competitive, but everyone will still make money. Yeah.
Speaker 3:Or is there a winner take all world that in in point solutions? Like, how do you think about the market in the long term?
Speaker 5:The thing I find most interesting about fintech, especially for a company like Klarna, you know, which has its which has footprint across Europe and The US. Like, fintech penetration in Europe is actually quite high. Mhmm. You know, if you think about Revolut's market share in some of these European countries or Trader Public for trading
Speaker 3:Yep.
Speaker 5:Or Klarna for payments. Yep. And, you know, they've really started to make a dent on the legacy retail banks. In The US, fintech market share is still tiny.
Speaker 3:Yeah. Right? And that's where they're eating from.
Speaker 5:And I think The US market, which obviously is the biggest profit pool in
Speaker 7:the world
Speaker 3:Yep.
Speaker 5:Is that's right. It's still still pretty much it's JK Morgan, it's Wells Fargo, it's Citigroup. It's and then that huge long tail of, you know, from the next tier down to the credit unions. And
Speaker 3:Also, I mean, with ACH, like Visa and Mastercard Yeah. There's also market share to take from that.
Speaker 5:Yeah. And, you know, not to mention Stablecoins are going up. There's so much things that happening in US fintech. And somehow US fintech is like lower penetration than Europe fintech.
Speaker 3:Yep.
Speaker 5:And I think if a company like Clarina, which is obviously gonna be Yeah. Growing here.
Speaker 3:It's How are you thinking about early stage fintech? Because with that frame of mind of, like, if I'm gonna be a fintech founder, I'm going up against Sebastian Klarna, you know, Max Levchin's active founder. You got Brian at Coinbase, Vlad at Robinhood.
Speaker 5:Yeah. You see that
Speaker 3:the YouTube video dog. Eric. You got Eric at Rave. Like, it's just like, they're every category has, like, a serious Yeah. Person with, like, a billion dollars on the balance sheet.
Speaker 3:Yeah. And they're ready to and they're bought in and they're not asleep at the wheel at all. Yeah. It's not the early days of of, like, you know, enterprise software. Was like, oh, yeah.
Speaker 3:Like, there's some integrator that did this in the sixties with paper and, like, you're just gonna take everything. So have you been how do you think the next wave of fintech at the early stage looks? Is it just yeah. What
Speaker 5:what the thoughts? You know, like, I dabble in fintech. Yeah. I wouldn't say I'm, you know
Speaker 3:Specialist.
Speaker 8:Go to
Speaker 5:him like Roloff Sure. Who knows everything Yeah. About everything. I'm certainly not a specialist. Yeah.
Speaker 5:The last fintech investment that I led was was in a company called Phantom Wallet
Speaker 3:Oh, yeah.
Speaker 5:Which is, you know, it's sort of the you need a discontinuous shift in the market. You need something Totally. Meaningful to be to differentiate yourself Yep. Along. Yep.
Speaker 5:So our Fantom, it was, you know, centralized to decentralized wallets. And
Speaker 4:Yeah. And then benefiting from Solana, like timing, picking the right chain to originally partner
Speaker 5:Yeah. To get out of the gate, now it's multi chain, and it's all non custodial, and it's a different business model, different footprint. That to me is the sort of market change you need to be, like, to plant your flag and go up and compete against people who have big
Speaker 3:Total. Prints.
Speaker 5:Yeah. Because you're right. These, like, the Being counters you just mentioned
Speaker 3:Yeah.
Speaker 5:Banners you just mentioned are
Speaker 3:They're not at the wheel.
Speaker 5:Not at the wheel.
Speaker 3:To the wheel. Yeah. And so it feels dangerous to go, like, head to head with any of these guys. But but, yeah, something completely different counter position like that. Yeah.
Speaker 3:You carve out, and then you can weave and build and eat off of someone else's plate for sure. Yeah. It makes a ton of sense.
Speaker 4:What was going on in 2021 and 2022 when Square bought Afterpay for now? If you just look at the transaction value, it's, like, $7.06 I think it's like 65, 70% of their current market cap Yeah. Paid or or their current market cap market cap. What why why do you think yeah. Was that just like fintech overheated I
Speaker 5:think there are
Speaker 3:a few
Speaker 5:of these stock for stock deals during that era. I think Okta, Okta Zero is another one, you know, where the actual mark to market value of the transaction was just different than what was reported at the time. Yeah. I think, like, you know that Peter Thiel thing about how in 1999, a moment of peak clarity at some level where like, you know, we saw the future perfectly. Yeah.
Speaker 5:We just totally overestimated how fast it would come. Yeah. I think a lot of the ecommerce things in '21 remind me something of that where we were on a straight shot
Speaker 4:was also the, you know, the
Speaker 5:And it was a, you know
Speaker 4:And I think we just actually got back to the same level of ecom penetration that we had in, like, 2020, 2021.
Speaker 3:Yeah. We're to the same original growth trajectory.
Speaker 4:Not growth trajectory, but I think overall penetration.
