SBF's sentencing, Robinhood's new credit card, and more woes for Fisker | Equity Podcast

SBF's sentencing, Robinhood's new credit card, and more woes for Fisker | Equity Podcast

Robinhood's New Credit Card and Tech Companies in Finance

  • Robinhood launched the Robinhood Gold Card, offering 3% cash back on all purchases that can be rolled into a Robinhood brokerage account.
  • The card has no annual or foreign transaction fees but requires a Robinhood Gold membership ($5 per month or $50 per year).
  • Robinhood's move into consumer credit is part of a broader trend of technology companies expanding into financial services, including Apple and LinkedIn.

Fisker's Challenges and Electric Vehicle Concerns

  • Fisker, an electric vehicle company, faces customer complaints, federal investigations, internal money problems, and a failed deal with an unnamed automaker.
  • The company lost track of millions of dollars in customer payments and delivered cars to unpaid customers.
  • Fisker's stock dropped 28%, and the New York Stock Exchange suspended trading due to these issues.
  • The company slashed vehicle prices by up to 39%, potentially damaging the resale value for existing Fisker Ocean owners.
  • Fisker is running out of money and may file for bankruptcy protection.
  • The broader issue of software-centric vehicles and the impact of companies going out of business on long-term vehicle maintenance and updates is highlighted.

DataBricks' Generative AI Model and Competition

  • DataBricks developed its generative AI model, DBRX, for $10 million, comparable to leading models but not as good as OpenAI's GPT-4.
  • DBRX requires at least four expensive Nvidia H100 GPUs, making it suitable for enterprise customers rather than individuals.
  • The competition for foundation models is expanding beyond OpenAI, Anthropic, and Alphabet, with other players entering the market due to sufficient capital resources and customer bases.
  • Generative AI has many potential dangers, but having multiple companies working on it can be positive.

Kid-Focused Startups and Sustainable Business Models

  • Kid-focused startups are gaining attention, with companies like Playtime Engineering creating musical instruments for children and Kidy reselling discounted kids' clothing, toys, and gear from major retailers.
  • Kidy partners with retailers to purchase unsold or returned items and resells them on its website, generating revenue and reducing waste.
  • The co-founder of Kidy, a former journalist, was inspired to start the company after learning about inventory glut and supply chain issues in the US through a documentary she directed on child labor and global supply chains.

New Summit Investments' Impact Fund and Venture Capital Trends

  • New Summit Investments is raising a new $100 million impact fund focused on investing in managers backing startups and companies addressing environmental and social problems.
  • This fund represents a significant increase from New Summit's previous funds, highlighting the growing interest in impact investing.
  • Sequoia, the top fund that invested in unicorns, backed only 2.8% of unicorns, suggesting that many big venture firms are not spotting future unicorns.
  • The venture capital market is fragmented, with no clear dominant winning VC, and venture capital funds often turn down businesses that go on to become unicorns.

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