Speaker 5:Yeah. But the way I I think about that trend is, you know, in 2021, it was obvious that we were headed towards 50% plus ecommerce penetration across categories. Yeah. And and it's happening so quickly. And then 2022, 2023, the narrative was like, ecommerce is dead.
Speaker 5:It was all pulled forward. You know?
Speaker 3:Yeah. Yeah.
Speaker 5:Yeah. And then sure enough, like, no. We are in fact headed towards ecommerce penetration.
Speaker 3:Was a cliff section of levels.
Speaker 5:And now you look at, like, you know, the Shopify numbers that came out. Yep. Their quarter was incredible. Yep. Right?
Speaker 5:Like, on top line and everything else. Yep. So it's like, yeah, ecommerce is still a long term trend. That's even during this
Speaker 4:rocky year with with tariffs and uncertainty on the vendor side
Speaker 5:Yeah. Or on
Speaker 4:the merchant side.
Speaker 3:Yeah. Anything else, Drew? I hear we have people waiting.
Speaker 7:Yeah. Okay.
Speaker 4:I I don't wanna I have a bunch more questions, but come on the show again.
Speaker 5:I will be I'll thank you for being here.
Speaker 4:I'm sure we'll be back here.
Speaker 5:You guys at the Stock Exchange.
Speaker 3:It's fantastic. Yeah.
Speaker 4:It's the best place to hang
Speaker 5:out. Thank you.
Speaker 3:What's up,
Speaker 5:you guys?
Speaker 3:How are doing?
Speaker 4:The
Speaker 5:mayor Thank you.
Speaker 4:The mayor of Nicey.
Speaker 3:Bringing Marcus. The what? Okay.
Speaker 4:It's not really
Speaker 3:Some breaking news. One second. Yeah. We're okay. Let's let's bring in Marcus.
Speaker 3:Yeah. And Hey. Hey, Marcus. Great to meet
Speaker 4:you in person. Absolutely. Likewise. Great to meet you. Alright.
Speaker 3:Please take a seat. Would you mind introducing yourself for the stream, and then we can talk about everything?
Speaker 8:Sure. Hey. I'm Mark Svilik, founder and CEO of Bolt.
Speaker 3:And I do you remember the first time we interacted online?
Speaker 7:I
Speaker 3:do. I made a I made a YouTube video essay all about Bolt. I had a friend on my team who was obsessed from Estonia. Okay. And I dug in and it was the most fascinating story.
Speaker 3:And and I remember asking you like, so did I get the story like roughly correctly? I should have just asked you because I wasn't doing I was doing video essays, like blog posts instead of like actual interviews. But here we are interviewing. Right. Anyway, tell us your story of how you got involved in Klarna.
Speaker 8:Sure. So I started the Bolt as an entrepreneur when I was 19 years old Mhmm. Back in 2013. Yeah. And back then, I was looking
Speaker 3:at our neighboring
Speaker 8:at our neighboring country, Sweden. Yeah. Where Klarna, I'm already back then, was one of the biggest tech companies.
Speaker 3:Sure.
Speaker 8:So I was always following it when we were building Bolt from Estonia.
Speaker 3:Just like a role model.
Speaker 8:Exactly. So I mean, saw they were obviously in a very competitive space Yep. Very tightly regulated Yep. Complex. And I saw they were doing well in Europe, and then over time, they started obviously expanding outside as well.
Speaker 8:Yep. So that was a big role model for us. So that's how I sort of started following the company.
Speaker 3:Yeah. And and walk me through a little bit of your journey. What how long did it take you to expand? Like, take me through the first couple eras in the axe.
Speaker 8:Sure. Sure. So, I mean, with with Bolt, took, I think, a lot of lessons from what Klarna has done as well. Mhmm. So we first focused on winning in our home market.
Speaker 8:Sure. And, obviously, our product set is a bit different there and I think same applies to Klarna where
Speaker 5:like Yep.
Speaker 8:The products they offer in Europe are lot more comprehensive than they already do in in US. Sure. And then we just first saturated the home markets and then started expanding.
Speaker 3:And Yeah.
Speaker 8:I think Klarna has done the same strategy really well.
Speaker 3:That's fantastic. Is this your first IPO, first public company board?
Speaker 8:It is actually. So for the 12, I've only been focused on Bolts. I haven't wanted to take on any distractions. But we're on to known Sebastian and the Clarna team over the years, and I was always really impressed. So earlier this year, when Sebastian reached out out that would I be open to joining, I thought about it for a for a couple of hours, but it made a lot of sense.
Speaker 4:Took a couple hours.
Speaker 3:What are what are the benefits of being a founder CEO on a on a board? I I know that there's people that do public company board work and that's how they pay the bills. But for you, it must be more about the connections and the industry insights. Is that something how how do you think
Speaker 1:about it?
Speaker 8:Absolutely. So actually, I mean, Sebastian pitched well to me. So Yeah. I was like, hey, like, I think there's three unique angles here. A, we're one of the largest European technology companies with a 110,000,000 customers.
Speaker 8:So I think you can learn a lot from what we've done. Mhmm. Second, they're one of the few European companies that's really made it big in US. Mhmm. And, obviously, for any company in the world, like, coming to the largest market and succeeding here is is a big lesson to learn from.
Speaker 8:And third, was like, we're gonna have a blockbuster IPO. So you wanna join and see how that's done? That's amazing. And I think all those three things have proven to be true over the last year.
Speaker 3:What is Klarna getting right about running a company that's it's sort of a two sided marketplace. They have Yeah. You know, customers that need to implement Klarna and then customers that use it to check out. And you're in a similar business where you have drivers and riders. Yeah.
Speaker 3:What what lessons have you learned from their branding, their business, their their their marketing, anything like that?
Speaker 8:I'd actually say that building a payments network and building a ride sharing network actually have a lot of similarities in terms of how you build a two sided marketplace. Sure. And what we found is that it always starts off on the supply side. Mhmm. Because unless you have the right supply available, like, there's little value for the consumer.
Speaker 8:Mhmm. And I think that's actually what Clarana has always got right. They're very customer obsessed, and they wanted to go and make sure they get the best merchants all around the world to sign up with them, so you can use Klarna as a payment method. And then once you have the supply base and you have a great product offering, then it makes sense to start to focus on the consumer side. Yeah.
Speaker 8:Otherwise, you know, you can bring millions of consumers to the platform if they can't use it to pay anywhere, it's Yeah.
Speaker 3:That makes sense. Talk to me about the state of ride sharing and and Bolt's business. Mhmm. In San Francisco, everyone's obsessed with Waymo. Elon's talking a big game about Robo Taxi rolling out.
Speaker 3:Mhmm. What do things look like in your business, and where do you see things going?
Speaker 8:So first of all, I I think it's it's great. Yeah. Self driving cars are completely gonna revolutionize cities. Mhmm. I think for Bolt specifically, we're really well positioned so this can a 100 x the size of the business.
Speaker 8:Sure. And we're really looking forward to the next decade. On the other hand though, like, we gotta be a bit be a bit more realistic. And I mean, I'm always the pragmatic guy in the room. So Yeah.
Speaker 8:When I look at the numbers, like, we gotta admit, like, these things are still a number of years before the commercial unit economics make sense. Sure. I think it's one thing to put a couple of thousand cars on the roads, and and I think what Weimar has done is absolutely unique and impressive. But they are operating only in the wealthiest cities in the world. Yeah.
Speaker 8:It's still gonna take a number of years before the costs come down to level where you can actually offer this in most cities, not to mention in Europe, but in emerging markets as well. Yep. So in that sense, I think Bolt's business is quite well insulated. Like, we have five to ten years before this is gonna have a major impact in terms of any downside or risk to our business.
Speaker 3:Yeah. I I think the the bull case for at least Uber in the era of self driving is that Dara Khosrowshari ran was it TripAdvisor before? Expedia. Expedia? Mhmm.
Speaker 3:And and and that is an aggregation platform. They don't own any Mhmm. Planes. They don't own any airlines. They route you to the correct airline.
Speaker 3:Mhmm. Are you thinking about the business similarly? Mhmm. If there's a if there's an owner of a self driving car in ten years from now Mhmm. And they wanna bring their their CapEx or their asset to the Bolt network, you act as an aggregator for for customer demand for them?
Speaker 8:So Is
Speaker 3:that the correct is that the correct partnership,
Speaker 7:I mean?
Speaker 8:I think the the industry is for sure gonna evolve over time, and it's it's still not clear how it's gonna end up ten years from now. But I think in the short term, we're absolutely ready to own the cars on our own balance sheet as well.
Speaker 3:Oh, interesting. So We do so do you own anything right now, scooters or anything?
Speaker 8:We do actually too. So so I think that's a core distinction both has versus any other ride sharing company in the world.
Speaker 5:This is
Speaker 3:the craziest thing. Like, you went into scooters and you didn't get destroyed. Like Yeah.
Speaker 4:But to me to to me to me that feels like again something we've been asking some of the other guests is like cultural differences between the American Mhmm. Consumer and maybe the European consumer in America. I I was living in LA during the during the bird scooter era, the lime scooter era and people used to destroy scooters for sport. It was like it was it was
Speaker 8:in Paris. So I mean, they were like we were at some point losing 2% of the fleet each week. What?
Speaker 4:What are they doing? Throwing it in a pond
Speaker 6:or something?
Speaker 8:Literally into the river.
Speaker 4:Into the river.
Speaker 3:Yeah. Into the Champs Elysees.
Speaker 4:But there are markets that it work where people respect the the robots and they they take care
Speaker 8:of it. Absolutely. And I think overall though, like, when we just, like, compare the journeys of of Bolt and Clara, I think there's a lot of similarities with how these European companies are built. I mean, generally, we start off not having access to the same amount of capital. So that forces us to be a lot more frugal and more efficient in how we operate.
Speaker 4:Yeah. You don't wanna lose 2% of the fleet weekly for that long.
Speaker 8:No. No. Exactly. Like, we we didn't raise hundreds of millions for the scooter business. Like, we had to be very clever in how we operate it.
Speaker 8:And so I think overall, I mean, what we've done is that we've operated some of these hardware CapEx heavy business as well, whether it's scooters or we have a car sharing business with thousands of cars. We operate in in more than dozen cities around Europe. So in that sense, like, we're not really afraid to to similarly operate self driving cars Yeah. If need be in the early stages of the market. Yeah.
Speaker 8:Long term, once this gets into hundreds of thousands of cars, obviously, the industry is gonna pay out differently.
Speaker 3:How did the initial Sequoia deal come together for you? Mhmm. Because I don't think they have an office in Estonia, but it's through the Stripe Mafia or the the Skype Mafia?
Speaker 8:Yeah. So so, actually, I mean, Sequoia, back when they invested in us back in 2021, they hadn't made too many European investments. I think actually Klarna was probably the first one they did a long time ago, and and I think that was a successful one. So they started looking around more in Europe.
Speaker 3:Okay.
Speaker 8:And actually, funny enough, I I met with with two of the Stripe founders. Really? They actually so they they came to Estonia. Okay. It was a it was a great fun time catching up with them years ago.
Speaker 8:Yeah. And then actually, they went back to Silicon Valley and then they were chatting with Sequoia about what are some interesting startups they've seen in Europe and then whole came up and that's where the original interest came from.
Speaker 4:What's the state of the Estonian early stage startup scene?
Speaker 8:It it's fantastic. Honestly, I think the Estonian startup scene per capita is the best in the world. Yep. Tallinn's half a million people. We got 11 unicorn companies.
Speaker 8:So for sure, there's something in the blood in The Nordics. Yeah. When we look at Tallinn or we look at Stockholm, they're just absolutely per capita better than almost any city in the world. Yeah. And when we look at just the number of entrepreneurs coming out of these companies, whether it's Bolt or Klarna as well, it's absolutely fascinating.
Speaker 8:Like, I mean, this is booming now the second and third generation of companies.
Speaker 3:A couple of the narratives that I've heard thrown around about why Estonia punches way above its weight relative to population size is huge investment in high speed Internet early on. And then also just the the the geopolitical situation of becoming an independent country Mhmm. And having the entire population animated. Mhmm. Hey.
Speaker 3:Hey. We we we we gotta take this stuff seriously, guys. Do those two narratives sit well with you? Does that sound about right?
Speaker 8:I'd say those are absolutely true. I mean, again, when we look at I mean, Estonia was under Russian occupation for fifty years. And during the communism era, entrepreneurship was literally banned. So you had all this bottled up energy for decades where people wanted to build businesses and they couldn't. So when in '91, Estonia regained its independence, we had this massive entrepreneurial boom where everybody wanted to build a company.
Speaker 4:Yeah. So that's the environment I grew up in.
Speaker 8:But I'd add actually a third very important factor that I think is same for Sweden and Estonia is that we have some of the best education in the world. Yeah. So when you look at all the PISA rankings, etcetera, Estonia is always at the top and so is Sweden. And I think that's the other thing that's fueling all the technology company creation in both countries.
Speaker 3:How are you thinking about artificial intelligence, just AI generally, either applying it to your business or this idea of
Speaker 4:We've heard from two CEOs, two public company CEOs in the last week Mhmm. That they are happy to not grow head count Mhmm. And but they're certainly growing revenue. Right? So that's Alex Alex Karp Mhmm.
Speaker 4:Over Palantir and then obviously Sebastian here at Clarna. That a similar approach that that you're taking in terms of, you know, finding what what that balance is?
Speaker 8:Absolutely. So actually, it's very similar I think with us and with Clarna over the last couple of years. Mhmm. So Clarna has done it I think even better than what we have. They've actually reduced headcount meaningfully over the last couple of years, partially by just improving efficiency through conventional means, partially by AI.
Speaker 8:And it's been the same with us. Like, we've now been massively growing the business the last three years and the headcount has been completely flat. Mhmm. So the only department that's been growing has effectively been tech and in every other department, we're just finding more efficiencies.
Speaker 3:Yeah. What about a data center national champion, an AI national champion in Estonia? Do you think we'll see it? Do you think that there's is there a potential for even if it's like latent capacity
Speaker 8:Yeah.
Speaker 3:There's just like a cheap data center down the street from the school Yeah. And we get another wave of that story of the of the of the past Internet. Yeah. And there's a 13 year old kid who's like, yeah. I'm gonna fine tune lava four or something, and you get the next generation of entrepreneurs.
Speaker 3:Do think that's possible?
Speaker 8:I wouldn't rule it out honestly because when we look at where is the biggest concentration of data centers in Europe Yeah. It's usually in the places that have a very good great connectivity Sure. That have cheap power Yeah. Stable Internet, etcetera etcetera. And actually, Nordics has been one of the most dominant places for it.
Speaker 4:So Nebius is, I guess, main data centers in Finland. Right?
Speaker 8:Exactly. Which is literally between Sweden and Estonia. Yeah. So I mean, you you saw the announcement probably today for them. So overall, like, we're not ruling it out that very likely they wanna expand in the region by setting up more data centers both in Sweden and Estonia.
Speaker 3:Yeah. What about the the geo the geographic footprint of Bolt now? I know there were experiments or business expansion into Africa. Like Mhmm. How are you thinking about conquering the globe, playing the game of risk internationally?
Speaker 8:So, again, for us, the the first priority was we needed to win in the core markets. We needed to have a home base that was generating enough cash flow so we could offset the costs and actually generate us some actual capital we could use for expansion. Sure. So we did that first in Central Eastern Europe, which we're now by far the number one player in. Yeah.
Speaker 8:Then after that, we looked at the emerging markets. Mhmm. So Africa was top of the list, but also some markets like Paraguay, Paraguay, Mexico, Thailand, where we're again now doing extremely well. Wow. And then actually we did this a bit unconventional story where we went and after that, we went into more established markets like Western Europe and Nordics.
Speaker 8:Sure. And funny enough, actually, that was a very easy expansion then for us because we started off in these low cost markets that were hard to compete in.
Speaker 4:Like Same same same with with with Klarna.
Speaker 8:Right? Exactly. So that was what I was about to get to that, like, if you're able to operate with very low ASPs in very difficult markets, then actually later going into high ASP much more wealthy markets like US is significantly easier. And I think that's why also Clariant has been taking so much share here and then winning the market. Mhmm.
Speaker 3:Yeah. Do you think that you'll expand in The US, or has the capital fight already played out? Is there any opportunity left?
Speaker 8:Not something I can disclose today, but keep keep watching us, and there's probably gonna be some news in the future.
Speaker 3:We will definitely be following. Very exciting. Well, thank
Speaker 8:you so much.
Speaker 3:Thank you
Speaker 4:for joining us.
Speaker 8:Was a pleasure. Thank you.
Speaker 5:Great to meet you.
Speaker 3:We'll talk to you soon.
Speaker 4:Have a Zoom you in. Some crazy news hitting the timeline. I don't know if you saw Charlie Kirk was shot at an event. Unclear yet if he is alive or dead but absolutely tragic. Otherwise, Sam Altman was on Tucker.
Speaker 3:You were on Tucker Carlson.
Speaker 4:Sam Altman was confronted by Tucker about the death of the OpenAI whistleblower, Soucher. Sam Altman says, I haven't done too many interviews where I've been accused of murder.
Speaker 3:I mean, that makes sense. Yeah.
Speaker 4:Crazy. Not.
Speaker 3:That is a crazy crazy
Speaker 4:story. Three I guess Oracle and OpenAI have signed a $300,000,000,000 computing deal. So you basically called this
Speaker 3:Yeah.
Speaker 4:Earlier in the show. Yeah. Where is that where is that revenue
Speaker 3:has to be with OpenAI and it has to be it has to be underwritten on the growth of of OpenAI's cloud
Speaker 4:OpenAI's losses. OpenAI's losses are are Larry's
Speaker 3:Yeah. Yeah. His his revenue and then but OpenAI Yeah. I mean, they should be losing burning as they grow. But, you know, they will still be bringing in a ton and ton of revenue on top of this, both on the business to business side, which they're taking more seriously in the in the in the the provision of tokens.
Speaker 3:They're starting to take coding more seriously. This has been kind of the narrative around g p t five was that g p t five was them, you know, kind of redoubling their efforts in just selling being token sales for b to b. Yeah. And so my our you know, the thesis that that that everyone's been kicking around is basically, we could see an an oligopoly in frontier model inference sort of play out. You have GCP with Gemini, rolling out.
Speaker 3:You have you have Anthropic, obviously, teamed up with Amazon. And then you have OpenAI teamed up with Microsoft, but also needing to scale their own business. They've been hitting rate limits. Ben Thompson's been talking for a long time about why do I have a rate limit on my consumer app? Your consumer app is fantastic.
Speaker 3:Pull back on the business to business side. Well, if Oracle can deliver these massive tens of h 100 equivalents, they're good to go. And OpenAI has been codeveloping chips with NVIDIA. Put those you know, but you need a you need someone that's like a hyperscaler like Oracle to actually go and implement that. Yep.
Speaker 3:Anyway, our next guest will be here in a few minutes. Do you have any
Speaker 4:other Prayers.
Speaker 3:This is some shocking news.
Speaker 4:For Charlie Kirk regardless of your political beliefs. Yeah. It's absolutely tragic. I feel like x needs to figure out some type of give people content warnings. There's been a lot of videos floating around but absolutely tragic.
Speaker 3:Yeah. Insane. Well, else? We have Lynn Martin from the New York Stock Exchange joining in just four minutes. We will bring her onto the stream and
Speaker 4:see what the chat has to say. We miss you guys.
Speaker 3:Yes. We've been on the road for two days. We will be back in the TVP and Ultradome tomorrow. A little bit more travel coming up, but, hopefully, the great lock in begins in full the following week. And I yeah.
Speaker 3:The chat is also talking about this news. Very, very sad. Very rough.
Speaker 4:Yeah. Everyone's saying don't open x. So if you're watching this on x, I guess Go stay
Speaker 3:over to YouTube, I guess.
Speaker 4:Over to YouTube or log off.
Speaker 1:Oh, rough.
Speaker 3:Well, we have two two or three minutes until our next guest is joining. We are gonna be hanging out here. We are again, if you're just tuning in live from the New York Stock Exchange in New York City, Manhattan. If you couldn't tell, if you've been maybe maybe you're listening to the audio, you know? Yep.
Speaker 3:We're at the Klarna IPO. We've interviewed the CEO and other folks, board members today, Marcus Villeig. Marcus Villeig is such a such a wild entrepreneur. The the the the clickbait title that I used or my team used on his video essay was Europe's youngest billionaire and it ripped. It has a million views on YouTube.
Speaker 3:Wow. Ripper. Ripper. Yeah. Ripper.
Speaker 4:Seems like a Chad.
Speaker 3:Yeah. He's a killer entrepreneur. Started the business very young in a very contrarian market. There's this massive capital war going on over in America, Lyft and Uber of course. Yeah.
Speaker 3:And he's just like, I'm I'm gonna work on myself. I'm gonna be over in Europe building. Anyway, anything else you wanna talk about?
Speaker 4:Really nothing like shooting to kill the vibe.
Speaker 3:In in incredibly vibe killing. I agree. I agree.
Speaker 4:Still unclear what is happening.
Speaker 3:I'm sure the story will develop over the next twenty four hours. Hopefully, there will be some good reporting from the folks who
Speaker 4:Cover this sort of thing.
Speaker 3:Type of stuff. It is a
Speaker 4:thankless Not our wheelhouse.
Speaker 3:Not our wheelhouse at all.
Speaker 4:Anyways We're hanging out. Yeah. It's tough. We like to have fun on this show but it doesn't feel right when a tragedy like this strikes.
Speaker 3:It is rough.
Speaker 4:Yeah. I feel bad for people that people are sharing around a close-up video of the shooting which is like
Speaker 3:Rough.
Speaker 4:Seems like I'm sure Nikita can figure out a solution so that
Speaker 3:people X does have the ability to add a sensitive content warning
Speaker 4:Yeah. But here's
Speaker 3:for an image, but
Speaker 4:I don't adding that?
Speaker 3:Also, I'm I'm not exact I've I've seen people use it as like
Speaker 4:A meme.
Speaker 3:As a meme. So it must be a button that you can click, but I have yet to actually see that used. And if it kills your reach in the algorithm, people won't do it because they they they they wanna grow their accounts no matter what. Very, very rough. Tough day in the news business.
Speaker 3:Well, on some other good news, in ten days, Jason Carmen will premiere his first sci fi film, Planet. Come see it. He's he's playing it at the Palace of Fine Arts in San Francisco. And you can go and get tickets. So if you're in San Francisco and you wanna see Jason latest work
Speaker 4:This morning, Vuco Capital blokes said my timeline is literally just Oracle earnings and a woman being murdered. Obviously, the
Speaker 3:Yes. Yes. Yes. The the the staff Others. On the
Speaker 4:the other murder. Really really tragic.
Speaker 3:Well, we condemn all violence of all forms of course.
Speaker 4:Yeah. And it's just you violence generates more violence.
Speaker 3:It's very bad. Unfortunately. Very rough. Well, we will be closing out in just a minute. In the meantime, let me there is some What else?
Speaker 3:News. We've been we've we've unfortunately been missing a few big fundraising as announcements, but we will be catching up with tons of founders tomorrow. Be sure to tune in. And we'll also be taking you through, hopefully, a bigger deep dive. I I I would love to go deeper on the iPhone.
Speaker 3:I don't know if you saw that x-ray photo of the iPhone Air, but folks were speculating that this looks like the future
Speaker 4:Coming over.
Speaker 7:Fantastic.
Speaker 3:Though though oh, she has her hat on. She's got
Speaker 4:her hat on.
Speaker 3:She has her hat on already. Welcome to the stream.
Speaker 9:I gotta put it on quickly.
Speaker 4:Here you go. It's good to see you again.
Speaker 3:Hey. Good to
Speaker 7:see you.
Speaker 3:How can help guys. Guys. Thank you so much for hosting us once again.
Speaker 9:Got the hat.
Speaker 3:You got
Speaker 6:the hat.
Speaker 3:Thank you for wearing it.
Speaker 4:Walk us through the day.
Speaker 3:Yeah. How did you say how did today go?
Speaker 9:Great.
Speaker 1:Our our
Speaker 9:Day went great.
Speaker 3:The I mean, just since we saw you, how busy have you been? I feel like we we when we left, we were like, we'll be back for the next one. And then I think the next one happened, like, literally the next day. So there's been a number of IPOs. Right?
Speaker 3:There's been a number. Walk us through the last couple weeks.
Speaker 6:Like, what's been big?
Speaker 9:There's been a bunch. There's been bullish.
Speaker 3:There's been That was big.
Speaker 9:Max. There's there's been quite a few that have been coming out. I mean, I know we talked about you're obviously here for Figma Day.
Speaker 3:Yep. It's fantastic.
Speaker 9:We have today. Yep. We got Via on Friday. I'm excited about that one.
Speaker 3:Very cool.
Speaker 9:Next week.
Speaker 3:That's great.
Speaker 6:It's gonna
Speaker 9:be busy too. So we got heard. The market is open. You know what? I really feel like the market's open because the traditional media just said, yeah, the IPO window's open.
Speaker 9:It's been open. It's
Speaker 3:like, yes. It
Speaker 4:is. It is. It
Speaker 3:is. Yeah.
Speaker 4:Yeah. It certainly felt like that. The today feels even Sebastian himself was, like, remarkably, like, calm and collected. Collected. And when you look at, like, the process this morning, I'm sure I don't know what was happening behind the scenes, but it felt like this is just another day at the office for you guys.
Speaker 3:Two days went very smoothly.
Speaker 9:It went very smoothly. And this IPO had a different pop, but it's it's it's stayed there,
Speaker 4:which is good. Yeah.
Speaker 9:It's still healthy. It was like a textbook IPO.
Speaker 3:Traditionally, wanna see, like,
Speaker 9:that 20% pop, and that's kind of where they are. I think they're about 25%.
Speaker 7:Let's give
Speaker 3:it up to 90%.
Speaker 9:So that was it was great. It was great. It was great. But I mean, this this deal has been thinking about going public for a couple of years now. It's been rumored for a couple of years.
Speaker 9:Been working with them for a couple of years Yep. On IPO readiness.
Speaker 1:So
Speaker 4:Everybody had to be patient.
Speaker 9:Everyone had to be patient. But now that this one went well, I think the next few are gonna go touch wood Yeah. Okay as well.
Speaker 4:Give us your thoughts on the market overall right now. Obviously, yesterday was crazy Oracle earnings.
Speaker 9:I was gonna say this
Speaker 7:is
Speaker 9:kind of a huge day here as well. I mean, we're so proud to be partnered with Oracle and Oracle will be one of our our list of companies. Last I checked, it was up 35%.
Speaker 4:Which is I guess more
Speaker 3:than not normal for a company that's
Speaker 9:because they just announced
Speaker 1:the partnership with
Speaker 9:OpenAI. Yep.
Speaker 4:It's like Everyone was wondering, okay. Where that's yours?
Speaker 9:Plus good news.
Speaker 7:Yeah. That's a lot
Speaker 4:of company. RPO. Yeah.
Speaker 3:Yeah. Massive backlog.
Speaker 9:Yeah. I mean, thrilled for them. Yeah. And I'm thrilled to see the market rewarding them too because that's been a deliberate strategy that they've employed. They've kept they've stayed focused on rolling out that strategy, and now they're seeing success from it, which is great.
Speaker 3:It's good to see Larry finally get a win. He's been a bit of an overnight success. He's been he's been working at Oracle. Decades
Speaker 4:in the making.
Speaker 3:Riding away for decades.
Speaker 4:Yeah. Give us give us the update on Texas.
Speaker 3:Yeah. Yes, please.
Speaker 9:Yeah. So we announced NYSE Texas
Speaker 6:Mhmm.
Speaker 9:February, something like that. Opened on March 31 and now have just over 50 listed companies and 13 listed ETFs. Okay. So incredibly excited. We just had a big launch party
Speaker 3:Yeah.
Speaker 9:At at the Star at Dallas Cowboys Stadium. Although, I'm a Giants fan. Although, Sunday was rough for the New York Giants.
Speaker 3:I don't know if you if you watched that. What goes into the decision to go to Texas instead of New York for a company?
Speaker 9:Yeah. So the reason we launched launched NYSE Texas was because of the amazing pro business legislation that governor Abbott's been pushing forward. Really filling a gap around company company governance and a variety of other measures. Yeah. It's been met with tremendous positive reception.
Speaker 9:You see companies moving their headquarters, changing where they're incorporated Yeah. From state that y'all are based in Yeah. In California, in particular, to Texas, but also some of the New York companies have built huge presences.
Speaker 3:Yeah. Joe Lonsdale at ABC's talked about it a lot. Elon Musk's talked about a lot. Starbase is a company town now. It's becoming a whole I know.
Speaker 3:Economy onto its own.
Speaker 7:We have
Speaker 3:friends who went and toured it, and they have their own shops and their own housing. Yeah. Everything it's become this massive movement over there.
Speaker 9:And Illinois as well. A lot of companies have moved out of Illinois to to Texas.
Speaker 3:To Texas.
Speaker 9:So we were just being responsive to our customers.
Speaker 3:In Texas, does that just align you with being registered as a business in Texas?
Speaker 9:Or It allows you to benefit from some of the pro business legislation.
Speaker 3:And is it but is it a prerequisite to be headquartered in Texas? It's a list. Do have an or? Okay. It's an or.
Speaker 4:Yeah. And cool.
Speaker 9:Yeah. Absolutely. Align the
Speaker 3:whole stack.
Speaker 9:Our first company Yeah. To do a list on us was Trump Media and Technology Okay. Which is based in Florida.
Speaker 3:Sure. Yeah.
Speaker 9:So they're not even based in Texas, but they were
Speaker 3:They wanted to
Speaker 9:be such proponents of the pro business mentality, the pro business legislation that was going through.
Speaker 4:Yep. What taking a step back, what what is the what is the right profile of
Speaker 5:a
Speaker 4:business for in the current IPO market? I think that there's so much capital available in the private markets. We haven't seen as many, you know. I I would have thought we'd maybe see some AI companies getting out with like, you know, 50, you know, sub 9 figures of revenue. We we haven't seen that, at least from our view, a ton so far.
Speaker 4:So what is the right what what what is the investment banking community see as, like, the right profile for a company today?
Speaker 9:I mean, there's always the question around the rule of 40. Yep. I think the companies are being rewarded are the ones with a very deliberate strategy that they've had a track record of success with. Not a strategy that is throwing a bunch of spaghetti against the wall and seeing which of these products winds up sticking, staying very focused on the strategy and telling the story of, k. Here's the core products, and then here are the additional products that we're layering onto those products.
Speaker 9:Yeah. There was a question for a while of whether a company needed to be profitable or not to go public. I don't think you do. I think you need to have a path to profitability that you can articulate
Speaker 3:Yep.
Speaker 9:To an investor, but you don't have to be 30% EBITDA margins, things of that nature to to go upside
Speaker 4:from Yeah. How do you think it do you think it's helpful? I mean, how helpful is it that that Affirm reported earnings, like, couple weeks ago did very well? I think people woke up to the you know, that that felt like kind of a turning point in people in
Speaker 5:the way that people were kind
Speaker 4:of viewing PNPL as a category. Does that help at all with the roads with with with, you know, Klarna's roadshow and give people more confidence in the category?
Speaker 9:I think the probably one of the success points for Klarna's roadshow was the expansion that they've been able to do not just in Europe, but also outside of Europe into The US market. I'm sure that was something that resonated Yeah. With investors. Macroeconomic environments also tend to factor into a lot of these roadshows as well.
Speaker 3:What do you think changed that sentiment about profitability to go public? Was that is is it okay to chop that up to what Jeff Bezos did for so long with Amazon, just, like, not really delivering profits to shareholders, reinvesting them again and again and again? Is that do you think, the the story that people should be telling? Are there other companies that have done it really well?
Speaker 9:Yeah. I think the when you're with an investor, they're asking you what you're gonna do with your capital. Are you gonna use it to pay down debt?
Speaker 8:Yep.
Speaker 9:Are you gonna return it to shareholders or are you gonna reinvest in the business? I think any of those answers are good. Yep. Particularly with companies during an IPO process. Investors do want to many investors, not all, but many investors want a medium to long term growth story, and that's going to involve reinvestment in the business.
Speaker 9:But there's needs to be a clearly articulated story about where you're investing and why you're investing and how it's going to make your business stronger or provide a really unique entry point
Speaker 6:Mhmm.
Speaker 9:Into another tangential area to your business.
Speaker 3:Mhmm. Well, thank you so much for coming on the stream.
Speaker 9:Thanks for having me. Gonna put my hat back on.
Speaker 4:Fantastic. Thank you for representing.
Speaker 3:Yeah. And thanks
Speaker 4:for Always great to be here.
Speaker 9:Great to be here with you, Salas.
Speaker 4:Hopefully, we'll be back soon.
Speaker 9:Hope to have
Speaker 3:you Absolutely. Back
Speaker 1:Keep me coming back.
Speaker 6:We'll open it up.
Speaker 4:It's open. It's open. We'll come find you after this. Alright. Cool.
Speaker 4:We'll talk you soon. Cheers. Bye. And on that note, I think we can
Speaker 3:yeah. It up. Thank you so much for tuning in to our livestream from the New York Stock Exchange. We will be live from the TVPN UltraDome in Tomorrow. California tomorrow.
Speaker 3:So And today. We will bring you
Speaker 4:thoughts and prayers to Charlie Kirk and his family and loved ones. Absolutely tragic.
Speaker 3:Thank you for watching. Thank you
Speaker 4:for tuning in.
Speaker 3:We'll talk to you soon.
Speaker 5:Cheers. Bye.